Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Wednesday, May 10, 2006

Bloated Ranks of Realtors

"The joke is old, but it goes something like this:

A shopper at a checkout counter wants to write a check. "Sure," the clerk says. "I'll just need to see your real estate license."

"You mean my driver's license?" the woman says.

"Well, ma'am," the clerk says. "Not everyone drives."'

"Not everyone is a real estate agent. But it may seem that way."

"Some are pulling in six figures a year. But the money is not easy, agents and brokers say. It takes work, dedication, odd hours -- and thick skin. Many don't make it. In good times, turnover is high. With the housing market cooling, even more churn is expected."

"Two-thirds of real estate agents "are always in motion," said Bill Porter of Porterhouse Properties in Richmond. "One-third is coming, one-third is going and one-third stays."

Many got in the business to ride the wave of the hot housing market."

"Porter has been in real estate since 1975 -- long enough to see mortgage interest rates at 18 percent and at 6 percent."

"Most agents are independent contractors. They knock on doors, send mailers and let people know they are in business, he said. "There are no secret agents in this business." But 80 percent act as if they are, and they won't make it, he said. Among those who stay, "20 percent do 80 percent of the work."'

"While agents' sales commissions are negotiable, 6 percent is standard. On a $200,000 house, that is $12,000 off the top. Half generally goes to the buyer's agent and the other to the listing agent. But realty firms get a cut -- as much as half -- of those takes."

"Most everyone has business, advertising and licensing fees. An agent could sell $1 million worth of real estate and net only $25,000, Porter said. Anyone getting into the business needs six months of income set aside, Porter said. "And fire in their belly."'

"Muriel Rodriguez, an agent, has been licensed for 2 1/2 years. "To really get it going has been tough. It is such a slow start."'

"Ken Rubert, an agent with Hermitage Realty, can empathize. A mechanical engineer for heavy industry, he was restructured out of a job once, then laid off again from a chemical conglomerate along with the entire American contingency."

"I was in my upper 50s, so it was getting more difficult to find a job."

"He got his real estate license and signed up for a course at the Multiple Listing Service in Richmond. The instructor was from his former company. Each was surprised to see the other in real estate."

'"I'm starving," Rubert told his colleague."

"The first broker he worked with tried to warn him. "I was told it was very competitive, and the majority of agents make $20,000 or less a year. Well, that is very true."'

"A. Terry Crawley, an agent since 1977 and a broker since 1988, said he has seen hundreds of people come and go in real estate. "You just have to get out there and work your butt off," he said."

FYI.... From Calculated Risk
"The California Department of Real Estate reports the total number of agents in California is now 490,861, up 0.9% from last month, and up 10% from last March. The number of licensed salespeople has risen 80% since March 2000."

p.s. Doesn't this smell just like back in the .bom days when when everyone and the horse they rode in on was a wannabe stockbroker getting into the industry to make their "easy money"... after all the money had been made?


At 5/10/2006 09:29:00 AM , Anonymous tom stone said...

it is going to get a lot tougher to make a buck in real estate no matter what part of the business you are in,a friend of mine with many years of experience had 4 consecutive loans fall through this month,all sonoma co.refi's from arms to fixed.all of these loans would have gone through in february... spoke to a couple of sales agents as said "things are flat"...he says "mmm organic fertilizer" when he has a mouth full of it...the other said the down cycle is here...and he won't take a listing unless the price is right.from what i am seeing,and hearing,the elephant in the living room has diarrhea.

At 5/10/2006 11:42:00 AM , Blogger Athena said...

I get listings every day from GMAC and so far I am not seeing anything priced right. Everyone still thinks their house is worth more than $500k

sorry to say baby, these chitboxes are gonna have to go for way below that. Personally I am not paying more than 300k for anything in boyes springs or el verano or agua caliente... and I probably won't even pay $300k. These are shoddy places to say the least... each and every one of them. Not a thing worth more than that. However, they are still pricing them way above.

At 5/10/2006 02:24:00 PM , Anonymous tom stone said...

had lunch with an appraiser today,she said appraisals ar a little below last year at this far as a drop i mentioned that i expected a 50% drop for small income properties and 25% for the best properties in the county within 2 years,at a minimum....she agreed that that was reasonable...she had not heard about centex and hovnanian dropping prices in the valley,said she is one busy appraiser and could work til 2 am,said 50-50 refi's and purchases and is seeing prices shecan't come close too in her appraisals.....the buyers are offering list price the homes are appraising at $100k below list price...said also is getting a lot of refi's that won't appraise,and just tells loan officer it won't float without an actual appraisal...."why charge a fee,there is just no way"

At 5/10/2006 03:17:00 PM , Blogger Athena said...

She sounds like an appraiser who is honest. I bet she gets unpopular real quick. :-/

At 5/13/2006 08:44:00 PM , Anonymous tom stone said...

no,she could work 18 hours a day,7 days a week,word gets around, and even scumbags want an honest professional opinion sometimes.brad guerra in petaluma also has a good reputation for competence and honesty.

At 5/13/2006 11:08:00 PM , Blogger Athena said...

An appraiser friend of mine who used to work in Sonoma County called me yesterday. She left the bank she was working for in Sacramento and went out on her own. One of the reasons was the bank manager TOLD her that if her appraisals didn't hit the number they would take her name off of it and change the appraisal to what they needed it to be!!!! They DID this on a number of occassions and their response to her objection was that they own her work, so her work isn't completed until they have checked it, and apparently if they check it and it doesn't hit their number... then they "complete" it themselves.



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