Posed by the New York Times today, the question is a fair one:
Are real estate brokers — like travel agents and other middlemen coping with the increasingly digital culture — in danger of becoming expensive anachronisms?
My answer to the question is probably not.
Although though I have to concede that the article makes some valid points, it overlooks some important ones as well.
While it is true that a compelling majority of listings are available on the Internet, the article fails to note that few brokers look anywhere but on their proprietary databases for available listings. If a property appears only on the New York Times site, for example, brokers won’t even know that the place is for sale.
Thus, a major way is abandoned of reaching a larger market – and, logically, the best price – through the buyers represented by brokers if the property is not listed by a broker. Doing so is kind of like inviting your friends to a party by posting an invitation only on your own door.
A second issue has to do with comparable sales. Numbers do not tell the full story, and they are often out of date.
Only those brokers who have years of experience and make a point of checking out other brokers’ listings in person can know how to evaluate the statistics. They usually know the condition of the comps, what the windows face, how flexible a board is likely to be, what the financial position of the building is, neighborhood issues, and the value of a multitude of pluses and minuses of a particular property.
Would you place a bet in a horse race without know how all the horses have performed before and their history on a specific kind of track?
As for comparable prices being out of date, there is nothing like having a broker who can call on other brokers to obtain useful information about recently closed sales and even those that are only under contract. Just try to get those data if you are a FSBO (For Sale By Owner).
Another issue for me that arises in the article is, arguably, insufficient discussion of the difference between the brokers whom I’ll characterize as “good” and those who are not. One reason for the “bad” ones is the laughably low threshold for becoming a broker; the other is that almost all brokers are independent contractors who are loosely supervised, if at all, by their firms. They are barely accountable to anyone but the seller (or, of course, buyer).
In a distinct minority, the good brokers are those that any seller would do well to consider before embarking solo on finding the right buyer at the right price with a minimum of inconvenience.
In this incomplete set of observations, finally, the article is oddly silent about the ability of a second person, especially a seasoned individual in the form of a broker, to wring the best price from the other side. Never mind the advantage of using someone whose very career is based on skilled negotiations.
(As good a negotiator as I fancy myself, I relied on another broker to handle the sale of a house I owned in D.C. Without that distance created by a third party, I doubt that the price would have been as favorable to me as it was or that the process would be as little wrought emotionally. I am not even sure that buyer and I would have agreed in the end.)
Certainly, I am invested in believing that most sellers should retain brokers, though I won’t go so far as to maintain that using a broker all but guarantees the highest price or justifies thousands of dollars in commission payments. But I think it is a mistake for a seller to fail to take into account all the benefits of calling on the expertise and professionalism of a broker, a good one.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022