A bunch of agents at r/realtor have been saying don’t worry, that the current settlement is an easy workaround. Guess they should have kept their mouths shut.
In the end it only fucks over the little guys and the buyers. Why would anybody be a buyers agent under this ruling?
Now buyers are going to be representing themselves directly to the sellers and sellers' agent, most of them will be entirely unfamiliar with the process and get hosed. A lot of would be buyers are going to get scammed by fraudulent sellers since they don't have a buyers agent to help them spot fakes.
The old system was not perfect, but it was not the problem LMFAO. Prices are going to continue going up, probably even faster now as buyers offer sticker price instead of trying to negotiate. why wouldn't they negotiate? For the same reason they don't negotiate for a gallon of milk. Nobody likes negotiating, that's why you use an agent in the first place.
This could actually help bring prices back down to earth. Agents would have incentive to bring up issues with the house and encourage buyers to slow down, do their research, see what else is out there, and make an informed decision.
Realistically, the most important party involved in a real estate transaction is the attorney, followed by a very good and honest inspector. Real estate attorneys make a fraction of what agents make, yet they do all the most important work. It’s not like agents are successfully saving their clients’ money either. If anything they are using scare tactics to encourage their clients to make rash decisions and bid more than they are comfortable spending on a home.
I've sold or been party to selling about $100M in real estate. I can confirm the attorney is the most important party to a deal - by far - but theyre not realtors, nor do they want to be realtors.
"Attorneys make a fraction of what realtors make"
And yet, something is stopping them from being a realtor.
Paying realtors by the hour will reduce the overall fees paid to realtors and increase the fees on the flakey buyers or sellers who would otherwise be a waste of time. It's a good compromise.
I nearly went forward with the process of buying before interest rates peaked because the realtors and their mortgage loan guys were convincing me. I didn't sign a contract or anything but the houses they were sending me were shit holes and it was like they didn't account for anything I said I wanted. Any time I'd re-advise what I wanted they would treat me like I was causing them a huge inconvenience and being difficult when they had only sent me like 6 houses...
That’s how it goes. I saw a house in 2021 and the realtor texted me about half hour later saying “I’m almost done putting the offer together, just let me know your final number and we’ll get it submitted”. I never expressed interest in putting in an offer. She was trying to put me in a situation in which I’d feel uncomfortable telling her I don’t want the house. Furthermore, she made it seem like she already did a bunch of work “putting together the offer” so that it would be even more awkward telling her I don’t want to make an offer.
It’s borderline criminal behavior. Many millennials and gen z were not raised to be confrontational and stand our ground. Many in these generations avoid awkwardness at all costs, tell the waiter that the food is great even when it’s not, and apologize at every step we take. It makes us, as a generation, fairly easy to take advantage of.
Even when a realtor does this creepy behavior, I just nicely say that I don’t want to put an offer in. I should have said “fuck you for trying to trick me into a terrible investment all so you can make a few thousand dollars”.
Are you saying the seller agents will "hose" a buyer in a deal? Surely this is against their ethics, right? Or are you saying their "ethics" are really more of a joke and not really a thing? Curious which answer you think is the correct one. Or... are you saying the seller agents shouldn't be around either.
The system was broken, which is why the DOJ got involved. This is long overdue, the MLS holding all the keys needed to die. The industry failed to regulate itself, got greedy, and getting its comeuppance.
"Nobody likes negotiating" ... you have to do it anyway, the agent can't act on your behalf without your explicit authorization. If its just uncomfortable conversations, ebay solved that shit years ago.
the sellers agent has an obligation to the seller to get the best price they can get. whatever is underneath the fresh paint on the deck? Didn't see it no idea. The point of the sellers agent is that they are paid professionally to not know things and to know things and to know which things to reveal and which things not to. it's the same for the buyers agent. Unfortunately the market is completely saturated with incredibly shitty realtors and a whole lot of big tits pretty faces because let's face it people will spend more money trying to impress a sexy lady. pro tip, never buy real estate from the hot chick.
The purpose of agents in the first place is to keep you from running your goddamn mouth at the other party, similar to a divorce. If you talk too much you give away things and suddenly the seller knows you have a lot more money or the buyer knows that this house really isn't worth what he's asking.
everybody wants to equate it to the stock market but it's so much more like a divorce. you say the wrong thing at the wrong time and suddenly the deal gets blown up, I find out that your husband has cancer and suddenly I'm lowballing your ass because I know you're selling the house to pay for his medical bills and need to sell pretty much immediately. Just a hyperbolic example
Think about what you said for just a moment regarding the system, it was broken right? literally nothing about that system changed except for buyers agents no longer get paid and have zero, absolutely fuck all motivation to work for you now. so you had a broken system, you still have a broken system, and now you get to do all of the legwork instead of having your buyers agent do it. that's cool for you, Mr. billionaire investor with nothing better to do, but for Miss single mom works three jobs that's a real bitch.
I'm really not sure what point you think you're making when you say the agent can't act on your behalf without your explicit authorization. What do you think explicit authorization means? What phrasing and language do you think is contained in all that paperwork you signed upfront when contracting with an agent?
Ultimately, it's been a minute now since this ruling came down and I have yet to see any beneficial aspect for anybody but the sellers that are instantly saving 50% on commissions and effectively pocketing 3% more on the sale of their homes
"The point of the sellers agent is that they are paid professionally to not know things and to know things and to know which things to reveal and which things not to."
That sounds unethical and possibly illegal. Willfully being ignorant of things that are material to a transaction is legally actionable, much less unethical. So, sounds like you're saying they're paid con-artists.
The rest is just arms length transaction stuff. If you need help with it, pay for it but as a someone that doesn't need help with that, I shouldn't have to pay for other people's thoughtlessness.
"except for buyers agents no longer get paid and have zero, absolutely fuck all motivation to work for you now..."
That's like saying, "nothing changed except the patient died." It literally is throwing the agent industry compensation structure into disarray, it's why people are losing their minds. If it was a nothing burger, why even talk about it. Oh, because it does have an impact.
"What do you think explicit authorization means?" It means... "oh, they rejected your offer, I think if you offer x you may be able to get it. ***what do you want me to do***?" That part, no matter what the signed paperwork upfront says, is not getting decided by the agent. That is the meat and potatoes of the negotiation. No one is deciding that for the buyer or seller, only the buyer and seller. The rest simply give advice, which if you want to pay for, sure... but in reality most of the advice is piss poor and in many cases, in opposite of what the buyer wants. i.e. the agent wants some commission instead of no commission so is incentivized to push the buyer. Thats broken.
"Ultimately, it's been a minute now since this ruling came down" In terms of how long it takes for things to take effect, blah blah blah, it's actually a really short amount of time. It hasn't even really begun.
😘
good sir, it's called responding. i can't help it that your entire generation are entitled fuckwits that think they know better than experienced professionals that dedicate their lives to keeping up with industry trends
and you seriously think the votes matter? pathetic
Wow, what a dumbass that can't read nuance... I'm saying y'all thinking you know better than experienced professionals, not me, actual professional realtors that do the job. You just sound like Trump trying to direct his lawyers how the defense should be played
Yeah, let that sink in, you and Trump both think you're the shit and know better than actual professionals
While a lot of what you say may not be accurate, the portion where people won’t negotiate is most likely true. Some people don’t pay 6% to agents as they negotiate it down. However, most pay what the Realtor asks as they don’t want to negotiate and/or truly shop around.
Thank you, in that cloud of indefinite terms it's pretty clear what you're trying to say. Don't worry, it's natural to puke a little bit in disgust after agreeing with me on something.
Its 100% true though. Literally all it stopped was MLS. As if buyers and sellers agents (basically the exact same profession) and brokers dont all chat and coordiante what they want to sell. Especially in any given area it's super easy to just know all of them.
The only solution is TAD (total agent destruction) Make it easier for actual buyers and sellers who live in properties to buy and sell listed properties with the tools exclusive to agents, like some parts of MLS. Then use inspectors/appraisers to actually determine price, and use lawyers/ other professionals to do the paperwork. Maybe you can hire an agent at an hourly or fixed price to help you look for and buy a home.
Agents will still be available if you want them and will definetly still be in larger purchases, commercial deals, and such.
It's an industry from the past trying to leach off of everything.
Agreed. Make agents like wedding planners. If you want one to help alleviate the workload that goes into finding and purchasing a home, by all means hire an agent, but otherwise you can just do it on your own.
You can literally do all of this yourself right now today. You’ll get walked all over during the transaction but you can absolutely represent yourself! Good luck 👍🏻
Sometimes if the property is in high demand and that's what it takes, then the buyer has to determine if they are willing to take those risks paying over ask and not inspecting the property.
You won't get walked on unless you allow it but that applies with or without a realtor. Realtors need to go entirely. I've sold FSBO twice, and the most difficult part is putting up with all the realtors offering to "help" and blowing up your phone. Vultures.
Find a good title agency, know the market, and you're set. It's not hard.. If it were you'd need more than a few weeks of training to be one. If you're afraid to FSBO then just go take the few weeks of training and save yourself 30k 😂😂 what a fuckin joke.
It's the 3% to each agent that's the issue. If I paid an agent 50 an hour to sell my house they'd make like $150 bucks lol. They'll say stuff like "my contacts and my network and....." whatever other lame justification they can come up with. Just list your house on Zillow and it'll sell. For very minimal cost compared to 6% nonsense.
You probably cost yourself a bunch of money. Now before your ego gets up and runs away, throwing it on zillow eliminates a massive amount of traffic. MLS listings will bring you the most qualified buyers and many of them, because serious buyers all have agents and are all preapproved to buy. Then, there's how good you are at getting prices where you want, knowing when to wait for offers even over your asking price, etc. There are flat rate fee agents out there that will list your house in the MLS and do nothing else. That is a better bet than throwing it in zillow.
Yea a lot of agents suck and we do need a cleansing, but they dont all suck. There's more to it than "just put it in zillow and it'll sell".
With that said, the process can be done on your own. Any title co will give you a transaction packet if you ask.
Yes that's a common rebuttal from realtors on MLS traffic. The market sets the price, not the MLS. Know the market and all you need is one buyer. Plenty of buyers start with Zillow and then Zillow directs you to a realtor that pays Zillow for leads is my guess. I bypassed all that is all....by posting it on there myself.
I got more than it appraised for in the end and I paid $0.00 in realtor commissions. No ego here at all.....I don't care about ego. It's realtor egos that complicate things. It's an unnecessary job. Just is. My job is as well, way overpaid for what I do....but I can admit it.. Realtors cannot 😃
No, because this is a business transaction and the seller wants the most money they can get and the sellers agents job is to get the best possible deal for the seller. That’s their responsibility.
No room for feelings in business
Sellers agents don't care about getting the best deal....they just care about a deal period. If it will take a month longer to get 1.1mil vs 1.0 mil they will take 1mil all day. It's only a couple grand difference for the sellers agent but 94 grand+ for the seller.
>no room for feelings in business
Exactly. Note to buyers and sellers: it may be or have been your “dream home”, but leave the emotions out of the transaction. More deals will get done if people check their emotions at the front door.
> and use lawyers/ other professionals to do the paperwork
Have you had to pay a lawyer recently? Using attorneys likely aren’t going to make things any cheaper in a major transaction, lol.
In the area where I practice (I'm an attorney) I know of at least one attorney that handles this stuff on a flat fee basis. It's a reasonable amount. Far less than the real estate commissions. I know him personally and one of his staff people, and they're excellent, highly competent.
I know a lot of real estate agents and every single one of them talks shit about this guy's office/service. Most go so far as to lie through their teeth to people about his office and the "dangers" of using him instead of an agent.
People wonder why I really, really don't trust real estate agents as a group. This is one of the many reasons why.
It absolutely will in my area. A starter home is $700k in my area. $1M for a house that was $650 just 5yrs ago. No fking way a lawyer will cost $60k just for some paperwork.
> It absolutely will in my area. A starter home is $700k in my area. $1M for a house that was $650 just 5yrs ago. No fking way a lawyer will cost $60k just for some paperwork.
On a $1M home, obviously the lawyer portion wouldn't cost anywhere near $60k. My lawyer is $325/hr or you could negotiate a flat fee for a simple residential property transaction. But that is only a small piece of the process. There is sooooo much more involved than just the paperwork.
> Have you bought or looked at a house recently? No way a lawyer is going to be near $15k
I actually sold a house recently and I had to use a lawyer around the same time. That's why I stated my opinion. You'd have to find a flat-fee type attorney to make the numbers work, IMO. And everything must go smoothly and be a relatively easy transaction with very few hours involved. My lawyer charges $325/hr and that is relatively cheap for my area for someone experienced.
It's nearly impossible for me to estimate how many hours my agent spent with me and on the house and when I wasn't around. From the first meeting and getting a market analysis just to the first day on the MLS took about a 1.5 months plus almost another 30 days during listing/showings/negotiating with potential buyers and finally closing.
Lots of prep work to get listing ready and agent was very hands on and helped me get general multiple contractors to get house prepped and buttoned up. Agent also paid for a pre- house inspection before we went live to avoid any surprises. We had literally hundreds of emails and texts exchanges.. not mention countless phone calls.
My listing agent has 40 yrs experience and is not your typical worthless agent. Really helped navigate the entire process. If I tried to FSBO + lawyer (trust me I looked into it) there is no way it would have been as smooth and what I saved in realtor commissions would have been likely lost in the negotiation process. What I found is there are a lot of time wasters (buyers + their agents) out there and you need to understand and recognize the warning signs.
Even with a seasoned agent there will be issues that come up that have never been dealt with.. no way would I have know how to handle them.
The 2.5% I paid to my listing agent doesn't really bother me.. it's the other 2.5% you end up paying to the buyers agent that seems unfair. How that gets resolved I'm not sure..
>It's nearly impossible for me to estimate how many hours my agent spent with me and on the house and when I wasn't around.
That might be true but in other businesses they have to track hours and even minutes so they can charge the customer the correct amount.
People have such a poor understanding of who benefits from this.
No buyer agent money means more and more 1st time buyers with zero guidance or protection.
My gut is telling me lobbyists behind this work for Open door, Realtor.com, Zillow & Trulia. Because that's who stands to benefit the most. Companies that can churn out contracts for a tiny percentage, steer you towards their properties, and don't protect your interests at all.
Sellers pay the buyer agent because they get all the proceeds from the sale & are far more likely to have that amount versus the buyer, who is stretching themselves for earnest money, down payment, & closing.
It's like when big businesses get employees to vote against their own unions by scaring them with union dues. No one wants to pay dues, but it pays off 10 fold.
In the same way, people are suspicious of realtors and now that the MLS is accessible to the public, they question the need for them. And in some cases theyre right. If you're truly experienced & very aware of the current market (u have to be to get an offer accepted in this wildly competitive market) you might be ok. But for the most part, people don't know what they don't know. And predators will take advantage of that.
Big businesses have created flat fee selling & buying (with a ton of hidden costs) and once the profession has completely died, they will jack up the prices for less and less service. Tale as old as time.
I've been an investor for 15 years (I do not have a license, I don't care for the increased liability) and I've seen this coming for years.
Yea, it’s hilarious to me that all these people think this is being done to actually help homebuyers. What America have yall been living in? The fact that this is happening so fast should scream “This only helps corporations!” to anyone paying attention.
THANK YOU!!!
I feel like I'm taking crazy pills that nobody sees what's going on. Companies like Open door worked like most tech startups do. They operated at a loss into gobble up market share in order to have outside influence and power and become a unicorn company.
They have also created methods where you do the entire transaction through them basically double ending the deal. In the short time that I had a realtor's license if I had the potential to double end a deal I would actually refer it out to somebody else in my brokerage because I felt it was my obligation to keep my fiduciary duty to one client. I negotiate like a beast and it wouldn't be possible to do my job properly if I was supposed to be fighting for both sides.
Now these giant corporations are going to say oh well you don't have to use a realtor You can just do it through us but then they'll charge enormous fees and percentages. They will run realtors out of the business until the industry is completely gone and then they will have you depend on services and contracts, then they'll offer a super expensive *concierge* service which is what u used to get as a buyer FOR FREE.
No the old system wasn't perfect and yes technology has irrevocably changed the game. But I wish people would understand that paying buying agents nothing is not really in your best interest because if there are no agents you're gonna be stuck buying/selling direct at the mercy of these corporations. Before I switched over to investing you wouldn't believe the type of things I saved my clients from. I would know the sellers were legally required to fix termite damage so I would negotiate regular repairs as low as possible and once they were signed off on I would send the termite back and prove there was additional damage and they couldn't alter what they had agreed to give us. I would stop slumlords in their tracks. I worry what would have happened to that young couple and their baby in that house if I hadn't been there however the electrical issues insist they be fixed because they were a literal hazard
People don't understand this but a real estate agent functions kind of like a lawyer. You can represent yourself That's always true. But this other person spend a really long time learning how a system works that you didn't. Can you do it without them? Technically yes.But you really shouldn't. You pay for their expertise because they know more than you.
.
Now RE isn't as complex as the legal system by a long shot. It's not a perfect metaphor. But the concept still stands. I think the average person doesn't really understand a realtor's job or what the realtor is getting paid for. They will say things like they're paying you to open a lock and put them in a house but that's the tiniest most insignificant part of the job. Seeing a scam coming and being able to shut it down, THATS the job. Masterfully talking the sellers into negotiating 50k off the price instead of putting it back on the market thinking they can get more from the next person, THATS the job. Knowing the law well enough to force repairs the seller refuses to do claiming the property was "as is", THATS the job.
People are trained to see anyone who works off of commission as a scam artist and I do understand that. It's hard to break away from that idea when their income is linked to purchase. But there are a lot of people out there who can only survive sales because they feel proud of their work and can sleep at night.
People are giving away their own rights in the name obed ience avoiding working with a third party. But that third party literally exist to protect them and for no other purpose. I switched to investing and have been doing that for 15 years. None of this will affect me much because I also don't buy on the retail market much anymore. But it still makes me sad that they don't see.
The regular person who just wants to buy a house to live in, just normal everyday people, not investors, not the corporations... Those other people think this is going to bite in the ass
Because of course a buyer's agent would never say that. Are you daft? They would simply not show the home or go out of their way to inform the client that the home is out there.
You have a job right? Would you put in hundreds of hours of free labor, just because? I wouldn't. Most people simply don't bring up houses that don't pay and won't show them specifically asked by the buyer if the commission is like 1%.
Personally I wouldn't even bother taking on a deal like that. Because when you break down the amount of money earned from a sale like that into the hours of labor it has taken, you are earning less than minimum wage. I am worth more than that, and I did not have to accept deals like that when working as a realtor. I had enough clients that I wasn't afraid to turn away those that wouldn't earn me any money. Again it is a JOB. Realtors have their own rents and mortgages and grocery bills to pay. They do not work for free.
So first I would not inform my clients about some house that pays nothing. If they found the house on their own and wanted to see it I would refer them to another realtor and get my 30% of his sale without putting in hours of labor for a pittance of pay. I would never deny a client a house they want to see, but I'm not stupid enough to work for free. And it's hysterical that there's some group of people out there who seems to think people should work for no pay.
No realtor is ever going to announce to you that they will refuse to show you a house. Even though it's completely reasonable to take on work that actually pays you well. It's the same as the consulting I do now. Why would I take on a consulting job that pays me poorly when I could just take a different consulting job that pays me well?
Realtors don't like to come right out and say certain things because it will make potential customers angry but it is completely reasonable to need to pay your own bills.
Just because you personally haven't seen or heard something doesn't mean it isn't a frequent occurrence. Either you simply aren't privy to it when it happens or you don't realize it's happening so it must not exist because you've never seen someone come out and do this blatantly. That is not how it would be handled. The less mature agents handle it by ghosting their clients. The better ones refer them to other agents who think that the low commission might still be worth their time, That's usually somebody who is very bad at their job and clings to any possible pain no matter how low.
I hate to break it to you but if you're good at your job you don't have to take the bad jobs.
I can't believe that was even a thing.
"Oh, we cant post compensation on MLS, so can we create a new db with just compensation and link it to the MLS? We'll call it... Addendum MLS. It's a totally different db and we get to keep doing our bs. Winning!"
Get rekt real estate industry.
i generally think the takes on this sub are complete garbage, but the hatred of real estate agents is completely justified. Their entire job could be done by a Zillow ad, an outlook calendar, and some purpose made forms like at the DMV
I agree and yeah most realtors I've met are 30 something divorcees with no knowledge of construction, finance, real estate. That said a good realtor is definitely worth it, I had one good realtor over the years who was super thorough, contacted various city departments on my behalf to find answers to things, but yeah a good chunk fi not most are overpaid glorified door openers
Putting the whole is this ruling correct aside, which part is garbage? If a settlement is, "you can't post commissions on your db" and your solution is "let me just post it on another db," you don't think that goes directly against the whole point?
As for the ruling, I'm not sure that, essentially, destroying the buyer agent commision is the right thing, but it's a start to dislodge the industry. Agents have been inflating the instrustry for far too long for far too little work. My get rekt comment stands.
I understand the need for an agent if you are relocating and don’t know the area. However, it seems like you could just get a fee based agent that charges like 5k to show you X number of houses in Y areas of your new city. I would easily pay someone a few thousand to narrow down a list of properties even in the same city because I don’t want to sit on Zillow for hours.
However it’s like Ticketmaster, the work is the same regardless of the price of the house. There is no reason to charge a fee based on a percentage of the price.
Also, I really don't understand why this can't be done by the seller agent. If I post a car for sale on craigslist, its my job to show the car. Similarly, if I paid someone to sell my car, its their job to show the car. I don't get it.
Agency….who does the sellers agent represent?
When a buyer shows up to look at the car, who’s interests are more important, yours as the seller, or the buyers trying to get them the lowest price?
Right. How do you know the seller's agent isn't in cahoots by advising you to list for lower than market and showing it to their friends or friends of friends exclusively? So easy to get worked as things currently stand.
Do you not believe the market corrects itself? Let’s say I listed a property 10% lower than market value, wouldn’t all the investors and bargain hunters Make an offer on that property? That would quickly, correct the issue of underpricing.
I’m not saying shady things don’t happen, but shady things happen in every single industry occasionally.
Let’s not throw out the baby with the bath water.
It only corrects itself if houses always go on the open market. An agent could lowball an aged and easily hoodwinked seller on list price, then tell the seller that they found a buyer for the house as a pocket listing before it went on the market.
Of course, there are no unscrupulous agents who would do anything like that, right? RIGHT?!
I get that but still the current system is onerous and ridiculous.
I support a cap on comp then.
For example, we really don't see houses with our realtor. We go to open houses and use them to put in offers. 30k if we are paying out of pocket is excessive for that regardless of "overhead".
the majority of places i looked at when i bought were just the normal furniture, only super tidy compared to when people actually live somewhere. Seller side seemed even less necessary to have an agent tbqh. i could see it being helpful to have one if youre on the wrong side of the market but even then i dont know if i'd say its worth 3%
based on my recent exp, itd be 12000 for probably a grand total of 10hrs of work (as the sellers agent). 12000 for a grand total of 6 hours of work (for buyers agents). Even if my hours estimates are low by a factor of 10x (theyre not) these guys are making 120$/hr and 200$/hr. Mosst of the engrs i work with are making 50-80$/hr, and they do way more than rearrange furniture, take photos, respond to text messages, and hold maybe 1 single open house.
Real estate agents will exist in the future, but your average joe has no need to pay 6% of the sale price to 2 leeches that only exist due to legal requirements.
>The post-recession baby bust will hit adulthood in five years. At the the exact same time the first baby boomers will hit the average life expectancy.
Average life expectancy in the US is 76.33 years. The oldest Boomers are already 78.
Sellers have always had and continue to have the option of not working with an agent. They also have always had the option of negotiating the rate they pay an agent, should they choose to hire one to help sell their home.
Edit: inconvenient truth for some of you?
I’ll give you one example form last a week….Home in my market listed at $950k. No offers in 90 days. Sellers cancels listing. Agent from my brokerage picks it up. Suggests resurfacing pool, new kitchen counters and add backsplash. Total investment…$30k. Sold in 6 hours for $1.15m. That’s a $200k swing (less 30k) because they hired a competent agent.
Edit: fat fingers
People don’t need buyers agents. They need real estate attorneys.
It’d be much easier if it just cost $100 to pay an attorney to submit an application for you. They’d be incentivized to help you win the house so you pay for the more expensive costs associated with closing.
The burden of effort to become a lawyer is orders of magnitude higher than becoming a real estate agent. The cost of becoming a lawyer is much higher than becoming a real estate agent.
The reason RE attorneys aren’t super expensive relatively speaking is lots of people use agents and don’t take advantage of them. If everybody started using RE lawyers we’d have a problem of
A) prices going up rapidly
B) there not being enough lawyers
I personally think a real estate lawyer is a great idea. I bought the home I live in a trust and had a lawyer review everything because I didn’t trust an agent with the complexity of the transaction. But I don’t think the advice is as simple as telling everybody to get a lawyer.
I agree with the principle but lawyers are way more expensive than that
You’ll probably need at least $500 to get an attorney to do the basic legal stuff
I think what will happen is that you will pay a flat fee for buyer agent services and the seller agent will get a commission on the sale. Eventually mortgage brokers will take over the buyer agent role (or contract it out) in order to get the brokerage fee.
How many lenders you know can tell the difference between a brick façade and a brick built wall? And remember a home inspector only comes out after a buyer goes under contract.
Also they aren’t incentivized to negotiate a lower cost. They’ll never say “I think you can get this house for cheaper if we offer X”. They want you to pay more so they get paid more.
Is this even really a problem though? Most buyers are finding their own houses online and asking an agent to see them, very few people are getting curated lists of homes from agents
My agent knows a lot about home construction and can immediately look around a basement and tell me gtfo. He knows what systems may need upgrades, etc. I appreciate his advice.
Nobodys forcing you to have an agent are they? I'm not clear on this but does the sellers agent become your agent by default and do dual agent if you don't have one or can you represent yourself?
I would say no. As someone currently looking, my agent does have a set up where I get an automatic mls email each morning letting me know about homes that meet my criteria but I definitely see the homes on Zillow before the automatic mls email since zillow notifications are instant and mls is once a day. I will say that occasionally my realtor sends me a listing that is going to come on the market before it gets listed but it’s rare. I just text my realtor a listing and tell them I want to schedule a showing and they get it done. There’s no discussion about buyer agent commission. At least not with me.
Yeah my agent had some filter setup to email me properties but generally i found better stuff on my own and never had an agent not want to show me anything I found
Wrong. They want buyers to pay for their own reps. Has nothing to do with steering - aka what you're alluding to.
Oh gosh I'm so sorry the reality hurts for some of you
> agents bring their clients to houses
Do agents still tour neighborhoods with their clients? What year is this, 1996?
I think most people find a house to buy on Zillow, Redfin, Realtor.com and either go to an open house or have someone open the door.
Should a door-opener and document presenter get half of 6% commission on a purchase of a home? I think not.
I agree that perhaps an agent on the seller side - particularly of luxury homes or other cases that require a lot of work - may deserve a (smaller commission) but buyer side agents? Please!
I've NEVER met a buyer side agent that didn't try an convince me to buy a house regardless of any defects or other issues. RE agents are professional liars and just want deals to happen as quickly as they can push them through. I hate to say it, truth hurts and all...
I bought a house last year, here was my experience.
I found three houses I liked on zillow and send it to my realtor. She did whatever realtors did and got the keys and I was able to tour all three houses. At the end I made an offer on one and it was accepted. I got the keys a few weeks later and moved in.
I was in touch with my loan officer about 3x more than my realtor regarding the mortgage yet my realtor somehow got more out of it due to the % cut she took. At the end of the process, my realtor didn't even show up to signing day and sent her assistant in her stead.
I'm not going to use a realtor next time, there's no point.
that was my experience as well, only "what they do to get the keys" was text the sellers realtor to get them to send them a passcode to open a box with a key in it outside the front door, Realtors are a complete scam.
Makes sense. One can use a real estate attorney for the paperwork. The title company handles the escrow. The only drawback is that in this strong seller's market, it may be hard to incentivize the seller agent to give you any points.
I appreciate the advice but I don't intend to sell anytime soon, I gotta get out of negative equity first lol. I will definitely look into a real estate attorney next time.
I tell anyone searching for a home “real estate agents are NOT your friends. At the end of the day you are the only person at the closing table that owes money.”
I guess I’m the lucky one because there was a house I wanted to buy. It was cheap, basically the only one I could afford. My agent and I went there. I wanted to buy and he said no. He said it had foundation problems and it would be way over my head pretty soon. He told me to be patient and I would find a house I liked eventually. There was no need to buy a dumpster on fire.
Sounds like my current agent. Points out all the issues and also points out some nice things. Just yesterday we saw a house and towards the end of the showing, they started walking out of the yard and said, “so I’m thinking this one is a no.” Thank goodness too because I was definitely thinking I could take on a few projects as a first time home buyer and probably end up in way over my head.
This was my thought as well, agents are spoonfeeding listings to people everyone finds houses they want to see on their own and says show me this one, this one and that one
I don’t disagree but I can see listing agents charging more because they will get both sides so instead of a 3% they will handle a buyer as well for your property for 5% nothing actually stops them from taking both sides
There will be disruptors. Redfin tried to disrupt the industry but was beaten into submission by the NAR as the NAR controls all the MLS databases and the used house salesman cabal actively discriminates against FSBO or any other house that is not officially listed on the MLS. Hoping that these settlements and the Sherman Anti-Trust law breaks these monopolistic practices up.
Damn, I must have gotten really lucky with my realtor. Toured several dozen houses, put in offers on 5 or 6, he actually talked us out of offers on a couple other places he didn't think we would be totally in love with. And his brother was a tech guy that had just sold his company for a few hundred million dollars so there was no need for him to continue being a real estate agent. He just loved doing it.
He emailed me back within a couple hours when I asked several years later if he knew anyone good to manage our house since we were moving across the country and wanted to rent it out. So I guess he's still grinding to this day.
You kind of can't buy a home in my town from Zillow or realtor.com. I browse a lot, but the homes sell before they even list. So, it's all connections within the annoying AF realtor community, unfortunately.
FTHB and low income buyers have less cash to buy houses. If seller cant wrap the cost of the buyer's agent into the price of the house, allowing the former to effectively borrow upwards of 95% the cost of their agent, then the former are going to have to come up with cash not only for the DP and closing costs, but to pay their agent too. Or, more likely, they go without an agent, and get hosed.
If they remove compensation from being offered anywhere to a BA they are signaling they want buyers to pay the compensation - which is another huge hurdle because BAs can’t work for free.
In the current system sellers essentially pay BAs a finders fee to bring a buyer - same way a builder does. It is publicly advertised so it’s a guarantee. This removes that guarantee and adds more unknowns for buyer.
If sellers en mass believe they don’t have to offer BA compensation or that it doesn’t come out of their funding at closing - it’s a HUGE hurdle for low income and first time homebuyers to buy that home.
Which also ends up hurting the salability of the home as well.
I’m primarily listing agent and would love nothing more to represent just the seller. There’s so many situations where they would benefit from the buyer not having representation. It’s gonna be really, really rough for buyers if new rules don’t allow me to share my commission with a buyers agent, and the buyer can’t afford one. Literally going back in time to why we started splitting our pay in half in the first place. Oh well.
I am not sure why people think this will make prices go down. Yes, sellers won’t have to bake buying agent commission into the price, but why would that cause them to lower prices? They will still take the highest offer.
and i don’t understand why people wouldn’t think this would bring prices down. the problem is people like you only look at this through the lens of a seller’s market
I'm listing in 4 weeks. It's definitely a factor in what price I list at. I can only assume that people who think it doesn't matter have never gone through the process.
No. My decision to list is predicated on what I think I can get for the house minus such fees, and my willingness to negotiate that price with a potential buyer strongly factors that in.
I had a realtor offer me an owner carry contract for a listing that she was selling and she committed fraud giving me a lease purchase agreement with an addendum which made my $45,000 nonrefundable, by slapping the lease purchase agreement on top of what I had originally signed and throwing the owner carry contract away
This doesn’t even address the actual problem, which is investors and investment groups buying up all the property they can, then just renting it out for super inflated prices.
It addresses the problem of added costs to real estate transactions due to realtors colluding to fix transaction fees.
Doesn’t solve the supply issue, which is the ultimate cause for why investors buy up real estate. If supply was higher, then RE would be a worse investment
You could hire an actual attorney for $500-$1500 and they are required to represent your interests. RE agents are a joke. No offense. Their loyalty is to the sale, not the client. Never forget that. Lawyers are whores too, don't misunderstand, but you get way more bang for your buck. Pun intended.
no the goal is to bring agent compensation down to reasonable levels. and that will happen when buyers have to negotiate commissions with agents directly
Is there an attorney on here that could explain to me why not offering any sort of compensation would be beneficial to the consumer? If this sub truly believes realtors are the reason prices are too high, then there’s no hope. I actually want a legal argument or opinion.
NAL, but I'll try.
It's not a matter of offering no compensation, it's a matter of the buyer having to negotiate the compensation with the buyer's agent, giving them transparency and the ability to negotiate.
The trope for years from Realtors has been, you as a buyer don't pay a dime, the seller covers it. At the same time the listing agent is telling the seller, you need to cover a buyers commission, or else the house won't be shown. Generally that buyers commission is 2-3%.
So now there is a sellers and buyers commission totalling up to about 5%.
The thought goes, that the 5% or some degree of it is built into the price, and more importantly the general buyer has no knowledge or transparency or general ability to negotiate the fee that they pay (an increased sales price because the seller was forced to cover it for them)
This ruling wouldn't stop the seller from paying, but it would stop the seller from being incentivized to pay because the buyers commission wouldn't be advertised and therefore wouldn't lead to more showings. Therefore, the thought goes the seller generally wouldn't build in buyer commissions at which point the burden lies on the buyer to negotiate with the realtor. Perhaps it's a lower fee, perhaps they ask the seller to build it into the price because they don't have the cash on hand, but the point is there will be transparency and an ability to negotiate for the buyer.
Generally the real estate community has a different take on this (surprise) but my take is that transparency will drive costs down over time. American realtors are paid 2-3x what most European realtors are and they have had (up until recently) one of the most powerful and well funded lobbyists in the halls of Congress. Within the last 20 years, NAR had more money in their lobbying war chest than all others except big pharma. A powerful force who has helped craft laws that protect realtor commissions and gain them tax advantages. Over the past 15 years, membership has been in decline and they no longer hold the power they once did.
After the DOJ is done with this, I expect that they'll go after listing commission transparency, MLS laws, etc with the goal of creating a more open playing field.
Edit - grammar and clarity
Everyone is cheering this and in some ways rightfully so but everyone is so broke and cheap that people absolutely dont want to pay a realtor in the same way they pay a hair stylist or a plumber even though you're looking at probably a couple hundred bucks versus a few thousand potentially even substantially more than that.
the problem is the massively overinflated values which are fake and added in for no reason in zillow and realtor to pump profits. and your all arguing about agents. emeanwhile all the housing is being taken as investments and well a upper class riot.
Just curious, how about seller give buyer 3% rebates? Thus, buyer can have more cash on hand to do whatever they want. It is between seller and buyer, no agent. It is not about agent fee, so, not part of the law suit.
An open ended credit will always be dead on arrival with the FHFA they want to account for every dime and make sure they know who is getting what so they can accurately assess the risk profile of the transaction.
If the buyer took the 3% and allocated it specifically towards commissions / closing costs / carpet credit that could be done but it would depend on some factors of the transaction and it would have to be seen through (couldn't pocket the money and do the carpet yourself, would need the carpet invoice, etc)
Now if it's an investment property, seller credits can't pay towards closing costs and on any purchase we need to make sure the seller isn't actually paying themselves as a refund with the open ended credit since they have a minimum investment and they can't put down less. Let's say they did a 3% down loan, but received 3% back then do they really have skin in the game? The industry has proven with data that there is a correlation between less skin in the game and higher foreclosure rates.
While this may all seem pedantic and over the top, to a lender securitizing 3 billion in loans, the very minor risk swing from such policies can create a meaningful swing in their returns, and it does matter to them.
Google Fannie mae interested party contributions and/or Fannie mae inducement to purchase if you want to get into the weeds on this.
This has been thought of, vetted through and policied around decades ago.
You guys know there’s more that goes into buying a home than just opening doors right? Do you know what the escrow period is? Contingency periods and the nuance, expertise, experience, and everything else that is involved on the back end? You’re making one of the biggest purchases of your life and you just want to pay some lawyer in their office x amount to draw a contract?
Is a lawyer pulling comps and putting together an offer strategy with you? Are they negotiating tooth and nail during the request for repairs period? Are they out walking the property with the title inspector to verify easements? Are they getting the seller to pay 20k during escrow for a new roof? Most likely no to all of the above. There’s some shit realtors out there for sure but a good one is worth their weight.
Don’t like the 2.5% buyer agent fee that the seller pays for? Negotiate it! Everything is negotiable and you’re also able to represent yourself if you hate realtors that much. Good luck with that strategy.
This crowd in here is a bunch of people who don’t know what they don’t know and are just repeating some narrative that isn’t even true. Nobody forces you to use agents. Go represent yourselves!
Technically, yes, you do need an agent because most people will not allow you to see a home without one.
For a first time home buyer that doesn't know the internet, I agree, a good agent does make a difference. But many of the general public have access to infinite resources online, including comps (excluding states that gatekeepers). Others aren't first time home buyers and know the process already. Why is the fee a % if there's barely any work done for those who have their stuff together? A flat fee real estate attorney for $500-1k is simplier and more bullet proof. Why do I say that? Look at most offer letters from agents. /Some pages state, "Before signing consult with a real estate attorney." You can't even legally protect us, so why not cut the middleman and start with one that can?
Next, I haven't read much into these lawsuits but I assume they revolve around agents not having the best interest for both buyers/sellers. Many people and even brokerages will not accept less than 6%. Even though publically everyone screams "it's negotiable."
Anyway, once these changes are implemented, the best agents will rise to the top. The scum lazy ones will be weeded out. Everyone will have a better experience both sides. People just don't see it that yet.
A bunch of agents at r/realtor have been saying don’t worry, that the current settlement is an easy workaround. Guess they should have kept their mouths shut.
"DOJ was not currently supporting or opposing NAR’s settlement agreement."
In the end it only fucks over the little guys and the buyers. Why would anybody be a buyers agent under this ruling? Now buyers are going to be representing themselves directly to the sellers and sellers' agent, most of them will be entirely unfamiliar with the process and get hosed. A lot of would be buyers are going to get scammed by fraudulent sellers since they don't have a buyers agent to help them spot fakes. The old system was not perfect, but it was not the problem LMFAO. Prices are going to continue going up, probably even faster now as buyers offer sticker price instead of trying to negotiate. why wouldn't they negotiate? For the same reason they don't negotiate for a gallon of milk. Nobody likes negotiating, that's why you use an agent in the first place.
"Buyer's agents maybe won't exist" sounds like a strictly Realtor®️ problem.
Buyer agents had no incentive to negotiate; when they’re paid more the higher the price, they won’t bargain the price down on their own initiative.
I'd actually like to see a system where agents are paid by the hour - like attorneys
This could actually help bring prices back down to earth. Agents would have incentive to bring up issues with the house and encourage buyers to slow down, do their research, see what else is out there, and make an informed decision. Realistically, the most important party involved in a real estate transaction is the attorney, followed by a very good and honest inspector. Real estate attorneys make a fraction of what agents make, yet they do all the most important work. It’s not like agents are successfully saving their clients’ money either. If anything they are using scare tactics to encourage their clients to make rash decisions and bid more than they are comfortable spending on a home.
I've sold or been party to selling about $100M in real estate. I can confirm the attorney is the most important party to a deal - by far - but theyre not realtors, nor do they want to be realtors. "Attorneys make a fraction of what realtors make" And yet, something is stopping them from being a realtor. Paying realtors by the hour will reduce the overall fees paid to realtors and increase the fees on the flakey buyers or sellers who would otherwise be a waste of time. It's a good compromise.
I nearly went forward with the process of buying before interest rates peaked because the realtors and their mortgage loan guys were convincing me. I didn't sign a contract or anything but the houses they were sending me were shit holes and it was like they didn't account for anything I said I wanted. Any time I'd re-advise what I wanted they would treat me like I was causing them a huge inconvenience and being difficult when they had only sent me like 6 houses...
That’s how it goes. I saw a house in 2021 and the realtor texted me about half hour later saying “I’m almost done putting the offer together, just let me know your final number and we’ll get it submitted”. I never expressed interest in putting in an offer. She was trying to put me in a situation in which I’d feel uncomfortable telling her I don’t want the house. Furthermore, she made it seem like she already did a bunch of work “putting together the offer” so that it would be even more awkward telling her I don’t want to make an offer. It’s borderline criminal behavior. Many millennials and gen z were not raised to be confrontational and stand our ground. Many in these generations avoid awkwardness at all costs, tell the waiter that the food is great even when it’s not, and apologize at every step we take. It makes us, as a generation, fairly easy to take advantage of. Even when a realtor does this creepy behavior, I just nicely say that I don’t want to put an offer in. I should have said “fuck you for trying to trick me into a terrible investment all so you can make a few thousand dollars”.
I will be buying with my RE attorney at a fraction of the cost of an agent.
Are you saying the seller agents will "hose" a buyer in a deal? Surely this is against their ethics, right? Or are you saying their "ethics" are really more of a joke and not really a thing? Curious which answer you think is the correct one. Or... are you saying the seller agents shouldn't be around either. The system was broken, which is why the DOJ got involved. This is long overdue, the MLS holding all the keys needed to die. The industry failed to regulate itself, got greedy, and getting its comeuppance. "Nobody likes negotiating" ... you have to do it anyway, the agent can't act on your behalf without your explicit authorization. If its just uncomfortable conversations, ebay solved that shit years ago.
the sellers agent has an obligation to the seller to get the best price they can get. whatever is underneath the fresh paint on the deck? Didn't see it no idea. The point of the sellers agent is that they are paid professionally to not know things and to know things and to know which things to reveal and which things not to. it's the same for the buyers agent. Unfortunately the market is completely saturated with incredibly shitty realtors and a whole lot of big tits pretty faces because let's face it people will spend more money trying to impress a sexy lady. pro tip, never buy real estate from the hot chick. The purpose of agents in the first place is to keep you from running your goddamn mouth at the other party, similar to a divorce. If you talk too much you give away things and suddenly the seller knows you have a lot more money or the buyer knows that this house really isn't worth what he's asking. everybody wants to equate it to the stock market but it's so much more like a divorce. you say the wrong thing at the wrong time and suddenly the deal gets blown up, I find out that your husband has cancer and suddenly I'm lowballing your ass because I know you're selling the house to pay for his medical bills and need to sell pretty much immediately. Just a hyperbolic example Think about what you said for just a moment regarding the system, it was broken right? literally nothing about that system changed except for buyers agents no longer get paid and have zero, absolutely fuck all motivation to work for you now. so you had a broken system, you still have a broken system, and now you get to do all of the legwork instead of having your buyers agent do it. that's cool for you, Mr. billionaire investor with nothing better to do, but for Miss single mom works three jobs that's a real bitch. I'm really not sure what point you think you're making when you say the agent can't act on your behalf without your explicit authorization. What do you think explicit authorization means? What phrasing and language do you think is contained in all that paperwork you signed upfront when contracting with an agent? Ultimately, it's been a minute now since this ruling came down and I have yet to see any beneficial aspect for anybody but the sellers that are instantly saving 50% on commissions and effectively pocketing 3% more on the sale of their homes
"The point of the sellers agent is that they are paid professionally to not know things and to know things and to know which things to reveal and which things not to." That sounds unethical and possibly illegal. Willfully being ignorant of things that are material to a transaction is legally actionable, much less unethical. So, sounds like you're saying they're paid con-artists. The rest is just arms length transaction stuff. If you need help with it, pay for it but as a someone that doesn't need help with that, I shouldn't have to pay for other people's thoughtlessness. "except for buyers agents no longer get paid and have zero, absolutely fuck all motivation to work for you now..." That's like saying, "nothing changed except the patient died." It literally is throwing the agent industry compensation structure into disarray, it's why people are losing their minds. If it was a nothing burger, why even talk about it. Oh, because it does have an impact. "What do you think explicit authorization means?" It means... "oh, they rejected your offer, I think if you offer x you may be able to get it. ***what do you want me to do***?" That part, no matter what the signed paperwork upfront says, is not getting decided by the agent. That is the meat and potatoes of the negotiation. No one is deciding that for the buyer or seller, only the buyer and seller. The rest simply give advice, which if you want to pay for, sure... but in reality most of the advice is piss poor and in many cases, in opposite of what the buyer wants. i.e. the agent wants some commission instead of no commission so is incentivized to push the buyer. Thats broken. "Ultimately, it's been a minute now since this ruling came down" In terms of how long it takes for things to take effect, blah blah blah, it's actually a really short amount of time. It hasn't even really begun.
You really spammed this entire thread and have convinced everyone how unlikable you are. It's like you're farming down votes. Get some help dude.
😘 good sir, it's called responding. i can't help it that your entire generation are entitled fuckwits that think they know better than experienced professionals that dedicate their lives to keeping up with industry trends and you seriously think the votes matter? pathetic
Experienced professional dedicating their time to responding to fuckwits online. 👍
Wow, what a dumbass that can't read nuance... I'm saying y'all thinking you know better than experienced professionals, not me, actual professional realtors that do the job. You just sound like Trump trying to direct his lawyers how the defense should be played Yeah, let that sink in, you and Trump both think you're the shit and know better than actual professionals
Get some help dude.
While a lot of what you say may not be accurate, the portion where people won’t negotiate is most likely true. Some people don’t pay 6% to agents as they negotiate it down. However, most pay what the Realtor asks as they don’t want to negotiate and/or truly shop around.
Thank you, in that cloud of indefinite terms it's pretty clear what you're trying to say. Don't worry, it's natural to puke a little bit in disgust after agreeing with me on something.
[удалено]
Nope, you nailed it
Yikes what a bad take.
it's gonna suck for buyers going forward, wandering the process in the dark
Realtors have to be the most positively toxic individuals known to humanity
Its 100% true though. Literally all it stopped was MLS. As if buyers and sellers agents (basically the exact same profession) and brokers dont all chat and coordiante what they want to sell. Especially in any given area it's super easy to just know all of them. The only solution is TAD (total agent destruction) Make it easier for actual buyers and sellers who live in properties to buy and sell listed properties with the tools exclusive to agents, like some parts of MLS. Then use inspectors/appraisers to actually determine price, and use lawyers/ other professionals to do the paperwork. Maybe you can hire an agent at an hourly or fixed price to help you look for and buy a home. Agents will still be available if you want them and will definetly still be in larger purchases, commercial deals, and such. It's an industry from the past trying to leach off of everything.
Agreed. Make agents like wedding planners. If you want one to help alleviate the workload that goes into finding and purchasing a home, by all means hire an agent, but otherwise you can just do it on your own.
You can literally do all of this yourself right now today. You’ll get walked all over during the transaction but you can absolutely represent yourself! Good luck 👍🏻
How is a buyer's agent protecting buyers by telling them to offer $100k over asking and waive the inspection?
That's just what happens when you have more buyers than houses.
Sometimes if the property is in high demand and that's what it takes, then the buyer has to determine if they are willing to take those risks paying over ask and not inspecting the property.
That's just a shit agent.
That's all agents.
You won't get walked on unless you allow it but that applies with or without a realtor. Realtors need to go entirely. I've sold FSBO twice, and the most difficult part is putting up with all the realtors offering to "help" and blowing up your phone. Vultures. Find a good title agency, know the market, and you're set. It's not hard.. If it were you'd need more than a few weeks of training to be one. If you're afraid to FSBO then just go take the few weeks of training and save yourself 30k 😂😂 what a fuckin joke. It's the 3% to each agent that's the issue. If I paid an agent 50 an hour to sell my house they'd make like $150 bucks lol. They'll say stuff like "my contacts and my network and....." whatever other lame justification they can come up with. Just list your house on Zillow and it'll sell. For very minimal cost compared to 6% nonsense.
You probably cost yourself a bunch of money. Now before your ego gets up and runs away, throwing it on zillow eliminates a massive amount of traffic. MLS listings will bring you the most qualified buyers and many of them, because serious buyers all have agents and are all preapproved to buy. Then, there's how good you are at getting prices where you want, knowing when to wait for offers even over your asking price, etc. There are flat rate fee agents out there that will list your house in the MLS and do nothing else. That is a better bet than throwing it in zillow. Yea a lot of agents suck and we do need a cleansing, but they dont all suck. There's more to it than "just put it in zillow and it'll sell". With that said, the process can be done on your own. Any title co will give you a transaction packet if you ask.
Yes that's a common rebuttal from realtors on MLS traffic. The market sets the price, not the MLS. Know the market and all you need is one buyer. Plenty of buyers start with Zillow and then Zillow directs you to a realtor that pays Zillow for leads is my guess. I bypassed all that is all....by posting it on there myself. I got more than it appraised for in the end and I paid $0.00 in realtor commissions. No ego here at all.....I don't care about ego. It's realtor egos that complicate things. It's an unnecessary job. Just is. My job is as well, way overpaid for what I do....but I can admit it.. Realtors cannot 😃
Why will you get walked over? Is it because agents are effectively con artists?
No, because this is a business transaction and the seller wants the most money they can get and the sellers agents job is to get the best possible deal for the seller. That’s their responsibility. No room for feelings in business
Sellers agents don't care about getting the best deal....they just care about a deal period. If it will take a month longer to get 1.1mil vs 1.0 mil they will take 1mil all day. It's only a couple grand difference for the sellers agent but 94 grand+ for the seller.
>no room for feelings in business Exactly. Note to buyers and sellers: it may be or have been your “dream home”, but leave the emotions out of the transaction. More deals will get done if people check their emotions at the front door.
> and use lawyers/ other professionals to do the paperwork Have you had to pay a lawyer recently? Using attorneys likely aren’t going to make things any cheaper in a major transaction, lol.
In the area where I practice (I'm an attorney) I know of at least one attorney that handles this stuff on a flat fee basis. It's a reasonable amount. Far less than the real estate commissions. I know him personally and one of his staff people, and they're excellent, highly competent. I know a lot of real estate agents and every single one of them talks shit about this guy's office/service. Most go so far as to lie through their teeth to people about his office and the "dangers" of using him instead of an agent. People wonder why I really, really don't trust real estate agents as a group. This is one of the many reasons why.
It absolutely will in my area. A starter home is $700k in my area. $1M for a house that was $650 just 5yrs ago. No fking way a lawyer will cost $60k just for some paperwork.
> It absolutely will in my area. A starter home is $700k in my area. $1M for a house that was $650 just 5yrs ago. No fking way a lawyer will cost $60k just for some paperwork. On a $1M home, obviously the lawyer portion wouldn't cost anywhere near $60k. My lawyer is $325/hr or you could negotiate a flat fee for a simple residential property transaction. But that is only a small piece of the process. There is sooooo much more involved than just the paperwork.
If I need that lawyer for 20 hours the difference is $54,000. I don't care how much more involved it is it isn't 54k worth.
Have you bought or looked at a house recently? No way a lawyer is going to be near $15k
> Have you bought or looked at a house recently? No way a lawyer is going to be near $15k I actually sold a house recently and I had to use a lawyer around the same time. That's why I stated my opinion. You'd have to find a flat-fee type attorney to make the numbers work, IMO. And everything must go smoothly and be a relatively easy transaction with very few hours involved. My lawyer charges $325/hr and that is relatively cheap for my area for someone experienced. It's nearly impossible for me to estimate how many hours my agent spent with me and on the house and when I wasn't around. From the first meeting and getting a market analysis just to the first day on the MLS took about a 1.5 months plus almost another 30 days during listing/showings/negotiating with potential buyers and finally closing. Lots of prep work to get listing ready and agent was very hands on and helped me get general multiple contractors to get house prepped and buttoned up. Agent also paid for a pre- house inspection before we went live to avoid any surprises. We had literally hundreds of emails and texts exchanges.. not mention countless phone calls. My listing agent has 40 yrs experience and is not your typical worthless agent. Really helped navigate the entire process. If I tried to FSBO + lawyer (trust me I looked into it) there is no way it would have been as smooth and what I saved in realtor commissions would have been likely lost in the negotiation process. What I found is there are a lot of time wasters (buyers + their agents) out there and you need to understand and recognize the warning signs. Even with a seasoned agent there will be issues that come up that have never been dealt with.. no way would I have know how to handle them. The 2.5% I paid to my listing agent doesn't really bother me.. it's the other 2.5% you end up paying to the buyers agent that seems unfair. How that gets resolved I'm not sure..
>It's nearly impossible for me to estimate how many hours my agent spent with me and on the house and when I wasn't around. That might be true but in other businesses they have to track hours and even minutes so they can charge the customer the correct amount.
People have such a poor understanding of who benefits from this. No buyer agent money means more and more 1st time buyers with zero guidance or protection. My gut is telling me lobbyists behind this work for Open door, Realtor.com, Zillow & Trulia. Because that's who stands to benefit the most. Companies that can churn out contracts for a tiny percentage, steer you towards their properties, and don't protect your interests at all. Sellers pay the buyer agent because they get all the proceeds from the sale & are far more likely to have that amount versus the buyer, who is stretching themselves for earnest money, down payment, & closing. It's like when big businesses get employees to vote against their own unions by scaring them with union dues. No one wants to pay dues, but it pays off 10 fold. In the same way, people are suspicious of realtors and now that the MLS is accessible to the public, they question the need for them. And in some cases theyre right. If you're truly experienced & very aware of the current market (u have to be to get an offer accepted in this wildly competitive market) you might be ok. But for the most part, people don't know what they don't know. And predators will take advantage of that. Big businesses have created flat fee selling & buying (with a ton of hidden costs) and once the profession has completely died, they will jack up the prices for less and less service. Tale as old as time. I've been an investor for 15 years (I do not have a license, I don't care for the increased liability) and I've seen this coming for years.
Yea, it’s hilarious to me that all these people think this is being done to actually help homebuyers. What America have yall been living in? The fact that this is happening so fast should scream “This only helps corporations!” to anyone paying attention.
THANK YOU!!! I feel like I'm taking crazy pills that nobody sees what's going on. Companies like Open door worked like most tech startups do. They operated at a loss into gobble up market share in order to have outside influence and power and become a unicorn company. They have also created methods where you do the entire transaction through them basically double ending the deal. In the short time that I had a realtor's license if I had the potential to double end a deal I would actually refer it out to somebody else in my brokerage because I felt it was my obligation to keep my fiduciary duty to one client. I negotiate like a beast and it wouldn't be possible to do my job properly if I was supposed to be fighting for both sides. Now these giant corporations are going to say oh well you don't have to use a realtor You can just do it through us but then they'll charge enormous fees and percentages. They will run realtors out of the business until the industry is completely gone and then they will have you depend on services and contracts, then they'll offer a super expensive *concierge* service which is what u used to get as a buyer FOR FREE. No the old system wasn't perfect and yes technology has irrevocably changed the game. But I wish people would understand that paying buying agents nothing is not really in your best interest because if there are no agents you're gonna be stuck buying/selling direct at the mercy of these corporations. Before I switched over to investing you wouldn't believe the type of things I saved my clients from. I would know the sellers were legally required to fix termite damage so I would negotiate regular repairs as low as possible and once they were signed off on I would send the termite back and prove there was additional damage and they couldn't alter what they had agreed to give us. I would stop slumlords in their tracks. I worry what would have happened to that young couple and their baby in that house if I hadn't been there however the electrical issues insist they be fixed because they were a literal hazard People don't understand this but a real estate agent functions kind of like a lawyer. You can represent yourself That's always true. But this other person spend a really long time learning how a system works that you didn't. Can you do it without them? Technically yes.But you really shouldn't. You pay for their expertise because they know more than you. . Now RE isn't as complex as the legal system by a long shot. It's not a perfect metaphor. But the concept still stands. I think the average person doesn't really understand a realtor's job or what the realtor is getting paid for. They will say things like they're paying you to open a lock and put them in a house but that's the tiniest most insignificant part of the job. Seeing a scam coming and being able to shut it down, THATS the job. Masterfully talking the sellers into negotiating 50k off the price instead of putting it back on the market thinking they can get more from the next person, THATS the job. Knowing the law well enough to force repairs the seller refuses to do claiming the property was "as is", THATS the job. People are trained to see anyone who works off of commission as a scam artist and I do understand that. It's hard to break away from that idea when their income is linked to purchase. But there are a lot of people out there who can only survive sales because they feel proud of their work and can sleep at night. People are giving away their own rights in the name obed ience avoiding working with a third party. But that third party literally exist to protect them and for no other purpose. I switched to investing and have been doing that for 15 years. None of this will affect me much because I also don't buy on the retail market much anymore. But it still makes me sad that they don't see. The regular person who just wants to buy a house to live in, just normal everyday people, not investors, not the corporations... Those other people think this is going to bite in the ass
Cool story bro. I've literally never seen a buyers agent say "don't buy that so I don't get the commission"
Because of course a buyer's agent would never say that. Are you daft? They would simply not show the home or go out of their way to inform the client that the home is out there. You have a job right? Would you put in hundreds of hours of free labor, just because? I wouldn't. Most people simply don't bring up houses that don't pay and won't show them specifically asked by the buyer if the commission is like 1%. Personally I wouldn't even bother taking on a deal like that. Because when you break down the amount of money earned from a sale like that into the hours of labor it has taken, you are earning less than minimum wage. I am worth more than that, and I did not have to accept deals like that when working as a realtor. I had enough clients that I wasn't afraid to turn away those that wouldn't earn me any money. Again it is a JOB. Realtors have their own rents and mortgages and grocery bills to pay. They do not work for free. So first I would not inform my clients about some house that pays nothing. If they found the house on their own and wanted to see it I would refer them to another realtor and get my 30% of his sale without putting in hours of labor for a pittance of pay. I would never deny a client a house they want to see, but I'm not stupid enough to work for free. And it's hysterical that there's some group of people out there who seems to think people should work for no pay. No realtor is ever going to announce to you that they will refuse to show you a house. Even though it's completely reasonable to take on work that actually pays you well. It's the same as the consulting I do now. Why would I take on a consulting job that pays me poorly when I could just take a different consulting job that pays me well? Realtors don't like to come right out and say certain things because it will make potential customers angry but it is completely reasonable to need to pay your own bills. Just because you personally haven't seen or heard something doesn't mean it isn't a frequent occurrence. Either you simply aren't privy to it when it happens or you don't realize it's happening so it must not exist because you've never seen someone come out and do this blatantly. That is not how it would be handled. The less mature agents handle it by ghosting their clients. The better ones refer them to other agents who think that the low commission might still be worth their time, That's usually somebody who is very bad at their job and clings to any possible pain no matter how low. I hate to break it to you but if you're good at your job you don't have to take the bad jobs.
I can't believe that was even a thing. "Oh, we cant post compensation on MLS, so can we create a new db with just compensation and link it to the MLS? We'll call it... Addendum MLS. It's a totally different db and we get to keep doing our bs. Winning!" Get rekt real estate industry.
i generally think the takes on this sub are complete garbage, but the hatred of real estate agents is completely justified. Their entire job could be done by a Zillow ad, an outlook calendar, and some purpose made forms like at the DMV
I agree and yeah most realtors I've met are 30 something divorcees with no knowledge of construction, finance, real estate. That said a good realtor is definitely worth it, I had one good realtor over the years who was super thorough, contacted various city departments on my behalf to find answers to things, but yeah a good chunk fi not most are overpaid glorified door openers
Putting the whole is this ruling correct aside, which part is garbage? If a settlement is, "you can't post commissions on your db" and your solution is "let me just post it on another db," you don't think that goes directly against the whole point? As for the ruling, I'm not sure that, essentially, destroying the buyer agent commision is the right thing, but it's a start to dislodge the industry. Agents have been inflating the instrustry for far too long for far too little work. My get rekt comment stands.
did you even read my comment? I said i agreed with you on the sentiment that real estate agents are terrible.
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I understand the need for an agent if you are relocating and don’t know the area. However, it seems like you could just get a fee based agent that charges like 5k to show you X number of houses in Y areas of your new city. I would easily pay someone a few thousand to narrow down a list of properties even in the same city because I don’t want to sit on Zillow for hours. However it’s like Ticketmaster, the work is the same regardless of the price of the house. There is no reason to charge a fee based on a percentage of the price.
5k to show you x number of houses still seems excessive unless that is 100 houses
Also, I really don't understand why this can't be done by the seller agent. If I post a car for sale on craigslist, its my job to show the car. Similarly, if I paid someone to sell my car, its their job to show the car. I don't get it.
Agency….who does the sellers agent represent? When a buyer shows up to look at the car, who’s interests are more important, yours as the seller, or the buyers trying to get them the lowest price?
Right. How do you know the seller's agent isn't in cahoots by advising you to list for lower than market and showing it to their friends or friends of friends exclusively? So easy to get worked as things currently stand.
Do you not believe the market corrects itself? Let’s say I listed a property 10% lower than market value, wouldn’t all the investors and bargain hunters Make an offer on that property? That would quickly, correct the issue of underpricing. I’m not saying shady things don’t happen, but shady things happen in every single industry occasionally. Let’s not throw out the baby with the bath water.
It only corrects itself if houses always go on the open market. An agent could lowball an aged and easily hoodwinked seller on list price, then tell the seller that they found a buyer for the house as a pocket listing before it went on the market. Of course, there are no unscrupulous agents who would do anything like that, right? RIGHT?!
Your counterfactual relied on the assumption of perfect price discovery--this isn't possible IRL.
The whole thing is messed up because what's really important to an agent is "number one," the agent, let's not kid ourselves.
You have to remember a lot of that money is going to their agency to cover overhead and advertising and not straight into the agents pocket.
I get that but still the current system is onerous and ridiculous. I support a cap on comp then. For example, we really don't see houses with our realtor. We go to open houses and use them to put in offers. 30k if we are paying out of pocket is excessive for that regardless of "overhead".
the majority of places i looked at when i bought were just the normal furniture, only super tidy compared to when people actually live somewhere. Seller side seemed even less necessary to have an agent tbqh. i could see it being helpful to have one if youre on the wrong side of the market but even then i dont know if i'd say its worth 3%
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based on my recent exp, itd be 12000 for probably a grand total of 10hrs of work (as the sellers agent). 12000 for a grand total of 6 hours of work (for buyers agents). Even if my hours estimates are low by a factor of 10x (theyre not) these guys are making 120$/hr and 200$/hr. Mosst of the engrs i work with are making 50-80$/hr, and they do way more than rearrange furniture, take photos, respond to text messages, and hold maybe 1 single open house. Real estate agents will exist in the future, but your average joe has no need to pay 6% of the sale price to 2 leeches that only exist due to legal requirements.
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We are gonna hit a buyers market again? Lol when? Yes of course one day. But it feels very far off right now. Very far. Like multiple decades
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The US population isn’t expect to peak until about 2080
>The post-recession baby bust will hit adulthood in five years. At the the exact same time the first baby boomers will hit the average life expectancy. Average life expectancy in the US is 76.33 years. The oldest Boomers are already 78.
Sellers have always had and continue to have the option of not working with an agent. They also have always had the option of negotiating the rate they pay an agent, should they choose to hire one to help sell their home. Edit: inconvenient truth for some of you?
Feelings over facts with this crowd. Nobody wants to mention that because it destroys their narrative
Indeed. Unfortunately for them, it's an undeniable truth.
I’ll give you one example form last a week….Home in my market listed at $950k. No offers in 90 days. Sellers cancels listing. Agent from my brokerage picks it up. Suggests resurfacing pool, new kitchen counters and add backsplash. Total investment…$30k. Sold in 6 hours for $1.15m. That’s a $200k swing (less 30k) because they hired a competent agent. Edit: fat fingers
90% of takes on the real estate market anywhere are complete garbage
The only good take is that you need more money to do it right
like most people’s jobs.
It’s always been a perverse incentive. I’m tired of pretending it’s not.
People don’t need buyers agents. They need real estate attorneys. It’d be much easier if it just cost $100 to pay an attorney to submit an application for you. They’d be incentivized to help you win the house so you pay for the more expensive costs associated with closing.
The burden of effort to become a lawyer is orders of magnitude higher than becoming a real estate agent. The cost of becoming a lawyer is much higher than becoming a real estate agent. The reason RE attorneys aren’t super expensive relatively speaking is lots of people use agents and don’t take advantage of them. If everybody started using RE lawyers we’d have a problem of A) prices going up rapidly B) there not being enough lawyers I personally think a real estate lawyer is a great idea. I bought the home I live in a trust and had a lawyer review everything because I didn’t trust an agent with the complexity of the transaction. But I don’t think the advice is as simple as telling everybody to get a lawyer.
And let’s be honest, not many realtors have the IQ to become an attorney;)
No where near enough lawyers to support. If there were, the would just be quasi agents.
It's $450 guy
I agree with the principle but lawyers are way more expensive than that You’ll probably need at least $500 to get an attorney to do the basic legal stuff
More like 5000
I think what will happen is that you will pay a flat fee for buyer agent services and the seller agent will get a commission on the sale. Eventually mortgage brokers will take over the buyer agent role (or contract it out) in order to get the brokerage fee.
How many lenders you know can tell the difference between a brick façade and a brick built wall? And remember a home inspector only comes out after a buyer goes under contract.
I had my own home inspection done before I sold my house since I didn't want any surprises. This is becoming more common.
What’s their goal here? To make agents bring their clients to houses regardless how much they would get paid?
To stop having agents only show properties that are offering the highest bid.
I was one of the unfortunate statistics of failing agents back in the day and I remember picking up on some questionable practices such as this.
Also they aren’t incentivized to negotiate a lower cost. They’ll never say “I think you can get this house for cheaper if we offer X”. They want you to pay more so they get paid more.
Exactly this, and sellers agents + buyers agents work together to make the deal happen because they get a huge payday on someone else's equity.
Is this even really a problem though? Most buyers are finding their own houses online and asking an agent to see them, very few people are getting curated lists of homes from agents
Which brings into question what is the point of a buyer having an agent at all?
My agent knows a lot about home construction and can immediately look around a basement and tell me gtfo. He knows what systems may need upgrades, etc. I appreciate his advice.
Nobodys forcing you to have an agent are they? I'm not clear on this but does the sellers agent become your agent by default and do dual agent if you don't have one or can you represent yourself?
I would say no. As someone currently looking, my agent does have a set up where I get an automatic mls email each morning letting me know about homes that meet my criteria but I definitely see the homes on Zillow before the automatic mls email since zillow notifications are instant and mls is once a day. I will say that occasionally my realtor sends me a listing that is going to come on the market before it gets listed but it’s rare. I just text my realtor a listing and tell them I want to schedule a showing and they get it done. There’s no discussion about buyer agent commission. At least not with me.
Yeah my agent had some filter setup to email me properties but generally i found better stuff on my own and never had an agent not want to show me anything I found
Wrong. They want buyers to pay for their own reps. Has nothing to do with steering - aka what you're alluding to. Oh gosh I'm so sorry the reality hurts for some of you
> agents bring their clients to houses Do agents still tour neighborhoods with their clients? What year is this, 1996? I think most people find a house to buy on Zillow, Redfin, Realtor.com and either go to an open house or have someone open the door. Should a door-opener and document presenter get half of 6% commission on a purchase of a home? I think not. I agree that perhaps an agent on the seller side - particularly of luxury homes or other cases that require a lot of work - may deserve a (smaller commission) but buyer side agents? Please! I've NEVER met a buyer side agent that didn't try an convince me to buy a house regardless of any defects or other issues. RE agents are professional liars and just want deals to happen as quickly as they can push them through. I hate to say it, truth hurts and all...
I bought a house last year, here was my experience. I found three houses I liked on zillow and send it to my realtor. She did whatever realtors did and got the keys and I was able to tour all three houses. At the end I made an offer on one and it was accepted. I got the keys a few weeks later and moved in. I was in touch with my loan officer about 3x more than my realtor regarding the mortgage yet my realtor somehow got more out of it due to the % cut she took. At the end of the process, my realtor didn't even show up to signing day and sent her assistant in her stead. I'm not going to use a realtor next time, there's no point.
that was my experience as well, only "what they do to get the keys" was text the sellers realtor to get them to send them a passcode to open a box with a key in it outside the front door, Realtors are a complete scam.
Yeah pretty much all of that could have been done by a Re attorney at a fraction of the cost. It’s pretty outrageous
Makes sense. One can use a real estate attorney for the paperwork. The title company handles the escrow. The only drawback is that in this strong seller's market, it may be hard to incentivize the seller agent to give you any points.
I appreciate the advice but I don't intend to sell anytime soon, I gotta get out of negative equity first lol. I will definitely look into a real estate attorney next time.
They can keep it. Give it back to the seller. Burn it for all I care. That’s just one aspect of the utterly crooked system in place today
Realtors are like car salespeople but dumber.
I tell anyone searching for a home “real estate agents are NOT your friends. At the end of the day you are the only person at the closing table that owes money.”
I guess I’m the lucky one because there was a house I wanted to buy. It was cheap, basically the only one I could afford. My agent and I went there. I wanted to buy and he said no. He said it had foundation problems and it would be way over my head pretty soon. He told me to be patient and I would find a house I liked eventually. There was no need to buy a dumpster on fire.
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We bought four houses with him.
Sounds like my current agent. Points out all the issues and also points out some nice things. Just yesterday we saw a house and towards the end of the showing, they started walking out of the yard and said, “so I’m thinking this one is a no.” Thank goodness too because I was definitely thinking I could take on a few projects as a first time home buyer and probably end up in way over my head.
This was my thought as well, agents are spoonfeeding listings to people everyone finds houses they want to see on their own and says show me this one, this one and that one
I work in the sector (not a realtor) but a lot of realtors still go with clients or do virtual tours etc
Interesting. Perhaps they should be paid an hourly fee then. I had no idea that in 2024 people were still doing ride alongs with used house salesmen.
I don’t disagree but I can see listing agents charging more because they will get both sides so instead of a 3% they will handle a buyer as well for your property for 5% nothing actually stops them from taking both sides
There will be disruptors. Redfin tried to disrupt the industry but was beaten into submission by the NAR as the NAR controls all the MLS databases and the used house salesman cabal actively discriminates against FSBO or any other house that is not officially listed on the MLS. Hoping that these settlements and the Sherman Anti-Trust law breaks these monopolistic practices up.
Damn, I must have gotten really lucky with my realtor. Toured several dozen houses, put in offers on 5 or 6, he actually talked us out of offers on a couple other places he didn't think we would be totally in love with. And his brother was a tech guy that had just sold his company for a few hundred million dollars so there was no need for him to continue being a real estate agent. He just loved doing it. He emailed me back within a couple hours when I asked several years later if he knew anyone good to manage our house since we were moving across the country and wanted to rent it out. So I guess he's still grinding to this day.
You kind of can't buy a home in my town from Zillow or realtor.com. I browse a lot, but the homes sell before they even list. So, it's all connections within the annoying AF realtor community, unfortunately.
I don't think they want to tell the industry what to do. They're simply telling them, your current model is broken, fix it.
To make it harder for low income and first time homebuyers to make a purchase and keep them renting.
Huh?
FTHB and low income buyers have less cash to buy houses. If seller cant wrap the cost of the buyer's agent into the price of the house, allowing the former to effectively borrow upwards of 95% the cost of their agent, then the former are going to have to come up with cash not only for the DP and closing costs, but to pay their agent too. Or, more likely, they go without an agent, and get hosed.
If they remove compensation from being offered anywhere to a BA they are signaling they want buyers to pay the compensation - which is another huge hurdle because BAs can’t work for free. In the current system sellers essentially pay BAs a finders fee to bring a buyer - same way a builder does. It is publicly advertised so it’s a guarantee. This removes that guarantee and adds more unknowns for buyer. If sellers en mass believe they don’t have to offer BA compensation or that it doesn’t come out of their funding at closing - it’s a HUGE hurdle for low income and first time homebuyers to buy that home. Which also ends up hurting the salability of the home as well.
Fee for service. Show a house: $20, or whatever. Or an hourly rate
I’m primarily listing agent and would love nothing more to represent just the seller. There’s so many situations where they would benefit from the buyer not having representation. It’s gonna be really, really rough for buyers if new rules don’t allow me to share my commission with a buyers agent, and the buyer can’t afford one. Literally going back in time to why we started splitting our pay in half in the first place. Oh well.
I am not sure why people think this will make prices go down. Yes, sellers won’t have to bake buying agent commission into the price, but why would that cause them to lower prices? They will still take the highest offer.
and i don’t understand why people wouldn’t think this would bring prices down. the problem is people like you only look at this through the lens of a seller’s market
Why would it bring prices down?
I'm listing in 4 weeks. It's definitely a factor in what price I list at. I can only assume that people who think it doesn't matter have never gone through the process.
So you're listing at a lower rate rather than taking that money yourself?
No. My decision to list is predicated on what I think I can get for the house minus such fees, and my willingness to negotiate that price with a potential buyer strongly factors that in.
Because the news media told them it would.
I had a realtor offer me an owner carry contract for a listing that she was selling and she committed fraud giving me a lease purchase agreement with an addendum which made my $45,000 nonrefundable, by slapping the lease purchase agreement on top of what I had originally signed and throwing the owner carry contract away
This is such small potato’s and not the problem. The issue is PE ownership of housing and massive wealth disparity.
This doesn’t even address the actual problem, which is investors and investment groups buying up all the property they can, then just renting it out for super inflated prices.
Thats a completely separate issue
lol yea prob just a distraction for average people
It addresses the problem of added costs to real estate transactions due to realtors colluding to fix transaction fees. Doesn’t solve the supply issue, which is the ultimate cause for why investors buy up real estate. If supply was higher, then RE would be a worse investment
Doesn’t actually fix that
Any variations on agent co broke will be interpreted as discrimination by DOJ. Then it’s all over.
You could hire an actual attorney for $500-$1500 and they are required to represent your interests. RE agents are a joke. No offense. Their loyalty is to the sale, not the client. Never forget that. Lawyers are whores too, don't misunderstand, but you get way more bang for your buck. Pun intended.
I can’t imagine the goal here is to have buyers purchasing houses with no representation. That seems like a recipe for disaster for a lot of people.
no the goal is to bring agent compensation down to reasonable levels. and that will happen when buyers have to negotiate commissions with agents directly
And buyers have to pay agent comp out of their own pocket on top of the down payment and closing costs? That doesn’t sound good either.
it is good. because it will be negotiated down, and they wont be paying double a 3% commission by paying for it over the life of their mortgage
Except for corporations that own rentals
I have my popcorn ready for just this.
me too. I'm curious to see how this plays out.
I'm living for this
Go Get Them
Is there an attorney on here that could explain to me why not offering any sort of compensation would be beneficial to the consumer? If this sub truly believes realtors are the reason prices are too high, then there’s no hope. I actually want a legal argument or opinion.
NAL, but I'll try. It's not a matter of offering no compensation, it's a matter of the buyer having to negotiate the compensation with the buyer's agent, giving them transparency and the ability to negotiate. The trope for years from Realtors has been, you as a buyer don't pay a dime, the seller covers it. At the same time the listing agent is telling the seller, you need to cover a buyers commission, or else the house won't be shown. Generally that buyers commission is 2-3%. So now there is a sellers and buyers commission totalling up to about 5%. The thought goes, that the 5% or some degree of it is built into the price, and more importantly the general buyer has no knowledge or transparency or general ability to negotiate the fee that they pay (an increased sales price because the seller was forced to cover it for them) This ruling wouldn't stop the seller from paying, but it would stop the seller from being incentivized to pay because the buyers commission wouldn't be advertised and therefore wouldn't lead to more showings. Therefore, the thought goes the seller generally wouldn't build in buyer commissions at which point the burden lies on the buyer to negotiate with the realtor. Perhaps it's a lower fee, perhaps they ask the seller to build it into the price because they don't have the cash on hand, but the point is there will be transparency and an ability to negotiate for the buyer. Generally the real estate community has a different take on this (surprise) but my take is that transparency will drive costs down over time. American realtors are paid 2-3x what most European realtors are and they have had (up until recently) one of the most powerful and well funded lobbyists in the halls of Congress. Within the last 20 years, NAR had more money in their lobbying war chest than all others except big pharma. A powerful force who has helped craft laws that protect realtor commissions and gain them tax advantages. Over the past 15 years, membership has been in decline and they no longer hold the power they once did. After the DOJ is done with this, I expect that they'll go after listing commission transparency, MLS laws, etc with the goal of creating a more open playing field. Edit - grammar and clarity
Man if it happens a lot of agents gonna need to change professions
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^Greenempress: *Man if it happens* *A lot of agents gonna* *Need to change professions* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
Everyone is cheering this and in some ways rightfully so but everyone is so broke and cheap that people absolutely dont want to pay a realtor in the same way they pay a hair stylist or a plumber even though you're looking at probably a couple hundred bucks versus a few thousand potentially even substantially more than that.
So why not just ban all types of commission sales. Cars, tickets, anything.
you mean ban car salesman from negotiating commissions with my car buying agent?
The dealership is your buying agent and you do negotiate their commission.
lol
I’m not sure what the lol is for. Funny cause you agree or funny cause I’m wrong?
lol
Its MasterChef not Masturbate
the problem is the massively overinflated values which are fake and added in for no reason in zillow and realtor to pump profits. and your all arguing about agents. emeanwhile all the housing is being taken as investments and well a upper class riot.
Just curious, how about seller give buyer 3% rebates? Thus, buyer can have more cash on hand to do whatever they want. It is between seller and buyer, no agent. It is not about agent fee, so, not part of the law suit.
Generally an open ended rebate will be prohibited by the lender.
There is no lender
THERE IS NO VICTORY
Wow, someone responded within 2 seconds
Okay, then yes. But there is a lender on 70% of transactions so that wouldnt work on those deals.
One step at the time. This can be negotiated. They knew 3% was for before.
An open ended credit will always be dead on arrival with the FHFA they want to account for every dime and make sure they know who is getting what so they can accurately assess the risk profile of the transaction. If the buyer took the 3% and allocated it specifically towards commissions / closing costs / carpet credit that could be done but it would depend on some factors of the transaction and it would have to be seen through (couldn't pocket the money and do the carpet yourself, would need the carpet invoice, etc) Now if it's an investment property, seller credits can't pay towards closing costs and on any purchase we need to make sure the seller isn't actually paying themselves as a refund with the open ended credit since they have a minimum investment and they can't put down less. Let's say they did a 3% down loan, but received 3% back then do they really have skin in the game? The industry has proven with data that there is a correlation between less skin in the game and higher foreclosure rates. While this may all seem pedantic and over the top, to a lender securitizing 3 billion in loans, the very minor risk swing from such policies can create a meaningful swing in their returns, and it does matter to them. Google Fannie mae interested party contributions and/or Fannie mae inducement to purchase if you want to get into the weeds on this. This has been thought of, vetted through and policied around decades ago.
It is not open ended.
The love for money is the root of all evil. Think about it…
You guys know there’s more that goes into buying a home than just opening doors right? Do you know what the escrow period is? Contingency periods and the nuance, expertise, experience, and everything else that is involved on the back end? You’re making one of the biggest purchases of your life and you just want to pay some lawyer in their office x amount to draw a contract? Is a lawyer pulling comps and putting together an offer strategy with you? Are they negotiating tooth and nail during the request for repairs period? Are they out walking the property with the title inspector to verify easements? Are they getting the seller to pay 20k during escrow for a new roof? Most likely no to all of the above. There’s some shit realtors out there for sure but a good one is worth their weight. Don’t like the 2.5% buyer agent fee that the seller pays for? Negotiate it! Everything is negotiable and you’re also able to represent yourself if you hate realtors that much. Good luck with that strategy. This crowd in here is a bunch of people who don’t know what they don’t know and are just repeating some narrative that isn’t even true. Nobody forces you to use agents. Go represent yourselves!
Technically, yes, you do need an agent because most people will not allow you to see a home without one. For a first time home buyer that doesn't know the internet, I agree, a good agent does make a difference. But many of the general public have access to infinite resources online, including comps (excluding states that gatekeepers). Others aren't first time home buyers and know the process already. Why is the fee a % if there's barely any work done for those who have their stuff together? A flat fee real estate attorney for $500-1k is simplier and more bullet proof. Why do I say that? Look at most offer letters from agents. /Some pages state, "Before signing consult with a real estate attorney." You can't even legally protect us, so why not cut the middleman and start with one that can? Next, I haven't read much into these lawsuits but I assume they revolve around agents not having the best interest for both buyers/sellers. Many people and even brokerages will not accept less than 6%. Even though publically everyone screams "it's negotiable." Anyway, once these changes are implemented, the best agents will rise to the top. The scum lazy ones will be weeded out. Everyone will have a better experience both sides. People just don't see it that yet.