I was first introduced to a broker (called a middleman) concept when we moved in to Mumbai. There was this man, who was already attached to an apartment. If you decide to lease that apartment, then you have to inherit that broker (you have no choice) and pay him 2 months rent for a 11 months lease. In return, the job of the middleman is to prepare the lease document and get it signed by the owner and the renter and collect the witness signatures. It made no sense to me. As I moved on with life, I kept seeing more of these middlemen. There are actually a big network of them. Name any industry, you will find people that serve as a layer between the real producer and the consumer. The real producer does not have access to the consumers, neither does s/he has the resources, expertise to meet the people who would like to use the produce. So, the middleman with his sales mans skills and networking comes into play. Often the middleman makes much more than the hard working producer. As long as it is restricted to this simple one middleman step, it is fine, but you will find often there are a network of middlemen who operate at various levels often making the produce insanely high priced and the consumer finally suffers. Most of the banks have broking business. The well paid stock brokers are middlemen, so also many of the banking and finance jobs that pay very well depends on the so called analysts who work for the brokers. In USA, it is even a bigger business. You will find brokers everywhere. The up side to this is, it generates jobs, but the downside is, it costs a product much more than it should. Walmart costs way cheaper because it has successfully gotten rid of many middlemen, in turn, it is the sole benefitter of the profits. Well, it is a vicious circle.
Realtor business is a big broker business. Anybody buys or sells a house always goes via agents without giving a second thought. In our own house selling experience, we decided to sell the house by ourselves without an agent. We were warned by friends that it may be insane and a ridiculous choice because you will be overwhelmed with the amount of work you end up doing. But as the things are moving on, we have a completely different opinion about hiring an agent. If you hire an agent, you actually spend a lot more time than you doing the job by yourself. If someone comes to see your house, the agent calls you and asks you to go away atleast 30 minutes before the potential buyers visit your home. They call you only after the buyers have left the scene and this could be easily 30 minutes more. So, in this process for every visit, you spend 1 hour more than the actual visit time. And of course before you leave your house, you also spend some extra time cleaning your mess. But if you sell the house by yourself, you don't have to leave the house!! You just walk them through the house and that is it. With realtors, you don't have direct access to the people who see your house, so you are completely in dark till the realtor calls you back with an offer, where as with direct buying, you can actually talk about the process right away, so there are no delays there. We bought this house through a realtor, and actually we signed a lot more papers than the actual contract papers.
I may be pompous here, but let me give you an example. Our house was listed 10 days back through owners.com and we had a potential buyer by our doorstep on the 4th day of listing. We talked about the price directly and yesterday signed the contract papers. Now the only thing remaining is the inspection. If it gets through, then we are all set. In addition to this buyer, we also have 3 people in waiting list, who are eager to make an offer should this contract fail. Now actually in this housing market, we as owners can choose the buyer, this sounds incredible!! On the other hand, there is another house for sale just one house apart from ours and it is through a realtor. I see that house listed for quite sometimes now and pretty sure that the contract is not signed yet. Coming to the price, they are charging 1 dollar less per sq. ft. than what we are charging. They were a model home and located just in front of the swimming pool and a play park. Now what is the difference? I don't know. So looks like eliminating the middleman has worked really well for us. So sellers of the house, please don't panic and try selling your house by yourself, it will workout well.
Realtors, please don't be angry with me that I am advocating against your job, but honestly, I feel brokerage should be restricted to a skilled profession, that individuals with average intelligence, outreach can't do it by themselves. Professions that are based on ignorance of other people should be eliminated. And this is entirely my opinion...
Realtor business is a big broker business. Anybody buys or sells a house always goes via agents without giving a second thought. In our own house selling experience, we decided to sell the house by ourselves without an agent. We were warned by friends that it may be insane and a ridiculous choice because you will be overwhelmed with the amount of work you end up doing. But as the things are moving on, we have a completely different opinion about hiring an agent. If you hire an agent, you actually spend a lot more time than you doing the job by yourself. If someone comes to see your house, the agent calls you and asks you to go away atleast 30 minutes before the potential buyers visit your home. They call you only after the buyers have left the scene and this could be easily 30 minutes more. So, in this process for every visit, you spend 1 hour more than the actual visit time. And of course before you leave your house, you also spend some extra time cleaning your mess. But if you sell the house by yourself, you don't have to leave the house!! You just walk them through the house and that is it. With realtors, you don't have direct access to the people who see your house, so you are completely in dark till the realtor calls you back with an offer, where as with direct buying, you can actually talk about the process right away, so there are no delays there. We bought this house through a realtor, and actually we signed a lot more papers than the actual contract papers.
I may be pompous here, but let me give you an example. Our house was listed 10 days back through owners.com and we had a potential buyer by our doorstep on the 4th day of listing. We talked about the price directly and yesterday signed the contract papers. Now the only thing remaining is the inspection. If it gets through, then we are all set. In addition to this buyer, we also have 3 people in waiting list, who are eager to make an offer should this contract fail. Now actually in this housing market, we as owners can choose the buyer, this sounds incredible!! On the other hand, there is another house for sale just one house apart from ours and it is through a realtor. I see that house listed for quite sometimes now and pretty sure that the contract is not signed yet. Coming to the price, they are charging 1 dollar less per sq. ft. than what we are charging. They were a model home and located just in front of the swimming pool and a play park. Now what is the difference? I don't know. So looks like eliminating the middleman has worked really well for us. So sellers of the house, please don't panic and try selling your house by yourself, it will workout well.
Realtors, please don't be angry with me that I am advocating against your job, but honestly, I feel brokerage should be restricted to a skilled profession, that individuals with average intelligence, outreach can't do it by themselves. Professions that are based on ignorance of other people should be eliminated. And this is entirely my opinion...
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