Cliff notes from recent conversations about real estate:

Who does a real estate agent work for? We work for our clients, but usually what you are asking is something else. Typically, Realtors are independent contractors. We contract to work with a real estate brokerage: EXIT Realty, ReMax, Keller Williams, Irongate, for example, and the commission is split with our brokerage, and the another brokerage involved in the real estate transaction, if there is one. Because every real estate agent, and every brokerage has their own unique business model, there are countless variations on this, but in general, that’s the way it works.

The brokerage gets paid at closing. And the real estate agent gets paid when the brokerage cuts a check- sometime after closing. Real estate agents don’t get paid by the hour, or the mile, or the number of signs in yards, we get paid when, and only when, a property sells, and how much we get paid is determined by the commission, and the selling price- all of which is negotiable. Many Realtors, or most perhaps, pay for the marketing of a property out of their own pockets, with no guarantee that a property will sell. It’s an interesting way to make a living.

If I am a listing agent, I’m going to ask you about your goals in selling your house, and suggest a price and marketing plan accordingly. We can market to the best of our ability, but if there is something undesirable about the property, the number of potential buyers shrinks. Price, of course, fixes everything, with the goal being to sell your home, not just list or market your home.

In my business model, which means I’m speaking only for myself here, if I’m representing buyers, the goal is still to sell a property, but this changes a bit from working with a seller. I only want to sell a property that a client will be happy with, and happy with it as long as they live there, and so happy that they will tell their friends how happy they are. The client has to live there, make the payments, enjoy the amenities, like the neighbors, etc. It doesn’t matter one bit if I like any of that. My goal is to find the home that best meets my client’s needs, and what those needs are will vary widely from client to client. Because I don’t work as a dual agent, I can represent and advocate for a buyer client, without representing the seller, too. It’s the way I choose to do business; it’s definitely best for the buyer, and it works for me.

Is this a good time to buy? Well, that depends: Where are you buying? What are you buying? Why are you buying? How are you buying? Without taking all those questions into account, no one can give a blanket answer to whether it’s a good time to buy. That balding guy with the rolled up sleeves? The one who is screaming at you from the television? He doesn’t know your answers to those questions, so he certainly can’t tell you whether you should buy.

Foreclosures? We are at, or near, ground zero for foreclosures, and we won’t see the worst of it until next year when the bulk of the subprime loans turn, however, we might be able to balance that here in Dayton with a few positives. Dayton is on the top ten list for singles and we have a huge stock of starter homes in Dayton and the first tier suburbs- that could work well. Forbes has named Columbus as a top ten most stable housing market, and Cincinnati as a top ten most affordable. Dayton, if it chooses to, could leverage all this into a positive thing. I’m certainly going to work it.

There are a lot of misconceptions about real estate agents, hope this helps clarify a few things.