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Real Estate Dorota Dyman and Associates blog: Shelley Bridgeman: Real estate commissions

Real Estate Dorota Dyman and Associates blog: Shelley Bridgeman: Real estate commissions | Dorota Dyman & Associates Real Estate | Scoop.it

The real estate industry is sometimes viewed with suspicion - no doubt because some of its entrenched processes appear to essentially betray the interests of the vendor. What agents - New Zealand Herald

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Article Source:
http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11222567

 

The real estate industry is sometimes viewed with suspicion - no doubt because some of its entrenched processes appear to essentially betray the interests of the vendor. What agents won't tell you about auctions examines the fact that auctions are favoured by real estate professionals in part because, in the absence of more than one "motivated bidder", the vendor is left in the unenviable position of feeling pressured to sell their property at the very lowest acceptable price (aka "the reserve").

 

Are open homes dodgy? alleges that open homes are used brazenly by real estate sales people but not for the purpose one would assume. For some it's less about showing off the actual house for sale and more about making contact with other potential house sellers in the neighbourhood.

 

The nature of the commission is the third part of the real estate business that can cause sellers discomfort. Firstly, the reasons behind the fact that an agent's remuneration is based on the value of the house concerned are not widely understood. Why should someone be rewarded more for selling a $5-million property than, say, a $500,000 one? Does it take extra effort to say "state-of-the-art Miele MultiSteam oven" than it does to say "plain old Shacklock oven"? Perhaps it's because marble floors wear out the soles of the real estate sale person's shoes faster than unassuming cork. Or is writing down that extra zero an especially onerous task?

 

The way commission is structured is also problematic. According to Consumer's 2011 survey, agent commissions in Auckland are 4 per cent on the first $300,000 and 2 per cent on the rest of the selling price. Because the commission is higher for the first few hundred thousand than the last few hundred thousand, real estate sales people have little incentive to negotiate a higher price on your behalf.

In fact, their emphasis on simply achieving the sale is likely to be counterproductive to getting the best possible price for the vendor. Given the fact that those extra thousands of dollars (which mean a great deal to the vendor) are of little significance to the sales person, it's clear that this commission structure has not been designed to satisfy the needs of the customer.

 

Financial columnist Mary Holm has been addressing this issue for years. In 2010 one of her readers asserted that "agents had no sense of pushing the potential buyers to anything but an easy sale, because the final negotiations are worth a small fraction of the overall price" and suggested, as a solution, that the "percentage paid to the sales agent should reflect that the last few thousand is the hardest part to obtain".

 

A second reader suggested a cunning ploy that could be used when negotiations for purchase stall: "Say both parties are $15,000 apart. I will say to the agent I will come down $5000 provided the other party comes up $5000 and the agent is prepared to take $5000 off their commission."

 

I'd love to try that strategy one day but after the (relatively mild) stress of selling a house eighteen years ago I'm hoping not to repeat the process. Rather than buy a new house we've recently made the decision to renovate our current place. There are several factors at play but one is certainly the desire to stay well clear of the questionable processes and systems associated with having an agent sell your home. I sometimes wonder how much the boom in home renovation can be attributed to people's active refusal to engage with an industry that seems deeply flawed. (Not everyone is suited to selling their own home privately.)

 

Obviously all commercial ventures are designed to make money. It's just that few are structured to potentially disadvantage the customer quite as insidiously as the real estate industry. And by the time you've factored in the consideration that for most of us our home is our most valuable asset it's a recipe for serious concern.

 

Related Article:
http://www.dailystrength.org/groups/dorota-dyman--associates


http://www.sodahead.com/united-states/dorota-dyman-associates-real-estate/group-32383


http://www.dailystrength.org/groups/dorota-dyman--associates/discussions/messages/17825503

 

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Dorota Dyman & Associates Real Estate: Real estate fraud seminar coming to Hamilton

Dorota Dyman & Associates Real Estate: Real estate fraud seminar coming to Hamilton | Dorota Dyman & Associates Real Estate | Scoop.it
Back in the heyday of the Bitterroot Valley’s housing boom, Bitterroot Valley appraiser Darwin Ernst said one local mortgage broker used to say: “You show us the house, we’ll show
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Source: http://missoulian.com/business/local/real-estate-fraud-seminar-coming-to-hamilton/article_1088f90e-4e1d-11e3-8d6e-0019bb2963f4.html

 

Back in the heyday of the Bitterroot Valley’s housing boom, Bitterroot Valley appraiser Darwin Ernst said one local mortgage broker used to say: “You show us the house, we’ll show you the money.”

 

Real estate fraud was more common than people realize, Ernst said.

 

“In some cases, people just didn’t know,” he said.

 

During the housing boom, the valley had about 10 unlicensed mortgage brokers. Today, two licensed brokers remain in business.

 

Inflated home prices, creative financing, and misrepresentations on loan documents weren’t issues that just happened somewhere else in the country, Ernst said.

 

New regulatory requirements that followed the housing market bust has changed the way people do business.

A two-day seminar on real estate fraud coming to Hamilton Monday is designed to help real estate agents, appraisers and lenders avoid the pitfalls of becoming an unsuspecting participant in mortgage fraud, Ernst said.

 

The seminar is hosted by the Bitterroot Valley Board of Realtors. It will be held at the Bitterroot River Inn on Monday and Tuesday, Nov. 18 and 19.

 

The first day focuses entirely on the kind of scams that can occur in real estate transactions and how to avoid them.

 

The second day is set aside for appraisers to consider issues of adjustments, independence and mandatory reporting requirements.

 

Anyone interested in attending the seminar can call the Bitterroot Valley Board of Realtors at 363-2000 to register.

The same seminar attracted nearly 200 in Missoula last month.

 

Ernst spent close to a year helping to design the course, which focuses on issues specific to Montana’s real estate market.

 

The course will examine 20 common frauds that occur during the purchase and financing of real estate transactions.

 

Nationally known fraud profiler Richard Hager will teach the course.

 

Hager will examine several actual real estate and mortgage fraud cases. He will point out the failures of the sellers, buyers, real estate agents, appraisers, mortgage loan originators and lenders.

 

And he’ll explain how their actions violated state and federal laws.

 

“On a daily basis, real estate professionals violate numerous laws, often without knowing it,” Hager said in a press release. “The course is designed to provide the basic education for real estate agents, appraisers and loan originators, attorneys and consumers regarding real estate fraud, ethics and the law.”

 

Ernst said the very same pressures that led to widespread fraud in the housing market that helped collapse the country’s economy is already beginning to well up again in some markets.

 

“We are seeing rapid 10 to 15 percent increases in the housing market in some major cities,” he said.

 

Those rapid increases and the potential for making lots of money can drive people to commit fraud.

 

“A person shouldn’t get into a house that they can’t afford,” he said. “We don’t want to see any more foreclosures. ... These classes are designed to help people fix the problem so it doesn’t happen again.”

 

Layna Lyons, executive officer for the Bitterroot Valley Board of Realtors, said everyone is invited to attend the course, which will offer education credits for Realtors and appraisers.

 

“It should be a good course,” she said. “This is the first time that we’ve ever offered classes for Realtors and appraisers for credit.”

 

With the new regulations that followed the national economic downturn, Lyons said it’s important that people understand the potential for fraud.

 

“People can get into a problem and not even realize they are doing something wrong,” she said. “I think this is going to be a great class for a lot of different people. We want everyone to know what fraud is.”

 

Read more:

http://www.goodreads.com/group/show/119495-dorota-dyman-associates

http://www.apsense.com/article/dorota-dyman-associates-real-estate-police-warn-of-online-real-estate-scam.html

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Miami real estate team targets Paris

Miami real estate team targets Paris | Dorota Dyman & Associates Real Estate | Scoop.it
A team of South Florida real estate professionals will head to the city of light at the end of the month to showcase some of the region’s new projects to potential Parisian clientele. For the trip, MC2 Realty partnered with the recently formed Fédération des Professionnels de L’Immobilier de Miami (FPIM) and those behind some …
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A team of South Florida real estate professionals will head to the city of light at the end of the month to showcase some of the region’s new projects to potential Parisian clientele.

For the trip, MC2 Realty partnered with the recently formed Fédération des Professionnels de L’Immobilier de Miami (FPIM) and those behind some of South Florida’s new residential real estate projects, said Marie-Charlotte Piro, vice president of MC2 Realty and founder and president of the federation.

Real estate Dyman (http://www.sodahead.com/united-states/dorota-dyman-associates/group-32501/) and FPIM partners – including attorneys and bankers – will make the journey to Paris, she said.

Two thousand potential clients have been invited to the two-day, invite-only event, Mrs. Piro said. The group is hoping to have 100 attendees, which she said would be more than enough.

Projects on show will include 1 Hotel & Homes South Beach, with partners The LeFrak Organization and Starwood Capital Group.

Mrs. Piro said the group has been working on the trip since November, and the next presentation could be in Geneva or Canada.

FPIM was incorporated last June, she said. The non-profit organization pairs French-speaking realtors in South Florida with French-speaking buyers from around the world who are interested in purchasing real estate in the region.

It was an idea she had been “massaging” for a couple of years.

The real estate business (http://www.dailystrength.org/groups/dorota-dyman--associates) works a little differently in France and she wanted to make the process easier for agents and clear for clients.

She explained that in France, clients work with several agents to see all the properties, whereas in Miami (http://www.miamitodaynews.com/2014/01/22/miami-real-estate-team-targets-paris/)they work with only one.

Many times, Mrs. Piro said, she would find out one of her clients was working with another realtor and would have to place a friendly phone call to them to make appropriate arrangements.

And roughly midway through last year, France was the origin of the most Miami property searches on the Miami Association of Realtors website.

“To find a realtor they go to the realtors association, which is a good thing, but the realtors association site is in English and most French people don’t speak English, or very few,” Mrs. Piro said.

“All these French people get lost in big national sites where it is very difficult for them to get the information that they really need… It’s time to incorporate as French realtors to be able to help them.”

When potential clients reach out to the group, they are directed to a list of agents.

The agents have criteria that are a little more personal than what language they speak and what area they work in, she said, adding that listed is the town they are from and university they attended.

Members of the group speak fluent French, are accredited by Florida’s Realtor Associations and have a strict code of ethical conduct.

There are two types of members – realtors and the partners. Partners include attorneys, business consultants, architects and builders.

And it’s not only buyers from France that are the sole focus of the group, she said, but also those from Belgium, Switzerland, Canada, Morocco, Algeria, Haiti and the French Caribbean.

FPIM also assists a lot of French-speaking buyers in commercial transactions, in particular multifamily buildings and businesses’ purchases, Mrs. Piro said.

Several of the group’s brokers, she added, are certified with the Business Brokers of Florida.

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