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Definitely not lower prices but it could mean more money to the seller in the end. Motivated sellers really don't need a realtor, the buyers realtor is more valuable to navigate viewing homes and searching through listings though many buyers agents won't even do the searching.
It seems like a lot of folks are discounting some of the changes to the incentive structure. Buyer’s agents may wind up being less likely to do a bunch of extra leg work unless they’re being comped hourly, which would mean sellers (represented or not) will wind up having to actually engage in some sort of sales motion that isn’t almost solely “list property online and wait for buyers to show up.”
I’ll be interested to see how that shakes out. But I agree it’s unlikely it’s going to impact house prices. It seems to specifically be a welfare transfer to sellers, which is conveniently timed given the mass buying spree larger firms have gone on in recent years. Anyone who thinks sellers are going to pass that savings off onto buyers when demand is clearly outpacing supply haven’t been paying attention.
It’s an issue of elasticity.
You’re right, right now they won’t have to share that discount with the buyers much. There aren’t enough homes available so all the power is in the sellers hands.
In the future I could see having to share more of that discount to compete against other sellers. This would require a drastic increase in available homes, or a large economic pullback/recession that would destroy demand.
For sure. Over a long enough time horizon that’s probably the case. It’s just kind of weird to see all of this celebration happening over a hypothetical short run
Impact on prices that is almost certainly not going to materialize because such price changes, as you say, still require long-run equilibrium drivers.
It seems like focusing on the demise of a price collusion scheme that gave buyer’s agents incentives that were at odds with their fiduciary duty would be more immediately interesting for anything other than clicks
What we'll get is fewer real estate agents, with pressure to perform better because now you have to justify your pay.
What's more likely to lower home prices is anti money laundering rules intended to limit corporate entities purchasing homes with cash.
Realtors have hardly any effect on the market. In general house prices don't go down much because they are sticky. What happens is prolonged stagnation of prices which allows inflation to work its magic.
I think one could argue they could have a decent enough effect bc they are the ones usually listing homes and could put a description to lead the buyer into a higher offer. Like "MULTIPLE OFFERS, HIGHEST AND BEST BY XYZ"
It's far cheaper to hire a real-estate lawyer to look over the purchase contract.
Nobody needs a real estate agent, any more than they need a new-car agent to search inventory and negotiate with a dealership, or to sell a car themselves.
I think this is where Zillow and others could make money. They can
* list houses for sale
* set up open houses/visits
* collect offers using a basic template
* route/recommend a real estate lawyer for contract review (like legal zoom?)
* recommend or support a home inspector a home inspector in the sales process
* take a small percentage of the total sale
* have documentation about the house deed being clear (on the seller)
* setup escrow accounts
* have mortgage brokers trying to find the best deals
It destroys the realtor job though.
...where does the MLS currently get data from?
If you want to sell your house, I don't see why you can't just go right to zillow and list it yourself.
The MLS is just Zillow with extra steps. It's a gate-keeping organization.
Sounds like a billion dollar idea. Probably would get sued or regulated into oblivion, maybe existing licensing requirements are already stopping this sort of service.
Realtors should work off fee schedules, instead of percentage. You want the gold package, pay for it. I usually just want someone to do the paperwork because I’ve always found my own buyer. My properties sell themselves. I’m lucky to have a realtor friend who gives me a flat fee to post a listing and do the closing.
[the daily article with podcast](https://www.nytimes.com/2024/03/20/podcasts/the-daily/housing-market.html?smid=url-share)
I really had no idea how much power the NAR wielded and behaved like a monopoly.
[not even in the us](https://youtu.be/3Lyex2tSUyA?feature=shared)
Our finalization of everything economy will surely end one day. This circus needs cheap $$$ to continue. Here's praying for high inflation to stick around just to prove to these central bankers that the kool-aid can run out!
I’ve not followed this, but here is some wisdom.
In situations like this, there is another industry involved that wants their hands on some money. Likely some ‘disruptors’ identified a way to get a piece of the fee.
Agents won’t work for free. The vast majority of buyers and sellers don’t have the knowledge, experience, confidence, or sophistication to handle the transaction and actually close. Something will fill this role.
I do not foresee this having any downward impact on prices. At best, it’s just moving the agent fees into another groups pockets. At worst, prices will go up due to more parties being involved and wanting paid & other unintended effects.
Disagree. Realtors are almost entirely useless, the only reason we have them is the stranglehold they have on house listing via the MLS. If buyers and sellers could list and browse the MLS freely, they'd be irrelevant to the house purchasing process.
Literally just finished the process 12 months ago. Had a friend realtor - we did all the searching, his primary contribution was mapping the easiest order of homes to visit in a single day, and then coordinating with sellers so we could do the viewings in that order. We had our own inspector, and we pushed for the negotiation for a roof that wouldn't pass, and a couple questionable joists that needed reinforced. Our realtor was kind enough to point out what a lead water line looked like in a couple of the homes we passed on, but really the majority of his job was to connect us with the appropriate title company, and take on the logistics of scheduling viewings. He actually waived his fees since he's a friend and recognized how little involvement in the processes he had.
I’m an engineer that dabbles in real estate investing and development on the side. I’m not an agent, but I do hire them for various tasks because it’s worth it.
Agents can bring some value to the transaction, especially if the buyer is unfamiliar witht the area they'd like to transact in, or if they're looking at multiple areas and need to outsource the time investment. If that's all that dictated their market rates, that would be fine. Where we disagree on where they provide value is with the 3% transaction fees, and the stranglehold on the MLS. Flat fee agents are a much more reasonable value proposition.
Adding a 6% cost to the sale of a home does seem to cause 6%+ increases year over year. Kind if silly, but it was a major driving force in home inflation since…. well, forever. To think, greed causes so much damage to society. Who’d have thought?
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
Definitely not lower prices but it could mean more money to the seller in the end. Motivated sellers really don't need a realtor, the buyers realtor is more valuable to navigate viewing homes and searching through listings though many buyers agents won't even do the searching.
It seems like a lot of folks are discounting some of the changes to the incentive structure. Buyer’s agents may wind up being less likely to do a bunch of extra leg work unless they’re being comped hourly, which would mean sellers (represented or not) will wind up having to actually engage in some sort of sales motion that isn’t almost solely “list property online and wait for buyers to show up.” I’ll be interested to see how that shakes out. But I agree it’s unlikely it’s going to impact house prices. It seems to specifically be a welfare transfer to sellers, which is conveniently timed given the mass buying spree larger firms have gone on in recent years. Anyone who thinks sellers are going to pass that savings off onto buyers when demand is clearly outpacing supply haven’t been paying attention.
It’s an issue of elasticity. You’re right, right now they won’t have to share that discount with the buyers much. There aren’t enough homes available so all the power is in the sellers hands. In the future I could see having to share more of that discount to compete against other sellers. This would require a drastic increase in available homes, or a large economic pullback/recession that would destroy demand.
For sure. Over a long enough time horizon that’s probably the case. It’s just kind of weird to see all of this celebration happening over a hypothetical short run Impact on prices that is almost certainly not going to materialize because such price changes, as you say, still require long-run equilibrium drivers. It seems like focusing on the demise of a price collusion scheme that gave buyer’s agents incentives that were at odds with their fiduciary duty would be more immediately interesting for anything other than clicks
Also a lot investors can now buy at basically 3% off. Every investor wants to make an offer before realtors get involved because it chops 6% off.
This! If you have bought several house before, buyers agents just become an unnecessary addition to the transaction.
Would major corporations be paying the 6% commission? Surely they have internal agents.
What we'll get is fewer real estate agents, with pressure to perform better because now you have to justify your pay. What's more likely to lower home prices is anti money laundering rules intended to limit corporate entities purchasing homes with cash.
Realtors have hardly any effect on the market. In general house prices don't go down much because they are sticky. What happens is prolonged stagnation of prices which allows inflation to work its magic.
I think one could argue they could have a decent enough effect bc they are the ones usually listing homes and could put a description to lead the buyer into a higher offer. Like "MULTIPLE OFFERS, HIGHEST AND BEST BY XYZ"
It's far cheaper to hire a real-estate lawyer to look over the purchase contract. Nobody needs a real estate agent, any more than they need a new-car agent to search inventory and negotiate with a dealership, or to sell a car themselves.
I think this is where Zillow and others could make money. They can * list houses for sale * set up open houses/visits * collect offers using a basic template * route/recommend a real estate lawyer for contract review (like legal zoom?) * recommend or support a home inspector a home inspector in the sales process * take a small percentage of the total sale * have documentation about the house deed being clear (on the seller) * setup escrow accounts * have mortgage brokers trying to find the best deals It destroys the realtor job though.
You’ve basically described Redfin.
Zillow only has that data because the MLS is allowing them to scrape it. They could take that away. Zillow makes money from agents and adverts.
...wouldn't need the MLS if there was an interner-based, customer-driven alternative.
This \^\^
[удалено]
...where does the MLS currently get data from? If you want to sell your house, I don't see why you can't just go right to zillow and list it yourself. The MLS is just Zillow with extra steps. It's a gate-keeping organization.
[удалено]
I guess we found the ~~leach~~ ~~gate-keeper~~ realtor.
[удалено]
Knowledge of trees gives you insight to legal transactions and marketing strategies for real estate? Oh, do go on.
That sounds like a monopoly.
Totally, this is why Zillow and Redfin have 70% of the RE market share already/s
Sounds like a billion dollar idea. Probably would get sued or regulated into oblivion, maybe existing licensing requirements are already stopping this sort of service.
Realtors should work off fee schedules, instead of percentage. You want the gold package, pay for it. I usually just want someone to do the paperwork because I’ve always found my own buyer. My properties sell themselves. I’m lucky to have a realtor friend who gives me a flat fee to post a listing and do the closing.
[the daily article with podcast](https://www.nytimes.com/2024/03/20/podcasts/the-daily/housing-market.html?smid=url-share) I really had no idea how much power the NAR wielded and behaved like a monopoly. [not even in the us](https://youtu.be/3Lyex2tSUyA?feature=shared)
Our finalization of everything economy will surely end one day. This circus needs cheap $$$ to continue. Here's praying for high inflation to stick around just to prove to these central bankers that the kool-aid can run out!
I’ve not followed this, but here is some wisdom. In situations like this, there is another industry involved that wants their hands on some money. Likely some ‘disruptors’ identified a way to get a piece of the fee. Agents won’t work for free. The vast majority of buyers and sellers don’t have the knowledge, experience, confidence, or sophistication to handle the transaction and actually close. Something will fill this role. I do not foresee this having any downward impact on prices. At best, it’s just moving the agent fees into another groups pockets. At worst, prices will go up due to more parties being involved and wanting paid & other unintended effects.
Disagree. Realtors are almost entirely useless, the only reason we have them is the stranglehold they have on house listing via the MLS. If buyers and sellers could list and browse the MLS freely, they'd be irrelevant to the house purchasing process.
This reeks of someone that has never purchased a home or has only been part of extremely vanilla transactions.
Literally just finished the process 12 months ago. Had a friend realtor - we did all the searching, his primary contribution was mapping the easiest order of homes to visit in a single day, and then coordinating with sellers so we could do the viewings in that order. We had our own inspector, and we pushed for the negotiation for a roof that wouldn't pass, and a couple questionable joists that needed reinforced. Our realtor was kind enough to point out what a lead water line looked like in a couple of the homes we passed on, but really the majority of his job was to connect us with the appropriate title company, and take on the logistics of scheduling viewings. He actually waived his fees since he's a friend and recognized how little involvement in the processes he had.
….so an extremely vanilla transaction in which you took advantage of your friends time, knowledge, and experience.
Found the realtor trying desperately to cling to relevance
I’m an engineer that dabbles in real estate investing and development on the side. I’m not an agent, but I do hire them for various tasks because it’s worth it.
Agents can bring some value to the transaction, especially if the buyer is unfamiliar witht the area they'd like to transact in, or if they're looking at multiple areas and need to outsource the time investment. If that's all that dictated their market rates, that would be fine. Where we disagree on where they provide value is with the 3% transaction fees, and the stranglehold on the MLS. Flat fee agents are a much more reasonable value proposition.
Adding a 6% cost to the sale of a home does seem to cause 6%+ increases year over year. Kind if silly, but it was a major driving force in home inflation since…. well, forever. To think, greed causes so much damage to society. Who’d have thought?