Flat Fees, Overpriced Appraisals, and Why ‘Local Agent’ Is a Myth

Here’s a glimpse of what you’ll learn: 

• Why flat-fee real estate can save sellers massive commission costs
• Why the “local agent” pitch may no longer matter in modern real estate
• How appraisal management companies are inflating appraisal costs
• Smart mortgage shopping tips beyond just comparing interest rates
• When refinancing actually makes financial sense
• Why fully underwritten pre-approvals strengthen buyer offers

In this episode with Fred Glick

In this episode of We Fixed Real Estate, Fred Glick of Arrivva breaks down why traditional real estate commissions continue to cost sellers tens of thousands more than necessary, and why the idea that you “need a local agent” may no longer hold up in today’s digital-first market. 

From flat-fee listings and Zillow Showcase marketing to appraisal management fees and mortgage shopping strategies, Fred explains how buyers and sellers can avoid unnecessary costs and make smarter real estate decisions.

Resources mentioned in this episode

• Fred Glick on LinkedIn
• Arrivva
• Arrivva Mortgage
• Rhino
• Live Mortgage Rates
• The Real Estate Insurance Crisis: What’s Happening Behind the Scenes

EPISODE TRANSCRIPT

Drew Hendricks (00:22)

We are on. Welcome to We Fixed Real Estate. Brand new platform today. Rolling it out with Fred Glick, talking about the latest in real estate news. And today the you know, Fred’s gotta do a little bit of bragging. He pulled a hat trick last week as far as listings.

Fred Glick (00:37)

Yeah, even though it’s hockey playoff season and the Flyers did not survive the second round. Let’s just put it that way. Yeah. We had three of our listings sold last week. two of them have kind of been around. Yeah, three listings in one week. One of them’s been around for a while and had price reductions, and it was kind of a crazy one that

Drew Hendricks (00:53)

Three listings in one week.

But it was a marquee property.

Fred Glick (01:06)

It was it’s cool. It’s it’s a penthouse unit in downtown San Francisco with two outdoor patios, two bedroom, two bath. I mean it vi it’s really nice place. But it took the the the list the seller wanted a number that was high. And you know, usually I would not do those kind of listings, but you know what, this made sense.

The market is crazy in San Francisco. As you probably have heard, if you listen to me all the time, you’ll know that I judge San Francisco by how the condos sell down around the embarcadero in that area. And this was one of them. And we said, look, let’s throw it out there, let’s see what happens. If somebody’s willing to pay a big number for it, because it’s a unique property. There’s other stuff down around the area, but nothing with outdoor space. So Yeah, exactly.

Drew Hendricks (01:56)

Yeah, it’s not like there’s tip for tat comps on this.

Fred Glick (02:00)

So finally we came down to a number that people started getting interested. And we were able to lock it down and sign a contract for that. So, you know, it took a little time, but some you know, the it the seller understood that. And he wasn’t just, my god, I have to get this number and there was just no way and nobody was seeing it and go on forever. But you know, he said, “Let’s let’s get rid of this.” So

Drew Hendricks (02:12)

Awesome.

And this is for

a flat fee of fifteen thousand seven hundred fifty. So what was the seller’s savings on this having gone three years?

Fred Glick (02:34)

Well, the last list price, I’m not gonna tell you what it sold for until it closes, was was you know, two point two point five. So it would have been, you know, if somebody charged three percent, seventy-five grand. So they saved a lot of money. Sixty grand, basically. So yeah, it’s for what I don’t know. You know what the difference is between us? You pay a flat fee and you’re paying me, and yes, I have people who work.

Drew Hendricks (02:38)

No no. I’ll park it.

Fred Glick (03:03)

under me who aren’t out there getting seventy, eighty, ninety ninety five percent big commissions, that’s what you’re saving on. You’re saving on these gigantic commissions that these people are getting paid.

Drew Hendricks (03:15)

And you’re not and you’re

not skimping on the the full service. Like you had you had you had a tea party. You didn’t just do an open house, you had a tea party.

Fred Glick (03:18)

gosh no. If if it

Yeah. Yeah, there you go.

No, and remember this, and brokerage won’t do this. Order the inspections and pay for them. Pay for a cleaning of the house. Make sure you get the correct photography and all of it. Drones and 3Ds, because we want to make sure that the buyer sees a floor plan with the dimensions. I mean that’s so important. I work backwards from what a buyer wants to see to get the listing done.

So it’s a big difference. the other one, one of the other ones we sold was in Northridge, home of a very large earthquake years ago. But knock on what exactly everybody thinks about that, especially if you live in California and you’ve been here. big single it it it was it back then it was called a McMansion when they called these things McManchions.

Drew Hendricks (04:06)

That was immutely what I thought of.

Fred Glick (04:23)

Big five bedroom, big yard. And it was in this development of four houses of which the other three had pools. So you don’t need to spend the money on pool unless your neighbors hate you. But if you make friends, you can, you know, use one of their pools. So that was nice. and the third one sold in like three days, I think.

It was literally right on the Pacific Ocean in Marina del Rey. It was a condo, second floor, top floor, three bedroom, two bath. And you know, again, that was around two and a half. Again, it’s a savings, monstrous savings. But really, Marina del Rey is the secret place for living on the beach. Because if that was in Malibu.

Be seven and a half million. Easy. Easy. If it was in Santa Monica, be five million. Marina del Rey, it’s two and a half. Even in Venice, if it was in Venice a couple blocks over, you know, it it would be another half a million. It’s location, location, location. Guess what? It’s a nice blank, gigantic beach with the Pacific Ocean. Nobody’s down there because there’s nothing there. It’s

five blocks or so south of the Venice Pier. So it it’s a place to look, but they rarely come up also. And when they do, they pretty much get snagged. but that’s a place to keep an eye on if you want beachfront property at still two and a half million ridiculous price, but if you want something at a quote unquote reasonable price if you’re in the millions, I mean obviously it’s not for everybody.

It’s yeah, and you know, the other place you keep going a little south is Playa del Rey. You know, Jerry Bus had a house on Playa del Rey and Jeannie took it over. I don’t think she lives there anymore, but it was significantly cheaper. And you know, you still get in the ocean. It’s right there. You can’t change that. You know, so and if you especially if you like airplanes, you can live in playa. But you know

Drew Hendricks (06:16)

Third of the price of Malibu.

Mm-hmm.

Fred Glick (06:45)

It it becomes white noise after a while. You know, El Segundo living near the airport and where the oil refinery is, a little different. I don’t know if they’re refining oil there anyway. They but they’re taking oil in from the ships, so I know that. But anyway, so yeah, we got three three done. all in the same week. So you know, beautiful thing as they would say.

Drew Hendricks (07:12)

And that’s a hat trick.

Fred Glick (07:14)

That’s a hat trick.

Drew Hendricks (07:15)

Explain

it to non hockey.

Fred Glick (07:19)

When someone, one person scores three goals in one hockey game, it is called a hat trick. And and the people in the stands throw their hats onto the ice to celebrate. And yes, you can actually get your hat back after the game, but most people realize they gotta buy a new hat at that point. Yeah. And for you hockey nerds out there,

Drew Hendricks (07:38)

Yeah.

that’s funny.

Fred Glick (07:49)

Do you know what a natural hat trick is? A natural hat trick is the same person scoring three goals, one, two, three in a row. So that’s pretty cool. As opposed to, you know, a seven-nothing shutout, and you score the first and the third and the sixth. Nope, one, two, three. Anyway, we get deeper into hockey, but we can start a completely different podcast.

Drew Hendricks (08:05)

Yeah.

So your listings are on fire right now and tell us about the future. I think there’s some little changes are in play.

Fred Glick (08:15)

Yeah, and yeah, we’re yeah,

we’re making some changes. couple of are are real interesting. So we get people who are looking to list with us and what they say and what other agents say to them to say is, you need a local agent. And I’ve always asked the question, why?

What I’m doing is marketing your house. So if somebody’s local but you know doesn’t can’t is taking phone pictures with their iPhone, that’s not a good agent because that’s not going to help attract people to get into the house. It used to be years ago, yeah, the local agent knew exactly about the schools and where the best coffee shop is and how to commute and all these things that we can now find on the Google and the AI.

That you don’t need a real estate agent to tell you. So, but what we’ve what we’re gonna do, because there’s so many listings out there and so many houses, we’re gonna go and concentrate. We’re gonna take that off the table. Meaning, if you’re gonna list with us, we’re only going to market in an area that’s where we have someone. Okay. So to give you an example, we have someone who lives in Encinitas, Mark.

He’s been on the program before. So we’re gonna push people, push our advertising to there to get listings there. we have person up in Seattle and Queen Anne. We have person in Sacramento. We have someone in San Francisco and the Marina Del Rey Venice area and out in Altadina, Monrovia. So so kind of

You know, we’re gonna hit these different spots. And so we’re gonna be able to be there. We’re gonna, you know, be able to take care of things, lockboxes, people want to come to the house and have an agent take them through. Whatever you think a a local agent is gonna be able to do, you can count on us to do it. So that’s the big thing. Second thing is we are going we are on Zillow’s showcase. So your house will get Zillow’s showcase. What does that mean?

Couple of things. Zillow will for the first seven or ten days, I’m not sure, will promote the listing more. It’ll it’ll show up in the showings as the first item in a certain zip code and certain price range for certain people looking for things. So that’ll help. It’s got better video, better photography. but here’s the cool thing. It will send out an email.

To anyone looking for that particular type of property as a reverse directory type of thing. So I have that in the Los Angeles MLS, where after I list the property, it’ll show me the people who’ve put their buyers into there. And that’s okay, but most buyers are in Redfin and Zillow, and we don’t put them into the MLS because once you get a a listing directly from the MLS, you’ll see how terrible it looks.

Drew Hendricks (11:14)

Okay.

Fred Glick (11:36)

I mean it’s just the UI UX is just awful. They haven’t changed it in fifty years. So the presentations by Zillow and Redfin are fabulous. So that’s what people want to look at. So that’s so that’s why. Yeah, so those are kind of the couple of big things that we’re gonna do. And we’re gonna get rocky and find us eventually on Facebook. We’re trying to straighten that out. Drew’s nightmare.

Drew Hendricks (12:05)

We can talk

about that for days. It for one of the largest companies in the world, the fact that they make it so difficult for a business to actually operate on it is ridiculous.

Fred Glick (12:07)

Yes. Yo.

Yeah, it’s crazy. It’s like what if you’re I said to Drew, what if you’re like, you know, General Motors and you wanna put ads on Facebook? It has to tie in with someone’s personal Facebook account. How did he do that? I’m sure there’s a way we’re not we don’t know what it is, but you know.

Drew Hendricks (12:28)

Yeah, it’s it’s

Fred Glick (12:35)

Is what it is.

Drew Hendricks (12:36)

Well

Fred Glick (12:36)

let’s not bore everybody

Drew Hendricks (12:38)

that’s not boring. It may okay. Well you know what isn’t boring? Appraisal prices.

Fred Glick (12:39)

with that.

man. Back in the day. And this wasn’t that long ago. Okay. So let’s go back before 2010. The way for years you’d order appraisals as a mortgage banker, mortgage broker, whatever. You just, you know, have two or three or four guys in the area and you just pick one and say, hey, hey Joe, do this appraisal, or hey Mark, do this appraisal.

Drew Hendricks (12:48)

Yeah.

Fred Glick (13:13)

Everything’s fine. I had three guys and they were all awesome and not a problem. Up until 2008, when our friends at Washington Mutual Savings Bank, and that’s very important, very important to remember Washington Mutual Savings Bank in New York. What they would do, they were the ones pushing the 1% mortgage. Everybody remember these things that actually caused the collapse in 2008? They were called option ARMs.

Drew Hendricks (13:25)

Yeah.

Fred Glick (13:44)

Advertised all over the place. You can get a 1% mortgage. It wasn’t a 1% mortgage. It was what I call the Wimpy mortgage. I’ll gladly pay you Tuesday for a hamburger today. So you kids go and Google who Wimpy was from Popeye, and then you’ll understand this. So basically, what it was is a one-month adjustable, the antithesis of the 30-year fixed. And every month it would adjust on the cost of funds index.

Plus a margin over that. And that cost the funds index plus the margin because the guy, the mortgage guy was ripping you off. He made more money with a higher margin and a no prepayment penalty. So he gotcha. He really gotcha. And he he probably charged you three points in addition to the three points he was making from the lender and just robbing people.

And people weren’t licensed to do this, and they they were just able to originate loans. It was a freaking nightmare. So what would happen? The index plus margin was probably seven and a half. And you but you were making payments based on one percent. Okay. So there was a difference of six and a half percent. And what they did was they took that and they just added it to your principal balance.

Drew Hendricks (14:56)

No chief.

Fred Glick (15:05)

So when that principal balance got 115%, or sometimes 125%, of your original mortgage amount, you then had to go up to the fully indexed payment, the seven and a half payment. So can you imagine paying 200 bucks a month and all of a sudden somebody says you got to pay 1500? How did they not understand that this was going to collapse? Ben Bernacke and Alan Greenspan, two very smart guys, heads of the Fed

didn’t realize this? I asked that question rhetorically and nobody can give me an answer. Why didn’t anybody see this? I’ve been seeing clips on TikTok of this movie about the big short, and that’s what it’s all about. And Michael I can’t remember the guy who figured it out, but he made so much money figuring this out. and everybody thought he was crazy. And he was anyway, you you can go see this. All right, back to the appraisals. So

Drew Hendricks (16:01)

Daily? Yeah.

Fred Glick (16:03)

Now we have Washington Mutual, and what these dudes were doing is calling up appraisers, basically saying, you better get me the value or you’re not getting any more deals. They were threatening them with all this. I mean, there were slimy New York sales guys. I’m from Philly, so I hate New York, okay? Let’s just get that out there. There was a slime boss. So after all the mishmash happened, and we decided, okay, appraisals were part of the problem.

According to then Attorney General of the state of New York, who eventually became governor, Mr. Cuomo, not Mario, his son, was the he was the commissioner or the attorney general of the state of New York. So he put this rule in and he got everybody to do it nationwide, that the appraisal had to be ordered through a blind system, through what was called an appraisal management company.

What that company do? Basically, the appraisal management company got all the appraisers into a into a software. And then the lender would order an appraisal and then they’d hit a button and they couldn’t request an appraiser. It would blindly go to an appraiser. So that’s all this function was. And maybe they like reviewed it a little bit and then it went back to the lender after it was done. They didn’t do squat. Just so happens that mer that Cuomo’s

relative owned an appraisal management company. Shocking, okay. And but you know what happened was the appraisal started going up $25. So I would get a normal vanilla appraisal back in Philadelphia for $350. Tops. But now it went to $375. Well now I’m seeing these appraisers at $1,000. But here’s the thing.

$1,200. The appraisers getting $450 and the appraisal management company’s getting the difference. What are they doing? They’re doing nothing. And you can actually request them to break the fee down. So that’s what I urge you to do. When you ask for the appraisal fee, you want to know how much the appraisal management company is getting paid and how much the appraiser is getting paid. You can scream and yell from the rooftop, but the lender has the gold, so they make the rules. There’s nothing you can do. But

My God, this is going to be a class action suit at some point. It’s disgusting. We need to all scream and yell about it. it’s gonna be hard to change, but it’s getting ridiculous, especially out in California. And they’ll say, liability and this, and you know, they’ll just mix up. The appraisers doing the work. They should get the bulk of the money in this appraisal management system, which really hasn’t changed. Software hasn’t changed since 2010. it’s still happening.

It’s and it’s just it’s frustrating.

Drew Hendricks (19:03)

So you could j I mean, ’cause you can’t pick your appraisal company, you can only pick your lender and you’re kinda stuck with whatever they’re doing.

Fred Glick (19:07)

Exactly. Ex

pretty much. Pretty much. So

Drew Hendricks (19:12)

So is there a question

people can ask as they’re going towards different lenders? I mean, is this a pre question before you get there in?

Fred Glick (19:18)

You know what’s fun?

What’s fun because nobody’ll have the answer, but ask, hey why am I paying an appraisal management company so much money? And before they when they tell you what the fee is for the appraisal, you say, I only want to pay the appraiser and not the appraisal management company. Just just start a bunch of aggravation and just see what you can do. Make make it make them nuts. Have ever have ever

Drew Hendricks (19:29)

Mm.

Yeah.

So if you’re filming like turn it up. But

what I mean, what would the management company do? I I can’t I mean they’re not it it’s still they’re not ensuring custodianship of it or

Fred Glick (19:50)

I don’t know. The lender here here’s the thing.

The appraiser does the appraisal. The underwriter at the lender underwrites the appraisal. So what do you need the appraisal management company to do? That’s a good question. Absolutely nothing. It’s you know, well, we check it for, you know, va validity of blah blah blah. You know what? I mean, come on.

for things in AI right now. Is is this value? Is this really the place? Is are the comps correct? You know, so I mean they they’re not helping anybody. Absolutely. And I welcome anyone who’s from an appraisal management company to come on this podcast and tell me why they exist and why. Why do we need them?

Drew Hendricks (20:37)

Yeah, no, that’s a good point. And it Michael Burris is the guy’s name.

Fred Glick (20:39)

Yeah. Michael

Burry, right? Yes. Yes.

Drew Hendricks (20:43)

And it

that’s the one where Margot Robbie gives the excellent explanation of mortgages.

Fred Glick (20:50)

Yeah, and also there’s a Anthony Bourdain explanation of what happened. And that’s a great one too. Yeah, it’s a great the big short, it’s a great movie.

Drew Hendricks (20:54)

Yeah.

Yep. No,

that’s good. Took me a minute to remember that. So you appra appraisal prices, take a look at the line items there. And then the other thing about it you’re going out for a lender, I mean there’s yeah, check check all the boxes. What other things do people should people be aware of when they’re looking at different lenders aside from the just pure rates?

Fred Glick (21:02)

Yes.

Yeah.

Three things, the rate, the fees or points to get the rate or rebate, and then all the other lender fees. So they could say six percent, no points, and four hundred dollar fees. or they could say here what we have is a list of rates. It goes from really high to really low. And then the prices are negatives to positives, meaning it’s like a seesaw.

Higher rates, lower points, lower rates, higher points. Every lender has a variation of that. So there’s not just one rate. So but here’s I had a discussion with someone yesterday and they’re gonna borrow let’s say a little over a million dollars. And I said to them, when looking at this chart, what you want to do is get a a a rate that gives you a bit of a rebate from the lender, money back.

Because you’re taking a higher rate. That would cover their costs. And realizing that sometime within the next couple of years, you’re gonna refinance that rate because at a million dollars, you refinance, you would refinance if the rate went down three-eighths of a point with no cost. Because it just makes economic sense at that point. It’s a 250 bucks. I I played with these numbers before, I think it was it was something like that. But save 250.

doesn’t cost you anything. So you’re gonna refi. But you know, some people like to pay all these points to get the lower payment. Maybe you have the seller pay some of them, or you need money towards your closing costs, you take a higher rate and the lender gives you the money back towards closing costs. So everybody’s situation is going to be a little different. But the basic situation is take the little bit of rebate to pay the costs or as much of the cost as you can.

And then knowing that you’re gonna refi at some point. I mean, rates rates are absolutely artificially high right now because from this war, everything’s spiked up because of oil prices and inflation. But what happens is rates go up fast, they don’t come down fast. They take their time. So it’s gonna take a little time to come down. But I think everybody’s like knows what this economy’s gonna be like with

Drew Hendricks (23:22)

And also I guess I asked.

Mm-hmm.

Fred Glick (23:49)

what’s happening out there with oil prices. So, you know, i price oil can’t get any worse.

Drew Hendricks (23:55)

Buying down your rate, paying up front, you’re making a long term bet that rates aren’t going down. ‘Cause if you thought rates are gonna drop pretty quickly over the next year, you’d be better off saving the money, paying the higher rate and refinancing. Is that what you’re saying?

Fred Glick (24:08)

Exactly.

And take maybe a seven or a five year arm as opposed to thirty year fixed and do that with a little bit of rebate and wait and keep taking five year arms. I had a guy who used to every year refinance a new one year adjustable. They don’t have one year adjustables anymore, but but even doing no cost, one year adjustable and just have a really low rate every year, you know?

Drew Hendricks (24:30)

And the offset of getting the new mortgage every year just made financial sense.

Fred Glick (24:34)

Exactly. Exactly.

Drew Hendricks (24:37)

Well that is

Fred Glick (24:37)

Exactly. But you gotta pay title insurance and blah blah blah and appraise you know so exactly. Exactly. So every yeah, thanks. Everybody’s gonna be different is the bottom line. So reach out to mortgage professionals to discuss it. Try not to talk

Drew Hendricks (24:43)

In appraisal management fees.

Well that wasn’t light.

How does Arriva’s

mortgage professionals handle it?

Fred Glick (25:02)

Me and Jen. we do you know, we look at the numbers, we we see what makes sense. You know, you just like we on our website, ariva.com slash rates, you can check mortgage rates anytime you want, day or night. They’re live. some of them some of the lenders s close at certain time in the evening, but you can get an idea what the rate was if you’re there at a midnight, what they were that day.

Drew Hendricks (25:03)

Yeah.

Fred Glick (25:31)

Then things start again at six thirty Pacific time, roughly. Well, it’s when the market opens. I usually don’t get rates until eight.

Drew Hendricks (25:41)

And

you can sign up for rate alerts and notices to be emailed to you.

Fred Glick (25:44)

Yeah. Yeah. You

can get them absolutely every day for all that. Most lenders you gotta call and talk to loan officers, which is here’s the thing. If you’re going to buy a house and you call up three lenders, four lenders, and you ask them what’s their rate.

it you have no idea if that’s the correct rate. And they can’t guarantee that rate. You can’t lock it in. So they just make it up so they sound like the cheapest. Or they give you a pre-approval at a really low rate. Well that’s the stupidest thing they can do. Because if rates go up, your pre-approval’s worthless. So you know it’s it’s sales guys. It’s ugh that’s why we have them live. What’s your rate? I don’t know. Put your situation in. You get it live there. In writing from a

Drew Hendricks (26:10)

Well yeah.

Fred Glick (26:32)

a reliable source. This is coming directly from the lenders who we lock in rates with, not just making them up. So realize that when you’re going in, you know, and if the guy doesn’t volunteer what all his fees are or what his lender fees are, that’s another reason not to use them. So

Drew Hendricks (26:50)

And you brought up

you brought up pre-approvals. Let’s hammer it home one more time. Why get the fully underwritten pre-approval?

Fred Glick (26:57)

Because you’re going to have to go through it anyway. So go through it, and then you can calm the seller down that they don’t have to worry about your mortgage contingency. It’s it’s just there is no reason not to do it. Okay? Someone want to give me a reason not to do it? The only reason I have found is that they’re in some weird mortgage program and then nobody offers pre approvals. Okay? I’m fully underwritten pre-approvals limited.

Drew Hendricks (27:24)

Mm.

Fred Glick (27:27)

That happens. There are some weird mortgage stuff. But vanilla, regular 30-year fixed stuff, even into jumbos, there’s no excuse for you not getting it. And this Yeah. Exactly. Exactly. Because you know what else? In a hot market, everybody’s fully under it and pre-approved. Or nobody else is, you’re the only one, and your deal gets picked because you are.

Drew Hendricks (27:37)

Or they’re not serious about buying a house. They’re fooling themselves.

Mm-hmm.

Fred Glick (27:54)

You know, we

we make sure you’re fully under it in pre-approval for the mortgage and we make sure you’re pre-approved or the house is pre-approved to get insurance and what it’s gonna cost. That’s another big one that nobody’s paying attention to. Yeah. Especially in California and Washington, we’re seeing it too. So insurance companies are getting tough there. That’s a whole nother discussion. We can bring Michael back.

Drew Hendricks (28:03)

That’s another big one.

California.

Yes, with

the with the fair plan. Or I think that’s what it was with.

Fred Glick (28:24)

Yeah, Fair Plan and the other stuff that he does. Yeah. If you haven’t heard that podcast, look it up, go down the channels. Exactly. For insurance.

Drew Hendricks (28:33)

The link in the show notes.

Well, you know, I think we’ve tackled a lot today, from listings to appraisals to educating us on the hockey hat trick. Suffice to say, this has been the latest episode of We Fixed Real Estate.

Fred Glick (28:54)

Good night and good hockey.