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With good realtors you sign a document that states that they work for only you. Of course there can be other issues, like the realtor "helpfully" setting up th

With good realtors you sign a document that states that they work for only you. Of course there can be other issues, like the realtor "helpfully" setting up the appraisal with their own company, the one that just happens not to notice any major issues with the sale. I also think that the convention of the the realtor taking a percentage of the sale as their commission is problematic as it incentivizes them to show you the most expensive houses instead of the ones that are best for you. I'd be happier if they charged a flat fee or a flat hourly rate.

joejerryronnie 6y ago
The realtor isn’t really incentivized to try and make the largest deal, they’re incentivized to bring forward the deal which has the highest degree of successfully closing as quickly as possible.
lotsofpulp 6y ago
> I'd be happier if they charged a flat fee or a flat hourly rate. You can always try to negotiate the agent’s price. I know a few sellers that had agents agree to 3% commission recently. It’s all about supply and demand, and if agents get desperate, they’ll agree to lower prices.
- toomuchtodo 6y ago
  I just (this weekend) negotiated a 4% commission with a realtor for a property I’m selling. The deal is that they’ll keep it in the brokerage and not have to split the fee with another brokerage (which is the usual arrangement; 6% split half and half between brokerages, with the realtors on both sides getting half of that split). Market is hot enough I’m satisfied I’ll get top dollar even with a smaller pool of potential buyers (cash deals over list market). With that said, my realtor in this market has been doing RE for decades and has a proven record of delivering.
  - RHSeeger 6y ago
    How does that work? Doesn't that mean they're filling the role of both buyer's and seller's agents? Ignoring the moral complexities there (hint: don't), it means they're doing more work to get the money; presumably up to twice as much work. It doesn't see like they're getting a good deal.
    - toomuchtodo 6y ago
      Yes, your example is how it works. Arguably, they're seeing more of the profit under the assumption that there will be almost no work to sell my property (which is the case; it's been completely renovated, and inventory is extremely limited, I would be shocked if it took more than 72 hours to sell), so they're capturing a bit more rev than if there was another broker's office involved in the transaction.
  - lupire 6y ago
    > keep it in the brokerage You'll miss the wealthy out of towner with a different brokerage, more likely to be the top bidder. Most listing brokers will accept a 1% discount, and many buyers will use a discount (refund) broker on their side, so 4% "in house" isn't a substantial discount to miss the one buyer who might go higher.
    - toomuchtodo 6y ago
      This is a condo on the lower end of the price spectrum in a large complex, so not a property a wealthy out of towner would be shopping for. If fair market value was >$300k, I wouldn't consider such an arrangement as I might miss the whale.
Gibbon1 6y ago
When I was looking I picked out the houses I wanted to look at. Then got my friend the real estate agent to get disclosures and and show me the house during the week day. I don't think that the incentive to show you more expensive homes is that strong. Impression from a friend of mine is a real estate agent wants to close as many deals a year as possible. Closing houses a year, more money. Being known as someone that closes fast and often means hopefully being poached by more upscale agencies. Buyers agent though has an incentive to soft bully the buyer into over bidding.
- ssully 6y ago
  I did the same approach. We used someone a family member used and recommended. We would send her houses we liked, and she would setup the appointments. She would offer her advice when asked, and did a great job handling the various offers we put in. I honestly never felt pressured at any point during the home buying process.
_huayra_ 6y ago
Even within the confines of that contract, any realtor will have their limits due to the commission-based structure. If they spend 50 hours working to get you 90% of your theoretical maximum selling price and it would take 50 more to get the last 10%, they may end up pushing you to accept the 90% offer because the next 50 hours is best used selling another property.
wehadfun 6y ago
>commission is problematic as it incentivizes them to show you the most expensive houses Don't know everyone's experience but Realtors show whatever house the client wants to visit and clients can and do find houses for them selves. >flat fee or a flat hourly rate Does the client still pay this flat fee/hourly rate if they don't buy or sell the home? I'm sure a realtor would have no problem showing you up to X homes for $Y,000 paid upfront.
analog31 6y ago
My rule of thumb is, nobody works for the buyer or the seller. They work for the sale, because the sale is what pays their commission.
- brianwawok 6y ago
  If your hire your own inspector, they get paid either way.
  - analog31 6y ago
    True, they always say to hire your own inspector. But finding one who isn't a charalatan is a coin toss. You might be able to hire them independently, but recommendations from agents who are "working for you" is still a large part of their business. And they're not liable for anything they fail to notice. That entire industry favors people who are deal makers, not deal breakers. The inspector is working for the sale, but indirectly. One house that my family sold, the inspector showed up at the appointed time, and mentioned that he was the buyer broker's brother. He didn't find any problems with the house.
    - tehwebguy 6y ago
      Yep, got to bring your own checklist for the inspector.
    - dagw 6y ago
      He didn't find any problems with the house. Don't they have any legal liability if they miss something obvious?
      - Kirby64 6y ago
        Usually their liability is limited at most to the cost of the inspection. Basically nothing in the grand scheme if they miss something big. I had a friend who had a house with termite issues that 2 inspectors missed. He tried to get lawyers involved and they all told him he had absolutely no resource besides the inspection fees, which would have been swamped by lawyer fees anyways. He ended up ripping out all the drywall to repair the termite damage bit by bit.
professoretc 6y ago
Our realtor was great... because he wasn't really a realtor. His fulltime job was as a DA, he just did the realty stuff on the side, so he didn't really need the commission. It seemed like he was showing us houses just because that's what realtors are supposed to do, but he was great when we found our house looking on our own.
datavirtue 6y ago
I have found that they want the sale as quick as possible. No matter what side of the table they are on they will never tell you to offer lower nor will they bring up anything that will slow the sale. It is a perverse relationship indeed. They only do the things they need to do to be in compliance with all the regulation that was enacted after people were swindled by realtors enmass. It is an outdated monopoly that preserves itself by laws they have lobbied for and by bullying people with lawyers. They used to offer an advantageous network effect that we needed before we had stuff like zillow.
- frongpik 6y ago
  There's a rare exception when a real estate attorney with a reputation is also a part time agent. Finding one is a challenge. They give a lot of valuable advice, but it's only actionable when you have choice and the money, i.e. the buyers market of the expensive houses.
- masonic 6y ago
  I have found that they want the sale as quick as possible. Generally, because this maximizes income per time/effort spent.

joejerryronnie 6y ago

The realtor isn’t really incentivized to try and make the largest deal, they’re incentivized to bring forward the deal which has the highest degree of successfully closing as quickly as possible.

lotsofpulp 6y ago

> I'd be happier if they charged a flat fee or a flat hourly rate. You can always try to negotiate the agent’s price. I know a few sellers that had agents agree to 3% commission recently. It’s all about supply and demand, and if agents get desperate, they’ll agree to lower prices.

toomuchtodo 6y ago
I just (this weekend) negotiated a 4% commission with a realtor for a property I’m selling. The deal is that they’ll keep it in the brokerage and not have to split the fee with another brokerage (which is the usual arrangement; 6% split half and half between brokerages, with the realtors on both sides getting half of that split). Market is hot enough I’m satisfied I’ll get top dollar even with a smaller pool of potential buyers (cash deals over list market). With that said, my realtor in this market has been doing RE for decades and has a proven record of delivering.
- RHSeeger 6y ago
  How does that work? Doesn't that mean they're filling the role of both buyer's and seller's agents? Ignoring the moral complexities there (hint: don't), it means they're doing more work to get the money; presumably up to twice as much work. It doesn't see like they're getting a good deal.
  - toomuchtodo 6y ago
    Yes, your example is how it works. Arguably, they're seeing more of the profit under the assumption that there will be almost no work to sell my property (which is the case; it's been completely renovated, and inventory is extremely limited, I would be shocked if it took more than 72 hours to sell), so they're capturing a bit more rev than if there was another broker's office involved in the transaction.
- lupire 6y ago
  > keep it in the brokerage You'll miss the wealthy out of towner with a different brokerage, more likely to be the top bidder. Most listing brokers will accept a 1% discount, and many buyers will use a discount (refund) broker on their side, so 4% "in house" isn't a substantial discount to miss the one buyer who might go higher.
  - toomuchtodo 6y ago
    This is a condo on the lower end of the price spectrum in a large complex, so not a property a wealthy out of towner would be shopping for. If fair market value was >$300k, I wouldn't consider such an arrangement as I might miss the whale.

Gibbon1 6y ago

When I was looking I picked out the houses I wanted to look at. Then got my friend the real estate agent to get disclosures and and show me the house during the week day. I don't think that the incentive to show you more expensive homes is that strong. Impression from a friend of mine is a real estate agent wants to close as many deals a year as possible. Closing houses a year, more money. Being known as someone that closes fast and often means hopefully being poached by more upscale agencies. Buyers agent though has an incentive to soft bully the buyer into over bidding.

ssully 6y ago
I did the same approach. We used someone a family member used and recommended. We would send her houses we liked, and she would setup the appointments. She would offer her advice when asked, and did a great job handling the various offers we put in. I honestly never felt pressured at any point during the home buying process.

_huayra_ 6y ago

Even within the confines of that contract, any realtor will have their limits due to the commission-based structure. If they spend 50 hours working to get you 90% of your theoretical maximum selling price and it would take 50 more to get the last 10%, they may end up pushing you to accept the 90% offer because the next 50 hours is best used selling another property.

wehadfun 6y ago

>commission is problematic as it incentivizes them to show you the most expensive houses Don't know everyone's experience but Realtors show whatever house the client wants to visit and clients can and do find houses for them selves. >flat fee or a flat hourly rate Does the client still pay this flat fee/hourly rate if they don't buy or sell the home? I'm sure a realtor would have no problem showing you up to X homes for $Y,000 paid upfront.

analog31 6y ago

My rule of thumb is, nobody works for the buyer or the seller. They work for the sale, because the sale is what pays their commission.

brianwawok 6y ago
If your hire your own inspector, they get paid either way.
- analog31 6y ago
  True, they always say to hire your own inspector. But finding one who isn't a charalatan is a coin toss. You might be able to hire them independently, but recommendations from agents who are "working for you" is still a large part of their business. And they're not liable for anything they fail to notice. That entire industry favors people who are deal makers, not deal breakers. The inspector is working for the sale, but indirectly. One house that my family sold, the inspector showed up at the appointed time, and mentioned that he was the buyer broker's brother. He didn't find any problems with the house.
  - tehwebguy 6y ago
    Yep, got to bring your own checklist for the inspector.
  - dagw 6y ago
    He didn't find any problems with the house. Don't they have any legal liability if they miss something obvious?
    - Kirby64 6y ago
      Usually their liability is limited at most to the cost of the inspection. Basically nothing in the grand scheme if they miss something big. I had a friend who had a house with termite issues that 2 inspectors missed. He tried to get lawyers involved and they all told him he had absolutely no resource besides the inspection fees, which would have been swamped by lawyer fees anyways. He ended up ripping out all the drywall to repair the termite damage bit by bit.

professoretc 6y ago

Our realtor was great... because he wasn't really a realtor. His fulltime job was as a DA, he just did the realty stuff on the side, so he didn't really need the commission. It seemed like he was showing us houses just because that's what realtors are supposed to do, but he was great when we found our house looking on our own.

datavirtue 6y ago

I have found that they want the sale as quick as possible. No matter what side of the table they are on they will never tell you to offer lower nor will they bring up anything that will slow the sale. It is a perverse relationship indeed. They only do the things they need to do to be in compliance with all the regulation that was enacted after people were swindled by realtors enmass. It is an outdated monopoly that preserves itself by laws they have lobbied for and by bullying people with lawyers. They used to offer an advantageous network effect that we needed before we had stuff like zillow.

frongpik 6y ago
There's a rare exception when a real estate attorney with a reputation is also a part time agent. Finding one is a challenge. They give a lot of valuable advice, but it's only actionable when you have choice and the money, i.e. the buyers market of the expensive houses.
masonic 6y ago
I have found that they want the sale as quick as possible. Generally, because this maximizes income per time/effort spent.