7 ms·
Commission based on home value is a joke. Realtors should earn a flat-rate.
by stuff4ben 3y ago
Commission based on home value is a joke. Realtors should earn a flat-rate.
- Kirby64 3y agoYou can. It's just a bit of a racket (hence, conspiracy judgment) and nobody will work with you if you only offer a flat rate. Since MLS is mostly limited to Realtors in most markets, you're basically locked out from posting there. There's ways around it, and flat fee brokers that exist, but you hamper your sales ability. Not an issue when its a sellers market, but can be rough in a buyers market.
- bluGill 3y agoThere are flat rate realtors where I live. However they are only 50%, the still give the same 3.5% to the buyers agent, but they take for themselves a fixed rate to get you on MLS. I'm not sure if it is a good deal - they still charge high prices relative for what they do for you. (it is cheaper than a full agent, but they also do much less)
- Kirby64 3y agoYou just don't sign a contract where you give a buyers agent commission, although again this limits the pool. Frankly, buyers agents are largely a scam in my view. With MLS, Zillow, Redfin, etc, their 'experience' seems mostly worthless. It certainly is not worth 3% of the cost of a house. If anything, sellers agents are more useful since they actually offer something valuable to the real estate experience (e.g., listing housing, photos, providing buyers access, etc).
- bluGill 3y agoBuyers agents know better how to search the MLS system (though only a few do this). They also line up times to see houses, and take time to drive you to each. So a good buyers agent has spent about 8 hours of time to each buyer, plus expenses. I agree they are getting far too much, but they still are valuable.
- Wytwwww 3y ago> but they still are valuable. All of those things seem to be pretty simple and worth barely of fraction of $2000 per hour (if they actually only spend 8 hours in total? I mean at that point it might make sense to spend 40-80 hours to do the same things yourself instead depending on your income).
- ejb999 3y agoI agree - especially for the last few years, when in order to sell a house all you had to do was put in on the market - and then get 10-15-20 offers at or above listing price - no agent deserves a 6% commission for simply getting something listed on zillow or MLS where in recent years, the houses just sold themselves.
- judge2020 3y ago> no agent deserves a 6% commission for simply getting something listed on zillow or MLS Typically 3% is seller agent commission and 3% is buyer agent commission - although in the paperwork it's most likely 6% to the seller's agent and the seller's agent offers 3% to the buyer's agent. Although 5% total / 2.5% to each realtor is becoming a bit more popular as of recent, based on the listing I browse.
- Spooky23 3y agoRemember there’s no professional responsibility for realtors, so they do shady shit like shop the house internally to keep the full 6%.
- scarface_74 3y agoYou choose the buyers agent.
- poulsbohemian 3y agoI encourage you to report any behavior you believe to be illegal or unethical to both your local realtor association as well as your state agency. That’s why those organizations exist and we are all better if people are held to professional standards.
- the_optimist 3y agoIs there a practical way to diligence theoretically unethical behavior?
- poulsbohemian 3y agoSo negotiate that with your agent if that's what you prefer.
- poulsbohemian 3y agoSo why downvote me? We've got this already in our buyer's agency agreements - if you as a buyer want to negotiate compensation with your agent, you have the ability to do that. Similarly, in both states where I work, you as a seller have had the ability to choose what, if any, compensation you want to offer to a buyer's broker. None of this is actually that different from how you negotiate (or not) with any other professional - your lawyer, your accountant, your financial advisor, etc.
- conjecTech 3y agoNegotiation is not an effective strategy when there is active collusion to fix prices. You are commenting on a story where a jury just found that had been systematically done.
- staplers 3y agoDid you forget the context of the article?
- mynameisash 3y agoI expect that when it comes time to sell my house, I'll hire a real estate attorney to make sure all the paperwork is in order, and I'll deal with the rest myself. I engaged an attorney when I bought my house, and she was super thorough.
- PaulDavisThe1st 3y agoI've sold 4 houses "by owner". I didn't even use an attorney for 3 of them - just a title/escrow service who take care of handling the deposit, filing the deeds after the funds transfer is complete etc.
- ejb999 3y agobuying a house, I would want an attorney - selling the house, I agree, no need for a realtor or attorney if you are willing to do a bit of work yourself.
- staticman2 3y agoWhere I live, the real estate agents association has model home sale contracts and it's not common or necessary for a buyer to have an attorney.
- SoftTalker 3y agoSame. It's all very standardized and the title/escrow company does it 10 times a day and will handle all the paperwork and filings.
- sct202 3y agoAttorneys are so ridiculously cheap compared to the realtors. In my area there are discount real estate attorneys that will do sales/purchases for $200, and the normal price is like $500 which is nothing compared to the real estate agents getting like $10k on an average home in the area.
- fma 3y agoAgreed. Add to the fact if you're a seller agent the money is easy. A buyer's agent struggle. AFAIK usually you start out as a buyer's agent and build up a network/reputation before people trust you to sell. In a seller's market, seems like a buyer's agent should be compensated more because it's more difficult to win bids now.
- scarface_74 3y agoNot every inch of America is in such a competitive market.
- sahila 3y agoSure, but then the logical step is to compensate for the realtors time as opposed to some national average.
- bozhark 3y agoBrokers do, 1.5% from seller and buyer. Don’t use realtors.
- slantaclaus 3y agoRealtors are brokers too
- balderdash 3y agoI’d be willing to pay a percentage above some predetermined price (e.g. if the realtor produces some sort of above market outcome) - but agree, that the value provided does not equal 3-6% of home value
- onlyrealcuzzo 3y agoIf you're selling a $2M house, you're willing to pay more for someone to get you a good price. On the flip side, no one is going to pay $5k to sell a $30k house. Flat rates don't make sense. Maybe you think the percentage is too high.
- ska 3y agoMaybe the percentage should be laddered, or there should be a floor.
- plagiarist 3y agoThe incentive for the agent selling the $2M house is to price it to sell so they can move on to get their cut of the next $2M sale.
- seattle_spring 3y agomin(5000, House.price * 0.03)
- losteric 3y ago> If you're selling a $2M house, you're willing to pay more for someone to get you a good price. That sounds very last-century... kinda like selling antiques to a pawn shop or consignment store that would take of finding a buyer. Why does discovery and bidding justify $200k in overhead for the $2MM property? Why does a person need to go out and "find a buyer"? Without this Realtor conspiracy, surely something like Redfin meets eBay would be more efficient? Posting online is what the cast majority of realtors do anyway, they don't actually "find" buyers... At least until you get to 1%er prices where golf club chats matter Heck, this racket gates even access to standardized legal forms that states themselves should freely offer.
- zone411 3y agoCommissions for the seller's relator are fine, but they shouldn't be based on the full price of the house. This setup encourages quick sales rather than getting the best price. Instead of the realtor earning 3% on a $1,000,000 house, set a base amount at, say, $700,000 and calculate the commission only on the remainder - 10% on $300,000. The same principle should apply to the buyer's agent but in reverse or there should be a flat fee. Their current incentive structure is totally screwed up.
- wbsun 3y agoI have always been wondering what kind of work a realtor needs to do for selling/buying a $100M mansion and ended up with $5M commission…
- plagiarist 3y agoNepotism, same as every other million-dollar job.
- matt-attack 3y agoHave connections, have established trust with the elite. Not saying it's worth $5M but it is indeed something.
- exmicrosoldier 3y ago"Stock options are a joke. Developers should just get a flat fee." There are people worth their commission and there are people who are not worth it. The bigger reason house prices are so high isnt the real estate agent cartel, it is the banking cartel and the capital chasing homes to rent them out.
- m463 3y agoI think a better analogy would be "stock sales are a joke, you should be able to sell them for a flat fee"
- alok-g 3y agoShould it be the same for income tax too? Let's think through why exactly it be based on income? (Genuinely saying.)