3 ms·

For the buyer, the value is clear: someone to go out with you to house after house, let you in, walk around with you, talk about whether you could fit a king-si

For the buyer, the value is clear: someone to go out with you to house after house, let you in, walk around with you, talk about whether you could fit a king-sized bed in that room, etc. It's a lot of work and the buyer gets a lot of value from it. But for the seller, who pays the tab, the only value is that some buyers' agents will steer their clients away from you unless you offer a large commission. The individual realtors I know are nice people who work hard, but the industry as a whole is pretty obviously maintained by collusion, and I'm glad it finally seems to be crumbling.

komadori 3y ago
That system seems very convoluted to me. In the UK, only the seller pays a commission on the sale price (typically ~1.5%) and the seller's estate agent is responsible for showing buyers around the property. The buyer doesn't need their own estate agent unless they're also selling a previous property at the same time.
- aftbit 3y ago
  That seems backwards. Only the buyer should need an agent, as they are the one who is searching. The seller is just sitting around waiting for offers.
  - travem 3y ago
    Think of this in the context of what happens with the majority of other purchases you are making? How many of those have a "buyers agent" vs a sales person? I've bought houses in both the UK and the US, I preferred the UK approach where I found the houses myself (and in the US it's not that different with tools like Zillow etc.) and paid for a lawyer to handle the paper work for much less than the real estate commission that was paid (and part of the house price I ultimately paid). In fact, you could really view the commission split paid to the buyers agent (from the seller) as part of that expense of the seller marketing their property.
  - cyanydeez 3y ago
    if it were just an object, it makes more sense that the seller does the leg work. they know the object, the market, etc. they're the expert. why does a buyer need a expert on all the objects out there? I know there's technical examinations like a home inspection that the buyer would have done, but if you're just talking about navigating the property and legal docs, seems like the buyer isn't going to need an agent to do that other than once to accept the price.
closeparen 3y ago
My realtor was incredibly helpful with my purchase, even knowing some insider details like this HOA is in litigation or that warehouse is becoming a high rise. I would have gladly paid him the $200-300/hour I pay for other professional services. Given the size of the transaction though, his effective hourly rate was well over $1500.
- kelnos 3y ago
  And that's the thing. We should be paying realtors by the hour, or some fixed fee unrelated to the eventual purchase price. The link between purchase price and the effort made by the realtor is weak at best, and often completely nonexistent.
kelnos 3y ago
I don't agree on the buyer side. I've been involved in purchasing three homes, and while I did find my realtor's help valuable, most of the work to narrow down listings fell to me. Even when my agent pro-actively pushed listings at me, most of them I had already found on Redfin or Zillow. The offer process can be a little confusing, but ultimately it's a bunch of standardized forms that everyone should be allowed to download from some government agency or whatever. The negotiation process is in some ways more frustrating when having to go through intermediaries. The only value the realtor provides there is frankly pretty shady: often the two realtors (who usually know each other and have a cordial relationship) will share information about their client that they really shouldn't. I've benefited from that type of information, but have felt dirty about it. Ultimately all the legal stuff is handled by a title company (and/or a lawyer), and the realtor isn't involved there. I think the main places where you can get a better outcome with a realtor are due to industry protectionism, not anything inherently difficult about the process that requires a trained, licensed agent with insider information.
- ineptech 3y ago
  I agree with all of this, I should've said the buyer's value can be significant, in terms of hours spent by the agent. I've had agents that toured dozens of properties with me, around a very large area over several months, and didn't make a cent because I ended up buying in a different county with a different agent. But that isn't so much an example of value-for-money as of a broken market in which agent pay is only tenuously related to job performance.
rconti 3y ago
Our agent presumably got $23k for finding our house. But actually, she didn't find our house, we found it. (to be fair, it was outside of our self-avowed search criteria because we had to settle on a 3/1 when we wanted a 3/2). But I suppose she got an easy sale. I'm not sure if she actually showed us any houses in person, or just showed us listings. She definitely had to spend a lot of time helping us sign the 150-or-whatever pages of the offer letter, going back and forth with the seller, etc. But still, it was probably 5 hours of 'visible' work, so I'll be generous and say 20 hours total invested. Had we spent 6 months showing us houses, she'd have invested a lot more. And, of course, not gotten a dime more out of us. So, you win some, you lose some.
bbarn 3y ago
I have gotten a lot of value from the two I've used as a buyer, and also the one I used as a seller. On the buyer side, once we'd toured a few houses and they understood better what we wanted, the number of "No, not a chance" houses dropped to almost zero. Also, when we were just "tire-kicking" and said we had no intent to buy for a year or more, our realtor flat out told us she enjoys seeing new houses and even if we aren't ready it's good leg-work and research for her to do for other clients anyway. Once we found one she was excellent at getting us to the right people for financing, inspections, etc. - in a very small local market. She was also incredibly helpful when we were trying to find a temporary rental from across the ocean remotely, which is what led us to ask her to help find a house to buy eventually. On the seller side, we left the country, and my realtor sold our house at an amount that covered his commission and then some with almost no effort from us at all. He had the place cleaned, staged, and photographed as part of his fee, and sold it in a day. Yes, I'm sure like any occupation there are people bad at their job and just collecting cash for doing damn near nothing, but if you find a good one on either side, they can add a lot. Look for referrals from people who've had good experiences, and don't just pick a name from the phone book.

komadori 3y ago

That system seems very convoluted to me. In the UK, only the seller pays a commission on the sale price (typically ~1.5%) and the seller's estate agent is responsible for showing buyers around the property. The buyer doesn't need their own estate agent unless they're also selling a previous property at the same time.

aftbit 3y ago
That seems backwards. Only the buyer should need an agent, as they are the one who is searching. The seller is just sitting around waiting for offers.
- travem 3y ago
  Think of this in the context of what happens with the majority of other purchases you are making? How many of those have a "buyers agent" vs a sales person? I've bought houses in both the UK and the US, I preferred the UK approach where I found the houses myself (and in the US it's not that different with tools like Zillow etc.) and paid for a lawyer to handle the paper work for much less than the real estate commission that was paid (and part of the house price I ultimately paid). In fact, you could really view the commission split paid to the buyers agent (from the seller) as part of that expense of the seller marketing their property.
- cyanydeez 3y ago
  if it were just an object, it makes more sense that the seller does the leg work. they know the object, the market, etc. they're the expert. why does a buyer need a expert on all the objects out there? I know there's technical examinations like a home inspection that the buyer would have done, but if you're just talking about navigating the property and legal docs, seems like the buyer isn't going to need an agent to do that other than once to accept the price.

closeparen 3y ago

My realtor was incredibly helpful with my purchase, even knowing some insider details like this HOA is in litigation or that warehouse is becoming a high rise. I would have gladly paid him the $200-300/hour I pay for other professional services. Given the size of the transaction though, his effective hourly rate was well over $1500.

kelnos 3y ago
And that's the thing. We should be paying realtors by the hour, or some fixed fee unrelated to the eventual purchase price. The link between purchase price and the effort made by the realtor is weak at best, and often completely nonexistent.

kelnos 3y ago

I don't agree on the buyer side. I've been involved in purchasing three homes, and while I did find my realtor's help valuable, most of the work to narrow down listings fell to me. Even when my agent pro-actively pushed listings at me, most of them I had already found on Redfin or Zillow. The offer process can be a little confusing, but ultimately it's a bunch of standardized forms that everyone should be allowed to download from some government agency or whatever. The negotiation process is in some ways more frustrating when having to go through intermediaries. The only value the realtor provides there is frankly pretty shady: often the two realtors (who usually know each other and have a cordial relationship) will share information about their client that they really shouldn't. I've benefited from that type of information, but have felt dirty about it. Ultimately all the legal stuff is handled by a title company (and/or a lawyer), and the realtor isn't involved there. I think the main places where you can get a better outcome with a realtor are due to industry protectionism, not anything inherently difficult about the process that requires a trained, licensed agent with insider information.

ineptech 3y ago
I agree with all of this, I should've said the buyer's value can be significant, in terms of hours spent by the agent. I've had agents that toured dozens of properties with me, around a very large area over several months, and didn't make a cent because I ended up buying in a different county with a different agent. But that isn't so much an example of value-for-money as of a broken market in which agent pay is only tenuously related to job performance.

rconti 3y ago

Our agent presumably got $23k for finding our house. But actually, she didn't find our house, we found it. (to be fair, it was outside of our self-avowed search criteria because we had to settle on a 3/1 when we wanted a 3/2). But I suppose she got an easy sale. I'm not sure if she actually showed us any houses in person, or just showed us listings. She definitely had to spend a lot of time helping us sign the 150-or-whatever pages of the offer letter, going back and forth with the seller, etc. But still, it was probably 5 hours of 'visible' work, so I'll be generous and say 20 hours total invested. Had we spent 6 months showing us houses, she'd have invested a lot more. And, of course, not gotten a dime more out of us. So, you win some, you lose some.

bbarn 3y ago

I have gotten a lot of value from the two I've used as a buyer, and also the one I used as a seller. On the buyer side, once we'd toured a few houses and they understood better what we wanted, the number of "No, not a chance" houses dropped to almost zero. Also, when we were just "tire-kicking" and said we had no intent to buy for a year or more, our realtor flat out told us she enjoys seeing new houses and even if we aren't ready it's good leg-work and research for her to do for other clients anyway. Once we found one she was excellent at getting us to the right people for financing, inspections, etc. - in a very small local market. She was also incredibly helpful when we were trying to find a temporary rental from across the ocean remotely, which is what led us to ask her to help find a house to buy eventually. On the seller side, we left the country, and my realtor sold our house at an amount that covered his commission and then some with almost no effort from us at all. He had the place cleaned, staged, and photographed as part of his fee, and sold it in a day. Yes, I'm sure like any occupation there are people bad at their job and just collecting cash for doing damn near nothing, but if you find a good one on either side, they can add a lot. Look for referrals from people who've had good experiences, and don't just pick a name from the phone book.