Yesterday Dmitry was having a conversation with an unrepresented seller, lets call him Simon, who told Dmitry, “I would never use ‘PruCenturyMax Brokers’ [name changed to protect the guilty] to sell my home. When we bought this home they helped us and they gave us terrible advice. They recommended that we pay top dollar for this home because someone else was making an offer.”
I was not there for the conversation but a couple of things come to mind.
First, 99.9% of real estate agents in Michigan are independent contractors. Our real estate licenses are kept with one broker who is responsible for supervising us. But we act very independently, and there is little that can be done to ensure that all of the agents working for one broker live up to one high set of standards. Unfortunately, that is just a reality of the way this business is structured. If you go to a McDonald’s Restaurant anywhere in the world, you can expect that the burger will taste pretty much the same. But if you go to a Re/Max, Century 21, or, for that matter, even a Sotheby’s International Realty, you cannot be assured that all of the agents are the same within that brand. So if Simon got bad advice from one agent from a particular brand, he should not write off the whole company.
Second, the market was so different a few years ago that paying asking price might have been not at all unreasonable. Basically almost anyone who bought a home in Southeast Michigan in the last few years and wants to sell it now would be lucky to get back what they paid for that. Even in a more normal market it is rare to recover all the costs of selling a home in the first few years after purchasing. We are not in a normal market.
Third, hindsight is 20/20. Simon got the home he wanted at a price he agreed to pay. Unfortunately the market did not keep up.
I am sure there is much more to the Simon story. I never like hearing that a consumer was dissatisfied with the services of any Realtor. But I do recognize that in the course of the hundreds of thousands of real estate transactions that take place every year, there is lots of room for disagreement.
I have long advocated a change in the way the Michigan licenses real estate agents, and I would be thrilled to see an increase in training requirements not only for new licensees but for those with existing licenses. As it stands today, a new agent in the state of Michigan only needs to take 40 hours of coursework and then pass a relatively easy exam. This pales in comparison to the state’s requirements for getting a license to cut hair or give a manicure, and yet a real estate licensee is typically overseeing someone’s largest single financial transaction of their life. A real estate license renewal requires nothing more than sitting through a six hour class every year.
I know that Governor Granholm has bigger fish to fry right now than looking at the real estate industry. Still, I would like to see it addressed in order to better protect Michigan consumers. But even if we do raise industry standards, Simon, and every other consumer, will need to do a bit of due diligence of his own before he engages the services of a real estate licensee. Just because Aunt Tilly took the classes and got the license, that does not mean she is the best one to represent you. Caveat emptor and caveat venditor.
[tags]michigan real estate license[/tags]