4 ms·
> where any buyer can view photos of a house for sale online real estate agents still expect to receive 6% It's not the same as buying a car as you have to gai
by gist 9y ago
> where any buyer can view photos of a house for sale online real estate agents still expect to receive 6%
It's not the same as buying a car as you have to gain access to the property to look at it which involves another agent and much work even after an offer has been accepted or negotiated.
The only thing that is 'absurd' is that the commission generally stays the same whether the house is 1.5 million or 150,000. And as others have mentioned that is split between various parties that are needed to sell a house which is a big one time purchase that most people need help with.
The other important thing is this. Agents spend a great deal of time with buyers who don't end up buying anything from them. Driving them around, setting up appointments, dealing with the listing agent and so on. Unless they make a sale they are not paid. Most of the agents in this country are not selling million dollar real estate either. And in the end they aren't really earning that much money either in a typical market.
Just yesterday I requested information on a property from an agent on something that I honestly don't think I have a serious interest in buying. They took time on the phone and I could easily setup an appointment with them to view the property and waste more of their time. In the end unless I buy now or in the future or refer someone to them they will end up eating that time and getting nothing in terms of pay.
- clamprecht 9y agoCan I just pay a real estate agent per hour instead? That solves the problem of me deciding to not buy a house from them later.
- runako 9y agoI tried this when purchasing my last house. I offered a pretty hefty hourly fee, knowing full well there's no way the hourly fees would approach 3% of the transaction. IIRC the response was essentially that they are prohibited from doing so by their Realtor organization (?). This was in Georgia.
- jrs235 9y agoThat's dependant on your state (state laws) and the broker. I know of a broker that offers showings at $50 per hour.
- kelukelugames 9y agoSort of, you can always find someone to write you an offer for a flat fee.
- bhandziuk 9y agoThat commission is huge. I just bought a 280k house which means the agent gets ~7,800 $. Sure they maybe keep some fraction of that but that is such a crazy big dollar amount. That's several month salary for me and they did it in a few hours of work. Plus, because this is paid through what eventually becomes my mortgage I'm paying that inflated price for decades. With those kinds of numbers I see why it is such a guarded industry.
- gist 9y agoYou are comparing a case where it only took them 'a few hours' for your particular transaction with all the time they had to spend either showing that house and getting nothing or showing other houses and getting nothing. Do you honesty believe the majority of transactions they do are so quick and easy? What do you think they are doing a transaction like that per week? There is an overhead cost to dealing with people and with sales. I would take a wild guess that in a year of work the agent that you dealt with (or a typical agent that sells $280k houses) is making less than $100k per year. That's not a crazy amount of money, even in a lower cost community.
- bhandziuk 9y agoThey were very rarely available to show us homes and instead just gave us the lock box codes to we could walk through on our own. It was also suspicious they felt the need to justify their existence saying the hard part is drawing up the contracts. But as far as we could tell the loan company did all that work. The realtor just showed up to the signing and let the loan officers answer any questions we had. Sure, most transactions are not as fast and easy for them but it seems with these numbers if they are with one client for 2 weeks straight and sell a house at the end they are still way ahead. Even if they sell 1 house a month at that rate it's still a killing.
- gist 9y agoI take it this is your first transaction buying a house. You are basing what you think on that and what people are saying online. I can assure you as someone that buys real estate (as investments) it typically isn't that easy, at least in a typical market and for most transactions. And I have been doing this since the 1980's fwiw.
- cgh 9y agoWe bought our house with no agents at all, buyer or seller. We used a notary public to do all the legal paperwork. Savings: $20,000 (Canada). If you can possibly avoid using a real estate agent, then do so. They may bring some value but it is not nearly commensurate with their commissions.
- jrs235 9y agoUntil you find yourself in a situation with contingencies that aren't properly dealt with. One could lose their earnest money or be liable for damages for breach of contact. Or possibly worse finding yourself in a situation where the deal falls through and your have no remedy or recourse because the "contract" you came up with is inside or not enforceable and are now homeless or scrambling to find housing.
- gaadd33 9y agoIf you are worried about the validity of a contract wouldn't retaining a real estate lawyer make far more sense than someone with no legal training?
- intrasight 9y agoThose sound line legal questions and issues, not realtor issues. Your lawyer will charge you hourly for their time.