4 ms·

That's what my agent claimed when setting our asking price. We sure didn't see a bidding war. The benefits to the agent for a lower price is in conflict with wh

by greedo 6y ago

That's what my agent claimed when setting our asking price. We sure didn't see a bidding war. The benefits to the agent for a lower price is in conflict with what the homeowner wants. For example, a $10K diff in sale price is $350 for the listing agent, and $9650 for the homeowner. So of course agents will push for low prices to get a quick sale. Of course, there are many times that a seller wants a quick sale (moving etc). But often it's in the seller's best interest to be a bit more patient and price it at market.

jlbnjmn 6y ago
Yup. Sold our house in January using Redfin. Best realtor we've dealt with and saved 2%. Also watch out for realtors saying you need upgrades and recommending contractors. They likely are getting a kickback, and by boosting the listing price their commission goes up. You end up with the same proceeds, IF it sells as fast, and you had to front the upgrades. The incentive structure for realtors is whack. At a minimum, the commissions could be tiered instead of continuous.
- poulsbohemian 6y ago
  I don't know your location, I am not a lawyer, this is not legal advice, YMMV, but: In most locales, a kickback like you are describing is illegal and can be reported to your state's real estate commission. If you believe that your agent is acting in bad faith, you should at least find a different agent if not report them. In many cases, smart upgrades can yield significant returns. Not all agents who recommend upgrades are trying to con you, many are providing market-aware prudent advise to help you maximize your return. As an agent, I think it is good that tech and other competitive forces are entering the field. That said, commissions often get pointed to as a "problem." Here's the deal: If you believe your house will sell within a range of say, +/- $20K, then the agent's job is to try to get you to the top of that range. 2% in my market, for an average house works out to about $6K. If I can get you an extra $10K+ that you wouldn't have gotten by FSBO or similar, that's where I'm adding value as an agent and that's why commissions exist.
  - jlbnjmn 6y ago
    Commissions are a major reason why the market lacks liquidity. When someone buys a house, they're immediately 6% below market value, just from commissions. To each their own. Redfin was a fantastic experience for us. The advice was rational and unbiased (they get paid off of reviews, not commissions, if I recall my research correctly). And the house sold, which is wonderful. Also, kickbacks may be illegal, but that doesn't mean they're uncommon or that the laws would be enforced.
poulsbohemian 6y ago
Former software developer turned real estate agent here, with this PSA: As an agent, I seek to inform you of market conditions and show you a range of pricing options based on that market. You as the seller always have and should always have the final say on the go to market price. If you believe your agent is not working in your best interests or is pressuring you in order to get a quick sale, find an agent with whom you can build the relationship you want. In terms of pricing high or pricing low - there are a range of strategies and a good agent will describe your options relative to market conditions and the marketability of your home. My own opinion: there are a lot of bad agents in the world, but a good agent really does earn their commission by understanding the market, how to present your house, will project manage a range of things that have to happen in every transaction, and will ultimately work to get you the best outcome possible. If you don't believe any of the above, I fully recommend you find a different agent.
- zo1 6y ago
  Honestly, no offense, but that's a bit of a marketing fluffy non-answer to the problem that essentially says "it depends". A fair bit of what people want and need from an agent is trustworthy and reliable advice. Especially when it comes to the price and price-maximizing behavior. If one can't reliably find such an agent, then the problem will always persist. With that in mind, we need to get the agent's incentives such that they don't align with dodgy behavior on the part of the agent. They should not be aligning remotely to the agent getting paid with a non-optimal outcome for the buyer, which it currently does and so attracts dodgy individuals.
  - poulsbohemian 6y ago
    >"it depends" Yup, you understood me completely. Because it really does depend on your wants and needs as a seller. In contemplating your message, I've come to realize that I cannot fully engage in this conversation via HN messages, so feel free to contact me directly if you want. There are a lot of agents that really care about this, as there are many who would say they too are worried that there are bad actors that bring down what is a surprisingly complex domain. Let me ask this, as I think it's a really interesting thought exercise: how would we determine what was the optimal outcome for a buyer or seller?
silexia 6y ago
I just sold my house by owner (high end home) inside of a week for significantly higher than market comps. For anyone willing to do 20 hours of work and spend a grand or two, this will save tens of thousands of dollars.

by greedo 6y ago

jlbnjmn 6y ago

Yup. Sold our house in January using Redfin. Best realtor we've dealt with and saved 2%. Also watch out for realtors saying you need upgrades and recommending contractors. They likely are getting a kickback, and by boosting the listing price their commission goes up. You end up with the same proceeds, IF it sells as fast, and you had to front the upgrades. The incentive structure for realtors is whack. At a minimum, the commissions could be tiered instead of continuous.

poulsbohemian 6y ago
I don't know your location, I am not a lawyer, this is not legal advice, YMMV, but: In most locales, a kickback like you are describing is illegal and can be reported to your state's real estate commission. If you believe that your agent is acting in bad faith, you should at least find a different agent if not report them. In many cases, smart upgrades can yield significant returns. Not all agents who recommend upgrades are trying to con you, many are providing market-aware prudent advise to help you maximize your return. As an agent, I think it is good that tech and other competitive forces are entering the field. That said, commissions often get pointed to as a "problem." Here's the deal: If you believe your house will sell within a range of say, +/- $20K, then the agent's job is to try to get you to the top of that range. 2% in my market, for an average house works out to about $6K. If I can get you an extra $10K+ that you wouldn't have gotten by FSBO or similar, that's where I'm adding value as an agent and that's why commissions exist.
- jlbnjmn 6y ago
  Commissions are a major reason why the market lacks liquidity. When someone buys a house, they're immediately 6% below market value, just from commissions. To each their own. Redfin was a fantastic experience for us. The advice was rational and unbiased (they get paid off of reviews, not commissions, if I recall my research correctly). And the house sold, which is wonderful. Also, kickbacks may be illegal, but that doesn't mean they're uncommon or that the laws would be enforced.

poulsbohemian 6y ago

Former software developer turned real estate agent here, with this PSA: As an agent, I seek to inform you of market conditions and show you a range of pricing options based on that market. You as the seller always have and should always have the final say on the go to market price. If you believe your agent is not working in your best interests or is pressuring you in order to get a quick sale, find an agent with whom you can build the relationship you want. In terms of pricing high or pricing low - there are a range of strategies and a good agent will describe your options relative to market conditions and the marketability of your home. My own opinion: there are a lot of bad agents in the world, but a good agent really does earn their commission by understanding the market, how to present your house, will project manage a range of things that have to happen in every transaction, and will ultimately work to get you the best outcome possible. If you don't believe any of the above, I fully recommend you find a different agent.

zo1 6y ago
Honestly, no offense, but that's a bit of a marketing fluffy non-answer to the problem that essentially says "it depends". A fair bit of what people want and need from an agent is trustworthy and reliable advice. Especially when it comes to the price and price-maximizing behavior. If one can't reliably find such an agent, then the problem will always persist. With that in mind, we need to get the agent's incentives such that they don't align with dodgy behavior on the part of the agent. They should not be aligning remotely to the agent getting paid with a non-optimal outcome for the buyer, which it currently does and so attracts dodgy individuals.
- poulsbohemian 6y ago
  >"it depends" Yup, you understood me completely. Because it really does depend on your wants and needs as a seller. In contemplating your message, I've come to realize that I cannot fully engage in this conversation via HN messages, so feel free to contact me directly if you want. There are a lot of agents that really care about this, as there are many who would say they too are worried that there are bad actors that bring down what is a surprisingly complex domain. Let me ask this, as I think it's a really interesting thought exercise: how would we determine what was the optimal outcome for a buyer or seller?

silexia 6y ago

I just sold my house by owner (high end home) inside of a week for significantly higher than market comps. For anyone willing to do 20 hours of work and spend a grand or two, this will save tens of thousands of dollars.