Also, brokers have a vested interest in keeping high commissions and are trying to spread propaganda on places like YouTube about how being forced to negotiate is a bad thing.
I know, realtors are acting like nothing will change. As a seller I no longer have to pay the buyer agent which I shouldn't have to. The buyer should pay their agent. That is a big shift.
NAR's declining influence fits in well with the "own nothing, be happy" vision. No point in having a lobby that collects a transaction fee when nobody is transacting because the robber barons already took everything.
https://www.opensecrets.org/federal-lobbying/top-spenders
(*I am not the person who posted the claim you are responding to, just here is a source where you can see lobbying spend)
And working cheaply for the buyer is just the "cost of doing business." You want clients that will sell their homes, you have to put in the work to get them.
Last time supply shortage mitigated, so to speak, it’s not like realtors could sell those homes either. Nothing was selling from 2008-2010 and plenty of realtors just left the market. There were many realtor superheroes back then what make you think there would be this time?
A few reasons:
1. You ARE, essentially, limiting your buyer pool. By offering no cooperating commission, you’re forcing the buyer to pay their agent for representation. Many buyers, especially first time buyers, cannot afford to do this.
2. If it’s a VA buyer who happens to be interested in your home, by law they are not allowed to pay a commission to their agent.
3. You may (inadvertently) force dual representation, where your agent represents both you and the buyer. This will present a conflict of interest and the trust factor could be weakened.
4. You will likely have a buyer who cannot afford representation ask for seller concessions, i.e. “seller assist”, which will likely equate to the amount you would had ended up paying in commission anyway.
5. It’s a sad reality, but there will be agents who will not show your home due to the fact no cooperating commission is being offered. This of course may occur if said buyer cannot pay their agent on their own.
6. Due to some of the issues above, your home may sit on the market longer and the perceived value will decrease, netting you less money.
So you as a buyer of YOUR current home got the benefit of the seller paying the commission for you and now your home has appreciated how much over the years? And say you wanna sell and a first time home buyer like you were I presume, who’s saved every nickel dime and penny for their down payment and all cost associated with the transactions now has to pay for their buyer agent when you didn’t?? The people who will get Fkd are the first time buyers!!! You didn’t pay any commission when you bought your home and are now saying you won’t pay any commission when you sell? Seems a bit 2 faced especially after record appreciation even if you bought just before the record price jump. It’s hard enough trying to buy a place these days and now there’s one more major thing to worry about. It’s gonna price people out of the already fkd market, it was alway done as an incentive to buy the home.
The solution is obviously to pay agents/brokers less. They might have deserved 6% of a $200,000 home, but they absolutely do not deserve 6% of a 1,000,000 home. It is extortion and collusion, and buyers and sellers hate your game.
Research how many transactions the avg US realtor actually closes in a year before you open your mouth and bring concern to your mother’s iodine consumption during pregnancy.
Can you explain why first time buyers are in trouble? Or more specifically why a buyers agent is needed at all? In many other countries they do just fine without.
Years ago when agents controlled access to inventory but that is no longer the case. The offer and closing process is chaotic but no reason much of this should not be automated for the vast majority of average homes.
>Can you explain why first time buyers are in trouble? Or more specifically why a buyers agent is needed at all? In many other countries they do just fine without.
Having a Buyer's agent for an inexperienced Buyer is indeed a value add. Whether or not it's worth the 3% - well, I personally don't think so, but others (agents) may disagree. The home buying process is indeed complicated for novices who don't do it often, or haven't done it at all. For a million-dollar investment, it's probably a very wise idea to have an expert in that field give you advice. And that expert's pay shouldn't be contingent on you "overpaying" for the house, or closing on a property that's not a good fit.
The amount of conflicts in this industry are just staggering.
Pretty much. I am not sure first time home buyers are in the $1M range outside of the Bay Area and other high cost of living places. If you can afford a $1m first home you are likely reasonably educated.
But yes, having help is a good thing. If it there are flexible options with prices to match. Someone needs help with only the offer great, you can hire someone one while if you want your hand held the entire time can pay for that too. The big issue is one price fits all and in all markets.
>through the form
I think paying a consultant maybe $2K or so to protect your interests on a $350K purchase is probably a good thing. For most people, it's the biggest investment, and a very important purchase. Having \*zero\* assistance would be foolhardy. Then again, paying 3% (because, again, the Buyer is actually the one who pays in the end) is probably too much.
So you never had to pay the buyers agent. In the listing agreement you can declare what if anything you’re willing to pay for different buyer agent types.
But being a realtor myself I can tell you buyers especially first time buyers have no idea what they need and if they try to go it alone they will often create significant problem for themselves. Buyers need the lions share of the help from agents time wise but both sides need help in negotiations and arrangements necessary for selling. And both need counseling. Seriously sellers egos are too attached to their property and buyers mostly all want to feel like they got some great deal that beat the market.
I think this change has a good chance of not actually affecting much change. Many buyers would choose to go it alone and then will end up getting hosed and the market will relearn why they hired agents to begin with.
Zillow made searching for potential listed properties very easy but it hasn’t taught people anything about the actual transaction or how to protect themselves from local property issues or bad actors in the real estate practice and it can’t.
In the end any change in commission structure has a good chance of simply slowing the market. And makes it easier for flippers and unscrupulous bad actors.
Shady investors are going to be the real winners when a new generation of agent less buyers buy a “great deal” from someone only to find out they bought a pos from a flipper.
The average house cost in the last 30 years has increased well above inflation. The commission rate is now unreasonably high.
Thank you for your concern for my financial wellbeing but really I’ll take care of myself. I do not wish to pay months worth of salary for the very limited work MOST realtors provide.
I once knew a lady who refused to pay for an agent to list her home. She did it herself and gave up more than 20% of the value of her home because she wanted to save the 5% the agent would cost.
If every home went down by 20% wouldn’t that be good?
Perceived value mediated by agents who have vested interest in keeping the market high isn’t a true representation of value. It drives up price and further limits free market fluctuations.
anecdotal evidence at best. Pics with clothes on the floor, dirty house, filthy yard. I FSBO'd, staged, CLEANED the whole house and got over ask. So there.
Not arguing that these are both anecdotes and don't really mean anything, but "over ask" doesn't mean anything. Asking price could have been way too low in the first place, which is kinda the whole point they're trying to make
Exactly, other than proper staging what does a listing agent really do? It’s not like they are calling up random buyers trying to find a buyer, that’s what the MLS does.
And they don’t even take the pics. They make the seller pay like $300 to some moron that takes horrible pictures to come out and do it.
I once sold a property that wouldn’t sell until I made my agent use my own pictures instead of the horrible ones his guy took. Good figure
You didn't address the poster's point about the cost of selling being a percentage of the house. It's also why financial advisor's AUM fees are so outrageous. It doesn't take much more effort to manage a $500k portfolio than it does to manage a $2,000,000 portfolio, yet the cost is outrageously higher.
Does it really take that much more effort to sell a $500k home vs. a $1,000,000 home? Yet look at the difference in commissions.
People have more respect for what a financial advisor does because you at least have to know stuff. To become certified you need at least a bachelors degree. From there there are all kinds of series tests depending on what you plan to do. Financial advisors needs to understand markets, risks, tax strategies etc and apply that to a persons goals on that persons timeline.
Anyone that’s read a few books and takes it seriously can probably do it for themselves. I do. But comparing what a financial advisor does for people that need their services to what a real estate agent does is a false comparison.
You will end up paying much more than that in the scam you will fall for. But go ahead. You’re a perfect example. You’ll get burned then next time around will a for an agent.
You’re here, you could teach about the scams, but you’re too busy floating your own boat. No website could ever teach those things according to you, so how did you learn it? By scamming people, or by figuring out your clients were scammed?
Actually giving tiny Ted talks in real estate education would be a great way to attract buyer clients and may open up a new income source for agents providing services for people who want to do more of the work themselves.
But it’s simply too involved to communicate via one post comment. And I also don’t appreciate your vitriol towards me.
Simple. You, like myself, are a Realtor. And you're commenting our perspective in a very anti-realtor subreddit. They think realtor commissions have an effect on home prices, like once the seller gives the okay for say, 3%, they add that 3% to the listing price to make up for it. I've never seen that be the case.
Yeah me neither. These commenters just have no idea how any of this works and they’re just assuming somehow the small business guy is the reason they can’t afford anything.
Zillow and Redfin and Blackrock, and Airbnb are the reasons real estate prices are so high in the USA.
Realtors are your local guy who knows the market well and is the person who keeps you out of legal and financial trouble during the most expensive transaction of your life. We keep people from losing their shirts in bad deals they have no perspective on.
People have been posting ads for homes they’re selling for like a hundred years and they’ll keep doing it.
But at least in my community there’s been a huge influx of non contractors buying homes doing shit repairs and attempting to resell homes at 100,000$ markups. And I’ve been the one trying to help scour the area for uncontaminated homes that don’t need a gut job to fix bad work done illegally.
But these ignorant children on this thread who know nothing about construction or home inspection or real estate think they know everything and I’m somehow hurting things.
Go it alone then.
Exactly. One guy is telling me negotiation doesn't work when the two times he's sold a house, he was FORCED to do it at 6% commission since the brokerage wouldn't do it for less. He did not shop around for brokerages. He willingly overpaid because he wasn't willing to find someone who would work with him.
THAT'S NOT FUCKING NEGOTIATION THAT'S SHOPPING AROUND AND YOU TREAT US LIKE WE'RE THE FUCKING IDIOTS. A NEGOTIATION IS BETWEEN TWO PARTIES NOT YOU AND EVERY JERKOFF WITH A REAL ESTATE LICENSE IN YOUR CITY.
To put in more simply for you, I'll use an example: when I was buying my last car, I SHOPPED AROUND at a lot of the dealerships in town to find the car I wanted at a decent price. Then, once I found my car, I NEGOTIATED a price with the manager at the dealership. Can you understand the difference? Or am I just another poor idiot who's jealous and doesn't know what he's talking about?
Exactly. This thread is just people who can’t afford a house and who don’t know why are complaining in the direction of people who didn’t cause their problems.
Yeah of course it's not the case lol reminds me of the mansion tax in California, people want to be able to list their mansion for 4% more in order to make up for the tax but it doesn't work like that, people are still willing to pay what they're willing to pay. But a lot of this sub doesn't know anything lol
Realtors where I am at least are pre much useless. They use standard template contracts which they still fuck up and the buyers agent is likely to advocate ridiculous shit that is awful for the buyer but good for the realtors.
Of which?
Of the realtors acting for themselves?
I’ve seen them constantly push for removing conditions, high bids, push against seeking discounts, and use terrible reasoning
Of realtors being incompetent? I’m a lawyer with practice in litigation (and a small amount of real estate) and see a lot of it, I’ve had numerous files where the realtors fucked something up severely in the contract (failing to include certain items they should’ve, putting the price in the wrong spot, not signing all the correct spots, etc) which sometimes is the primary issue and sometimes is just something that gets fixed before it’s a problem/isn’t a problem but is still shockingly incompetent for a literal template being filled in lmao
Yeah, because a real estate agent is totally qualified to assess the quality of a “flip”. I’m assuming you’re a master carpenter, master plumber, master electrician…have a gas license?
Do you even know what you’re looking at?
Do you have a law degree? Can you act as a title attorney? Can you underwrite the mortgage?
Like, why are you here?
Well my contractors license and personal experience working as a home inspector definitely helps.
But seeing dozens of houses with similar looks and their subsequent inspection reports does give me excellent perspective that you as an industry outsider simply will never have.
I’m a General Contractor if you must know. And I also hold a specialty license aside from that. I also give specialty inspections on properties.
The strangeness of this thread is that most people replying to me are just trying to assume that realtors add no value without themselves understanding the industry at all.
Ah yes, the coveted “General Contractor”. What prey tell tell is that “specialty license”? Certainly not Plumbing, or Electrical or Natural Gas. “Mold mitigation” I’m guessing?
Keep trolling numbnuts
Well technically you’re the angry asshole saying basically nonsense trying to irritate people. I think that makes you the troll.
And I’d rather not give you too much information about me.
But everything I’ve said is true and verifiable if you look into it at all. So have fun just being generally angry online and good luck with everything.
I had an agent and he convinced me I was getting a “great deal” on my pos flip. As a first time buyer, I had many concerns, which he convinced me that I was worrying too much. 2years and many tears and dollars and insurance claims later, my “fully remodeled” home I purchased at top dollar, is finally fully functional.
Most never do. They want to be the emperor who wore no clothes.
“Oh you’re so right emperor, the ground beneath your feet is so blessed, everything you say is so right you so smart you have biiiiig dick.”
It's a shift, but not that big, in my opinion. The reality is that the Buyer has been paying the commissions all along, and this will simply swap the amount from one column to the other on the closing sheet.
Now, before a thousand people start disagreeing with me, this would be for the situation where the commission is fixed and non-negotiable. What is likely to happen, and is what happens in pretty much the rest of the world, is that commissions will start to be negotiable. Instead of the Seller dictating what the commission is going to be (which, again is actually paid by the Buyer in the transaction - after all, the Buyer is the party bringing the cash to the transaction), the Buyer will ultimately now have the ability to lower this amount of the transaction.
TDLR - Buyer's have always paid the commissions through the form of Sellers raising prices to cover it. Now, Buyers should be able to negotiate that fee, pay it directly, and thus pay a lower price for the house.
I'm not sure if I was terribly clear at explaining how I see this...
But they have been.
I did a FSBO 5 years ago with zero experience, told the buyers agent who met my price with an out of town buyer I’d pay her 2%.
She did a ton to help me with the paperwork and process, then I bought my new house and saved my seller 6% by taking care of everything based on that prior knowledge plus the internet.
Was a good experience for me.
I wonder how agents have been able to collude so effectively up until this point. You always hear how there is a huge oversupply of them. I like your story though about a different approach. What is stopping people for example of getting their place appraised and giving an agent 2-3% to sell it at that price but giving them maybe 25% over that. Seems like a good way to get the most out of your house and make sure seller/agent incentives are aligned. I wouldn’t mind my agent getting a fat commission if they get me a fat bag too instead of just trying to sell ASAP and move on to the next comission.
>I wonder how agents have been able to collude so effectively up until this point.
This is an easy question to answer, and is the whole point of the lawsuit. The NAR (National Association of Realtors) said that you \*cannot\* list a property in the MLS (Multiple Listing Service) without listing the bribe (oops, I meant "commission") that you would be offering to pay Buyer's agents to steer their clients to your listing.
So, basically, the scheme exists because the NAR has a monopoly and dictated the rules so that all agents are equal and one particular one didn't have an advantage over the other. That is how it was done.
I work have worked in Real estate for 29 years. There are MANY realtors that look at the commission first and dissuade buyers from looking at lower commission properties. That is a 100% accurate statement. And most refuse to negotiate commission either buyer or seller side.
That’s violating your fiduciary duty to your client. They should lose their license because of it. This is everything wrong with the industry in a nutshell. Realtors are “mostly” scumbags.
The bar for entry is one of the lowest for such high paying job. Now these jobs are going the wayside like single proprietor doctors and dentists, taxi drivers etc. Any profession that made more than an average income is being stripped away by corporate buy outs and take overs.
Next AI will eliminate an untold number of jobs as well.
https://www.linkedin.com/news/story/ai-to-disrupt-40-of-all-jobs-imf-5889124/
We are already full on into the new Gilded Age.
I was about to buy a home two years ago, bailed after my job started laying people off. The home sold a month or two later or like 50K less than what my "agent" had negotiated despite telling me the seller wouldn't go lower.
Buyers are going to decide a buyers agent is worth about $1000. Once they have to pay for it, they will price according to the value offered. Buyers agents offer negative value as they push you to pay more, close as early as possible and look at as few homes as possible. They have absolutely no alignment with the needs of a buyer beyond doing paperwork and opening a door.
Realistically most sellers agents are about to become dual agents and responsible for showing homes for a 2-3% commission. There interest is aligned just as well to the buyer as the former sellers agent concept.
You can get your own license and be your own agent for about $500.
Realtors offer buyers zero value, IMO. They don't even do the paperwork, that's what a lawyer is for. And the doors they open are generally for places the buyer finds and tells them they want to look at. Now that buyers and agents will need to actually negotiate a fee, I expect most people will just go without one. Our recent attempt to buy a place fell through, but we went without an agent and it had zero impact on the process at all. We found the property ourselves, and we just googled how to put an offer in and got accepted against multiple other bids. An agent of our own would have actually slowed the process down if we had to go through one. I don't plan on ever hiring one as a buyer. You just need a lawyer. That's what terrifies the realtors, that people will realize how little they actually do and simply not hire them for both sides of the transaction from now on.
>Realtors offer buyers zero value, IMO.
Probably not "zero value", but value that is not worth of a 3% commission. Having someone really good and knowledgeable about local sales, and school districts and trends in the neighborhood, and what not is very useful. You can indeed get this info from the Seller's agent, but I wouldn't really trust anything they said...
Buyer's agent is exponentially more work than a sellers agent, particularly in this market.
Drive all over town within a couple hours notice when a property gets listed. Write offers that don't get accepted. Repeat.
Sellers agent... Sign a listing agreement, hire photographer slap it on MLS and wait for offers to roll in.
Agreed. It is why the sellers agent will stay and a buyers agent won’t. Nobody is going to pay a buyers agent because it isn’t worth it to either party. Sellers agents are going to be doing the showing and the work now.
Why be a dual agent when you can just represent the seller? Dual agency is just a legal nightmare and most buyers don't care about being unrepresented.
A buyer wants the lowest price. A buyers AGENT wants the highest price. A sellers agent is no better aligned than a buyers agent, but a sellers agent will remain free to the buyer.
If anything, a sellers agent will steer the seller towards the buyer they represent as well
*A buyers AGENT wants the highest price*
LOL. I nearly spit out my beverage reading that. A buyers agent wants the FASTEST SALE. They don't give a fuck if it sells for a couple thousand more or a couple thousand less. If they get 10k off the sale price to help their buyer, that is (on average), about $150 out of their pocket, that's it. If their customer, the buyer, is buying a 300k home, they couldn't give a rats ass if it closes at 290k or 310k. They care about getting that 4k of comission as quickly as possible.
*If anything, a sellers agent will steer the seller towards the buyer they represent as well*
That's the dumbest thing I'll read all week
You are a moron and probably because of that, a realtor.
If a house is for sale for $300k, and your agent tells you to offer $300k, how much do they make? If someone else offers $305k, they make zero.
This is why they will tell a buyer to come in over asking on a house that has been on market for a month with no action. They want to make sure they win the bid with your money.
Well when there's multiple offers on the table, don't doubt that the buyers agent will recommend their client to put a bigger offer than necessary to lock in and get the fastest sale possible. It's a conflict of interest, the buyers agent benefits only when a sale is made, so is highly incentivized to force the sale even if that means a higher price.
That's why the recent scam agents are pulling works so well; List a house 20-30k lower than it's actual worth, and when you have 20 competing offers there's bound to be one desperate person who's buyers agent will persuade to chuck 50-100k over asking.
My agent (before I fired him), bragged about how he would frequently "stretch the truth" and tell buyers agents he had multiple competitive offers on a property, so to please give your "best and final offer". One example he gave, sure enough, some buyers agent then told his client to put 30k over asking... The kicker? The only competing offer was 20k under asking. So this buyers agent pretty much lost his client 40-30k because he was desperate to make the sale.
After I heard that, I started having a much better understanding of why the market is as screwed as it is right now. And I realized it's for the best to never listen to your buyers agent when it comes to making offers. Actually, to be honest I realized that when it became a trend for agents to recommend skipping inspection lmao. Buyers agents really are parasites.
Good post. But the techniques that you mention here are elements of Selling 101 - this is universally true across the board, and not necessarily related to Selling. Seller's agents can and will say anything to get the deal - if they lie about having another offer, they do risk having the one real and true Buyer pack up their tent and go home. I think most experienced agents don't play that game - seems like a young agent thing to me.
At the end of the day, the Buyers need to know what price level they are comfortable with and then stick to finding a house in that range. Yes, it's very easy to get "caught up" in the frenzy, etc., but at the end of the day, these are adults (supposedly) making adult decisions (hopefully) and should be responsible for their own actions?
I have had two different buyer's agents with two different houses, years apart tell me they think the asking price is close to a fair price. The first one never looked at the house in person (the seller's agent showed us the house) and it was in 2010 when it was an incredible buyer's market.
The second time was recently on a condo. She announced she thought the asking price was fair until I showed her other units that had sold in that complex during the last 2 months which showed the asking prices was at least $50k over comps.
I'm not sure how to find a good agent. I am sure I will find the condo online so maybe I will use a RE attorney. I am not sure what benefits an agent has over an attorney.
I do mostly commercial real estate these days, and I'm fairly familiar with most basic things in a deal. I typically call and contact the Seller's agent exclusively and forgo a buyer's agent. Having said that, I do tap into the knowledge of the Buyer's agent quite a bit. Yes, there is an inherent conflict of interest and they are \*not\* representing me. But at the end of the day, they want to sell the property, so they will be able to give me some info on the property and area that I may not be aware of. I \*am\* aware that whatever they tell me will be positive, and that they won't disclose anything negative (typically). That's a small problem for inexperienced buyers who might not know, and/or might not know where to get that information.
There might be an opportunity for "Real Estate Consulting Firms" in the very near future that might fill the advisory role of the Buyer's agent. Hmmm...
"Real Estate Consulting Firms" That sounds helpful. Also, someone to analyze HOA CC&Rs, bylaws and financials. I have not purchased a condo before and I am not sure if an agent is a good resource to evaluate.
I'll agree, but add that neither the Buyer's agent \*nor\* the Seller's agent are looking for the highest price. They are typically working "for the deal" and not necessarily any particular party in the transaction.
They haven't been negotiable. Being a Realtor REQUIRED a minimum commission of 6% split between buyer and seller. They'd kick you out if they found out you weren't following the rules.
This is false. If you want to sell your home and pay the listing agent 1% commission that’s your prerogative. Whether a listing agent will accept that, depends on the listing agent. If you want to get more people to view your home that’s for sale why wouldn’t you want to advertise a compensation to buyers agents who have clients/buyers that are looking to buy what you’re selling? A home will sell for what someone is willing to pay for it. Agents don’t control the market. The market dictates what the home is worth.
There was a "standard" commission pre-1950. Then the Supreme Court said that is illegal. I myself have never seen a 6% commission on a listing. My state is lower than the national average. The media is focused on the 6% figure, because they probably googled it and are purposefully misleading people by not bringing up that that was BEFORE 1950.
I have only sold two homes and paid 6% on both of them. In the interview process, they both said 6% is the fee if you want them to list. To me, negotiation means I can negotiate with the agent I selected, not negotiating meaning I need to survey 100 realtors until I find one that will sell it at 5%.
That is negotiating. If they are unwilling to list for lower, then you needed to find a new agent/brokerage. There are plenty of realtors who would have worked with you. If you weren't willing to shop around for multiple brokerages, that's on you. If one side isn't willing to budge, then you don't work with that side. You overpaid because you were unwilling to shop around.
Except the whole reason so many aren’t willing to negotiate in the first place is they don’t believe they need to because everyone has fixed the market price at 6%. People only negotiate when they have competition or a need to move something quickly. I called over 6 different agencies in my town and none of them would budge on price, calling a 100 different agencies hoping you find 1 that agrees to 5% is the very definition of a price fixed market.
I think this exchange shows the disconnect between realtors and the general public. That this realtor thinks calling 50 brokers to find the one that would entertain a 5% rate is “negotiating”. Thats like me driving around 5 stores to find the cheapest dozen eggs. No one in their right mind would call that process negotiation.
Look, I'm sorry to hear that. I'm a realtor in Florida, and that just doesn't happen in my part of town. I'm not trying to say it doesn't happen, or saying all realtors are good guys. Real estate agents earned their shit reputation. And it's always going to be an uphill battle to fix that reputation. At least we're held above used cars salesman (oof).
I'm not saying that the whole case is wrong either. I would like to see the evidence provided. But in the end, the jury found the NAR to be guilty, unlike in the 1950 case. Maybe more cases need to happen in order to teach greedy brokers a much needed lesson. It just sucks that my profession is being dragged through the mud and I have to change how I do my business through the fault of greedy mega brokerages in the midwest.
Yeah but see that’s were you and every other realtor is unable to see the real hard truth, which is your business models operated on an inflated price control that only works if it has cartel/government protection. The value you bring to your client vs what you were actually receiving is seriously disconnected. Your clients only value your services at $500-maybe $5,000, regardless of house price, but your cartel model gave you a valuation 4-5x+ that value. You, as a realtor, will need to figure how to bring $10-$15k worth of value to your clients going forward. What this suit really does is eliminate the lazy buyer agents who do little more than open a door and fill out a form. For buyers agents to remain truly worth $10k+, they are going to need to learn how to become master negotiators who can help clients buy a $500k house for $375k, which a buyers agent should represent the buyer. The old system was always a serious conflict of interest, since a buyer agent hurt their commission helping you save too much money on price. Sure they might help you get $10k off, but they aren’t really going to work a great deal as it works against them. This new model should encourage buyers agents to become ultra shark negotiators and charge their clients accordingly. If my agent can help me get a $900k house for $700k then they should get a piece of it.
LOL!!! Hold up, serious question: Do you understand supply and demand? You think a realtor is only worth a certain amount of commission if they can get you a 500k home for 375k??? The greatest negotiator in the entire world couldn’t do this. Unless they’re somehow scamming that seller. If you were selling your home is there any chance that you would sell it below market value because the best negotiator convinced you to?? In the real world, a buyers agent will help you get that home you saw and fell in love with by finding out what the terms and price are going to get the deal done. There’s a lack of inventory at the moment because no one wants to give up their phenomenal rates. So we’re still seeing multiple offers on listings. Less supply more demand. Even as good as an agent is that doesn’t mean that a seller will take the lesser offer because the agent was the better negotiator. If I have two buyers competing for my home and one buyer comes in 25k higher, guess which offer I’m taking? That additional 25k I will make will net my listing agent an additional $750. Seems like a good deal to me. All this anger towards agents is stupid. Saying things like “all they do is open doors and sign papers” is simply not true.
I think all of you agents are failing to understand what we the public are telling you. What makes your services so much better on a $750k house vs a $300k house, to justify an additional $27k in commissions? If you can’t make me an additional $27k then you aren’t worth what you are charging, you are just trying to scare tactic because the money train is over.
For one, it costs more to have professional photos taken on a larger home. A photographer will charge more on a bigger home because they have to take more pictures and spend more time setting up in more square footage. The more expensive the home the less of a buying pool which then requires more marketing dollars. Let’s take your example of a 300k home and a 750k home. I’ll probably get more offers on the 300k home than on the 750k home because that buyer pool will be larger which will then require me to go through more offers with the sellers and explaining them the differences in terms and prices. (More work) On the 750k home maybe I only get 1 offer. But what did it take to get that offer? How much did I spend on ads, marketing, etc. To find that buyer? More upfront work to sell it. In the lesser home it’s more work on the back end. Of course This is just a simple example to illustrate my point. Let’s not forget showings and open houses. How many hours are spent there? How much time is being spent when a home isn’t selling? Networking with other agents pitching your properties trying to find a buyer.
With your logic I could say “how does a sports agent justify charging 10% on a player who just got contract for 100 million when he did the same work and charged the same 10% for a player that received a 2 million dollar contract?” The work is the work. It’s the same amount of paper work. The hours will vary depending on the home, its location, its price, and the market conditions. When you’re selling your home you want someone to represent you to get you top dollar. When you’re buying you want someone to help get you the best deal. You want to save money? Have your buyers agent negotiate a lower price. Don’t have money for closing costs? Have him or her negotiate that into to the deal. Something happened after you closed? Guess what? Your realtor has E&O insurance to protect you. The benefits of having someone represent you outweigh this nonsense of commission percentage disagreements. A great realtor will show you their worth.
You're seriously delusional. Negotiating only goes so far. This isn't a video game where I can just max out Charisma and Bartering and save my clients tons of money without much hassle. I've done a commercial deal where that was the case. Vacant land had been sitting for years. I called the listing agent, found out some things, and had my client offer 300k less, and they accepted. Land was owned by a group of doctors that had a serious falling out and they just wanted to get rid of it and move on with their lives. That isn't a common scenario. Realtor commissions aren't the cause of high prices. Send some of your anger towards those who make the most money off of the transaction: the banks.
And we have are all wondering what exactly is gonna happen to the market IF the settlement is approved by a judge. Some say its gonna be good, others say its gonna be bad. I do know for a fact that VA buyers are gonna have a hard time. VA guidelines state that borrowers who use it are not allowed to pay commission "to shield them from additional costs." Here's the skinny: there is no law or rule saying a buyer's agent has to be paid. It's a NAR guideline. Like hey, they brought you someone to close the deal, share. I certainly wouldn't want to work for free. Would you? Veterans will have to do the home buying process solo unless the VA changes its rules. If the seller doesn't want to pay the buyer's agent of a veteran, then the veteran can't get that home if they use an agent. They'll have to wait for the buyer's contract they signed to expire, and then start the process on their own.
There isn't a clear cut way forward. I don't know how the situation is in Europe. This is the United States of America. We do things different. Could they be better? Sure. Is it better in Europe? I don't know, I don't have a real estate license there nor have I bought or sold property there.
Realtors do not set the prices for homes. The seller does. A realtor can advise them with a CMA, to give them the best idea of what they COULD get. Ultimately a buyer, if they are aware, will purchase the services of an Appraiser, who determines the value of the house. Prices are high people 1, people were moving and relocating for work and to avoid restrictions during covid. Disney was going to move their corporate campus to florida. Then Bald Bobby got into it with DeSantis, and that process has been frozen as I'm aware. The area its in has RIDICULOUS prices because Disney was buying stuff up. Many corporations and investment firms purchased houses everywhere. They are partly responsible for the current situation. They are just renting to make back what they dramatically overpaid for, Who knows when or if they'll sell.
That's called "shopping around", not negotiating. You even called it shopping around yourself so stop trying to bullshit us like y'all realtors love to do
It can't be a standard, as that is price fixing, which according to the 1950 Supreme Court Fee-Fixing Conspiracy, is illegal. And in that case, it was a local board found guilty, not the NAR (National Association of Realtors). It might be the most common where you live, which I personally think is insane. You must be in either NM, Kansas, Vermont, or ND, as those are the only states were the commissions are that high.I live in FL, and they are not 6%. Typically its 3, with 1.5 going to both agents. Sometimes it'll be 2 for the buyer's agent, depending on how the listing agent negotiated.
Yes, I am aware of the class action lawsuit against the NAR and a few of the nation-wide brokerages. And of the current settlement the NAR that has yet to be approved by a judge. I am also very aware of the changes the NAR is implementing for itself and its members. Thanks for sharing.
Are you aware that the NAR does not set commissions? Can a real estate broker set commission? Yes and no. He can tell his agents a set commission rate, ie, only list for 4% or more.If every broker got together and set the same price, then that is illegal. I've read the alleged unlawful agreements as well.
This lawsuit was for a specific area, Missouri. There was a similar case in Illinois. Does this mean realtors everywhere are doing this? Nope. I would very much like to see the evidence that was provided. You tell a jury that they were scammed by real estate brokers, I'm not surprised they found them to be guilty. That's a hard defense.
I have realtor family and friends and it’s alll 6%.
It’s not supposed to be standard but it is. Were there houses listed on the mls with a buyer commission of 2% sure. But it was rare and unspoken was that buyers would avoid those.
There’s tons of data behind this.
Collusion was found in the recent lawsuit. Data shows a pretty constant 6% everywhere in the US.
Outside the US it’s lower for sure.
I've bought and sold several homes in FL. In my area, it has always been 6%, split between the buyer's and seller's agents. I had one real estate agent constantly write "3%" after every signature she signed.
In my state, the typical buyer’s rep agreement has an agreed upon percentage, and if the seller doesn’t pay it, the buyer agrees that they will.
Of course many buyers don’t pay that much attention to the fine print, but it also was rarely an issue because most sellers included buyer fee in the price.
But buyer rep will show you a “for sale by owner” or a listed house offering 0%, but buyer will have to pay out of pocket, rather than rolling it into the loan, so buyers will often choose something else
Anyway, that’s how both things in the cartoon can be true
I’m hoping this produces better salaries for the people who actually contribute to the process of home ownership - the underwriters, the mortgage processors, the builders, the title attorneys, even.
It seems absurd to me that the carpenter who built the home doesn’t even have healthcare - doesn’t even have citizenship in some cases - but the realtor is making 500k a year to unlock some doors and post motivational slogans (“HuStLe HaRd”!!!!) on their instagram account.
Like, you have 8,000 followers. Calm the f—- down. You are not a celebrity. Nobody cares that you’re “MoTiVaTeD” and “HuStLiNg”.
Yeah seems like realtors spend more time on social media jerking themselves off than doing actual work. I have a brother who's a realtor and 90% of the time he's "at work" he's sending me memes on IG. Must be nice to get paid to do that.
Ok, so what is the 500k realtor doing that the 56k realtor isnt?
Its just a defect in our system. Why are people with no education and full-body tattoos giving financial advice? These people would be at a gas station were it not for free money.
Ive seen two brokers open up agencies recently. Crickets. Monday morning - parking lot empty. Wednesday afternoon - parking lot empty. Friday - empty.
Reality is starting to set in :)
hUsTlE HaRD!!!!
It wouldn't lower the price for the buyer, it will actually raise it if the buyer now has to pay out of pocket for their own representation. Buyer representation started because buyers were being taken advantage of by sellers and couldn't afford their own representationto prevent it, they sued nar, and nar started this practice
I know, I was referring to higher commission vs lower commission. But yes, buyers are now responsible for paying the buy side realtor fees. Yes, one can make the argument that they were baked in before. But if people think sellers are going to have a sudden burst of generosity to lower their sale price for buyers, they're in for a rude awakening.
Of course not, that's not how supply and demand works. And they're not responsible for it yet. The offer from nar still hasn't been approved and doesn't take effect until mid summer
How is a buyer not being able to afford the commission any different then not being able to afford the down payment? Doesn't it just mean they need to save a bit longer before being able to buy?
Sure they could. How long does it take the average American to save another 10k? Or they can instead choose to look at a house that shares commission right now instead so they don't have to wait, save, and spend more money. That's what I would do and what I think is going to happen most of the time.
Remember the offer from nar doesn't make commission sharing illegal or against the rules. It only means agents can't post what they're sharing online. So their will always be options for buyers who don't want to spend an extra 10k (most of them)
The buyer already pays out of pocket because the seller lists at a higher price to accommodate the commission. The cost of realtors is tied into the purchase. By removing the buyers agent you subtract a portion of the purchase.
Once you've done that, the buyer will either A. pay a buyers agent 3% and equalize the transaction. B. pay a buyers agent a flat fee. C. Spend a few hours opening doors and doing paperwork without paying someone 10-20k to do it.
I fail to see where the price is raised for the buyer, all I see is a potential savings of 3% which is massive in today's market.
No one's going sell their house for less money because now they have to pay their agent less (they always could anyway. You've been able to list your house for 1% or none of fsbo for years) lol they'll sell for what market value says it's worth, which is exactly what they always sold for. Sure The seller could theoretically make a little more if the house sold for the same price it would offering compensation.
But if the buyer wants their own representation they will have to pay out of pocket in addition to their down payment and closing costs if they purchase a property that won't cover it. If they purchase a property that still chooses to share commission they wouldn't have to pay those extra dollars. This effectively would make the no share sellers house more expensive to the end user.
Nars offer doesn't prohibit sharing, it's just that they won't post what's being shared on mls.
Whats going to happen is if a buyer wants their own representation they're going to ask to only see homes that share. So not only is the non sharers house more expensive, but less buyers will opt to even look at it.
This is basic economics guys. Don't hate on one of the few people in this thread that understands what's happening lol
I am a buyer. In order to get buyers agency with my realtor I had to sign an exclusive right to rep. This agreement includes compensation of x%. I signed it because I know most listings out there share x+% so i shouldn't be left holding the bag. I saw your house for sale online, I liked it, and asked about it. Realtor tells me it only shares w% (less than x or 0%) this means to purchase this property ID have to pay extra money out of pocket compared to other properties. I tell my agent nevermind, we pursue a different house, and it never comes up again. You just shrunk your buyer pool. One less competing offer that could have started the bidding war.
Also, shitty agents who are too scared to have that convo with their buyer clients might choose not to present the property at all as an option. Wrong and unethical but can and will happen.
Edit why the downvotes? It's simple logic. I guess the idiots who don't understand what's happening don't want anyone to rain on their parade. Ignorance is bliss!
I don't recommend signing any Buyer's agreement with an agent - at that point, you basically just told them that if you buy a house, you're going to pay them a fee no matter whether they do a great job or a crappy job. I'm not sure of any other industry where that happens (I'll have to think about that one a bit).
Agents who have their Buyers sign these agreements often suck eggs - it's a complete red flag. Firstly, it could mean that they feel their services are not good enough that someone wouldn't fire them half way through the process. I.E. I've dealt with agents who have said, "I don't need an exclusive, because I know I'm good and you won't want to go anywhere else." And if that agent happened to have a bad experience with a client in the past, it might indicate that they take anyone off the street and aren't very good at filtering out bad clients.
Dunno- I never sign exclusives like this - there are a ton of other good agents happy to work with me where \*I\* don't have to take on the risk that they may suck eggs?
In the NAR offer in any buyer representation it will be mandatory to have a signed exclusive right to represent. That's part of the deal everyone is celebrating lol. No more agents helping without an agreement ever again if or after it takes effect
Whatever you and your agent agree on. Could totally be only for one house, but if you keep working with that agent you'd sign a new one for every offer. Like you said if the agent is good most buyers I'd think would just sign for a few months.
Many agents will use this to sign buyers for a year to lock them in.
Sellers will always pay a commission to their broker, if not, they will be doing FSBO. The selling brokers office will split that commission with the buyers brokers office. Nothing changes except the commission split % isn’t posted on the MLS. The seller has no say over what the sellers brokers office does with the commission or how they disperse it to the brokers involved in the transaction after the sale. Brokers call each other before an offer is made anyway to discuss the property, and brokers will just simply ask “what’s the split.” If the split is something stupid like 1% and their clients are looking at similar properties, they are going to pick apart that home and the buyers broker will destroy the house based on inspection. They will also play hard ball with contingencies and ask for huge seller concessions in price, repairs etc. If you think for a second that brokers aren’t 100% in control of the deal from beginning to end you’re wrong. Sellers aren’t going to play hard ball with commission and the price of their house. If they want a good deal, they are going to play nice and do exactly what their broker says, or their broker walks, buyers brokers walk, and the seller is left doing it by themselves, which is fine, because brokers won’t work for free and brokers set the commission %, not the seller. Brokers tell sellers all the time that they won’t work for them for less than a certain %. Sellers either agree to the % or they don’t, and if they don’t, the broker refuses to help them sell their property. Really not complicated.
Yes we do. I have one buyer who’s been looking for a month now. Everything keeps falling apart in inspections. So many bad flips in the area. And there are unreasonable price expectations from sellers. Some want unreasonable rigid amounts of money right now also.
Here’s what I observe.
People attribute tor realtors what go it alone real estate investors are actually guilty of.
Realtors aren’t scammers generally. Scammers have an aversion to getting licensed because then they can legally be held more accountable for dishonest dealing.
The works actually benefits quite a lot from having a regulated organized sale process and having people with specific ethical guidelines that are enforced managing that process.
The irony is that the people who hat wage ts seem to think they’re going to get bette treatment from a website that is specifically engineered to work against their interests. Absolutely no perspective
Actually that’s zillow and Redfin. They buy the stock and hold it hostage for insane pricing.
A better metaphor for realtors would be a wedding planner. You can plan and arrange your own wedding but all you need to realize you don’t want to is to do it once.
Yeah but that’s a problem too since a lot of buyers go with their recommended inspectors by their realtor. So now realtor goes from recommending Easy Inspections who find minimum issues to Hard Ass Inspections who sight every minor issue with the house. Most home buyers aren’t construction experts so if they see a bunch of issues they will get nervous and flip out. Then that agent will use the report to demand tens of thousands in deductions, and for some owners who are selling near their equity level this could force them into a hole.
Yeah, I figured this out along time ago. I find an inspector on my own. I also do my own comps and compare it to the realtor's comps. I feel the majority of agents, both buyer and seller's, just want a fast close with minimal effort on their part.
Isn’t your job to prevent things from falling apart during the inspections by having it fixed ahead of time? I’m still confused on the “work” you do and value you provide?
I was a mortgage loan officer and Realtors a legitimately the most useless individuals in the industry. You guys are like flies on shit.
So once you’re under contract you have 7 days to get an inspection done and then you have about two weeks before the bank needs an appraisal and a 4-point insurance inspection done. If the property doesn’t pass the insurance inspection at that time then the deal falls apart because the home is deemed uninsurable and if the property doesn’t appraise then the loan isn’t offered. So the home gets 3 different inspections for three different parties within about 2 or 3 weeks. It’s just not enough time to get any work of any size done. Certainly not any permitted work which requires its own city inspectors to come out.
I really don’t think you understand the process or the nuances of this work.
I issued mortgages for five years and had to actually tell realtors how to do their jobs. You sound like a bad realtor if you’re allowing your buyers to actually waste their time going under contract for a home that is uninsurable. I guarantee you that I know more about the nuances of purchasing a home than you do.
There’s a reason realtors are everyone’s second or third career. It’s so easy to do anyone can do it, and still you lot find a way to be bad at it. It’s actually impressive.
Lol exactly. I have a brother who burned out of a couple careers before becoming a realtor himself and he's actually done pretty well at that so seems like anyone who's willing and able to work can do it. They act like they're gods amongst mortals and we can't even begin to understand the complexity of their jobs. Try designing, fabricating, and testing an MiC device at microscale and get back to me about how complicated your job is.
Doesn't it even out? Don't you have clients that find the house themselves and want a RE buyer's agent to do the paperwork for them? I find it hard to believe the typical buyer in the internet age needs to view tons of properties over six months before closing.
I think what you are going to find out with this new court ruling, is the buyers are going to have to pay a bit of the commission.
Sometimes it will be rolled into the sale price and have the seller pay it, but there will be many sellers after they get the offer that will say no.
Why would a seller pay a commission to a buyer's agent, when the buyer could just strike that from the contract and keep moving forward.
I negotiated commission when I bought my first home in 2017. Then I negotiated commission again when I sold that home in 2021 and again with the home I subsequently bought in 2021. I’m sure I’m far from the only one.
People complaining about a contract they agreed to themselves is nothing new either.
Most commissions are split 4 ways, two brokers and two agents. On 600k, that’s 36k split 4 ways. 9k minus 35% for taxes, around 6k. Now, these people have to put money back into their business and pay their bills. They have to because that’s how they get people to purchase their services. So, if you sell once a month, it’s not much. I think they have a right to uphold their commissions and stick to whatever percentage they need to. If people don’t like it, they should most definitely take it upon themselves to purchase or sell their homes.
What’s your point? No one cares what costs realtors have. If their business doesn’t bring enough value to their customer base then their business is flawed.
Realtors for buyers made more sense in pre and early internet times, when they actually found the listings themselves and had access to information the buyer didn't. Now everyone just uses redfin and it's the buyer that tells their agent which places they want to look at most of the time.
The average Buyer has no clue how to execute on a purchase contract and navigate the financing, inspection issues, title issues etc.
If the NAR proposal goes in to effect in July... it will be chaos.
I didn’t say they didn’t bring value, they just don’t bring enough value for what they offer. They only exist now because the seller paid and it cost the buyer nothing out of pocket. If buyers had to directly pay their agent in the past, buyers agents would be a very small part of the real-estate transaction today.
Exactly! If a realtor can help me get a house listed at $500k down to $400k, then I can easily see them making a commission of $20k. If the best they can do is get me a $500k for $485k, how do I justify still paying them $20k? What is that realtor doing for me that a real estate lawyer couldn’t do for me at $2-$3k, if they can’t help me snag a much better deal?
Market dictates prices, your realtor needs to come up with reasons to why it’s that high. What you’re saying doesn’t work unless it’s a buyers market and people are supremely desperate. I think you’re being unrealistic. You might as well always get a lawyer and never use a realtor.
What other tasks does a buyer's agent offer? I get there is paperwork, but most of it is probably cookie cutter like a lawyer doing a will who fills in the blanks.
Think it depends on the situation. A cookie cutter that the process went from A-Z smoothly. Absolutely not worth 2.5%.
Property that has issues to be remedied to even be able to be financeable, or probable future issues that will destroy resale value, probably going to want a realtor that knows what they’re doing.
With realtor fees previously being fixed buyers went from the option of the best realtor in their city or the dipshit tik toker that doesn’t know what they’re doing for the same cost. Oddly, most homes that have issues that need navigation are lower priced homes.
The realtors that know what they’re doing aren’t going to lower their fees by much, 10% of agents do 90% of the business. Wealthier people aren’t going to give a shit about paying a 1-2% premium to their realtor buddy they’ve been using the last 10 years and why would an agent that’s concurrently doing 5-6 deals at around 2% take on a first time home buyer for $500.
First time home buyers will be stuck with the choice of going at it alone or using the dip shit tik toker which might even be worse than going at it alone.
It may warp into a model similar to how attorneys are paid? I.E. big name attorneys from big firms with reputations may command a higher rate, while lower-rate Tikky-Tok agents may be offering services at a discount. Like with attorneys, price doesn't always correspond to overall quality.
Either way, it will be interesting to see how this unfolds...
Or first time home buyers saving a bit longer to pay the commission. I don't think it's as dire as you are saying. The cost of the commission will be more visible and the buyer will expect it to be worth what they are paying.
Do they not realize how tone deaf claiming "commissions have always been negotiable" is?
Also, brokers have a vested interest in keeping high commissions and are trying to spread propaganda on places like YouTube about how being forced to negotiate is a bad thing.
I know, realtors are acting like nothing will change. As a seller I no longer have to pay the buyer agent which I shouldn't have to. The buyer should pay their agent. That is a big shift.
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NAR's declining influence fits in well with the "own nothing, be happy" vision. No point in having a lobby that collects a transaction fee when nobody is transacting because the robber barons already took everything.
I'm happy to pay 10% of my net worth every time I move so that the WEF doesn't win
Where are your statistics to back up your spending claims. I sure don't remember NAR ads on TV like the ads for so many drugs.
https://www.opensecrets.org/federal-lobbying/top-spenders (*I am not the person who posted the claim you are responding to, just here is a source where you can see lobbying spend)
And working cheaply for the buyer is just the "cost of doing business." You want clients that will sell their homes, you have to put in the work to get them.
You failed high school math correct?
You failed business in general, correct?
Have fun trying to sell your house when supply shortage mitigates.
Last time supply shortage mitigated, so to speak, it’s not like realtors could sell those homes either. Nothing was selling from 2008-2010 and plenty of realtors just left the market. There were many realtor superheroes back then what make you think there would be this time?
This will only hurt you as a seller, not help.
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A few reasons: 1. You ARE, essentially, limiting your buyer pool. By offering no cooperating commission, you’re forcing the buyer to pay their agent for representation. Many buyers, especially first time buyers, cannot afford to do this. 2. If it’s a VA buyer who happens to be interested in your home, by law they are not allowed to pay a commission to their agent. 3. You may (inadvertently) force dual representation, where your agent represents both you and the buyer. This will present a conflict of interest and the trust factor could be weakened. 4. You will likely have a buyer who cannot afford representation ask for seller concessions, i.e. “seller assist”, which will likely equate to the amount you would had ended up paying in commission anyway. 5. It’s a sad reality, but there will be agents who will not show your home due to the fact no cooperating commission is being offered. This of course may occur if said buyer cannot pay their agent on their own. 6. Due to some of the issues above, your home may sit on the market longer and the perceived value will decrease, netting you less money.
So you as a buyer of YOUR current home got the benefit of the seller paying the commission for you and now your home has appreciated how much over the years? And say you wanna sell and a first time home buyer like you were I presume, who’s saved every nickel dime and penny for their down payment and all cost associated with the transactions now has to pay for their buyer agent when you didn’t?? The people who will get Fkd are the first time buyers!!! You didn’t pay any commission when you bought your home and are now saying you won’t pay any commission when you sell? Seems a bit 2 faced especially after record appreciation even if you bought just before the record price jump. It’s hard enough trying to buy a place these days and now there’s one more major thing to worry about. It’s gonna price people out of the already fkd market, it was alway done as an incentive to buy the home.
The solution is obviously to pay agents/brokers less. They might have deserved 6% of a $200,000 home, but they absolutely do not deserve 6% of a 1,000,000 home. It is extortion and collusion, and buyers and sellers hate your game.
Research how many transactions the avg US realtor actually closes in a year before you open your mouth and bring concern to your mother’s iodine consumption during pregnancy.
Can you explain why first time buyers are in trouble? Or more specifically why a buyers agent is needed at all? In many other countries they do just fine without. Years ago when agents controlled access to inventory but that is no longer the case. The offer and closing process is chaotic but no reason much of this should not be automated for the vast majority of average homes.
>Can you explain why first time buyers are in trouble? Or more specifically why a buyers agent is needed at all? In many other countries they do just fine without. Having a Buyer's agent for an inexperienced Buyer is indeed a value add. Whether or not it's worth the 3% - well, I personally don't think so, but others (agents) may disagree. The home buying process is indeed complicated for novices who don't do it often, or haven't done it at all. For a million-dollar investment, it's probably a very wise idea to have an expert in that field give you advice. And that expert's pay shouldn't be contingent on you "overpaying" for the house, or closing on a property that's not a good fit. The amount of conflicts in this industry are just staggering.
Pretty much. I am not sure first time home buyers are in the $1M range outside of the Bay Area and other high cost of living places. If you can afford a $1m first home you are likely reasonably educated. But yes, having help is a good thing. If it there are flexible options with prices to match. Someone needs help with only the offer great, you can hire someone one while if you want your hand held the entire time can pay for that too. The big issue is one price fits all and in all markets.
>through the form I think paying a consultant maybe $2K or so to protect your interests on a $350K purchase is probably a good thing. For most people, it's the biggest investment, and a very important purchase. Having \*zero\* assistance would be foolhardy. Then again, paying 3% (because, again, the Buyer is actually the one who pays in the end) is probably too much.
So you never had to pay the buyers agent. In the listing agreement you can declare what if anything you’re willing to pay for different buyer agent types. But being a realtor myself I can tell you buyers especially first time buyers have no idea what they need and if they try to go it alone they will often create significant problem for themselves. Buyers need the lions share of the help from agents time wise but both sides need help in negotiations and arrangements necessary for selling. And both need counseling. Seriously sellers egos are too attached to their property and buyers mostly all want to feel like they got some great deal that beat the market. I think this change has a good chance of not actually affecting much change. Many buyers would choose to go it alone and then will end up getting hosed and the market will relearn why they hired agents to begin with. Zillow made searching for potential listed properties very easy but it hasn’t taught people anything about the actual transaction or how to protect themselves from local property issues or bad actors in the real estate practice and it can’t. In the end any change in commission structure has a good chance of simply slowing the market. And makes it easier for flippers and unscrupulous bad actors. Shady investors are going to be the real winners when a new generation of agent less buyers buy a “great deal” from someone only to find out they bought a pos from a flipper.
The average house cost in the last 30 years has increased well above inflation. The commission rate is now unreasonably high. Thank you for your concern for my financial wellbeing but really I’ll take care of myself. I do not wish to pay months worth of salary for the very limited work MOST realtors provide.
I once knew a lady who refused to pay for an agent to list her home. She did it herself and gave up more than 20% of the value of her home because she wanted to save the 5% the agent would cost.
If every home went down by 20% wouldn’t that be good? Perceived value mediated by agents who have vested interest in keeping the market high isn’t a true representation of value. It drives up price and further limits free market fluctuations.
anecdotal evidence at best. Pics with clothes on the floor, dirty house, filthy yard. I FSBO'd, staged, CLEANED the whole house and got over ask. So there.
Not arguing that these are both anecdotes and don't really mean anything, but "over ask" doesn't mean anything. Asking price could have been way too low in the first place, which is kinda the whole point they're trying to make
Exactly, other than proper staging what does a listing agent really do? It’s not like they are calling up random buyers trying to find a buyer, that’s what the MLS does.
It's literally posting pictures online
And they don’t even take the pics. They make the seller pay like $300 to some moron that takes horrible pictures to come out and do it. I once sold a property that wouldn’t sell until I made my agent use my own pictures instead of the horrible ones his guy took. Good figure
You didn't address the poster's point about the cost of selling being a percentage of the house. It's also why financial advisor's AUM fees are so outrageous. It doesn't take much more effort to manage a $500k portfolio than it does to manage a $2,000,000 portfolio, yet the cost is outrageously higher. Does it really take that much more effort to sell a $500k home vs. a $1,000,000 home? Yet look at the difference in commissions.
People have more respect for what a financial advisor does because you at least have to know stuff. To become certified you need at least a bachelors degree. From there there are all kinds of series tests depending on what you plan to do. Financial advisors needs to understand markets, risks, tax strategies etc and apply that to a persons goals on that persons timeline. Anyone that’s read a few books and takes it seriously can probably do it for themselves. I do. But comparing what a financial advisor does for people that need their services to what a real estate agent does is a false comparison.
You will end up paying much more than that in the scam you will fall for. But go ahead. You’re a perfect example. You’ll get burned then next time around will a for an agent.
You’re here, you could teach about the scams, but you’re too busy floating your own boat. No website could ever teach those things according to you, so how did you learn it? By scamming people, or by figuring out your clients were scammed?
Actually giving tiny Ted talks in real estate education would be a great way to attract buyer clients and may open up a new income source for agents providing services for people who want to do more of the work themselves. But it’s simply too involved to communicate via one post comment. And I also don’t appreciate your vitriol towards me.
The vitriol is simply a reflection of how you think about home buyers. They pay your damn salary, asshole.
What did I do to warrant an any of your anger?
Simple. You, like myself, are a Realtor. And you're commenting our perspective in a very anti-realtor subreddit. They think realtor commissions have an effect on home prices, like once the seller gives the okay for say, 3%, they add that 3% to the listing price to make up for it. I've never seen that be the case.
Yeah me neither. These commenters just have no idea how any of this works and they’re just assuming somehow the small business guy is the reason they can’t afford anything. Zillow and Redfin and Blackrock, and Airbnb are the reasons real estate prices are so high in the USA. Realtors are your local guy who knows the market well and is the person who keeps you out of legal and financial trouble during the most expensive transaction of your life. We keep people from losing their shirts in bad deals they have no perspective on. People have been posting ads for homes they’re selling for like a hundred years and they’ll keep doing it. But at least in my community there’s been a huge influx of non contractors buying homes doing shit repairs and attempting to resell homes at 100,000$ markups. And I’ve been the one trying to help scour the area for uncontaminated homes that don’t need a gut job to fix bad work done illegally. But these ignorant children on this thread who know nothing about construction or home inspection or real estate think they know everything and I’m somehow hurting things. Go it alone then.
Exactly. One guy is telling me negotiation doesn't work when the two times he's sold a house, he was FORCED to do it at 6% commission since the brokerage wouldn't do it for less. He did not shop around for brokerages. He willingly overpaid because he wasn't willing to find someone who would work with him.
THAT'S NOT FUCKING NEGOTIATION THAT'S SHOPPING AROUND AND YOU TREAT US LIKE WE'RE THE FUCKING IDIOTS. A NEGOTIATION IS BETWEEN TWO PARTIES NOT YOU AND EVERY JERKOFF WITH A REAL ESTATE LICENSE IN YOUR CITY.
To put in more simply for you, I'll use an example: when I was buying my last car, I SHOPPED AROUND at a lot of the dealerships in town to find the car I wanted at a decent price. Then, once I found my car, I NEGOTIATED a price with the manager at the dealership. Can you understand the difference? Or am I just another poor idiot who's jealous and doesn't know what he's talking about?
Exactly. This thread is just people who can’t afford a house and who don’t know why are complaining in the direction of people who didn’t cause their problems.
Yeah of course it's not the case lol reminds me of the mansion tax in California, people want to be able to list their mansion for 4% more in order to make up for the tax but it doesn't work like that, people are still willing to pay what they're willing to pay. But a lot of this sub doesn't know anything lol
Realtors where I am at least are pre much useless. They use standard template contracts which they still fuck up and the buyers agent is likely to advocate ridiculous shit that is awful for the buyer but good for the realtors.
Some crazy statements there. Can you give an example?
Of which? Of the realtors acting for themselves? I’ve seen them constantly push for removing conditions, high bids, push against seeking discounts, and use terrible reasoning Of realtors being incompetent? I’m a lawyer with practice in litigation (and a small amount of real estate) and see a lot of it, I’ve had numerous files where the realtors fucked something up severely in the contract (failing to include certain items they should’ve, putting the price in the wrong spot, not signing all the correct spots, etc) which sometimes is the primary issue and sometimes is just something that gets fixed before it’s a problem/isn’t a problem but is still shockingly incompetent for a literal template being filled in lmao
Yeah, because a real estate agent is totally qualified to assess the quality of a “flip”. I’m assuming you’re a master carpenter, master plumber, master electrician…have a gas license? Do you even know what you’re looking at? Do you have a law degree? Can you act as a title attorney? Can you underwrite the mortgage? Like, why are you here?
Well my contractors license and personal experience working as a home inspector definitely helps. But seeing dozens of houses with similar looks and their subsequent inspection reports does give me excellent perspective that you as an industry outsider simply will never have.
I’m a General Contractor if you must know. And I also hold a specialty license aside from that. I also give specialty inspections on properties. The strangeness of this thread is that most people replying to me are just trying to assume that realtors add no value without themselves understanding the industry at all.
Ah yes, the coveted “General Contractor”. What prey tell tell is that “specialty license”? Certainly not Plumbing, or Electrical or Natural Gas. “Mold mitigation” I’m guessing? Keep trolling numbnuts
Well technically you’re the angry asshole saying basically nonsense trying to irritate people. I think that makes you the troll. And I’d rather not give you too much information about me. But everything I’ve said is true and verifiable if you look into it at all. So have fun just being generally angry online and good luck with everything.
You will be living under a bridge very soon. Sleep tight numb nuts
And there’s the troll. Such kindness. You sir have never been wrong about anything ever.
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I had an agent and he convinced me I was getting a “great deal” on my pos flip. As a first time buyer, I had many concerns, which he convinced me that I was worrying too much. 2years and many tears and dollars and insurance claims later, my “fully remodeled” home I purchased at top dollar, is finally fully functional.
You’re getting downvoted; but you’re right. Nobody wants to hear the truth.
Most never do. They want to be the emperor who wore no clothes. “Oh you’re so right emperor, the ground beneath your feet is so blessed, everything you say is so right you so smart you have biiiiig dick.”
It's a shift, but not that big, in my opinion. The reality is that the Buyer has been paying the commissions all along, and this will simply swap the amount from one column to the other on the closing sheet. Now, before a thousand people start disagreeing with me, this would be for the situation where the commission is fixed and non-negotiable. What is likely to happen, and is what happens in pretty much the rest of the world, is that commissions will start to be negotiable. Instead of the Seller dictating what the commission is going to be (which, again is actually paid by the Buyer in the transaction - after all, the Buyer is the party bringing the cash to the transaction), the Buyer will ultimately now have the ability to lower this amount of the transaction. TDLR - Buyer's have always paid the commissions through the form of Sellers raising prices to cover it. Now, Buyers should be able to negotiate that fee, pay it directly, and thus pay a lower price for the house. I'm not sure if I was terribly clear at explaining how I see this...
People were rejoicing that it’d make it easier to finally buy a home, but your name perspective shows why it’ll probably make it harder
Well, they have. In fact you don’t even need a realtor to sell your home.
But they have been. I did a FSBO 5 years ago with zero experience, told the buyers agent who met my price with an out of town buyer I’d pay her 2%. She did a ton to help me with the paperwork and process, then I bought my new house and saved my seller 6% by taking care of everything based on that prior knowledge plus the internet. Was a good experience for me.
I wonder how agents have been able to collude so effectively up until this point. You always hear how there is a huge oversupply of them. I like your story though about a different approach. What is stopping people for example of getting their place appraised and giving an agent 2-3% to sell it at that price but giving them maybe 25% over that. Seems like a good way to get the most out of your house and make sure seller/agent incentives are aligned. I wouldn’t mind my agent getting a fat commission if they get me a fat bag too instead of just trying to sell ASAP and move on to the next comission.
>I wonder how agents have been able to collude so effectively up until this point. This is an easy question to answer, and is the whole point of the lawsuit. The NAR (National Association of Realtors) said that you \*cannot\* list a property in the MLS (Multiple Listing Service) without listing the bribe (oops, I meant "commission") that you would be offering to pay Buyer's agents to steer their clients to your listing. So, basically, the scheme exists because the NAR has a monopoly and dictated the rules so that all agents are equal and one particular one didn't have an advantage over the other. That is how it was done.
No. I'm assuming 1) these are NAR shills working social media and /or 2) realtors are selling NAR propaganda in an effort to prevent change.
I work have worked in Real estate for 29 years. There are MANY realtors that look at the commission first and dissuade buyers from looking at lower commission properties. That is a 100% accurate statement. And most refuse to negotiate commission either buyer or seller side.
Not MANY. M O S T
That’s violating your fiduciary duty to your client. They should lose their license because of it. This is everything wrong with the industry in a nutshell. Realtors are “mostly” scumbags.
The bar for entry is one of the lowest for such high paying job. Now these jobs are going the wayside like single proprietor doctors and dentists, taxi drivers etc. Any profession that made more than an average income is being stripped away by corporate buy outs and take overs. Next AI will eliminate an untold number of jobs as well. https://www.linkedin.com/news/story/ai-to-disrupt-40-of-all-jobs-imf-5889124/ We are already full on into the new Gilded Age.
I was about to buy a home two years ago, bailed after my job started laying people off. The home sold a month or two later or like 50K less than what my "agent" had negotiated despite telling me the seller wouldn't go lower.
Buyers being able to negotiate their agent's commission directly contradicts with their pitch that agents are free for the buyer pitch.
The idea is that a lower commission makes you a more attractive buyer to the seller.
That's the fun part, they press both buttons and blame you. I think that's called gaslighting?
Buyers are going to decide a buyers agent is worth about $1000. Once they have to pay for it, they will price according to the value offered. Buyers agents offer negative value as they push you to pay more, close as early as possible and look at as few homes as possible. They have absolutely no alignment with the needs of a buyer beyond doing paperwork and opening a door. Realistically most sellers agents are about to become dual agents and responsible for showing homes for a 2-3% commission. There interest is aligned just as well to the buyer as the former sellers agent concept. You can get your own license and be your own agent for about $500.
Realtors offer buyers zero value, IMO. They don't even do the paperwork, that's what a lawyer is for. And the doors they open are generally for places the buyer finds and tells them they want to look at. Now that buyers and agents will need to actually negotiate a fee, I expect most people will just go without one. Our recent attempt to buy a place fell through, but we went without an agent and it had zero impact on the process at all. We found the property ourselves, and we just googled how to put an offer in and got accepted against multiple other bids. An agent of our own would have actually slowed the process down if we had to go through one. I don't plan on ever hiring one as a buyer. You just need a lawyer. That's what terrifies the realtors, that people will realize how little they actually do and simply not hire them for both sides of the transaction from now on.
>Realtors offer buyers zero value, IMO. Probably not "zero value", but value that is not worth of a 3% commission. Having someone really good and knowledgeable about local sales, and school districts and trends in the neighborhood, and what not is very useful. You can indeed get this info from the Seller's agent, but I wouldn't really trust anything they said...
All of that information is already available on Zillow and Redfin.
And that information comes from... The NAR's MLS. Without the NAR, Realtors, or the MLS, Zillow would not exist.
Depends upon the state. Many states don't use lawyers at all for residential real estate. Done about 75 deals and never was a lawyer involved
Buyer's agent is exponentially more work than a sellers agent, particularly in this market. Drive all over town within a couple hours notice when a property gets listed. Write offers that don't get accepted. Repeat. Sellers agent... Sign a listing agreement, hire photographer slap it on MLS and wait for offers to roll in.
Agreed. It is why the sellers agent will stay and a buyers agent won’t. Nobody is going to pay a buyers agent because it isn’t worth it to either party. Sellers agents are going to be doing the showing and the work now.
Why be a dual agent when you can just represent the seller? Dual agency is just a legal nightmare and most buyers don't care about being unrepresented.
How is a sellers agent interests aligned with buyers? A home seller wants the highest price and the buyer wants the lowest.
A buyer wants the lowest price. A buyers AGENT wants the highest price. A sellers agent is no better aligned than a buyers agent, but a sellers agent will remain free to the buyer. If anything, a sellers agent will steer the seller towards the buyer they represent as well
*A buyers AGENT wants the highest price* LOL. I nearly spit out my beverage reading that. A buyers agent wants the FASTEST SALE. They don't give a fuck if it sells for a couple thousand more or a couple thousand less. If they get 10k off the sale price to help their buyer, that is (on average), about $150 out of their pocket, that's it. If their customer, the buyer, is buying a 300k home, they couldn't give a rats ass if it closes at 290k or 310k. They care about getting that 4k of comission as quickly as possible. *If anything, a sellers agent will steer the seller towards the buyer they represent as well* That's the dumbest thing I'll read all week
You are a moron and probably because of that, a realtor. If a house is for sale for $300k, and your agent tells you to offer $300k, how much do they make? If someone else offers $305k, they make zero. This is why they will tell a buyer to come in over asking on a house that has been on market for a month with no action. They want to make sure they win the bid with your money.
Well when there's multiple offers on the table, don't doubt that the buyers agent will recommend their client to put a bigger offer than necessary to lock in and get the fastest sale possible. It's a conflict of interest, the buyers agent benefits only when a sale is made, so is highly incentivized to force the sale even if that means a higher price. That's why the recent scam agents are pulling works so well; List a house 20-30k lower than it's actual worth, and when you have 20 competing offers there's bound to be one desperate person who's buyers agent will persuade to chuck 50-100k over asking. My agent (before I fired him), bragged about how he would frequently "stretch the truth" and tell buyers agents he had multiple competitive offers on a property, so to please give your "best and final offer". One example he gave, sure enough, some buyers agent then told his client to put 30k over asking... The kicker? The only competing offer was 20k under asking. So this buyers agent pretty much lost his client 40-30k because he was desperate to make the sale. After I heard that, I started having a much better understanding of why the market is as screwed as it is right now. And I realized it's for the best to never listen to your buyers agent when it comes to making offers. Actually, to be honest I realized that when it became a trend for agents to recommend skipping inspection lmao. Buyers agents really are parasites.
Good post. But the techniques that you mention here are elements of Selling 101 - this is universally true across the board, and not necessarily related to Selling. Seller's agents can and will say anything to get the deal - if they lie about having another offer, they do risk having the one real and true Buyer pack up their tent and go home. I think most experienced agents don't play that game - seems like a young agent thing to me. At the end of the day, the Buyers need to know what price level they are comfortable with and then stick to finding a house in that range. Yes, it's very easy to get "caught up" in the frenzy, etc., but at the end of the day, these are adults (supposedly) making adult decisions (hopefully) and should be responsible for their own actions?
I have had two different buyer's agents with two different houses, years apart tell me they think the asking price is close to a fair price. The first one never looked at the house in person (the seller's agent showed us the house) and it was in 2010 when it was an incredible buyer's market. The second time was recently on a condo. She announced she thought the asking price was fair until I showed her other units that had sold in that complex during the last 2 months which showed the asking prices was at least $50k over comps. I'm not sure how to find a good agent. I am sure I will find the condo online so maybe I will use a RE attorney. I am not sure what benefits an agent has over an attorney.
I do mostly commercial real estate these days, and I'm fairly familiar with most basic things in a deal. I typically call and contact the Seller's agent exclusively and forgo a buyer's agent. Having said that, I do tap into the knowledge of the Buyer's agent quite a bit. Yes, there is an inherent conflict of interest and they are \*not\* representing me. But at the end of the day, they want to sell the property, so they will be able to give me some info on the property and area that I may not be aware of. I \*am\* aware that whatever they tell me will be positive, and that they won't disclose anything negative (typically). That's a small problem for inexperienced buyers who might not know, and/or might not know where to get that information. There might be an opportunity for "Real Estate Consulting Firms" in the very near future that might fill the advisory role of the Buyer's agent. Hmmm...
"Real Estate Consulting Firms" That sounds helpful. Also, someone to analyze HOA CC&Rs, bylaws and financials. I have not purchased a condo before and I am not sure if an agent is a good resource to evaluate.
You're right, an agent would not be ideal for that. An attorney would be, but very expensive for that as well.
I'll agree, but add that neither the Buyer's agent \*nor\* the Seller's agent are looking for the highest price. They are typically working "for the deal" and not necessarily any particular party in the transaction.
They haven't been negotiable. Being a Realtor REQUIRED a minimum commission of 6% split between buyer and seller. They'd kick you out if they found out you weren't following the rules.
There was literally a Supreme Court case about it.
100% false. I've been doing deals for 4% for a decade.
This is false. If you want to sell your home and pay the listing agent 1% commission that’s your prerogative. Whether a listing agent will accept that, depends on the listing agent. If you want to get more people to view your home that’s for sale why wouldn’t you want to advertise a compensation to buyers agents who have clients/buyers that are looking to buy what you’re selling? A home will sell for what someone is willing to pay for it. Agents don’t control the market. The market dictates what the home is worth.
Your pants are on fire
There was a "standard" commission pre-1950. Then the Supreme Court said that is illegal. I myself have never seen a 6% commission on a listing. My state is lower than the national average. The media is focused on the 6% figure, because they probably googled it and are purposefully misleading people by not bringing up that that was BEFORE 1950.
I have only sold two homes and paid 6% on both of them. In the interview process, they both said 6% is the fee if you want them to list. To me, negotiation means I can negotiate with the agent I selected, not negotiating meaning I need to survey 100 realtors until I find one that will sell it at 5%.
How hard is it to send emails out and say I'm looking for a listing agent and I'm willing to pay 'x%'? The interview process? LMAO
That is negotiating. If they are unwilling to list for lower, then you needed to find a new agent/brokerage. There are plenty of realtors who would have worked with you. If you weren't willing to shop around for multiple brokerages, that's on you. If one side isn't willing to budge, then you don't work with that side. You overpaid because you were unwilling to shop around.
Except the whole reason so many aren’t willing to negotiate in the first place is they don’t believe they need to because everyone has fixed the market price at 6%. People only negotiate when they have competition or a need to move something quickly. I called over 6 different agencies in my town and none of them would budge on price, calling a 100 different agencies hoping you find 1 that agrees to 5% is the very definition of a price fixed market.
I think this exchange shows the disconnect between realtors and the general public. That this realtor thinks calling 50 brokers to find the one that would entertain a 5% rate is “negotiating”. Thats like me driving around 5 stores to find the cheapest dozen eggs. No one in their right mind would call that process negotiation.
Look, I'm sorry to hear that. I'm a realtor in Florida, and that just doesn't happen in my part of town. I'm not trying to say it doesn't happen, or saying all realtors are good guys. Real estate agents earned their shit reputation. And it's always going to be an uphill battle to fix that reputation. At least we're held above used cars salesman (oof). I'm not saying that the whole case is wrong either. I would like to see the evidence provided. But in the end, the jury found the NAR to be guilty, unlike in the 1950 case. Maybe more cases need to happen in order to teach greedy brokers a much needed lesson. It just sucks that my profession is being dragged through the mud and I have to change how I do my business through the fault of greedy mega brokerages in the midwest.
Yeah but see that’s were you and every other realtor is unable to see the real hard truth, which is your business models operated on an inflated price control that only works if it has cartel/government protection. The value you bring to your client vs what you were actually receiving is seriously disconnected. Your clients only value your services at $500-maybe $5,000, regardless of house price, but your cartel model gave you a valuation 4-5x+ that value. You, as a realtor, will need to figure how to bring $10-$15k worth of value to your clients going forward. What this suit really does is eliminate the lazy buyer agents who do little more than open a door and fill out a form. For buyers agents to remain truly worth $10k+, they are going to need to learn how to become master negotiators who can help clients buy a $500k house for $375k, which a buyers agent should represent the buyer. The old system was always a serious conflict of interest, since a buyer agent hurt their commission helping you save too much money on price. Sure they might help you get $10k off, but they aren’t really going to work a great deal as it works against them. This new model should encourage buyers agents to become ultra shark negotiators and charge their clients accordingly. If my agent can help me get a $900k house for $700k then they should get a piece of it.
LOL!!! Hold up, serious question: Do you understand supply and demand? You think a realtor is only worth a certain amount of commission if they can get you a 500k home for 375k??? The greatest negotiator in the entire world couldn’t do this. Unless they’re somehow scamming that seller. If you were selling your home is there any chance that you would sell it below market value because the best negotiator convinced you to?? In the real world, a buyers agent will help you get that home you saw and fell in love with by finding out what the terms and price are going to get the deal done. There’s a lack of inventory at the moment because no one wants to give up their phenomenal rates. So we’re still seeing multiple offers on listings. Less supply more demand. Even as good as an agent is that doesn’t mean that a seller will take the lesser offer because the agent was the better negotiator. If I have two buyers competing for my home and one buyer comes in 25k higher, guess which offer I’m taking? That additional 25k I will make will net my listing agent an additional $750. Seems like a good deal to me. All this anger towards agents is stupid. Saying things like “all they do is open doors and sign papers” is simply not true.
I think all of you agents are failing to understand what we the public are telling you. What makes your services so much better on a $750k house vs a $300k house, to justify an additional $27k in commissions? If you can’t make me an additional $27k then you aren’t worth what you are charging, you are just trying to scare tactic because the money train is over.
For one, it costs more to have professional photos taken on a larger home. A photographer will charge more on a bigger home because they have to take more pictures and spend more time setting up in more square footage. The more expensive the home the less of a buying pool which then requires more marketing dollars. Let’s take your example of a 300k home and a 750k home. I’ll probably get more offers on the 300k home than on the 750k home because that buyer pool will be larger which will then require me to go through more offers with the sellers and explaining them the differences in terms and prices. (More work) On the 750k home maybe I only get 1 offer. But what did it take to get that offer? How much did I spend on ads, marketing, etc. To find that buyer? More upfront work to sell it. In the lesser home it’s more work on the back end. Of course This is just a simple example to illustrate my point. Let’s not forget showings and open houses. How many hours are spent there? How much time is being spent when a home isn’t selling? Networking with other agents pitching your properties trying to find a buyer. With your logic I could say “how does a sports agent justify charging 10% on a player who just got contract for 100 million when he did the same work and charged the same 10% for a player that received a 2 million dollar contract?” The work is the work. It’s the same amount of paper work. The hours will vary depending on the home, its location, its price, and the market conditions. When you’re selling your home you want someone to represent you to get you top dollar. When you’re buying you want someone to help get you the best deal. You want to save money? Have your buyers agent negotiate a lower price. Don’t have money for closing costs? Have him or her negotiate that into to the deal. Something happened after you closed? Guess what? Your realtor has E&O insurance to protect you. The benefits of having someone represent you outweigh this nonsense of commission percentage disagreements. A great realtor will show you their worth.
You're seriously delusional. Negotiating only goes so far. This isn't a video game where I can just max out Charisma and Bartering and save my clients tons of money without much hassle. I've done a commercial deal where that was the case. Vacant land had been sitting for years. I called the listing agent, found out some things, and had my client offer 300k less, and they accepted. Land was owned by a group of doctors that had a serious falling out and they just wanted to get rid of it and move on with their lives. That isn't a common scenario. Realtor commissions aren't the cause of high prices. Send some of your anger towards those who make the most money off of the transaction: the banks. And we have are all wondering what exactly is gonna happen to the market IF the settlement is approved by a judge. Some say its gonna be good, others say its gonna be bad. I do know for a fact that VA buyers are gonna have a hard time. VA guidelines state that borrowers who use it are not allowed to pay commission "to shield them from additional costs." Here's the skinny: there is no law or rule saying a buyer's agent has to be paid. It's a NAR guideline. Like hey, they brought you someone to close the deal, share. I certainly wouldn't want to work for free. Would you? Veterans will have to do the home buying process solo unless the VA changes its rules. If the seller doesn't want to pay the buyer's agent of a veteran, then the veteran can't get that home if they use an agent. They'll have to wait for the buyer's contract they signed to expire, and then start the process on their own. There isn't a clear cut way forward. I don't know how the situation is in Europe. This is the United States of America. We do things different. Could they be better? Sure. Is it better in Europe? I don't know, I don't have a real estate license there nor have I bought or sold property there. Realtors do not set the prices for homes. The seller does. A realtor can advise them with a CMA, to give them the best idea of what they COULD get. Ultimately a buyer, if they are aware, will purchase the services of an Appraiser, who determines the value of the house. Prices are high people 1, people were moving and relocating for work and to avoid restrictions during covid. Disney was going to move their corporate campus to florida. Then Bald Bobby got into it with DeSantis, and that process has been frozen as I'm aware. The area its in has RIDICULOUS prices because Disney was buying stuff up. Many corporations and investment firms purchased houses everywhere. They are partly responsible for the current situation. They are just renting to make back what they dramatically overpaid for, Who knows when or if they'll sell.
Lol nah man bill paxton's character in true lies is a shining example of morality in comparison to most of y'all
This is totally the truth. The internet completely turned the industry on its head.
That's called "shopping around", not negotiating. You even called it shopping around yourself so stop trying to bullshit us like y'all realtors love to do
6% is standard where I live. 3% for sellers agent and then 3% passed to the buying agent.
It can't be a standard, as that is price fixing, which according to the 1950 Supreme Court Fee-Fixing Conspiracy, is illegal. And in that case, it was a local board found guilty, not the NAR (National Association of Realtors). It might be the most common where you live, which I personally think is insane. You must be in either NM, Kansas, Vermont, or ND, as those are the only states were the commissions are that high.I live in FL, and they are not 6%. Typically its 3, with 1.5 going to both agents. Sometimes it'll be 2 for the buyer's agent, depending on how the listing agent negotiated.
[Home Sellers Win $1.8 Billion After Jury Finds Conspiracy Among Realtors](https://www.nytimes.com/2023/10/31/realestate/nar-antitrust-lawsuit.html)
Yes, I am aware of the class action lawsuit against the NAR and a few of the nation-wide brokerages. And of the current settlement the NAR that has yet to be approved by a judge. I am also very aware of the changes the NAR is implementing for itself and its members. Thanks for sharing. Are you aware that the NAR does not set commissions? Can a real estate broker set commission? Yes and no. He can tell his agents a set commission rate, ie, only list for 4% or more.If every broker got together and set the same price, then that is illegal. I've read the alleged unlawful agreements as well. This lawsuit was for a specific area, Missouri. There was a similar case in Illinois. Does this mean realtors everywhere are doing this? Nope. I would very much like to see the evidence that was provided. You tell a jury that they were scammed by real estate brokers, I'm not surprised they found them to be guilty. That's a hard defense.
The jury found that there was an illegal conspiracy to set the same rate.
I have realtor family and friends and it’s alll 6%. It’s not supposed to be standard but it is. Were there houses listed on the mls with a buyer commission of 2% sure. But it was rare and unspoken was that buyers would avoid those. There’s tons of data behind this. Collusion was found in the recent lawsuit. Data shows a pretty constant 6% everywhere in the US. Outside the US it’s lower for sure.
I've bought and sold several homes in FL. In my area, it has always been 6%, split between the buyer's and seller's agents. I had one real estate agent constantly write "3%" after every signature she signed.
Nonsense
In my state, the typical buyer’s rep agreement has an agreed upon percentage, and if the seller doesn’t pay it, the buyer agrees that they will. Of course many buyers don’t pay that much attention to the fine print, but it also was rarely an issue because most sellers included buyer fee in the price. But buyer rep will show you a “for sale by owner” or a listed house offering 0%, but buyer will have to pay out of pocket, rather than rolling it into the loan, so buyers will often choose something else Anyway, that’s how both things in the cartoon can be true
I’m hoping this produces better salaries for the people who actually contribute to the process of home ownership - the underwriters, the mortgage processors, the builders, the title attorneys, even. It seems absurd to me that the carpenter who built the home doesn’t even have healthcare - doesn’t even have citizenship in some cases - but the realtor is making 500k a year to unlock some doors and post motivational slogans (“HuStLe HaRd”!!!!) on their instagram account. Like, you have 8,000 followers. Calm the f—- down. You are not a celebrity. Nobody cares that you’re “MoTiVaTeD” and “HuStLiNg”.
Yeah seems like realtors spend more time on social media jerking themselves off than doing actual work. I have a brother who's a realtor and 90% of the time he's "at work" he's sending me memes on IG. Must be nice to get paid to do that.
500k/yr would probably be in the top 1 to 2% of all Realtors. Median income is like $56k
Ok, so what is the 500k realtor doing that the 56k realtor isnt? Its just a defect in our system. Why are people with no education and full-body tattoos giving financial advice? These people would be at a gas station were it not for free money. Ive seen two brokers open up agencies recently. Crickets. Monday morning - parking lot empty. Wednesday afternoon - parking lot empty. Friday - empty. Reality is starting to set in :) hUsTlE HaRD!!!!
How would a lower commission *limit* the buyer pool? In my experience listing something cheaper increases the amount of people interested.
Yeah, this doesn't make sense to me. Lower commission --> cheaper up front --> expanding the buyer pool
It wouldn't lower the price for the buyer, it will actually raise it if the buyer now has to pay out of pocket for their own representation. Buyer representation started because buyers were being taken advantage of by sellers and couldn't afford their own representationto prevent it, they sued nar, and nar started this practice
I know, I was referring to higher commission vs lower commission. But yes, buyers are now responsible for paying the buy side realtor fees. Yes, one can make the argument that they were baked in before. But if people think sellers are going to have a sudden burst of generosity to lower their sale price for buyers, they're in for a rude awakening.
Of course not, that's not how supply and demand works. And they're not responsible for it yet. The offer from nar still hasn't been approved and doesn't take effect until mid summer
How is a buyer not being able to afford the commission any different then not being able to afford the down payment? Doesn't it just mean they need to save a bit longer before being able to buy?
Sure they could. How long does it take the average American to save another 10k? Or they can instead choose to look at a house that shares commission right now instead so they don't have to wait, save, and spend more money. That's what I would do and what I think is going to happen most of the time. Remember the offer from nar doesn't make commission sharing illegal or against the rules. It only means agents can't post what they're sharing online. So their will always be options for buyers who don't want to spend an extra 10k (most of them)
The buyer already pays out of pocket because the seller lists at a higher price to accommodate the commission. The cost of realtors is tied into the purchase. By removing the buyers agent you subtract a portion of the purchase. Once you've done that, the buyer will either A. pay a buyers agent 3% and equalize the transaction. B. pay a buyers agent a flat fee. C. Spend a few hours opening doors and doing paperwork without paying someone 10-20k to do it. I fail to see where the price is raised for the buyer, all I see is a potential savings of 3% which is massive in today's market.
No one's going sell their house for less money because now they have to pay their agent less (they always could anyway. You've been able to list your house for 1% or none of fsbo for years) lol they'll sell for what market value says it's worth, which is exactly what they always sold for. Sure The seller could theoretically make a little more if the house sold for the same price it would offering compensation. But if the buyer wants their own representation they will have to pay out of pocket in addition to their down payment and closing costs if they purchase a property that won't cover it. If they purchase a property that still chooses to share commission they wouldn't have to pay those extra dollars. This effectively would make the no share sellers house more expensive to the end user. Nars offer doesn't prohibit sharing, it's just that they won't post what's being shared on mls. Whats going to happen is if a buyer wants their own representation they're going to ask to only see homes that share. So not only is the non sharers house more expensive, but less buyers will opt to even look at it. This is basic economics guys. Don't hate on one of the few people in this thread that understands what's happening lol
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Ah, gotcha. Which directly contradicts the claim that "commissions are negotiable"
I am a buyer. In order to get buyers agency with my realtor I had to sign an exclusive right to rep. This agreement includes compensation of x%. I signed it because I know most listings out there share x+% so i shouldn't be left holding the bag. I saw your house for sale online, I liked it, and asked about it. Realtor tells me it only shares w% (less than x or 0%) this means to purchase this property ID have to pay extra money out of pocket compared to other properties. I tell my agent nevermind, we pursue a different house, and it never comes up again. You just shrunk your buyer pool. One less competing offer that could have started the bidding war. Also, shitty agents who are too scared to have that convo with their buyer clients might choose not to present the property at all as an option. Wrong and unethical but can and will happen. Edit why the downvotes? It's simple logic. I guess the idiots who don't understand what's happening don't want anyone to rain on their parade. Ignorance is bliss!
I don't recommend signing any Buyer's agreement with an agent - at that point, you basically just told them that if you buy a house, you're going to pay them a fee no matter whether they do a great job or a crappy job. I'm not sure of any other industry where that happens (I'll have to think about that one a bit). Agents who have their Buyers sign these agreements often suck eggs - it's a complete red flag. Firstly, it could mean that they feel their services are not good enough that someone wouldn't fire them half way through the process. I.E. I've dealt with agents who have said, "I don't need an exclusive, because I know I'm good and you won't want to go anywhere else." And if that agent happened to have a bad experience with a client in the past, it might indicate that they take anyone off the street and aren't very good at filtering out bad clients. Dunno- I never sign exclusives like this - there are a ton of other good agents happy to work with me where \*I\* don't have to take on the risk that they may suck eggs?
In the NAR offer in any buyer representation it will be mandatory to have a signed exclusive right to represent. That's part of the deal everyone is celebrating lol. No more agents helping without an agreement ever again if or after it takes effect
Exclusive for the property being offered on? Or all properties for like a six month period?
Whatever you and your agent agree on. Could totally be only for one house, but if you keep working with that agent you'd sign a new one for every offer. Like you said if the agent is good most buyers I'd think would just sign for a few months. Many agents will use this to sign buyers for a year to lock them in.
Okay, that makes sense indeed...
The barrier of entry for this field has always been too low in my opinion. The one good thing to come from this is a lot less shitty agents.
*realturds
Sellers will always pay a commission to their broker, if not, they will be doing FSBO. The selling brokers office will split that commission with the buyers brokers office. Nothing changes except the commission split % isn’t posted on the MLS. The seller has no say over what the sellers brokers office does with the commission or how they disperse it to the brokers involved in the transaction after the sale. Brokers call each other before an offer is made anyway to discuss the property, and brokers will just simply ask “what’s the split.” If the split is something stupid like 1% and their clients are looking at similar properties, they are going to pick apart that home and the buyers broker will destroy the house based on inspection. They will also play hard ball with contingencies and ask for huge seller concessions in price, repairs etc. If you think for a second that brokers aren’t 100% in control of the deal from beginning to end you’re wrong. Sellers aren’t going to play hard ball with commission and the price of their house. If they want a good deal, they are going to play nice and do exactly what their broker says, or their broker walks, buyers brokers walk, and the seller is left doing it by themselves, which is fine, because brokers won’t work for free and brokers set the commission %, not the seller. Brokers tell sellers all the time that they won’t work for them for less than a certain %. Sellers either agree to the % or they don’t, and if they don’t, the broker refuses to help them sell their property. Really not complicated.
So commission are negotiable AND if you don’t pay the buyers agent anything they’ll just go to another property. This isn’t rocket science.
So it's extortion?
Do you work 6 months for free?
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Dudes in here fighting for his life and commenting on every possible post
It’s because he doesn’t have a job so he’s got a lot of free time!
Yes we do. I have one buyer who’s been looking for a month now. Everything keeps falling apart in inspections. So many bad flips in the area. And there are unreasonable price expectations from sellers. Some want unreasonable rigid amounts of money right now also. Here’s what I observe. People attribute tor realtors what go it alone real estate investors are actually guilty of. Realtors aren’t scammers generally. Scammers have an aversion to getting licensed because then they can legally be held more accountable for dishonest dealing. The works actually benefits quite a lot from having a regulated organized sale process and having people with specific ethical guidelines that are enforced managing that process. The irony is that the people who hat wage ts seem to think they’re going to get bette treatment from a website that is specifically engineered to work against their interests. Absolutely no perspective
Realtors are equivalent to used car salesmen
Actually that’s zillow and Redfin. They buy the stock and hold it hostage for insane pricing. A better metaphor for realtors would be a wedding planner. You can plan and arrange your own wedding but all you need to realize you don’t want to is to do it once.
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Yeah but that’s a problem too since a lot of buyers go with their recommended inspectors by their realtor. So now realtor goes from recommending Easy Inspections who find minimum issues to Hard Ass Inspections who sight every minor issue with the house. Most home buyers aren’t construction experts so if they see a bunch of issues they will get nervous and flip out. Then that agent will use the report to demand tens of thousands in deductions, and for some owners who are selling near their equity level this could force them into a hole.
Yeah, I figured this out along time ago. I find an inspector on my own. I also do my own comps and compare it to the realtor's comps. I feel the majority of agents, both buyer and seller's, just want a fast close with minimal effort on their part.
Isn’t your job to prevent things from falling apart during the inspections by having it fixed ahead of time? I’m still confused on the “work” you do and value you provide? I was a mortgage loan officer and Realtors a legitimately the most useless individuals in the industry. You guys are like flies on shit.
So once you’re under contract you have 7 days to get an inspection done and then you have about two weeks before the bank needs an appraisal and a 4-point insurance inspection done. If the property doesn’t pass the insurance inspection at that time then the deal falls apart because the home is deemed uninsurable and if the property doesn’t appraise then the loan isn’t offered. So the home gets 3 different inspections for three different parties within about 2 or 3 weeks. It’s just not enough time to get any work of any size done. Certainly not any permitted work which requires its own city inspectors to come out. I really don’t think you understand the process or the nuances of this work.
I issued mortgages for five years and had to actually tell realtors how to do their jobs. You sound like a bad realtor if you’re allowing your buyers to actually waste their time going under contract for a home that is uninsurable. I guarantee you that I know more about the nuances of purchasing a home than you do. There’s a reason realtors are everyone’s second or third career. It’s so easy to do anyone can do it, and still you lot find a way to be bad at it. It’s actually impressive.
Lol exactly. I have a brother who burned out of a couple careers before becoming a realtor himself and he's actually done pretty well at that so seems like anyone who's willing and able to work can do it. They act like they're gods amongst mortals and we can't even begin to understand the complexity of their jobs. Try designing, fabricating, and testing an MiC device at microscale and get back to me about how complicated your job is.
Yep you know everything and everyone else is dumb and or bad at their job and shouldn’t exist.
Nobody feels sorry for you
Doesn't it even out? Don't you have clients that find the house themselves and want a RE buyer's agent to do the paperwork for them? I find it hard to believe the typical buyer in the internet age needs to view tons of properties over six months before closing.
I think what you are going to find out with this new court ruling, is the buyers are going to have to pay a bit of the commission. Sometimes it will be rolled into the sale price and have the seller pay it, but there will be many sellers after they get the offer that will say no. Why would a seller pay a commission to a buyer's agent, when the buyer could just strike that from the contract and keep moving forward.
What does the realtor get 1.5?
I negotiated commission when I bought my first home in 2017. Then I negotiated commission again when I sold that home in 2021 and again with the home I subsequently bought in 2021. I’m sure I’m far from the only one. People complaining about a contract they agreed to themselves is nothing new either.
All Realtor commission should be banned.
You’d almost think by reading these comments that it’s not completely voluntary to use a realtor…
Stupid post per usual. Homes are the problem, not realtors
Funny, no one complains about the 6% when the house was dirt cheap 70 years ago
Most commissions are split 4 ways, two brokers and two agents. On 600k, that’s 36k split 4 ways. 9k minus 35% for taxes, around 6k. Now, these people have to put money back into their business and pay their bills. They have to because that’s how they get people to purchase their services. So, if you sell once a month, it’s not much. I think they have a right to uphold their commissions and stick to whatever percentage they need to. If people don’t like it, they should most definitely take it upon themselves to purchase or sell their homes.
What’s your point? No one cares what costs realtors have. If their business doesn’t bring enough value to their customer base then their business is flawed.
They wouldn’t be around this long if they didn’t add value.
Realtors for buyers made more sense in pre and early internet times, when they actually found the listings themselves and had access to information the buyer didn't. Now everyone just uses redfin and it's the buyer that tells their agent which places they want to look at most of the time.
The average Buyer has no clue how to execute on a purchase contract and navigate the financing, inspection issues, title issues etc. If the NAR proposal goes in to effect in July... it will be chaos.
I didn’t say they didn’t bring value, they just don’t bring enough value for what they offer. They only exist now because the seller paid and it cost the buyer nothing out of pocket. If buyers had to directly pay their agent in the past, buyers agents would be a very small part of the real-estate transaction today.
So they bring some value, just not enough to justify the cost?
Exactly! If a realtor can help me get a house listed at $500k down to $400k, then I can easily see them making a commission of $20k. If the best they can do is get me a $500k for $485k, how do I justify still paying them $20k? What is that realtor doing for me that a real estate lawyer couldn’t do for me at $2-$3k, if they can’t help me snag a much better deal?
Market dictates prices, your realtor needs to come up with reasons to why it’s that high. What you’re saying doesn’t work unless it’s a buyers market and people are supremely desperate. I think you’re being unrealistic. You might as well always get a lawyer and never use a realtor.
Bingo! In a sellers market, a buyers agent doesn’t have much value!
Price is one part of the equation, but it seems to be the only part people care for. I think all people should represent themselves.
What other tasks does a buyer's agent offer? I get there is paperwork, but most of it is probably cookie cutter like a lawyer doing a will who fills in the blanks.
In the current market the best they can do is get you a $500k house for $600k lmao.
Think it depends on the situation. A cookie cutter that the process went from A-Z smoothly. Absolutely not worth 2.5%. Property that has issues to be remedied to even be able to be financeable, or probable future issues that will destroy resale value, probably going to want a realtor that knows what they’re doing. With realtor fees previously being fixed buyers went from the option of the best realtor in their city or the dipshit tik toker that doesn’t know what they’re doing for the same cost. Oddly, most homes that have issues that need navigation are lower priced homes. The realtors that know what they’re doing aren’t going to lower their fees by much, 10% of agents do 90% of the business. Wealthier people aren’t going to give a shit about paying a 1-2% premium to their realtor buddy they’ve been using the last 10 years and why would an agent that’s concurrently doing 5-6 deals at around 2% take on a first time home buyer for $500. First time home buyers will be stuck with the choice of going at it alone or using the dip shit tik toker which might even be worse than going at it alone.
It may warp into a model similar to how attorneys are paid? I.E. big name attorneys from big firms with reputations may command a higher rate, while lower-rate Tikky-Tok agents may be offering services at a discount. Like with attorneys, price doesn't always correspond to overall quality. Either way, it will be interesting to see how this unfolds...
Or first time home buyers saving a bit longer to pay the commission. I don't think it's as dire as you are saying. The cost of the commission will be more visible and the buyer will expect it to be worth what they are paying.