Christmas came early for HP in this important double whammy article from Business Week. Hopefully people are reading.
First they expose the realtor bribery topic we've been ranting on for months, and then they give Greg Swann the noose to go hang himself which he promptly does.
Nice job again at Business Week, who's taking the MSM housing crash lead and picking sides against the REIC. Someone been reading HP?
Home Buyer, Beware
Desperate sellers are paying brokers supersized commissions, which get incorporated into the price ultimately paid by buyers
Ever wonder why a real estate agent seems to be steering you toward a certain house? The agent just might be in line for a jumbo commission or bonus from the owner if he or she manages to sell you that particular property. As the housing market continues to soften, some desperate sellers are offering outsize incentives to influence buyers' agents.
While the typical commission for a broker who works with a buyer is 2% or 3%, outsize commissions are becoming more common. There are 10% commissions on luxury condos in Miami and even a 20% commission on a house in Atlanta. The result can be a strong financial incentive to push a certain home.
But in many states disclosure is poor or inconsistent. In Arizona, for example, brokers who show houses are encouraged to sign agreements specifying how they're compensated. But the agreements aren't required.
Add it all up, and, "I don't have to disclose to you how much I'm getting paid," says Realtor Greg Swann, the designated broker of BloodhoundRealty.com in Phoenix, who says he voluntarily imposes stricter rules on his own agents.
By offering extra-high commissions without informing customers, he says, "the builders are trying to bribe me to sell their houses."
Diane Scherer, CEO of the Phoenix Association of Realtors, says the association has a strict code of ethics and anyone who believes it's being violated can ask for an investigation.
Advice to consumers: Start with the assumption that the nice person showing you around is not your ally. In today's slow market, buyers have the potential for more power than they've had in years. But if you don't know how the game is played, you can still get fleeced.
29 comments:
Too good to be true! The MSM attacking Swann, wow
WOW. Swann really is THAT STUPID. Doesn't he realize that people already dislike and distrust realtors? Doesn't he realize that a quote like that will only hurt his business?
You don't have to say "no". It's obvious that he just doesn't get it.
What a complete tool!!!!!!!!
I wonder if he can lose his license or NAR membership for saying something like that to the press?
Realtors taking bribes to steer homedebtors to a property is as bad if not worse as corrupt stockbrokers pushing clients into stocks because they're accepting kickbacks, and this should be highly illegal.
If realtors had morals or ethics this wouldn't be an issue but alas they do not, so therefore government regulation is called for.
The NAR should be ashamed for allowing this practice to go on without making any comment or issuing any direction. The realtor profession is now completely corrupt and discredited.
Swann is also a laughingstock. But HP'ers already knew that
Greg Swann is toast and so are all Realtwhores(TM)
Business Week probably googled "idiot realtor" and found the dumbest one
You are pathetic here Keith. The article took some info that Greg has written about, but then forgot the context it was actually written in.
Greg's posts on this topic are to inform the readers of the practice of sellers (mostly builders) offering way more incentives to the agent to bring buyers.... when in reality the sellers should be offering the incentives to the buyers themselves.
As a result, Greg and many other realtors are offering a flat fee buyers service. As in buyers negotiate the rate they are willing to have their representative paid and any amount beyond the flat fee would be rebated to the buyer while in escrow.
Business Week was cherry picking quotes to frame their article.... gee... just like you do. You owe your readers better than that.
HP directly quoted the Business Week article verbatim.
I don't think Greg Swann is a person who deserves your defense Todd.
Or are you on the take too with realtor bribes?
Like the NAR is not "Cherry Picking" data ?? As for Swann, here's your new bunkmate Bubba !!
Swann essentially just said "Builders try to bride realtors into selling out their clients. I don't let my agents participate in that". Shouldn't you guys be happy that he's saying that?
Am I on the take?? Nope, I just refunded a client money on a regular deal with no extra incentives.
Know where I got the idea from??
Greg Swann.
You guys are silly. You rail against realtor's... all realtor's... even the ones that are saying the things that your audience would like to hear.
Not my fault that BW used Greg's quote the way they did. Greg was stating the obvious that yes, sellers (especially builders) are basically bribing realtor's to bring buyers to them. But then he went further and explained how the buyer could benefit... if the buyer only negotiated buyer representation fees up front. It is the buyers money after all.
But no, you are on this silly crusade... misleading your readers along the way. I get what you are trying to do but in do to some degree. I have my own feelings about the kind of realtor that you are trying to paint all of us realtor's in.
You are wrong. Many of us are leading the changes that are needed in this business. We are leading the cause for MORE transparency with consumer benefits in mind.
That's all right, I'll continue to point out where you are wrong, blatantly wrong.
"You are wrong. Many of us are leading the changes that are needed in this business. We are leading the cause for MORE transparency with consumer benefits in mind."
AHAHAHAHAHA!! AHAHAHAHAHAHA!!
It's fun to kick Greg Swann in the balls because he deserves it for being such a self-absorbed, self-important, know-nothing know-it-all. But I read his quote as saying that it's other realtors that use the hidden incentives and that he does not. The quote actually makes it look like Swann is not a complete sheister, which he is.
But he does say that other realtors are accepting these devious incentives and in so doing he discredits his 'profession'. And that's been a long time coming.
I agree. I actually helped Peter write this article with data on the bribing that goes on. I was quoted in that article as well.
You can see more about Realtor bribes and how to avoid them on my blog at http://blog.FranklyRealty.com
Frank Borges LLosa- Realtor/Broker
www.FranklyRealty.com
Greg Swann has been ratted out!!!
Great work Business Week!!!
More rats will be abandoning ship. Just keep watching!!!
Todd Tarson said...
Am I on the take?? Nope, I just refunded a client money on a regular deal with no extra incentives.
ya, cause they caught you
But no, you are on this silly crusade...
what? like calling you
bvllsh!ters on your bs?
Tell you what Todd, I'll take you at your word. There are good honest realtors out there like our friend Osman.
So, please publish on your blog and post here too an open letter to the NAR and your realtor brethren that you do not condone this kickback, bonus commission or "co-broke" practice, and ask for the NAR to immediately condemn, not allow and identify the bribery. If the NAR would "disbar" any member who took a bribe, as the State Bars would to any lawyer, this issue would go away.
Then cc me on the letter to your congressman where you ask for urgent hearings on this matter.
Finally, swear that you've never taken any bribe from any builder or screwed any client of yours, and that you condemn any realtor who has taken these bribes.
Do that, and you're good by me.
Don't, and I'll lump you into the corrupt realtor category
Your call
Greg Swann admitted in a posting once that his wife/girlfriend/whatever took a co-broke bribe
>>ya, cause they caught you
Caught me?? I was offered 3% by the selling broker, it was right in the MLS listing. Pretty standard for a RE transaction on MLS.
I didn't have to tell the buyer anything and could have collected what was coming to me, but I didn't. Instead I told the buyer that I would offer her the refund in escrow. I'm the one that brought it up.
My client was happy before I opened my mouth, even happier now.
But no Mr. or Ms. anonymous, I wasn't caught in anything.
Keith, sellers are free to offer any amount of compensation as they want, in my opinion.
They are free to offer a reduced flat fee (like builders were doing when the market was all gang busters) take it or leave it kind of thing like in the very recent past. If we limited the amount of compensation offered I think we head towards anti-trust situations.
So I'm not sure what a letter to NAR or my congressman would do for your agenda except get somebody in trouble for setting fees anti-trust style.
Now kickbacks to me are outside of the transaction, and that is a huge no-no where heavy fines and even jail time could await a criminal. In those cases I'd like to see the law-men do their job to see that it does not happen because I think that breaking the law is not acceptable. I'm all in favor of throwing the book at law breakers. I don't want them in my business.
Like you, I generally think that over-inflated compensation offers are a bribe in the very general sense. But I also feel that the inflated fees are a marketing ploy... a faulty one and one I don't agree with to be sure.
I'd much rather see the builder offer the price reduced incentive than the over-inflated compensation offer. But that is why I am offering buyers an in transaction rebate on any amount over a certain negotiated flat fee that I charge.
I call this a competitive advantage over my competitors that are not doing this. I think that realtor's like me, and even Greg Swann, that are offering this flat fee buyers service will change the market and it will be the customer, client, consumer, etc. that will ultimately benefit.
Have I ever taken a so called over inflated compensation from a listing broker for representing a buyer?? The answer is no. I've never had a transaction that paid more than 3% on a single family home. When the market was hot I routinely took 1%, 1.5%, and 2% offers of compensation when representing a buyer. Was paid even less on some transactions where my buyer bought a builder owned property. Many times I was going to get paid zero dollars and simply released the buyer client to the builder, but I doubt you'd be on any kind of soapbox for that situation.
I don't live in a place where there are large housing developments so I haven't seen all that many local builder jack up the compensation offers. I did see one builder offer a 5% commission to the buying broker but that was for a limited time only. I have not represented a buyer for a new home build since the hot market days, due to the market and my involvement in leadership at the local and state levels.
But if I was to run across such a situation I have the perfect remedy for MY client, I will simply rebate any money over the amount negotiated up front with my buyer... or... I will simply make an agreement to alter the compensation with the seller in exchange for the price reduction dollar for dollar.
I am out to raise some hell in my industry. It is way beyond time to make some needed changes to 'traditional' business models in real estate. But no letter writing campaign is going to get it done. Simply too many powerful brokers in the way. Not to mention that congressmen are completely ineffectual to rely on for this kind of thing. The free market will be a much better tool than any politician or NAR leader.
I won't condemn the realtor that will take an inflated compensation offer. I think the onus is on the consumer. The consumer can simply ask their representative how much are they paying him/her. It is not that difficult AND it is the buying consumers money in the first place. If the consumer does not like the answer, give them a link to my blog.
Thankyou Business Week for exposing realtor/seller fraud in a public format.
Greg Swann was caught receiving rim jobs from Filipinas brought over to this country by a sexual slavery ring.
THAT'S HOT!
Todd T. ~
Well stated.
Thanks for your ideas!!!
I don't like Greg Swann, but for those of you who thought that Greg was admitting to taking inflated commissions, you've been had. Some reading comprehension skills are in order. If that didn't work, a little research would have taken you to the Bloodhound Blog where he discusses his quote in the article.
Of course, Mr. Swann led himself into a trap when he talked in the hypothetical first person when he should have spoken in the third person.
Hey if your buying, its your money. You ultimately control the show. Offer a price you think is acceptable. If the homeowner and/or realtor drops dead from a heart attack due to your low offer, so be it. It just business. There will be other oportunities. Protect yourself.
Building quality is an issue:
www.maracayhomescaution.com
I like this site! Thanks for admin!
- housingpanic.blogspot.com 4
spaghetti alla carbonara
Greg Swann doesn't deserve anyones defense, thats for sure. If he sheds a couple layers of arrogance I might take some pity on him!
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