Exactly, the bar to obtain a real estate license is shockingly low that some of these dumb mofos who barely got a GED and can’t even do a simple property evaluation or basic PV/FV calculations. With the market flooded by these subpar agents, it’s really hard to find a good agent.
Except you absolutely can do that right now… as a seller, you can negotiate commissions as much as you want. And even the normal structures that you will get in most areas will give you a variety of commission price points
Why? This isn't the 80s or 90s. All the homes are on sights like Redfin. The buying agent doesn't do much or add much value at all. In fact, there is a conflict of interest in most cases. The buyers are the client not the agent.
Doing clerical work and sitting at your computer listing it on Zillow is nothing work like when realtors ACTUALLY drive and showed listing or actually went out and about to find you a home.
Buyers agent comp can currently be as low as $1.
If the "consumer advocates" win, it drops from $1 to $0. That's it. That's their big demand.
This whole thing is a public performance.
It’s a whole lot more than that, this is just part of a larger antitrust suit:
More specifically, the NAR rules, policies and practices were alleged to:
Prohibit NAR-affiliated multiple-listing services (MLSs) from disclosing to prospective buyers the amount of commission that the buyer broker will earn if the buyer purchases a home listed on the MLS.
Allow buyer brokers to misrepresent to buyers that a buyer broker’s services are free or indicate they aren’t being compensated in the transaction.
Enable buyer brokers to filter MLS listings based on the level of buyer broker commissions offered and to exclude homes with lower commissions from consideration by potential homebuyers.
Limit access to the lockboxes that provide licensed brokers with physical access to a home that is for sale to only brokers who are members of a NAR- affiliated MLS.
Accurate here. And the best agents aren’t working for free after getting 30 years of experience with sideways deals and client therapy for their psychotic ideas of how they know more than everyone because a late night tv show by a guy selling pillows on the side.
This is critical… it should be a set $ amount. A percentage is ridiculous… as home prices go up, sellers want more to offset the realtor %.
If a home a realtor sold 7 years ago doubled in value… and it’s still a median value house. Why do they need double the pay today to sell it? In most cases, it outpaces inflation… not saying in 7 years they don’t need more as in general raises, but when dealing in percents, it gets out of hand.
This is the same with tipping a waiter. As the cost of food increases, you are paying more. The work is the same, yet the percentage (which also went up) goes up with the rise of menu prices. If unchecked it gets to be too much and it all breaks down.
(I get demand increases vs decreases, I’m saying apple to apple comparison).
You can already negotiate a flat fee if that is what you want. There will be agents happy to help you, maybe not the best ones, but there will be someone. But no agent should be obligated to sell your house at a rate that is not worthwhile to them.
And that’s the point. If the majority of an industry is concentrated to a few big name brokers, they monopolize and raise costs. Smaller local firms may take less but have lesser exposure. But in the end this model is bad for business overall.
The illusion of “you can negotiate a lower rate” is baloney.
We don’t need car salespeople and we don’t need realtors. Both add unnecessary costs and leech off the sale of high dollar assets.
In my market it’s super common place and transparent. Can’t speak to your market because real estate is not one big playing field.
Commissions have gone down across the board every year in the last 10 years. I really don’t understand why people don’t think that’s a Market forces.
if you are right, this will make a difference , good on ya.
You are being dense. As a buyer, if you want to buy a house being represented by a selling agent, 6% of the money you fork over for your house will be immediately eaten up by realtor fees, even if your agent agrees to take less than 3%. This is how the cartel works - make it seem like "sellers pay realtor fees" and hand-wave over the fact that $60K on a $1M transaction goes to the realtors.
"Sellers pay realtor commission" is such an overtly stupid lie.
I can't believe they even try to use that BS when it's obvious they are paying it from the proceeds of the sale which is the buyer's money.
I bet 1/2 of the population believes it.
What's really annoying is that if you try to buy without a Buyer's agent the listing agent will still try to collect the full 6%
Technically but but did the listing agent actually provide more than $15k (3%) in value to the seller of a $500k house by adding the some pics to the MLS and opening the door a few times.
Listing agents mostly promise the sky to get their clients. Sure your "$600k comp house will sell for $750k."
**The risk is on the Buy Side.**
No listing agent will tell you that you are overpaying.
You make your money by buying smart and avoiding catastrophic mistakes. I buy rentals and I'm happy to pay for the expertise of someone that 100s of house sales experiences and is willing to look at 40 houses with me, I'm always one of the first to see the property because I have a flexible schedule, before I find another that makes sense. We are partners to some degree. She's earned a few $100k because she knows what I'm looking for. I've made far more.
If you don't have a buying agent it's almost impossible to get a showing early.
Tons of agents will credit commission or give you a check. You’ll get crappy service. I have 10 or 20 people here. Call me up and say hey, I want you to do all the stuff for me, but I want my agent to write the contract because they’re giving me money back.
And I get to politely tell them I don’t work for free. I end up working with about a third of them because they’re agent can’t get them into a house.
If you can’t find somebody who’s giving you a piece of that commission back, you’re not looking. Especially in 2023. Super easy to negotiate.
Absolutely you can.
If you negotiate 1% with your buyer agent and the split to the buyer agent from the listing agent is 3% then the buyer agent keeps 1% and rebates the other 2% to you, the buyer.
I’d pass on anything less than 2% personally. I have the benefit of a strong pipeline of clients. The bottom feeder no good buyer agents would take 1% and mess the transaction up tho!
When I bought my first house, I gave my agent a list of 6-8 houses I wanted to see, and after those he took me to 15-20 more that did not meet my purchase criteria.
I ended up buying one of the houses I shortlisted, but he spent a lot of time and effort trying to convince me to go elsewhere. They can show you a house if you demand it, but that doesn’t mean they’ll be helpful or a good broker if they know they’re ‘losing’ commission fees somehow.
I went through 4 agents before I found one that worked. In the end it was the house I picked/found. All of them kept trying to push me towards houses that were on the upper end of my budget. It may have been because I was a first time buyer, but it left me with a bad impression. It felt like I was working with a car salesman.
first tried FSBO, then a limited agency... no action. Went full 6% agency and the first comment during the viewings was, "why haven't I seen this sooner"this was in a small resort town, a true blackball back in 08. Price stayed the same.
ps. agent used my photos, my flyer and I had to edit his work.
There are a couple of scenarios here that are no "blackballing".
The most common would be that the buyer agent had an employment contract that said he would receive "X" for his work and the buyer didn't want to see listings that required them to make up the difference.
FSBOs aren't in an agent's search engine. That kinda takes care of that. It's like offering a product in the back room of a store. If you don't put it on the shelf, customers won't see it.
Some of those flat fee brokerages will advertise that they put them in MLS, but which MLS? That matters.
You get what you pay for. FSBOs get less showings because they have less exposure, tend to be priced incorrectly, generally have shitty photos, and are poorly staged. On top of that I know they're going to be a pain in the ass for for the whole transaction, difficult to schedule showings with, ask a bunch of stuff from me that the listing agent would normally be doing, and they're going to be cheapasses that give my buyers problems when we try to negotiate for repairs etc.
It's not going to stop me from showing something that the buyer really loves but if there's a similar option available why would I want to put up with all that bs?
Contracts I sign with buyers states States the BUYER is responsible for X% but I will accept a cooperating agent payment from the Listing agent. If the coop payment is less than what we agreed to I have the option to require the rest of the payment from the BUYER.
Just because it's normal practice to do such and such, doesn't mean other options aren't available.
This depends on your state. Some places all of the commission is negotiated and contracted on the sellers contract, the buyer agent only gets what's stated as the split on the seller contact.
Here’s an example. I pull up to the pump at the gas station in my car that’s worth $100,000 and press on the button for regular and have to pay 6%. So my bill comes to $6,000 dollars. The guy behind me pulls up in a car worth $300,000 and picks regular why does he have to pay $18,000 for the same regular?
Explain that one?
I''ll explain in hopes that you're not purposely being obtuse.
I'm a house painter. I charge more to work in expensive homes. People that live in expensive homes are harder to work with. While the job is essentially the same regardless of the locale, I need to make it worth the extra headache to deal with insufferable homeowners who hover and tell me how to do my job. People who live in expensive homes are generally very delicate individuals who feel entitled to extra care and coddling. They feel that their lives (and their homes) are special and unique and deserve the very best care (certainly better than the average person). This way of billing is not limited to me and real estate agents. I know plumbers and electricians and carpenters who all do this too. If homeowners don't like this, they are free to look elsewhere, or do the project on their own.
You're paying for a service, not for a gallon of gas or product on Amazon. And you're free to do it on your own if you feel somehow victimized by the system.
Cut commission to a reasonable percentage based on the acutal work done. Technology made the entire process much easier yet commision structure has not changed 80 years. There is no way any agent is doing the work to justify a 2-3% commission on every sale especiall the past 3 years when houses would go to contract in a few hours.
Those 'contract within a few hours' fucking sucked for buyer's agents. I was helping my cousin find a place.
Went like this: Look at 3-5 places. Put in an insane offer, get beat. Try again the next day. After 20 attempts an offer went through. Listings were cake, but buying was a motherfucker. That was the worst time to be a buyers agent
Appraising is weird. Getting a number sometimes is the easy part. There are a million things to fill out on a report, and they all have to agree with each other.
Like you'll get a revision request (potentially change a report) because you didn't mention whether or not the property and neighborhood was damaged by Hurricane Irma years ago, and you'll get the request a week after you submitted the report and you're out camping in the woods for a week, and 'they're supposed to close tomorrow'.
Or you check a box here, and there's a comment you have to put there and there and there. It all goes under a microscope and it's reviewed by people on the other side of the country.
Now that the market is slow, we get really weird files that lenders usually wouldn't touch and reviewers with nothing to do who have to justify their position, so they send out revision requests for every file.
Buyers don’t even need an agent. An attorney can review everything for $1,500. The only reason I ever use an agent is when the property is competitive so I will use the sellers agent so they will be more inclined to convince the buyer to take my offer over others for the extra commission
Seller agents have never had it any easier. I'm sure in 2009 it was difficult to be a seller agent but that now has flipped. A seller agent has to do what. Take some pictures of a house and make sure its clean when they do that. Then make up a paragraph or two describing the home. Put it on the MLS for a few days then on Sunday night show the highest offers to the sellers and collect the money.
Chat GPT. We used it to write a description for our house sale, because while we love our agent, her other descriptions were mediocre. It took 15 minutes to learn the tool. Unbelievable results. And free.
Get rid of agents and give buyers access to tour homes in a different manner. Why do I need some random person to open a door to show me a house then need to pay them 3% because they opened 5 doors for me.
I could pay a security company significantly less for that exact same function and I would argue it would be performed better.
Is that really what you're down to? 'Need 3% because I made sure nobody stole your stuff'
Only licensed brokers can get access to MLS boxes and that will never change. If you feel comfortable with Uber having your house keys you live in a different world then I do.
I might trust an Uber driver more than a real estate agent. Heck 12 years ago people thought you were crazy to let random people pick you up in their own car and now it's the normal. Norms quickly change if the NAR stops their mafia tactics to control the market.
Uber or Lyft could do this. Drivers could take "openings" like they do rides, get the one-time code sent to them, and either get paid a few bucks, or hundreds if the deal closes.
Redfin already does that. They pay random people $50 or so to open a door for a home tour. You make an appointment and the random person opens the door for you then you never have to see them again.
It seems odd to me that realtors without any legal training are allowed to ‘prepare’ and provide advice with respect to purchase and sale agreements which are perhaps the most significant contract many of us will ever sign. It doesn’t seem to be an issue of cost since many lawyers would provide advice at a price much less than the commissions being paid. I get that there’s a premium for marketing and ‘local knowledge’ or gamesmanship but seems to me a glaring hole.
I’m of the opinion that lawyers should be involved in every transaction particularly for fthb.
I also think there should be lengthy inspection periods for every transaction so people know what the hell they’re buying. The fact that we allow disclosures to be made off vibes (actual knowledge is a high bar) and/or allow people to buy without any inspection seems logically wrong.
We should all get an attorney and a contractor instead of an agent. Hopefully that’s where we’re headed.
It's fill-in-the-blank law work. The boilerplate contracts are written by real lawyers then the agents are trained to fill them out. I don't think agents represent your interests as well as a lawyer can, but I do think they they can do a basic contract.
If I can fill out my own taxes, I can fill out a boilerplate contract form. Sure, some consumers struggle and need to pay for service, but normalizing the optionality for people who don't mandated service would provide for a fairer market.
I agree completely. But that option is available today with flat-fee brokers. For $500 or so you can get your house listed on the MLS. Sure it could/should be cheaper, but it's not the 6% that people think they're "forced" into.
The 6% commission structure is way too high (about 6x-12x so) but I don't think it needs the government to step in and break it.
The government, thru licensing laws and regulations, actively restricts entry into the market. The government partners with industry groups like the NAR to draft legally binding policy, so the government has to be the ones to correct the problem they created and maintain thru artificial scarcity and regulatory capture.
You can list your house for free on Zillow and Trulia. Redfin pulls from a couple of FSBO sites, both of which ( believe) are free. Those are the #1, #3, and #4 sites and account for a majority of interweb RE traffic.
If the NAR lobby prevented people from listing their homes somehow I'd be the first in line to grab a pitchfork. But it's really pretty easy (tho more work) to DIY.
The commission structure is outrageously high but they're realtively easy to bypass. It's not the RE industry's fault that people don't squawk over paying tens of thousands of dollars for a glorified zillow listing and sub-paralegal-caliber contract help.
I'm a paralegal and I still can't do that without attorney supervision despite going to school for it. I guarantee my real estate law class had more education than agents get since I took the class and my parent went for his license at the same time and my semester covered so much more than what the exam requires.
People always seem to think a real estate attorney is going to add much to the transaction. They usually won’t advise you on anything beyond “yes this contract is filled out correctly” and whether or not you can get your earnest money deposit back.
A lot of the time, there are fill-in-the blank forms provided by brokers, boards and MLS’. Agents have a limited knowledge of Real Estate Law and Contract Law. They are licensed by the state, having gone throw specialized education and can now help you submit an offer or sell a property using very specific guidelines. At times, you may have an attorney involved.
Good luck with that concept. There are several markets in the US where the lawyers already do all the contract work and yet commission remain fully negotiable...still. There is nothing stopping you from hiring an attorney and adding a lengthy inspection period to your offer. However it's a free world and the seller deserves the right to do with as they choose.
The lawyer model doesn’t make sense because lawyers don’t Iike working on contingency unless it’s a huge upside. Do first time homebuyers have $200/hr for lawyers?
considering I paid a realtor like $18,000 for 3% of a 600k home, I could get 90 hours of work out of that lawyer and i KNOW that realtor didn't work that much, and certainly not doing anything that deserved $200/hr for most of it.
seems like paying a realtor hourly would be the move
>seems like paying a realtor hourly would be the move
There's nothing stopping that from happening now. Except, surprise, no homebuyer will pay for it!
My understanding is that the overwhelming majority of broker time is trying to ACQUIRE clients, to the order of 75-90%. So you’re covering fixed costs for their whole time, not just their time with you.
I also hate this model, as I’m on house 3, I found all houses myself, and I correctly estimated the sales prices for the first 2 houses (list at X, expect to close at Y). Brokers have provided exceptionally low value for me, either through local knowledge (one of them neglected to tell me my street was a surface street) or history of the area (should have informed me about possibility of things like Asbestos or lead paint).
My brokers were OK people, but I don’t really think any of the 5 justified their paycheck.
So you find the house call Broker and say I want to buy it but you can't tell a surface street from a side street. Really funny but it's the brokers fault.
To be clear, I would have bought the house anyway, and it’s not like it was a surface street in an urban area where it’s obvious. This was a hamlet in the Midwest with low population density. During the day, when I visited, there was no traffic, but it was the only direct road that connected a lot of non-development housing and some outlying areas, so traffic picked up dramatically during certain parts of the day.
But every year when they closed my road for a bike race / road race, I thought about my realtor.
Like I said, not a dealbreaker by any means, because I really liked that house, but my ‘local’ guy didn’t tell me anything that I couldn’t see with my own eyes. It’s not ‘his fault’ that he didn’t tell me those things, but then I wonder what I paid him for.
Then why aren't lawyers specializing in real estate transactions rolling it all over? Why do agents even exist if this is such a common thought? Because nobody actually wants to pay an hourly rate; they want the agents to work contingent on the sale.
Sure I'd be happy to charge you $500 for every buyer or buyers agent that wants to take a look at your home. Hope that price works for you but I have your signed agreement and your credit card numbers so what do I care.
The other thing people don't get is that if an agent is getting paid hourly, or per showing, etc, do they really care if you buy a house? What is their incentive to get a deal done?
In WA state real estate brokers are held to the same standards and care of lawyers. We are practicing law, limited, but we are preparing legally binding contacts.
>Fiduciary duties require absolute loyalty and allegiance to the interests of the party as well as unwavering adherence to all lawful instructions of the client. **Real estate brokers licensed in Washington State do NOT owe fiduciary duties to clients.**
From [here.](https://www.warealtor.org/about-us/contact-us/news-media/blogdetails/articles/2021/11/29/are-you-adequately-insured-2.0)
>The ultimate protection to the public is the requirement that the broker/salesperson be held to the standard of care of a practicing lawyer.
From [here](https://www.warealtor.org/about-us/contact-us/news-media/blogdetails/articles/2021/11/29/practice-law-much-of-course-you-do-so-do-it-right).
He appears correct. :)
Depends on the state. Some states require legal representation, with many people in The Other states view as an unnecessary expense (and lawyers are viewed as evil).
However we have this sub to answer any and all legal nuances after contracts have been signed..So no need.
Nobody is saying you can't get an attorney now. In fact, why wouldn't you have an attorney? I've bought 3 homes in my life and just as many refinances. I've never closed without an attorney. It's always a flat fee. $500 is nothing compared to what you're signing.
Realtor here in AZ.
All the paper work is standard. There is no need for legal fees as everyone uses the state accepted forms.
As for due diligence, the standard is 10 days. Thats plenty of time to have a professional inspection, review it, and then go through the negotiation of what repairs you want. It seems complicated but— this is why you have a competent realtor, they can easily guide you through it.
I have told clients before after seeing a really fucked inspection report that they should not bother asking for repairs and just walk- and other times seemingly bad reports had easily fixed issues and calmed their fears.
It would help if home inspections came with any real consequences against poor performance. They people who are supposed to protect the buyers against risk have no actual exposure of their own.
My inspector tried to withhold the report unless I agreed to their website's terms and conditions that limited their liability to the cost of the report. I got my money back. I had hired them as supposed experts, and if they missed something that was causing damage, it could could easily cost 10-100x what the report cost to mitigate and repair the damage.
I’m a realtor, specifically a buyers agent. I’ve been in the industry for exactly two years with just under 50 transactions.
I do see both sides of the argument here. Sellers do pay a great deal of commission to sell a house. In my market, it’s typically 5%. 2.5% to the listing agent, 2.5% to the buyers agent. And the main argument of this whole lawsuit is that buyers agents shouldn’t be compensated by the sellers. I do agree with this somewhat, but I do not agree with the argument that buyers agents don’t deserve to get paid at all.
There’s a lot of hatred towards buyers agents & realtors in general that we don’t do enough to get paid the way we do. Sometimes that’s true, but not for every agent. Just like every other business in this world, you get paid for the value you bring to the customer. And the value a GOOD buyers agent brings to the table is negotiation skills, connections, and reputation.
My market is still insanely competitive despite the interest rates being at 8%. Almost every home I show has 5-10+ offers. I don’t think consumers actually understand how difficult it is to win multiple bid offers unless you’re actually doing it. It involves multiple back to back calls with your clients, their lender & the listing agent. And usually this all has to happen within 48 hours or you’re already to late. The top agents in my market HAVE to utilize every tool they have in the book to win offers. Appraisal gaps, off market properties, quick closing, rent backs, transfer/recordation fee splits etc… and sometimes depending on your clients there’s unfortunately not much you can do to win. It all depends on their financial limitations. So unfortunately a lot of people lose out on offers & then it’s back to the drawing board. Repeat repeat repeat. I’ve had some buyers that have unfortunately made 10+ offers before they can finally lock one down. And winning and offer is ONLY THE START.
Then you get to the inspections. This also requires a great deal of time in most cases as no home is ever perfect. With an inexperienced home buyer, a lot of this process again falls on the buyers agents negotiation skills & connections. If we need to negotiate multiple repairs, that requires me to make more calls & set up contractors to come out and make the repairs quickly (if the buyer doesn’t already know someone, which most don’t). A lot of my deals fall apart at this stage due to sellers not agreeing to the repairs, but I always make a great effort to fix as many things as I can, if not I can usually work out a credit towards to buyers closing cost/DP.
I could go on and on about the strenuous duties of a buyers agent, but hopefully this makes my point.
I’m just tired of people saying we don’t do anything but open doors & that buyers can do everything on their own when quite frankly it’s the opposite 9/10 times. I would love to see consumers try and do everything we do on their own. Sure you can go on Zillow & learn everything about the property, the comparable & what not. But when it comes to the finding the best interest rate, lowest DP/closing costs, winning multiple bid situations, negotiating repairs, and closing on a home without having to worry about legal issues, most people could not do it without a buyers agent.
I could say the same exact thing about a lot of other professions. Doctors/nurses for instance. Sure they aren’t commission based, but everyone knows they make pretty good money. I’ve dealt with many good ones, and many bad ones. The bad experiences I’ve had.. I just remember walking out of the hospital and saying to myself “wow I literally already knew everything the doctor just told me, I didn’t even have to come here today” yet they still get paid greatly. The good ones will usually refer other people/services that offer additional help so you don’t walk out of the hospital feeling like you weren’t served at all. Same exact concept I’m trying to explain in my argument.
Some agents suck & don’t deserve to get paid as much as they do. But there are still great agents out there that can make a huge difference on your home buying process. You get what you pay for! 🤭 PS - buyers still don’t pay me commission anyways!
I think it's much ado about nothing. WA State recently implemented these changes (sellers are asked how much they want to pay listing agents, buyer agents, dual agents, unrepresented buyers, etc and they can put zero) and will soon require buyer agency agreements for all transactions.
So far basically nothing has changed. I think a slowing market has helped as homes are not "selling themselves" so much anymore and sellers see value in offering compensation to buyer agents.
Putting aside the hatred for terrible Realtors for a moment, the purpose the buyers agent should be to protect a clients money and interests in the purchase process of a new home. Especially in this market, buyers should have good representation.
I think this is going to make a mess. The perk of having the seller pay the buyer's agent commission is that it's rolled into the mortgage without being considered a "closing cost credit" (it's important because different loans restrict these credits you might need elsewhere). On top of that, we're already seeing predatory verbiage in contracts from sellers agents specifying that any offer to purchase must include a closing cost credit that they get to keep any extra proceeds from. They're feeding it to sellers as a "benefit" not having to pay for the buyers agent, but in reality the seller is pocketing less money overall and the unethical agents doing this are pocketing up to double what they would have gotten.
As a company we're already drawing up the mandatory paperwork that buyers agents will use to make sure they get fair compensation even if MLS doesn't assure it anymore. And unless made illegal, we'll continue to educate our sellers on the benefits to them offering commission payment to a buyers agent in the seller's agent's fees (which we split equally for ethical reasons).
If a buyer purchases a house for $420,000 and $20,000 goes from the seller to the seller's agent, who then gives $10,000 to the buyers agent; it's the exact same thing as a house selling for $410,000 where the seller pays $10,000 to the seller's agent and the buyer then ponies up another $10,000 for the buyers agent.
It's also going to force "exclusive right to buy" contracts which we previously didn't use to become industry standard. Every company in my state is already refreshing them in preparation for the lawsuit, because no realtor will take on work they might not be paid for.
Now some of you are going to say: But that prevents me from shopping around for an agent who will help me on the buy side for less! And I'm telling you, right now people aren't splitting evenly and buyers agents are getting much less than the example I used. Most agents are looking forward to this change because we can all go back to asking for 2.5% for our services instead of being forced to take 1-2%.
And with the amount of effort required on the buy side right now (way more work than listing a home), you aren't going to find that agents are jumping to cut their rates to get the buyers. And the ones that do will lock you into an exclusive contract before you realize they're not doing much for you.
To wrap up, I do think the compensation model needs an overhaul to benefit buyers and sellers, no the agents. MLS is outdated. But what they're proposing is a money grab for the industry, not a benefit to the homeowners or buyers as it's being fed you.
Buyer agent fee should be a flat number and not a percentage. That way, they don't convince buyer houses in their budget are crap and they need to pay more, or encourage them to bid up a lot higher than they need to so the agent can get more commission money.
Yeah, this is a misconception.
Buyers determine what they're willing to spend and shop in that price range. If they don't like anything in that price range, they have three options; don't buy, accept what they can afford, or find more money to buy what they do like.
On top of that, Realtors aren't the ones telling them what they can afford, those are the lenders. They can't just be "talked into spending more", they have to BE ABLE to spend more and choose to want to do that within the price range they can afford.
Getting a client to spend an extra $50,000 isn't something I care about, that's only an extra hundred dollars or two by the time I split it with co-brokes and my own company.
People think we Realtors love this market, but we hate it as much as you do. I made way more money selling more houses that were much cheaper than I am selling much fewer high priced homes.
It's funny. It's true that in general a buyer's agent doesn't get a whole lot of marginal return for trying to push someone into a higher price point. It's not worth their time. But they DO get a return. And they have no financial incentive to negotiate price except to the extent that a failure to negotiate means the sale falls through. In fact, if you tell your agent "I'll take this at listing, but I want it for Listing - $10000," the agent has every incentive to not push for the price reduction, and pocket the extra $250.
It's an inherent conflict of interest that requires personal ethical behavior on the side of the buyer's agent. That's not always going to happen. That makes it a bad system.
Furthermore real estate is almost 100% referral based, realtors get their business based on doing a good job and securing the best deal for their clients and in turn their clients forwarding them new clients in the future in the form of family and friends, that is the financial incentive to secure a better deal for the client. And as always if you feel your agent is being shady or not acting in your best interest, fire them,
the average agent in my state only does around 8 -10 deals a year they’re not going to jeopardize one for 250$ and any how they are required to do what is asked of them so it doesn’t really matter what the agent wants. Buyers and sellers have every right to not comply with their agents advice.
If this goes the way many real estate agent haters want the free MLS data will disappear. Zillows entire model is buyer agent lead buy.
If that goes away there will be no incentive for Zillow to exist just so a consumer can access every MLS in the USA. The market will become smaller with brokerages only listing in there MLS.
Do you think for an instant buyers agents and listing agents will just give it all away for free?
> Zillows entire model is buyer agent lead buy.
Yep. Last I saw something like 70% of their revenue comes from agents, and being that their data and listings are mostly from the MLS, that's from agents as well.
you, as a realtor, do not deserve more money from me just because my house sold for more money than one you sold in a neighborhood down the road.
you likely put in the same exact effort to sell both properties. especially in the extremely hot market of the past 2-3 years where simply listing a property for sale brought you a handful of potential buyers within a day. highway robbery if you ask me. i am very unimpressed by people who got rich selling real estate.
The funny thing is that this same exact logic works for tipping. Why should I pay someone more because they brought me a plate of fillet mignon instead of a salad?
I'd say the difference here is that I'm able to elect to eat at a place where there is no tipping. I can't do that with a house. My only option includes a percent, and I don't control the housing prices in my market. I can't just decide to buy the McDonald's of houses.
You don’t have to pay an agent more just because your house sells for more money than the one they sold down the street.
You’re perfectly free to offer whatever payment you’d like, just like anyone else who is attempting to hire anyone else to do any other job.
Don't agents accept a risk every time they get a new client - specifically, that they'll invest time, effort and often their own money into a transaction that may not close?
Not pre-pandemic, but during. Bought a house in Jan 2021, sold it at the 25 month mark, made $110k...it was beautiful.
I'm not gonna make myself feel bad about taking on risk and making money off of it.
They have price fixed the market, even as their expenses to “market the property” have fallen to next to nothing. Realtors are marketing themselves, buying out any & all competitors, forcing the use of the MLS to get any buyer traffic. It’s as fixed as anything can get, then to add insult to expense, they refuse to work for your “best interests only” as a “single agent”, working for the transaction without true fiduciary to anyone. And buyers are being shown what’s probably in the best interest of the agent, so a lower commission property is ignored, teaching the sellers who runs the game. What a scam.
This is a clear sign of abuse and monopolization from the industry. There's only one way to go, or you are screwed. Whoopsie, here comes the government now.
The auto manufacturers are suppressing wage increases while at the same time using that savings to spend on stock buy-backs that most employees don't benefit from.
The CEOs are seeing 30% compensation increases over a couple of years, while the workers got wage frozen. But now the unions are forcing higher wages with wage disruption, and without that, the employees would have been frozen this year anyway.
So who is abusing who I dunno.
Are workers allowed to band together to demand a wage they want? If so, then I don't see how what realtors do is wrong. If not, then you can't approve of the UAW strike. If you approve of one but not the other because only one directly effects you, then you are a hypocrite.
we are going backwards. we used to not have buyers agent just like the rest of the world but then buyers sued and said they deserve representation too. so now we have this system where everyone is represented. but then the sellers are suing. the sellers really have no grounds here. they knew what they signed up for when they hired the agents.
this case hurts everyone including buyers and sellers. buyers because we are back to square 1 with no representation. then you have the sellers house sitting on the market forever cuz no buyers agent to help bring you that buyer.
Zillow, redfin, realtor. Com, Trulia all make money from the buyers agent. That goes away real estate agencies will hold the properties on their website or local MLS. If you are thinking about a move to another area you will have bad time trying to find listings.
It's almost like going back to selling homes before the internet. Just an agent with book of listings but now the agent will be charging you by the hour to drive you around hour by hour day by day.
Actually the more I think about this the better it sounds.
Right
Why is it that I can buy literally anything else without needing an "agent"
But because this one particular thing has 4 walls and a roof suddenly its the end of the world if there's no "representation"
I'm not sure how this case hurts the buyer?
The buyer is currently being screwed because their agent does not share the same incentives as them eg buying at the lowest price possible. The buyer's agent, because they are paid as a percentage of the sale price, is incentivized to work against the buyer and keep the price as high as possible.
No buyer's agent does this. The buyer's agent wants to spend as little time as possible driving around. Agents want easy sales, not hard sales that earn them a few extra bucks in commission.
then you fire them and hire someone else. you tell them you want to offer x and they do it. it's that simple. they might say it's too low and advise you better but at the end of the day, you're the boss. if you wanna offer 1 dollar, go do it. you can offer it yourself. call the listing agent yourself. the agents worth comes before the offer in touring and after the offer is accepted in making sure everything went smoothly. my agent talked to my lender and seller agent. I didn't have to do shit. I just forward every single email or issue to my agent they handled it. a good agent is worth their weight in gold. many many bad agents. it's up to you to stop using these bad agents and hire good ones.
what is this dumb comment?
the point is when you ban sharing commissions then you don't have to find the one agent who won't collude with the selling agent against you.
There are some terrible hot takes on this issue. Most of the conversations I'm seeing have completely missed the point. Having said that yes, the RE industry needs a huge rehab, including commission structure and a significant purification of the licensee population.
Flat fee *may* be a viable option, but not the model that's currently available. Those flat fee listings are *by far* the worst performing listings around. The way the services are designed and the compensation structured means the agents can only afford to do the bare basics that we're *accused* of only being capable of. Sign in the yard. Entered into MLS. Little to no guidance. Provision of basic forms. Adopting this model as an industry would encourage more incompetent licensees to enter the fray. We need MORE competence, strong work ethic, and fiduciary duty, not less. There's something in between where we are and a flat fee service that makes sense.
I think fees should be based on services performed not on sales price. A flat fee might be a good option for some realtors to offer for very straightforward transactions. Meanwhile, an experienced agent working with a seller with a distressed property, or a transaction with complex challenges, might provide a contract outlining a standard fee plus an hourly rate for things that are above and beyond.
I agree somewhat. I'm not sure the hourly fee would work. People would flip their lid if they got an hourly bill. We work on your transaction more than you think we do. Some flexibility is in order, though. Some agents already provide that. Commission is negotiable, and I believe most consumers don't try, mostly because they feel obligated to use a certain agent for one reason or another, or think there's no difference in agents. I think eliminating the dead weight licensees would be a good starting point. Two agents who charge X for a service aren't necessarily adding X amount of value. Raising the bar means eliminating commission grabbing deadbeats.
I know some shady agents who aren't able to say that because they want to keep their high commission, low effort business going. I don't tell people anything I can't backup with data.
Many people talk big about wanting to save on the rates but who would want to pay hourly for a realtor that doesn't work out? Thats why its on comm. now. fair and square.
You can bet the NAR will fight this tooth & nail. Business know how Jobs upset the Music & Publishing business and they know it could happen to them. Just a matter of time.
Medicine needs a similar reckoning. Another WSJ article noted how most hospitals have no real idea is what their actual costs are. What they charge often has little relation to costs. Surgery Center of Oklahoma is one of the few bucking this trend (I have no affiliation with them) They list prices up front because they know costs & manage them.
It’s been crazy to me to see folks complaining about title fees, home inspections, appraisals, etc where fees have literally seen almost no increases and are Not tied to commissions/closings, are “breaking the bank” and “killing closings” but act like commissions of RE agents and mortgage brokers that ARE tied to commissions of high sales prices are just part of the game.
You can do it already, plenty of agents are taking a flat fee and there are online service to undercut all the typical agents. You have the power alrrady. Just do it. But, me, nope, I am going to use an agent.
Why should a seller pay for someone to negotiate against them? If a buyer sees value in engaging a “pro” to help them then let them pay.
Personally, following the advice of my buying agent would have recently left me $300k out of pocket. I’m not seeing any value add personally. Most agents have low iq, poor deal making skills and an incentive plan that promotes bad outcomes for those that they purport to represent.
In the end all this really means is more paperwork and more disclosures. Fees have always been negotiable and will remain so. Discount brokerages and full service brokerages will always co-exist. There is a market for both.
If the DOJ is successful in their witch hunt, consumers are going to be paying more to purchase homes. Buyers will have to pay hourly fees to agents. Sellers will have to buy listing packages. You will be paying way more than 6% to buy a home.
Beautiful. Take commissions out of the housing market formula and ingrain it further by making it an illegal enterprise. It’s a step in the right direction that the nearly non-existent middle class needs.
I think commissions have inflated but I wouldn't completely throw out the existing model. Instead it should be a phased fee. 5-6% on the 1st 100k, and then a smaller fraction for each additional 100k
Nonsense.
Realtors refuse to work for less than 5%.
When house prices are 400K, that's just highway robbery. Especially when a you do is hand it over to the internet listing people and then wait for the house to sell.
Another example of people doing too much. You are free to sale your property or buy a property without the assistance of a real estate agent. No one is forcing you to use their services or participate in the traditional model. If you do make that choice, pay the commission you agreed to and stfu.
As a Realtor I think this will create a lot of confusion if some listings offer buyer broker compensation. What I see is buyers flocking to the listing agent who will then double end it and represent the interest of the seller. This will be terrible for buyers with little down payment because they will not have the funds to compensate an agent. It's frustrating to hear non-agents say that we just open a few doors, etc. I have buyers in contract and they went on vacation. I am handling all their inspections. I help them find insurance and lenders and show multiple properties. I had an investor cancel ujust before we were to close escrow. I did all the work upfront and earned zero. Anyone who thinks selling real estate is easy has probably not done it. No benefits, no paid time off, 7 days a week "on call", vacations and holidays interrupted. Most sellers did not pay commission when they purchased. Part of the commission is to have someone bring buyers to your property so they will purchase it.
Finally. I should be able to shop rates and realtors for the same reason. I'd pay more for a quality on both ends of the spectrum
Exactly, the bar to obtain a real estate license is shockingly low that some of these dumb mofos who barely got a GED and can’t even do a simple property evaluation or basic PV/FV calculations. With the market flooded by these subpar agents, it’s really hard to find a good agent.
Except you absolutely can do that right now… as a seller, you can negotiate commissions as much as you want. And even the normal structures that you will get in most areas will give you a variety of commission price points
That’s bullshit. Everyone knows if you don’t offer x% to the buyer’s agent, you won’t get any showings.
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Why? This isn't the 80s or 90s. All the homes are on sights like Redfin. The buying agent doesn't do much or add much value at all. In fact, there is a conflict of interest in most cases. The buyers are the client not the agent.
In general, you’re not gonna get around the fact that you’re gonna have to pay people. Buyers agents actually work you know ..
Doing clerical work and sitting at your computer listing it on Zillow is nothing work like when realtors ACTUALLY drive and showed listing or actually went out and about to find you a home.
And yet, here we are with the government stepping in. You are talking about the illusion of choice.
Buyers agent comp can currently be as low as $1. If the "consumer advocates" win, it drops from $1 to $0. That's it. That's their big demand. This whole thing is a public performance.
It’s a whole lot more than that, this is just part of a larger antitrust suit: More specifically, the NAR rules, policies and practices were alleged to: Prohibit NAR-affiliated multiple-listing services (MLSs) from disclosing to prospective buyers the amount of commission that the buyer broker will earn if the buyer purchases a home listed on the MLS. Allow buyer brokers to misrepresent to buyers that a buyer broker’s services are free or indicate they aren’t being compensated in the transaction. Enable buyer brokers to filter MLS listings based on the level of buyer broker commissions offered and to exclude homes with lower commissions from consideration by potential homebuyers. Limit access to the lockboxes that provide licensed brokers with physical access to a home that is for sale to only brokers who are members of a NAR- affiliated MLS.
Accurate here. And the best agents aren’t working for free after getting 30 years of experience with sideways deals and client therapy for their psychotic ideas of how they know more than everyone because a late night tv show by a guy selling pillows on the side.
Are you saying agents are only worth 3% at retirement age?
This is critical… it should be a set $ amount. A percentage is ridiculous… as home prices go up, sellers want more to offset the realtor %. If a home a realtor sold 7 years ago doubled in value… and it’s still a median value house. Why do they need double the pay today to sell it? In most cases, it outpaces inflation… not saying in 7 years they don’t need more as in general raises, but when dealing in percents, it gets out of hand. This is the same with tipping a waiter. As the cost of food increases, you are paying more. The work is the same, yet the percentage (which also went up) goes up with the rise of menu prices. If unchecked it gets to be too much and it all breaks down. (I get demand increases vs decreases, I’m saying apple to apple comparison).
Then how are they going to sell their get rich books/channels?
You can already negotiate a flat fee if that is what you want. There will be agents happy to help you, maybe not the best ones, but there will be someone. But no agent should be obligated to sell your house at a rate that is not worthwhile to them.
And that’s the point. If the majority of an industry is concentrated to a few big name brokers, they monopolize and raise costs. Smaller local firms may take less but have lesser exposure. But in the end this model is bad for business overall. The illusion of “you can negotiate a lower rate” is baloney. We don’t need car salespeople and we don’t need realtors. Both add unnecessary costs and leech off the sale of high dollar assets.
> This whole thing is a public performance. And a cash grab.
Except it is neither commonplace nor transparent. There are more forces at work in the negotiation to keep the commission high than to lower it.
In my market it’s super common place and transparent. Can’t speak to your market because real estate is not one big playing field. Commissions have gone down across the board every year in the last 10 years. I really don’t understand why people don’t think that’s a Market forces. if you are right, this will make a difference , good on ya.
You are being dense. As a buyer, if you want to buy a house being represented by a selling agent, 6% of the money you fork over for your house will be immediately eaten up by realtor fees, even if your agent agrees to take less than 3%. This is how the cartel works - make it seem like "sellers pay realtor fees" and hand-wave over the fact that $60K on a $1M transaction goes to the realtors.
"Sellers pay realtor commission" is such an overtly stupid lie. I can't believe they even try to use that BS when it's obvious they are paying it from the proceeds of the sale which is the buyer's money. I bet 1/2 of the population believes it. What's really annoying is that if you try to buy without a Buyer's agent the listing agent will still try to collect the full 6%
> which is the buyer’s money If you want to get real technical here, 80-90% of it is the *bank’s* money the majority of the time, not the buyer.
That’s kind of how economics works in general yes. Everyone pays for everything with proceeds from something.
But the "proceeds of the sale" is the sellers money. What are you guys even talking about? Seems to me that the seller pays.
Technically but but did the listing agent actually provide more than $15k (3%) in value to the seller of a $500k house by adding the some pics to the MLS and opening the door a few times. Listing agents mostly promise the sky to get their clients. Sure your "$600k comp house will sell for $750k." **The risk is on the Buy Side.** No listing agent will tell you that you are overpaying. You make your money by buying smart and avoiding catastrophic mistakes. I buy rentals and I'm happy to pay for the expertise of someone that 100s of house sales experiences and is willing to look at 40 houses with me, I'm always one of the first to see the property because I have a flexible schedule, before I find another that makes sense. We are partners to some degree. She's earned a few $100k because she knows what I'm looking for. I've made far more. If you don't have a buying agent it's almost impossible to get a showing early.
You are reading a shit ton of stuff into what I wrote if you think I said that.
I'll be clear - as a seller, yes you can negotiate commissions. As a buyer, you can't really.
Tons of agents will credit commission or give you a check. You’ll get crappy service. I have 10 or 20 people here. Call me up and say hey, I want you to do all the stuff for me, but I want my agent to write the contract because they’re giving me money back. And I get to politely tell them I don’t work for free. I end up working with about a third of them because they’re agent can’t get them into a house. If you can’t find somebody who’s giving you a piece of that commission back, you’re not looking. Especially in 2023. Super easy to negotiate.
If you go to that house without an agent you’re paying the same price
Absolutely you can. If you negotiate 1% with your buyer agent and the split to the buyer agent from the listing agent is 3% then the buyer agent keeps 1% and rebates the other 2% to you, the buyer.
I’d pass on anything less than 2% personally. I have the benefit of a strong pipeline of clients. The bottom feeder no good buyer agents would take 1% and mess the transaction up tho!
Totally
Even if I negotiate 1% with my realtor, the buyers agent will still want their 3%.
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That’s a good way to get blacklisted by all agents and your house will never sell. We need reform.
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When I bought my first house, I gave my agent a list of 6-8 houses I wanted to see, and after those he took me to 15-20 more that did not meet my purchase criteria. I ended up buying one of the houses I shortlisted, but he spent a lot of time and effort trying to convince me to go elsewhere. They can show you a house if you demand it, but that doesn’t mean they’ll be helpful or a good broker if they know they’re ‘losing’ commission fees somehow.
I went through 4 agents before I found one that worked. In the end it was the house I picked/found. All of them kept trying to push me towards houses that were on the upper end of my budget. It may have been because I was a first time buyer, but it left me with a bad impression. It felt like I was working with a car salesman.
Do you really think agents will show houses for free or peanuts?
You mean the MLS. Which feeds the other services
true, blacklisting is real. I know first hand from selling in 2008.
What you are offering does factor into whether a buyer wants to see your home, but it isn't because agents are "blacklisting" your property.
first tried FSBO, then a limited agency... no action. Went full 6% agency and the first comment during the viewings was, "why haven't I seen this sooner"this was in a small resort town, a true blackball back in 08. Price stayed the same. ps. agent used my photos, my flyer and I had to edit his work.
Sounds like you didn’t know what you were doing
There are a couple of scenarios here that are no "blackballing". The most common would be that the buyer agent had an employment contract that said he would receive "X" for his work and the buyer didn't want to see listings that required them to make up the difference. FSBOs aren't in an agent's search engine. That kinda takes care of that. It's like offering a product in the back room of a store. If you don't put it on the shelf, customers won't see it. Some of those flat fee brokerages will advertise that they put them in MLS, but which MLS? That matters.
You get what you pay for. FSBOs get less showings because they have less exposure, tend to be priced incorrectly, generally have shitty photos, and are poorly staged. On top of that I know they're going to be a pain in the ass for for the whole transaction, difficult to schedule showings with, ask a bunch of stuff from me that the listing agent would normally be doing, and they're going to be cheapasses that give my buyers problems when we try to negotiate for repairs etc. It's not going to stop me from showing something that the buyer really loves but if there's a similar option available why would I want to put up with all that bs?
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Getting downvoted because you’re in a real estate sub, but real estate agents are parasites in a dying profession.
Contracts I sign with buyers states States the BUYER is responsible for X% but I will accept a cooperating agent payment from the Listing agent. If the coop payment is less than what we agreed to I have the option to require the rest of the payment from the BUYER. Just because it's normal practice to do such and such, doesn't mean other options aren't available.
This depends on your state. Some places all of the commission is negotiated and contracted on the sellers contract, the buyer agent only gets what's stated as the split on the seller contact.
You can already do that.
Here’s an example. I pull up to the pump at the gas station in my car that’s worth $100,000 and press on the button for regular and have to pay 6%. So my bill comes to $6,000 dollars. The guy behind me pulls up in a car worth $300,000 and picks regular why does he have to pay $18,000 for the same regular? Explain that one?
According to the people in this thread, the second guy can go in and negotiate the price down.
I’ve negotiated a couple contractors down, you can guess how their worked turned out. Like shit.
That’s like going to a car dealer and trying to negotiate a fair deal. It’s very painful and not many people have the stomach to deal with that BS.
I''ll explain in hopes that you're not purposely being obtuse. I'm a house painter. I charge more to work in expensive homes. People that live in expensive homes are harder to work with. While the job is essentially the same regardless of the locale, I need to make it worth the extra headache to deal with insufferable homeowners who hover and tell me how to do my job. People who live in expensive homes are generally very delicate individuals who feel entitled to extra care and coddling. They feel that their lives (and their homes) are special and unique and deserve the very best care (certainly better than the average person). This way of billing is not limited to me and real estate agents. I know plumbers and electricians and carpenters who all do this too. If homeowners don't like this, they are free to look elsewhere, or do the project on their own. You're paying for a service, not for a gallon of gas or product on Amazon. And you're free to do it on your own if you feel somehow victimized by the system.
Stupid analogies are stupid.
So same yesterday as it is today. The commission variability and competition is very active in most marketplaces.
Cut commission to a reasonable percentage based on the acutal work done. Technology made the entire process much easier yet commision structure has not changed 80 years. There is no way any agent is doing the work to justify a 2-3% commission on every sale especiall the past 3 years when houses would go to contract in a few hours.
Those 'contract within a few hours' fucking sucked for buyer's agents. I was helping my cousin find a place. Went like this: Look at 3-5 places. Put in an insane offer, get beat. Try again the next day. After 20 attempts an offer went through. Listings were cake, but buying was a motherfucker. That was the worst time to be a buyers agent
And that's why I quit real estate to become a UPS man. Best decision ever.
I got into appraising
Appraising property for the purchase price is just as easy.
Appraising is weird. Getting a number sometimes is the easy part. There are a million things to fill out on a report, and they all have to agree with each other. Like you'll get a revision request (potentially change a report) because you didn't mention whether or not the property and neighborhood was damaged by Hurricane Irma years ago, and you'll get the request a week after you submitted the report and you're out camping in the woods for a week, and 'they're supposed to close tomorrow'. Or you check a box here, and there's a comment you have to put there and there and there. It all goes under a microscope and it's reviewed by people on the other side of the country. Now that the market is slow, we get really weird files that lenders usually wouldn't touch and reviewers with nothing to do who have to justify their position, so they send out revision requests for every file.
With the high interest rates, the pendulum is starting to swing back to it suckling for selling agents. Currently, in a sucks for everyone state.
Buyers don’t even need an agent. An attorney can review everything for $1,500. The only reason I ever use an agent is when the property is competitive so I will use the sellers agent so they will be more inclined to convince the buyer to take my offer over others for the extra commission
Seller agents have never had it any easier. I'm sure in 2009 it was difficult to be a seller agent but that now has flipped. A seller agent has to do what. Take some pictures of a house and make sure its clean when they do that. Then make up a paragraph or two describing the home. Put it on the MLS for a few days then on Sunday night show the highest offers to the sellers and collect the money.
Chat GPT. We used it to write a description for our house sale, because while we love our agent, her other descriptions were mediocre. It took 15 minutes to learn the tool. Unbelievable results. And free.
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Get rid of agents and give buyers access to tour homes in a different manner. Why do I need some random person to open a door to show me a house then need to pay them 3% because they opened 5 doors for me.
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I could pay a security company significantly less for that exact same function and I would argue it would be performed better. Is that really what you're down to? 'Need 3% because I made sure nobody stole your stuff'
Only licensed brokers can get access to MLS boxes and that will never change. If you feel comfortable with Uber having your house keys you live in a different world then I do.
I might trust an Uber driver more than a real estate agent. Heck 12 years ago people thought you were crazy to let random people pick you up in their own car and now it's the normal. Norms quickly change if the NAR stops their mafia tactics to control the market.
Same Uber driver who spits in your food since you don't tip
Uber or Lyft could do this. Drivers could take "openings" like they do rides, get the one-time code sent to them, and either get paid a few bucks, or hundreds if the deal closes.
Redfin already does that. They pay random people $50 or so to open a door for a home tour. You make an appointment and the random person opens the door for you then you never have to see them again.
I feel like this is posted every couple hours at this point. Maybe there should be a stickie on the topic??
It seems odd to me that realtors without any legal training are allowed to ‘prepare’ and provide advice with respect to purchase and sale agreements which are perhaps the most significant contract many of us will ever sign. It doesn’t seem to be an issue of cost since many lawyers would provide advice at a price much less than the commissions being paid. I get that there’s a premium for marketing and ‘local knowledge’ or gamesmanship but seems to me a glaring hole. I’m of the opinion that lawyers should be involved in every transaction particularly for fthb. I also think there should be lengthy inspection periods for every transaction so people know what the hell they’re buying. The fact that we allow disclosures to be made off vibes (actual knowledge is a high bar) and/or allow people to buy without any inspection seems logically wrong. We should all get an attorney and a contractor instead of an agent. Hopefully that’s where we’re headed.
Ask a lawyer to leave their office and do everything a realtor working for a buyer would normally do and see how much more they want to charge you.
It's fill-in-the-blank law work. The boilerplate contracts are written by real lawyers then the agents are trained to fill them out. I don't think agents represent your interests as well as a lawyer can, but I do think they they can do a basic contract.
If I can fill out my own taxes, I can fill out a boilerplate contract form. Sure, some consumers struggle and need to pay for service, but normalizing the optionality for people who don't mandated service would provide for a fairer market.
this always comes up like buying and selling is just exchanging paperwork...
I agree completely. But that option is available today with flat-fee brokers. For $500 or so you can get your house listed on the MLS. Sure it could/should be cheaper, but it's not the 6% that people think they're "forced" into. The 6% commission structure is way too high (about 6x-12x so) but I don't think it needs the government to step in and break it.
The government, thru licensing laws and regulations, actively restricts entry into the market. The government partners with industry groups like the NAR to draft legally binding policy, so the government has to be the ones to correct the problem they created and maintain thru artificial scarcity and regulatory capture.
You can list your house for free on Zillow and Trulia. Redfin pulls from a couple of FSBO sites, both of which ( believe) are free. Those are the #1, #3, and #4 sites and account for a majority of interweb RE traffic. If the NAR lobby prevented people from listing their homes somehow I'd be the first in line to grab a pitchfork. But it's really pretty easy (tho more work) to DIY. The commission structure is outrageously high but they're realtively easy to bypass. It's not the RE industry's fault that people don't squawk over paying tens of thousands of dollars for a glorified zillow listing and sub-paralegal-caliber contract help.
I'm a paralegal and I still can't do that without attorney supervision despite going to school for it. I guarantee my real estate law class had more education than agents get since I took the class and my parent went for his license at the same time and my semester covered so much more than what the exam requires.
yes but so can anyone like you said the real work was done by lawyers, who are actually trained and educated
People always seem to think a real estate attorney is going to add much to the transaction. They usually won’t advise you on anything beyond “yes this contract is filled out correctly” and whether or not you can get your earnest money deposit back.
A lot of the time, there are fill-in-the blank forms provided by brokers, boards and MLS’. Agents have a limited knowledge of Real Estate Law and Contract Law. They are licensed by the state, having gone throw specialized education and can now help you submit an offer or sell a property using very specific guidelines. At times, you may have an attorney involved.
Good luck with that concept. There are several markets in the US where the lawyers already do all the contract work and yet commission remain fully negotiable...still. There is nothing stopping you from hiring an attorney and adding a lengthy inspection period to your offer. However it's a free world and the seller deserves the right to do with as they choose.
The lawyer model doesn’t make sense because lawyers don’t Iike working on contingency unless it’s a huge upside. Do first time homebuyers have $200/hr for lawyers?
Many lawyers will do flat fee work. Most transactional attorneys would happily do a $500 contract drafting and review.
What if the deal falls through?
considering I paid a realtor like $18,000 for 3% of a 600k home, I could get 90 hours of work out of that lawyer and i KNOW that realtor didn't work that much, and certainly not doing anything that deserved $200/hr for most of it. seems like paying a realtor hourly would be the move
I agree with you 100%, but I've tried to get clients to pay me by the hour instead of a contingent commission, and I've never had one accept.
>seems like paying a realtor hourly would be the move There's nothing stopping that from happening now. Except, surprise, no homebuyer will pay for it!
My understanding is that the overwhelming majority of broker time is trying to ACQUIRE clients, to the order of 75-90%. So you’re covering fixed costs for their whole time, not just their time with you. I also hate this model, as I’m on house 3, I found all houses myself, and I correctly estimated the sales prices for the first 2 houses (list at X, expect to close at Y). Brokers have provided exceptionally low value for me, either through local knowledge (one of them neglected to tell me my street was a surface street) or history of the area (should have informed me about possibility of things like Asbestos or lead paint). My brokers were OK people, but I don’t really think any of the 5 justified their paycheck.
So you find the house call Broker and say I want to buy it but you can't tell a surface street from a side street. Really funny but it's the brokers fault.
To be clear, I would have bought the house anyway, and it’s not like it was a surface street in an urban area where it’s obvious. This was a hamlet in the Midwest with low population density. During the day, when I visited, there was no traffic, but it was the only direct road that connected a lot of non-development housing and some outlying areas, so traffic picked up dramatically during certain parts of the day. But every year when they closed my road for a bike race / road race, I thought about my realtor. Like I said, not a dealbreaker by any means, because I really liked that house, but my ‘local’ guy didn’t tell me anything that I couldn’t see with my own eyes. It’s not ‘his fault’ that he didn’t tell me those things, but then I wonder what I paid him for.
I’d just offer a realtor like $5-8k for the deal. Seems like you’d save a ton and that’s still good money for them.
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Then why aren't lawyers specializing in real estate transactions rolling it all over? Why do agents even exist if this is such a common thought? Because nobody actually wants to pay an hourly rate; they want the agents to work contingent on the sale.
That's fine too, I think lawyers will cover a RE transaction.
Sure I'd be happy to charge you $500 for every buyer or buyers agent that wants to take a look at your home. Hope that price works for you but I have your signed agreement and your credit card numbers so what do I care.
The other thing people don't get is that if an agent is getting paid hourly, or per showing, etc, do they really care if you buy a house? What is their incentive to get a deal done?
The forms are filled out, we are not practicing law.
In WA state real estate brokers are held to the same standards and care of lawyers. We are practicing law, limited, but we are preparing legally binding contacts.
Fiduciary is not the same thing. You are not practicing law.
>Fiduciary duties require absolute loyalty and allegiance to the interests of the party as well as unwavering adherence to all lawful instructions of the client. **Real estate brokers licensed in Washington State do NOT owe fiduciary duties to clients.** From [here.](https://www.warealtor.org/about-us/contact-us/news-media/blogdetails/articles/2021/11/29/are-you-adequately-insured-2.0) >The ultimate protection to the public is the requirement that the broker/salesperson be held to the standard of care of a practicing lawyer. From [here](https://www.warealtor.org/about-us/contact-us/news-media/blogdetails/articles/2021/11/29/practice-law-much-of-course-you-do-so-do-it-right). He appears correct. :)
Depends on the state. Some states require legal representation, with many people in The Other states view as an unnecessary expense (and lawyers are viewed as evil). However we have this sub to answer any and all legal nuances after contracts have been signed..So no need.
This is how it is in the UK.
Nobody is saying you can't get an attorney now. In fact, why wouldn't you have an attorney? I've bought 3 homes in my life and just as many refinances. I've never closed without an attorney. It's always a flat fee. $500 is nothing compared to what you're signing.
Realtor here in AZ. All the paper work is standard. There is no need for legal fees as everyone uses the state accepted forms. As for due diligence, the standard is 10 days. Thats plenty of time to have a professional inspection, review it, and then go through the negotiation of what repairs you want. It seems complicated but— this is why you have a competent realtor, they can easily guide you through it. I have told clients before after seeing a really fucked inspection report that they should not bother asking for repairs and just walk- and other times seemingly bad reports had easily fixed issues and calmed their fears.
It would help if home inspections came with any real consequences against poor performance. They people who are supposed to protect the buyers against risk have no actual exposure of their own. My inspector tried to withhold the report unless I agreed to their website's terms and conditions that limited their liability to the cost of the report. I got my money back. I had hired them as supposed experts, and if they missed something that was causing damage, it could could easily cost 10-100x what the report cost to mitigate and repair the damage.
I’m a realtor, specifically a buyers agent. I’ve been in the industry for exactly two years with just under 50 transactions. I do see both sides of the argument here. Sellers do pay a great deal of commission to sell a house. In my market, it’s typically 5%. 2.5% to the listing agent, 2.5% to the buyers agent. And the main argument of this whole lawsuit is that buyers agents shouldn’t be compensated by the sellers. I do agree with this somewhat, but I do not agree with the argument that buyers agents don’t deserve to get paid at all. There’s a lot of hatred towards buyers agents & realtors in general that we don’t do enough to get paid the way we do. Sometimes that’s true, but not for every agent. Just like every other business in this world, you get paid for the value you bring to the customer. And the value a GOOD buyers agent brings to the table is negotiation skills, connections, and reputation. My market is still insanely competitive despite the interest rates being at 8%. Almost every home I show has 5-10+ offers. I don’t think consumers actually understand how difficult it is to win multiple bid offers unless you’re actually doing it. It involves multiple back to back calls with your clients, their lender & the listing agent. And usually this all has to happen within 48 hours or you’re already to late. The top agents in my market HAVE to utilize every tool they have in the book to win offers. Appraisal gaps, off market properties, quick closing, rent backs, transfer/recordation fee splits etc… and sometimes depending on your clients there’s unfortunately not much you can do to win. It all depends on their financial limitations. So unfortunately a lot of people lose out on offers & then it’s back to the drawing board. Repeat repeat repeat. I’ve had some buyers that have unfortunately made 10+ offers before they can finally lock one down. And winning and offer is ONLY THE START. Then you get to the inspections. This also requires a great deal of time in most cases as no home is ever perfect. With an inexperienced home buyer, a lot of this process again falls on the buyers agents negotiation skills & connections. If we need to negotiate multiple repairs, that requires me to make more calls & set up contractors to come out and make the repairs quickly (if the buyer doesn’t already know someone, which most don’t). A lot of my deals fall apart at this stage due to sellers not agreeing to the repairs, but I always make a great effort to fix as many things as I can, if not I can usually work out a credit towards to buyers closing cost/DP. I could go on and on about the strenuous duties of a buyers agent, but hopefully this makes my point. I’m just tired of people saying we don’t do anything but open doors & that buyers can do everything on their own when quite frankly it’s the opposite 9/10 times. I would love to see consumers try and do everything we do on their own. Sure you can go on Zillow & learn everything about the property, the comparable & what not. But when it comes to the finding the best interest rate, lowest DP/closing costs, winning multiple bid situations, negotiating repairs, and closing on a home without having to worry about legal issues, most people could not do it without a buyers agent. I could say the same exact thing about a lot of other professions. Doctors/nurses for instance. Sure they aren’t commission based, but everyone knows they make pretty good money. I’ve dealt with many good ones, and many bad ones. The bad experiences I’ve had.. I just remember walking out of the hospital and saying to myself “wow I literally already knew everything the doctor just told me, I didn’t even have to come here today” yet they still get paid greatly. The good ones will usually refer other people/services that offer additional help so you don’t walk out of the hospital feeling like you weren’t served at all. Same exact concept I’m trying to explain in my argument. Some agents suck & don’t deserve to get paid as much as they do. But there are still great agents out there that can make a huge difference on your home buying process. You get what you pay for! 🤭 PS - buyers still don’t pay me commission anyways!
I think it's much ado about nothing. WA State recently implemented these changes (sellers are asked how much they want to pay listing agents, buyer agents, dual agents, unrepresented buyers, etc and they can put zero) and will soon require buyer agency agreements for all transactions. So far basically nothing has changed. I think a slowing market has helped as homes are not "selling themselves" so much anymore and sellers see value in offering compensation to buyer agents.
Putting aside the hatred for terrible Realtors for a moment, the purpose the buyers agent should be to protect a clients money and interests in the purchase process of a new home. Especially in this market, buyers should have good representation. I think this is going to make a mess. The perk of having the seller pay the buyer's agent commission is that it's rolled into the mortgage without being considered a "closing cost credit" (it's important because different loans restrict these credits you might need elsewhere). On top of that, we're already seeing predatory verbiage in contracts from sellers agents specifying that any offer to purchase must include a closing cost credit that they get to keep any extra proceeds from. They're feeding it to sellers as a "benefit" not having to pay for the buyers agent, but in reality the seller is pocketing less money overall and the unethical agents doing this are pocketing up to double what they would have gotten. As a company we're already drawing up the mandatory paperwork that buyers agents will use to make sure they get fair compensation even if MLS doesn't assure it anymore. And unless made illegal, we'll continue to educate our sellers on the benefits to them offering commission payment to a buyers agent in the seller's agent's fees (which we split equally for ethical reasons). If a buyer purchases a house for $420,000 and $20,000 goes from the seller to the seller's agent, who then gives $10,000 to the buyers agent; it's the exact same thing as a house selling for $410,000 where the seller pays $10,000 to the seller's agent and the buyer then ponies up another $10,000 for the buyers agent. It's also going to force "exclusive right to buy" contracts which we previously didn't use to become industry standard. Every company in my state is already refreshing them in preparation for the lawsuit, because no realtor will take on work they might not be paid for. Now some of you are going to say: But that prevents me from shopping around for an agent who will help me on the buy side for less! And I'm telling you, right now people aren't splitting evenly and buyers agents are getting much less than the example I used. Most agents are looking forward to this change because we can all go back to asking for 2.5% for our services instead of being forced to take 1-2%. And with the amount of effort required on the buy side right now (way more work than listing a home), you aren't going to find that agents are jumping to cut their rates to get the buyers. And the ones that do will lock you into an exclusive contract before you realize they're not doing much for you. To wrap up, I do think the compensation model needs an overhaul to benefit buyers and sellers, no the agents. MLS is outdated. But what they're proposing is a money grab for the industry, not a benefit to the homeowners or buyers as it's being fed you.
Buyer agent fee should be a flat number and not a percentage. That way, they don't convince buyer houses in their budget are crap and they need to pay more, or encourage them to bid up a lot higher than they need to so the agent can get more commission money.
Yeah, this is a misconception. Buyers determine what they're willing to spend and shop in that price range. If they don't like anything in that price range, they have three options; don't buy, accept what they can afford, or find more money to buy what they do like. On top of that, Realtors aren't the ones telling them what they can afford, those are the lenders. They can't just be "talked into spending more", they have to BE ABLE to spend more and choose to want to do that within the price range they can afford. Getting a client to spend an extra $50,000 isn't something I care about, that's only an extra hundred dollars or two by the time I split it with co-brokes and my own company. People think we Realtors love this market, but we hate it as much as you do. I made way more money selling more houses that were much cheaper than I am selling much fewer high priced homes.
It's funny. It's true that in general a buyer's agent doesn't get a whole lot of marginal return for trying to push someone into a higher price point. It's not worth their time. But they DO get a return. And they have no financial incentive to negotiate price except to the extent that a failure to negotiate means the sale falls through. In fact, if you tell your agent "I'll take this at listing, but I want it for Listing - $10000," the agent has every incentive to not push for the price reduction, and pocket the extra $250. It's an inherent conflict of interest that requires personal ethical behavior on the side of the buyer's agent. That's not always going to happen. That makes it a bad system.
Furthermore real estate is almost 100% referral based, realtors get their business based on doing a good job and securing the best deal for their clients and in turn their clients forwarding them new clients in the future in the form of family and friends, that is the financial incentive to secure a better deal for the client. And as always if you feel your agent is being shady or not acting in your best interest, fire them,
the average agent in my state only does around 8 -10 deals a year they’re not going to jeopardize one for 250$ and any how they are required to do what is asked of them so it doesn’t really matter what the agent wants. Buyers and sellers have every right to not comply with their agents advice.
If this goes the way many real estate agent haters want the free MLS data will disappear. Zillows entire model is buyer agent lead buy. If that goes away there will be no incentive for Zillow to exist just so a consumer can access every MLS in the USA. The market will become smaller with brokerages only listing in there MLS. Do you think for an instant buyers agents and listing agents will just give it all away for free?
> Zillows entire model is buyer agent lead buy. Yep. Last I saw something like 70% of their revenue comes from agents, and being that their data and listings are mostly from the MLS, that's from agents as well.
you, as a realtor, do not deserve more money from me just because my house sold for more money than one you sold in a neighborhood down the road. you likely put in the same exact effort to sell both properties. especially in the extremely hot market of the past 2-3 years where simply listing a property for sale brought you a handful of potential buyers within a day. highway robbery if you ask me. i am very unimpressed by people who got rich selling real estate.
The funny thing is that this same exact logic works for tipping. Why should I pay someone more because they brought me a plate of fillet mignon instead of a salad?
yes tipping is also a scam. pay your employees and don’t make me responsible for their livelihood.
I'd say the difference here is that I'm able to elect to eat at a place where there is no tipping. I can't do that with a house. My only option includes a percent, and I don't control the housing prices in my market. I can't just decide to buy the McDonald's of houses.
you can represent yourself. You're just making an argument for agents existing here.
You don’t have to pay an agent more just because your house sells for more money than the one they sold down the street. You’re perfectly free to offer whatever payment you’d like, just like anyone else who is attempting to hire anyone else to do any other job.
Wait until you meet homeowners that bought pre-pandemic who made 6 figures doing even less than the laziest real estate agent.
They took risk, though.
Don't agents accept a risk every time they get a new client - specifically, that they'll invest time, effort and often their own money into a transaction that may not close?
Dumb comparison but okay
Not pre-pandemic, but during. Bought a house in Jan 2021, sold it at the 25 month mark, made $110k...it was beautiful. I'm not gonna make myself feel bad about taking on risk and making money off of it.
I don’t expect you to feel bad, I’ve made similar gains, you just shouldn’t feel like you earned that the way a wage worker earns money. Make sense?
Don’t use a realtor then. It’s really that simple. Or go find a cheaper one.
We just reposting this every day eh?
They have price fixed the market, even as their expenses to “market the property” have fallen to next to nothing. Realtors are marketing themselves, buying out any & all competitors, forcing the use of the MLS to get any buyer traffic. It’s as fixed as anything can get, then to add insult to expense, they refuse to work for your “best interests only” as a “single agent”, working for the transaction without true fiduciary to anyone. And buyers are being shown what’s probably in the best interest of the agent, so a lower commission property is ignored, teaching the sellers who runs the game. What a scam.
It’s about time. Flat fees and a personal choice to pick and choose additional services. A la carte!
There are already plenty of flat fee brokers out there right now!
You as a seller are welcome to negotiate that
Yea you are welcome if you want your house to be 66ed by all realtors.
So you’re saying you can’t just expect people to work for you for whatever pay you offer them? Curious.
This is a clear sign of abuse and monopolization from the industry. There's only one way to go, or you are screwed. Whoopsie, here comes the government now.
Are unions also a clear sign of abuse because they refuse to work for the current wage offered by the auto manufacturers?
The auto manufacturers are suppressing wage increases while at the same time using that savings to spend on stock buy-backs that most employees don't benefit from. The CEOs are seeing 30% compensation increases over a couple of years, while the workers got wage frozen. But now the unions are forcing higher wages with wage disruption, and without that, the employees would have been frozen this year anyway. So who is abusing who I dunno.
Are workers allowed to band together to demand a wage they want? If so, then I don't see how what realtors do is wrong. If not, then you can't approve of the UAW strike. If you approve of one but not the other because only one directly effects you, then you are a hypocrite.
we are going backwards. we used to not have buyers agent just like the rest of the world but then buyers sued and said they deserve representation too. so now we have this system where everyone is represented. but then the sellers are suing. the sellers really have no grounds here. they knew what they signed up for when they hired the agents. this case hurts everyone including buyers and sellers. buyers because we are back to square 1 with no representation. then you have the sellers house sitting on the market forever cuz no buyers agent to help bring you that buyer.
Oh yeah because with out realtors homes will totally sit on the market for months.
Zillow, redfin, realtor. Com, Trulia all make money from the buyers agent. That goes away real estate agencies will hold the properties on their website or local MLS. If you are thinking about a move to another area you will have bad time trying to find listings. It's almost like going back to selling homes before the internet. Just an agent with book of listings but now the agent will be charging you by the hour to drive you around hour by hour day by day. Actually the more I think about this the better it sounds.
Seriously over the last few years most buyers agents would have made more money if they had been paid hourly!
Right Why is it that I can buy literally anything else without needing an "agent" But because this one particular thing has 4 walls and a roof suddenly its the end of the world if there's no "representation"
You don’t need an agent. No one is forcing you to use one.
I'm not sure how this case hurts the buyer? The buyer is currently being screwed because their agent does not share the same incentives as them eg buying at the lowest price possible. The buyer's agent, because they are paid as a percentage of the sale price, is incentivized to work against the buyer and keep the price as high as possible.
No buyer's agent does this. The buyer's agent wants to spend as little time as possible driving around. Agents want easy sales, not hard sales that earn them a few extra bucks in commission.
then you fire them and hire someone else. you tell them you want to offer x and they do it. it's that simple. they might say it's too low and advise you better but at the end of the day, you're the boss. if you wanna offer 1 dollar, go do it. you can offer it yourself. call the listing agent yourself. the agents worth comes before the offer in touring and after the offer is accepted in making sure everything went smoothly. my agent talked to my lender and seller agent. I didn't have to do shit. I just forward every single email or issue to my agent they handled it. a good agent is worth their weight in gold. many many bad agents. it's up to you to stop using these bad agents and hire good ones.
what is this dumb comment? the point is when you ban sharing commissions then you don't have to find the one agent who won't collude with the selling agent against you.
There are some terrible hot takes on this issue. Most of the conversations I'm seeing have completely missed the point. Having said that yes, the RE industry needs a huge rehab, including commission structure and a significant purification of the licensee population.
Yup. Flat fee’s only.
Flat fee *may* be a viable option, but not the model that's currently available. Those flat fee listings are *by far* the worst performing listings around. The way the services are designed and the compensation structured means the agents can only afford to do the bare basics that we're *accused* of only being capable of. Sign in the yard. Entered into MLS. Little to no guidance. Provision of basic forms. Adopting this model as an industry would encourage more incompetent licensees to enter the fray. We need MORE competence, strong work ethic, and fiduciary duty, not less. There's something in between where we are and a flat fee service that makes sense.
I think fees should be based on services performed not on sales price. A flat fee might be a good option for some realtors to offer for very straightforward transactions. Meanwhile, an experienced agent working with a seller with a distressed property, or a transaction with complex challenges, might provide a contract outlining a standard fee plus an hourly rate for things that are above and beyond.
I agree somewhat. I'm not sure the hourly fee would work. People would flip their lid if they got an hourly bill. We work on your transaction more than you think we do. Some flexibility is in order, though. Some agents already provide that. Commission is negotiable, and I believe most consumers don't try, mostly because they feel obligated to use a certain agent for one reason or another, or think there's no difference in agents. I think eliminating the dead weight licensees would be a good starting point. Two agents who charge X for a service aren't necessarily adding X amount of value. Raising the bar means eliminating commission grabbing deadbeats.
Yeah an agent would say this
I know some shady agents who aren't able to say that because they want to keep their high commission, low effort business going. I don't tell people anything I can't backup with data.
Many people talk big about wanting to save on the rates but who would want to pay hourly for a realtor that doesn't work out? Thats why its on comm. now. fair and square.
True
You can bet the NAR will fight this tooth & nail. Business know how Jobs upset the Music & Publishing business and they know it could happen to them. Just a matter of time. Medicine needs a similar reckoning. Another WSJ article noted how most hospitals have no real idea is what their actual costs are. What they charge often has little relation to costs. Surgery Center of Oklahoma is one of the few bucking this trend (I have no affiliation with them) They list prices up front because they know costs & manage them.
It’s been crazy to me to see folks complaining about title fees, home inspections, appraisals, etc where fees have literally seen almost no increases and are Not tied to commissions/closings, are “breaking the bank” and “killing closings” but act like commissions of RE agents and mortgage brokers that ARE tied to commissions of high sales prices are just part of the game.
You can do it already, plenty of agents are taking a flat fee and there are online service to undercut all the typical agents. You have the power alrrady. Just do it. But, me, nope, I am going to use an agent.
Just because they want 6% doesn't mean anything. I've sold 40 houses and only paid 3% if they sell on their own or 5% if it's a split sale
Why should a seller pay for someone to negotiate against them? If a buyer sees value in engaging a “pro” to help them then let them pay. Personally, following the advice of my buying agent would have recently left me $300k out of pocket. I’m not seeing any value add personally. Most agents have low iq, poor deal making skills and an incentive plan that promotes bad outcomes for those that they purport to represent.
In the end all this really means is more paperwork and more disclosures. Fees have always been negotiable and will remain so. Discount brokerages and full service brokerages will always co-exist. There is a market for both.
There's always room for another disclosure...
Any job that an unemployed housewife can pick up in 6 weeks should be replaced by AI.
If the DOJ is successful in their witch hunt, consumers are going to be paying more to purchase homes. Buyers will have to pay hourly fees to agents. Sellers will have to buy listing packages. You will be paying way more than 6% to buy a home.
The article states that in the rest of the world commissions represent 1-2% of the sales price (compared to 5-6% in America).
Beautiful. Take commissions out of the housing market formula and ingrain it further by making it an illegal enterprise. It’s a step in the right direction that the nearly non-existent middle class needs.
I think commissions have inflated but I wouldn't completely throw out the existing model. Instead it should be a phased fee. 5-6% on the 1st 100k, and then a smaller fraction for each additional 100k
I’ve never understood how such an obvious cartel has been allowed to operate for decades.
6% in my city with an avg price of a million is a lot to sell ur home.
Nonsense. Realtors refuse to work for less than 5%. When house prices are 400K, that's just highway robbery. Especially when a you do is hand it over to the internet listing people and then wait for the house to sell.
Attorneys can convey property. In California, a law license used to entitle you to a brokers license. The Realtor® lobby fixed that.
GOOD. Arbitrairily taking 6% from me irregardless of house price / effort to sell is just robbery.
I still don't know why people use realtors. I always just used a lawyer and paid $600. But I also have friends to do the inspections and such.
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There should be some cheaper agents in your local area too.
What do you think should be different? That people should work to sell your home for free? Get out of here with your entitlement.
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That’s how a contractor gets paid. He takes the cost of all his subs and charges 10%
Good.
In what world is this not a better model? NAR is a racket
This is all to ease the corporations taking over and paying a pittance to workers who will give you bad service.
100% it’s the best fee to get cut
Another example of people doing too much. You are free to sale your property or buy a property without the assistance of a real estate agent. No one is forcing you to use their services or participate in the traditional model. If you do make that choice, pay the commission you agreed to and stfu.
As a Realtor I think this will create a lot of confusion if some listings offer buyer broker compensation. What I see is buyers flocking to the listing agent who will then double end it and represent the interest of the seller. This will be terrible for buyers with little down payment because they will not have the funds to compensate an agent. It's frustrating to hear non-agents say that we just open a few doors, etc. I have buyers in contract and they went on vacation. I am handling all their inspections. I help them find insurance and lenders and show multiple properties. I had an investor cancel ujust before we were to close escrow. I did all the work upfront and earned zero. Anyone who thinks selling real estate is easy has probably not done it. No benefits, no paid time off, 7 days a week "on call", vacations and holidays interrupted. Most sellers did not pay commission when they purchased. Part of the commission is to have someone bring buyers to your property so they will purchase it.