7 ms·

Realtors reach settlement that will change how Americans buy and sell homes

62 points by erehweb 3y ago

ungreased0675 3y ago
Does a settlement increase the chances of the status quo continuing?
- djbusby 3y ago
  Well, it (can) reduce commission fees and might make FSBO or un-assisted purchase easier. Which would change the status quo a bit. But states have their own rules too, eg MA requires a real-estate attorney to be part of the process.
deleted 3y ago
[deleted]
rcpt 3y ago
This is disappointing. I feel like the realtor cartel got off way too easy here
- abeppu 3y ago
  I also find the realtor system to be poorly aligned with the best interests of their clients. But ... is it a cartel? On the one hand, yes, brokering these transaction is limited to a specific group. But getting into that group seems not that hard, and lots of people do it.
  - jedberg 3y ago
    What makes it a cartel is their control over supply and demand. It's really hard to buy or sell a house without dealing with them, because inevitably one of the sides of the transactions has a contract with them, because of they way they require exclusivity.
    - abeppu 3y ago
      But: - sale by owner without a realtor is a thing (at least many places?) - all you need to do to be "them" is take a test and get a license, right? I.e. if as a buyer willing to pay 6-7 figures for a home, the cost of getting that license is negligible. If you wanted to recoup the buyer agent commission, you could represent yourself and do so. Like, you also need a license (or multiple) to operate a restaurant, and it's really hard to do a prepared-meal-for-money transaction without one side of the transaction being such a license holder ... but we wouldn't in general say that restaurants are a "cartel" in virtue of this fact, because there's healthy competition.
      - jedberg 3y ago
        > sale by owner without a realtor is a thing (at least many places?) Realtors are not allowed to help you buy FSBO properties. If you have a contract with a buying agent (which most will require) then you can't buy an FSBO. So basically you have to choose -- get access to the 97% of listings that are done by Realtors, or the 3% that are FSBO (and get no help with it). You also can't buy a house listed by a Realtor without your own Realtor. That is why it is a cartel. Because the monopolize the listings and then refuse to work with anyone not in their system. And it's not that easy to get a Real Estate license. To your restaurant analogy, imagine if you could only eat in a restaurant if also owned one and had a restaurant license. It would be similar to that.
  - noqc 3y ago
    I bet you could sign up to be a drug mule with not that much effort.
  - MisterTea 3y ago
    > But getting into that group seems not that hard, and lots of people do it. Getting in to the bottom floor, sure. Working your way up? Not so easy. Same for any other cartel like the mafia and so on.
  - malfist 3y ago
    The MLS system they run certainly is a cartel. There's all kinds of rules that you have to play by that prevents competition if you want to be able to read MLS data.
  - whimsicalism 3y ago
    it’s a brokered market where the brokers collude. if it is not directly a cartel, it is very cartel resembling. NAR was taught as a model case of broker collusion in my economics classes.
- shepardrtc 3y ago
  Realtors are grifters these days. Getting paid 5 figures for a few days of busy work is an absolute scam.
  - Spooky23 3y ago
    That’s the real issue. We’re capitalizing professional services at insane scale for little value. Compensation isn’t in line with value, and the cartel nature of the business puts a lot of friction on the pricing. This isn’t unique to real estate. A lot of sales guys are driving Porsches based on earnings of questionable value. The difference is your Oracle salesman doesn’t have a monopoly backed by state law on blowing hot air.
    - whimsicalism 3y ago
      Yeah one is collusion and the other is more just within-firm inefficiency.
  - ohyes 3y ago
    A good sellers agent with experience will stage your home for sale to get you the maximum possible sale price. For sale by owner is definitely an option, but it’s kind of similar to being your own lawyer. A good buyers agent won’t pressure you into any purchase and may end up showing you at least a dozen homes and can give you advice on bidding / actual value of the home, and can identify issues with the house before you’ve bid. The key is that they’re prioritizing the long term network effects of being well recommended. Our buyers agent was great and I’d recommend her in a heartbeat. She definitely saved us from a couple of potential disasters, and from overbidding (likely saved us low six figures all things considered). But obviously there are a lot of agents that prioritize turnover rather than actually helping you. You definitely have to either judge them carefully or get a positive recommendation from someone trustworthy.
    - nrclark 3y ago
      I agree that a good realtor can provide a lot of value. But the amounts of money involved are crazy. Much too high. The average sale-price for a house in my neighborhood is about 1.4M these days. At a standard 3% commission, that's $42k each for the buyer's realtor and the seller's realtor. Yes, they both provide value. But $42k of value each? At that price, they only need to sell one house a month to have a $500k gross income. And they definitely aren't doing a month of fulltime labor to close my sale. I think that $15k is probably fair for the amount of labor that a realtor provides. But the whole realtor system really is a huge predatory monopoly, and they are squeezing too much money out of the market. And now they're starting to get to the "find out" part.
- pierat 3y ago
  Well, yeah. A real punishment would be destroying their business, returning money illegally gotten to individuals profited on, and opening up criminal proceedings on cartel and monopolization. But no, here's your slap on the wrist. And they'll just make a 10x more convoluted plan that does the same. Why is it allowed? Cause "they're too big to fail".
- bilsbie 3y ago
  What are examples of outcomes that would be better?
xnx 3y ago
An under appreciated aspect of the "housing crisis" (define that however you want) is how illiquid the market is. A big factor in this is the 3-6% cost of each transaction. That's $11-23K for the median US house price of $387,600. Compare that to the $100 title transfer fee of a car. There would be a lot more housing transactions if it didn't cost the equivalent of a year's rent to do so.
- tempsy 3y ago
  Are there really more transactions in other countries where the commission is much smaller? I'm not sure that is really one of the main reasons why a seller decides to sell a home or not.
- radlad 3y ago
  Wouldn't lower fees encourage more frequent speculative trading of properties? Most homeowners are not jumping houses every year or so.
  - smileysteve 3y ago
    Many speculators get their license specifically to avoid these fees; so the professional speculators can speculate for less marginal overhead than an individual that intends to live in the home.
  - whimsicalism 3y ago
    Most housing that is “speculated” on is still rented out. Encouraging price discovery lets us provide cheaper housing in areas of high demand before it becomes a major problem.
- whimsicalism 3y ago
  Debt financing has a lot more to do with illiquidity.
- BenFranklin100 3y ago
  Three are two housing crises. The first is a market-rate housing crisis which is caused by government zoning that limits the construction of new homes and thus leads to supply shortages and high prices. Zoning reform will fix this crisis. The second housing crisis is one of people who can’t afford housing no matter the price. These people need govt assistance, preferably in the form of vouchers. The transactional costs from realtor fees does reduce liquidity, but it is a secondary factor compared to zoning.
vladgur 3y ago
From [1] "The settlement includes many significant rule changes. It bans N.A.R. from establishing any sort of rules that would allow a seller’s agent to set compensation for a buyer’s agent, a practice that critics say has long led to “steering,” in which buyers’ agents direct their clients to pricier homes in a bid to collect a bigger commission check." To me this reads that a transaction cost of selling a house will come down drastically from where its at now -- 6%. [1] https://archive.is/1O8Mh https://archive.is/1O8Mh
- vladgur 3y ago
  P.S. I havent read the actual settlement, this NYTimes comment reads like buyers agents will now compete for their compensation, but it doesnt tell me if I would still have to pay 3% to the seller agent and whether that compensation will be open to market forces now
jedberg 3y ago
A good real estate agent does add value. A good sellers agent will know better than you how to prep your home for sale, how to market it, where to find qualified leads, what price to set it to, where to get contractors to make repairs, what kind of repairs are worth making, and when you get to the deal phase, how to negotiate and what paperwork is necessary, and how to deal with contingencies. A good buyers agent will have deep knowledge of the neighborhood you're looking at (or can take your requirements and find you a good one), will have strong knowledge of the local schools, local demographics, local issues that can affect homeowners, what to look for in a home that could be a problem after purchase, red flags, and can help you negotiate the best deal and extract the most concessions from a seller. But in both cases, I don't see why the value they provide changes based on the value of the home. Some of them might change based on the size of the home or property, but not the home value. I don't see why we don't push for fixed fee based services, perhaps with an adjustment for local cost of living and size of the home/property? I know the Realtor cartel doesn't want that, but how can we citizens make that change happen?
- onlyrealcuzzo 3y ago
  > But in both cases, I don't see why the value they provide changes based on the value of the home. In both cases, the value they provide is relative to the value of the house being transacted. A seller's agent definitely makes sense to take some percentage of the purchase. The services they render - for say a $20M home in the Beverly Hills - are completely different than when selling a $1M house in San Jose or a $200k condo in Chicago. I disagree in how valuable buyer's agents are, though. The value they provide is mainly for people who are completely clueless about real estate - which I guess could be a lot of buyers.
  - vladgur 3y ago
    what are those differences in services and what prevents them from being itemized?
    - onlyrealcuzzo 3y ago
      They could be itemized. The itemizations would be charged at much higher rates - the same way rich people pay 10x more for a lawyer than average people. If you're selling a $20M home, and you think a good seller's agent is going to get you $20M instead of $15M - most people don't really have a problem paying 3% for the services - otherwise we would've never gotten into this common deal structure. It's only people on HN who think realtors sit around doing nothing and make $100k selling an expensive home - and then generalize that to all realtors. SOME realtors are definitely doing that. So are some people in every industry.
ryandvm 3y ago
Couldn't have happened to a better rent seeker.
ChrisArchitect 3y ago
[dupe] Some more discussion over here: https://news.ycombinator.com/item?id=39715511 https://news.ycombinator.com/item?id=39715511
EngCanMan 3y ago
The conflict of interest on a buyers real estate agent is crazy: the person you are entrusting to get you the best value is compensated on the opposite.
blacksqr 3y ago
I suppose at this point most people don't remember that in the 20th century the Multiple Listing Service was a private database that only registered agents could access. So your average buyer had to hire an agent just to get a good idea of what was on the market. The upside of this is that the MLS did a lot to make the housing market rational, with more accurate and consistent pricing. So a house became a better investment. A lot of people thought that was worth the commissions. YMMV. In the early 2000's the NAR made a bet that they could make MLS listings accessible to the public via the internet and maintain their business model. For decades the bet paid off, and people got the convenience of being able to do their own real estate shopping. But time seems to have run out on the payoff. The smart move for the NAR at this point would simply be to take the MLS private again. Then buyer's agents would have leverage to contract for a minimum commission regardless of what sellers were offering. If sellers decided to offer little to no buyer's agent commission, then a lot of deals would fall apart when buyers realized how much they'd have to cough up in cash to cover the buyer's commission at closing. The alternative would be either for sellers to offer competitive buyer's commissions, or for the buyer's and seller's agents to make a side deal to roll the buyer's commission into the mortgage financing agreement. The net result would be the same as the current situation, less buyer's money going to the seller -- but instead of everyone seeing the commission numbers up front, the question of whether the buyers could actually afford the house would be pushed later into the deal process, more money would go to lawyers to sort things out, and more time wasted by all parties in busted deals. If the DOJ forbids taking the MLS private, then the NAR would simply have no incentive to maintain it. Without it, I expect the market would revert to the previous wild-west status, where it would be much harder to value a house, and financing would be more difficult and time-consuming to arrange, with many deals falling apart amid such difficulties. If this scenario were to come to pass, I expect there would eventually be public clamor for a new deal that would be equivalent to the current arrangement, except for names and who referees. The most interesting question in that scenario will be whether the new deal happens before or after a real estate market crash. I have no idea what equivalent system if any there is be in Europe for fair and consistent pricing of houses, and listing of available units, and who pays for MLS equivalents, if they exist. I never hear that discussed in articles on this topic. I'd be interested to know more.
- 3y ago
lostmsu 3y ago
I just sold my rather expensive house without hiring a seller agent. The most useful thing that brought buyers was using https://homecoin.com/ https://homecoin.com/ (not a crypto company) to make a flat $99 fee MLS listing. I got the buyer to cover their agent fee. People should just do the same - it is not that difficult.
Ajay-p 3y ago
This paragraph jumped out for me It is possible that little changes for consumers in the near term because many sellers are used to including the cost of a buyer’s agent in their sale price. But over time, new brokerage business models could emerge that make it easier for buyers to choose low-cost options "could" not "should" or will. Except for a huge payout for the lawyers, I don't see how this ruling is going to affect home buyers, or sellers in the near future. There would have to be a law put in place, so going forward it's still an agreement between private parties to sell or buy a house. I'm also troubled by what the Wall Street Journal claims is that this might push a lot of young realtors out of the career field. That can't be seen as a positive outcome. Overall, I'm still unclear exactly how this is going to help anyone. Especially for the overwhelming majority of buyers and sellers who DON'T want to be their own agent, and want to hire the best realtor to do it for them. I remember when this first came out and lots of people on HN said I'll just be my own agent. Well, that's fine, but that's not an option for most people. I think regardless there will still be plenty of realtors doing business, and they will still make bank.
- ssharp 3y ago
  This ruling helps eliminate incentives that prevented innovation in agent services. There was zero need to innovate because Realtor controlled the entire market and nobody wanted to give up the cash cow, even though the only people it was really good for was agents. > I'm also troubled by what the Wall Street Journal claims is that this might push a lot of young realtors out of the career field. That can't be seen as a positive outcome. I guess that's one way to look at it. This was a service that provided very little value to the people needing the service but there was not really a feasible alternative. Sure some young people who find success in the field may no longer be able to but we shouldn't prop up nefarious businesses just to keep jobs going. Rather, what should be more likely to happen now is that young people will be able to move into this space and start out innovating the old practices, carve out a more impactful and scalable business model for themselves, and still do very well. > Overall, I'm still unclear exactly how this is going to help anyone. Especially for the overwhelming majority of buyers and sellers who DON'T want to be their own agent, and want to hire the best realtor to do it for them. I remember when this first came out and lots of people on HN said I'll just be my own agent. Well, that's fine, but that's not an option for most people. This option will almost certainly still be available and will now cost less. If you ever want to hear someone spout of a truckload of B.S., just ask an agent why a 3% commission is justified on either end of the transaction. The value simply isn't there and it's a huge benefit that this initial hurdle has been toppled.
throwaway99110x 3y ago
[dead]
1vuio0pswjnm7 3y ago
[flagged]
- 1vuio0pswjnm7 3y ago
  [flagged]
  - marklyon 3y ago
    Why do you keep spamming your scripts? Anyone who cares doesn't need your "help".
neonate 3y ago
https://archive.ph/Kq5dE https://archive.ph/Kq5dE
nojvek 3y ago
Wonderful news. Real estate agent fees are ludicrous for the amount of work they do. Efficient markets are better markets.

62 points by erehweb 3y ago

ungreased0675 3y ago

Does a settlement increase the chances of the status quo continuing?

djbusby 3y ago
Well, it (can) reduce commission fees and might make FSBO or un-assisted purchase easier. Which would change the status quo a bit. But states have their own rules too, eg MA requires a real-estate attorney to be part of the process.

deleted 3y ago

[deleted]

rcpt 3y ago

This is disappointing. I feel like the realtor cartel got off way too easy here

abeppu 3y ago
I also find the realtor system to be poorly aligned with the best interests of their clients. But ... is it a cartel? On the one hand, yes, brokering these transaction is limited to a specific group. But getting into that group seems not that hard, and lots of people do it.
- jedberg 3y ago
  What makes it a cartel is their control over supply and demand. It's really hard to buy or sell a house without dealing with them, because inevitably one of the sides of the transactions has a contract with them, because of they way they require exclusivity.
  - abeppu 3y ago
    But: - sale by owner without a realtor is a thing (at least many places?) - all you need to do to be "them" is take a test and get a license, right? I.e. if as a buyer willing to pay 6-7 figures for a home, the cost of getting that license is negligible. If you wanted to recoup the buyer agent commission, you could represent yourself and do so. Like, you also need a license (or multiple) to operate a restaurant, and it's really hard to do a prepared-meal-for-money transaction without one side of the transaction being such a license holder ... but we wouldn't in general say that restaurants are a "cartel" in virtue of this fact, because there's healthy competition.
    - jedberg 3y ago
      > sale by owner without a realtor is a thing (at least many places?) Realtors are not allowed to help you buy FSBO properties. If you have a contract with a buying agent (which most will require) then you can't buy an FSBO. So basically you have to choose -- get access to the 97% of listings that are done by Realtors, or the 3% that are FSBO (and get no help with it). You also can't buy a house listed by a Realtor without your own Realtor. That is why it is a cartel. Because the monopolize the listings and then refuse to work with anyone not in their system. And it's not that easy to get a Real Estate license. To your restaurant analogy, imagine if you could only eat in a restaurant if also owned one and had a restaurant license. It would be similar to that.
- noqc 3y ago
  I bet you could sign up to be a drug mule with not that much effort.
- MisterTea 3y ago
  > But getting into that group seems not that hard, and lots of people do it. Getting in to the bottom floor, sure. Working your way up? Not so easy. Same for any other cartel like the mafia and so on.
- malfist 3y ago
  The MLS system they run certainly is a cartel. There's all kinds of rules that you have to play by that prevents competition if you want to be able to read MLS data.
- whimsicalism 3y ago
  it’s a brokered market where the brokers collude. if it is not directly a cartel, it is very cartel resembling. NAR was taught as a model case of broker collusion in my economics classes.
shepardrtc 3y ago
Realtors are grifters these days. Getting paid 5 figures for a few days of busy work is an absolute scam.
- Spooky23 3y ago
  That’s the real issue. We’re capitalizing professional services at insane scale for little value. Compensation isn’t in line with value, and the cartel nature of the business puts a lot of friction on the pricing. This isn’t unique to real estate. A lot of sales guys are driving Porsches based on earnings of questionable value. The difference is your Oracle salesman doesn’t have a monopoly backed by state law on blowing hot air.
  - whimsicalism 3y ago
    Yeah one is collusion and the other is more just within-firm inefficiency.
- ohyes 3y ago
  A good sellers agent with experience will stage your home for sale to get you the maximum possible sale price. For sale by owner is definitely an option, but it’s kind of similar to being your own lawyer. A good buyers agent won’t pressure you into any purchase and may end up showing you at least a dozen homes and can give you advice on bidding / actual value of the home, and can identify issues with the house before you’ve bid. The key is that they’re prioritizing the long term network effects of being well recommended. Our buyers agent was great and I’d recommend her in a heartbeat. She definitely saved us from a couple of potential disasters, and from overbidding (likely saved us low six figures all things considered). But obviously there are a lot of agents that prioritize turnover rather than actually helping you. You definitely have to either judge them carefully or get a positive recommendation from someone trustworthy.
  - nrclark 3y ago
    I agree that a good realtor can provide a lot of value. But the amounts of money involved are crazy. Much too high. The average sale-price for a house in my neighborhood is about 1.4M these days. At a standard 3% commission, that's $42k each for the buyer's realtor and the seller's realtor. Yes, they both provide value. But $42k of value each? At that price, they only need to sell one house a month to have a $500k gross income. And they definitely aren't doing a month of fulltime labor to close my sale. I think that $15k is probably fair for the amount of labor that a realtor provides. But the whole realtor system really is a huge predatory monopoly, and they are squeezing too much money out of the market. And now they're starting to get to the "find out" part.
pierat 3y ago
Well, yeah. A real punishment would be destroying their business, returning money illegally gotten to individuals profited on, and opening up criminal proceedings on cartel and monopolization. But no, here's your slap on the wrist. And they'll just make a 10x more convoluted plan that does the same. Why is it allowed? Cause "they're too big to fail".
bilsbie 3y ago
What are examples of outcomes that would be better?

xnx 3y ago

An under appreciated aspect of the "housing crisis" (define that however you want) is how illiquid the market is. A big factor in this is the 3-6% cost of each transaction. That's $11-23K for the median US house price of $387,600. Compare that to the $100 title transfer fee of a car. There would be a lot more housing transactions if it didn't cost the equivalent of a year's rent to do so.

tempsy 3y ago
Are there really more transactions in other countries where the commission is much smaller? I'm not sure that is really one of the main reasons why a seller decides to sell a home or not.
radlad 3y ago
Wouldn't lower fees encourage more frequent speculative trading of properties? Most homeowners are not jumping houses every year or so.
- smileysteve 3y ago
  Many speculators get their license specifically to avoid these fees; so the professional speculators can speculate for less marginal overhead than an individual that intends to live in the home.
- whimsicalism 3y ago
  Most housing that is “speculated” on is still rented out. Encouraging price discovery lets us provide cheaper housing in areas of high demand before it becomes a major problem.
whimsicalism 3y ago
Debt financing has a lot more to do with illiquidity.
BenFranklin100 3y ago
Three are two housing crises. The first is a market-rate housing crisis which is caused by government zoning that limits the construction of new homes and thus leads to supply shortages and high prices. Zoning reform will fix this crisis. The second housing crisis is one of people who can’t afford housing no matter the price. These people need govt assistance, preferably in the form of vouchers. The transactional costs from realtor fees does reduce liquidity, but it is a secondary factor compared to zoning.

vladgur 3y ago

From [1] "The settlement includes many significant rule changes. It bans N.A.R. from establishing any sort of rules that would allow a seller’s agent to set compensation for a buyer’s agent, a practice that critics say has long led to “steering,” in which buyers’ agents direct their clients to pricier homes in a bid to collect a bigger commission check." To me this reads that a transaction cost of selling a house will come down drastically from where its at now -- 6%. [1] https://archive.is/1O8Mh https://archive.is/1O8Mh

vladgur 3y ago
P.S. I havent read the actual settlement, this NYTimes comment reads like buyers agents will now compete for their compensation, but it doesnt tell me if I would still have to pay 3% to the seller agent and whether that compensation will be open to market forces now

jedberg 3y ago

A good real estate agent does add value. A good sellers agent will know better than you how to prep your home for sale, how to market it, where to find qualified leads, what price to set it to, where to get contractors to make repairs, what kind of repairs are worth making, and when you get to the deal phase, how to negotiate and what paperwork is necessary, and how to deal with contingencies. A good buyers agent will have deep knowledge of the neighborhood you're looking at (or can take your requirements and find you a good one), will have strong knowledge of the local schools, local demographics, local issues that can affect homeowners, what to look for in a home that could be a problem after purchase, red flags, and can help you negotiate the best deal and extract the most concessions from a seller. But in both cases, I don't see why the value they provide changes based on the value of the home. Some of them might change based on the size of the home or property, but not the home value. I don't see why we don't push for fixed fee based services, perhaps with an adjustment for local cost of living and size of the home/property? I know the Realtor cartel doesn't want that, but how can we citizens make that change happen?

onlyrealcuzzo 3y ago
> But in both cases, I don't see why the value they provide changes based on the value of the home. In both cases, the value they provide is relative to the value of the house being transacted. A seller's agent definitely makes sense to take some percentage of the purchase. The services they render - for say a $20M home in the Beverly Hills - are completely different than when selling a $1M house in San Jose or a $200k condo in Chicago. I disagree in how valuable buyer's agents are, though. The value they provide is mainly for people who are completely clueless about real estate - which I guess could be a lot of buyers.
- vladgur 3y ago
  what are those differences in services and what prevents them from being itemized?
  - onlyrealcuzzo 3y ago
    They could be itemized. The itemizations would be charged at much higher rates - the same way rich people pay 10x more for a lawyer than average people. If you're selling a $20M home, and you think a good seller's agent is going to get you $20M instead of $15M - most people don't really have a problem paying 3% for the services - otherwise we would've never gotten into this common deal structure. It's only people on HN who think realtors sit around doing nothing and make $100k selling an expensive home - and then generalize that to all realtors. SOME realtors are definitely doing that. So are some people in every industry.

ryandvm 3y ago

Couldn't have happened to a better rent seeker.

ChrisArchitect 3y ago

[dupe] Some more discussion over here: https://news.ycombinator.com/item?id=39715511 https://news.ycombinator.com/item?id=39715511

EngCanMan 3y ago

The conflict of interest on a buyers real estate agent is crazy: the person you are entrusting to get you the best value is compensated on the opposite.

blacksqr 3y ago

I suppose at this point most people don't remember that in the 20th century the Multiple Listing Service was a private database that only registered agents could access. So your average buyer had to hire an agent just to get a good idea of what was on the market. The upside of this is that the MLS did a lot to make the housing market rational, with more accurate and consistent pricing. So a house became a better investment. A lot of people thought that was worth the commissions. YMMV. In the early 2000's the NAR made a bet that they could make MLS listings accessible to the public via the internet and maintain their business model. For decades the bet paid off, and people got the convenience of being able to do their own real estate shopping. But time seems to have run out on the payoff. The smart move for the NAR at this point would simply be to take the MLS private again. Then buyer's agents would have leverage to contract for a minimum commission regardless of what sellers were offering. If sellers decided to offer little to no buyer's agent commission, then a lot of deals would fall apart when buyers realized how much they'd have to cough up in cash to cover the buyer's commission at closing. The alternative would be either for sellers to offer competitive buyer's commissions, or for the buyer's and seller's agents to make a side deal to roll the buyer's commission into the mortgage financing agreement. The net result would be the same as the current situation, less buyer's money going to the seller -- but instead of everyone seeing the commission numbers up front, the question of whether the buyers could actually afford the house would be pushed later into the deal process, more money would go to lawyers to sort things out, and more time wasted by all parties in busted deals. If the DOJ forbids taking the MLS private, then the NAR would simply have no incentive to maintain it. Without it, I expect the market would revert to the previous wild-west status, where it would be much harder to value a house, and financing would be more difficult and time-consuming to arrange, with many deals falling apart amid such difficulties. If this scenario were to come to pass, I expect there would eventually be public clamor for a new deal that would be equivalent to the current arrangement, except for names and who referees. The most interesting question in that scenario will be whether the new deal happens before or after a real estate market crash. I have no idea what equivalent system if any there is be in Europe for fair and consistent pricing of houses, and listing of available units, and who pays for MLS equivalents, if they exist. I never hear that discussed in articles on this topic. I'd be interested to know more.

3y ago

lostmsu 3y ago

I just sold my rather expensive house without hiring a seller agent. The most useful thing that brought buyers was using https://homecoin.com/ https://homecoin.com/ (not a crypto company) to make a flat $99 fee MLS listing. I got the buyer to cover their agent fee. People should just do the same - it is not that difficult.

Ajay-p 3y ago

This paragraph jumped out for me It is possible that little changes for consumers in the near term because many sellers are used to including the cost of a buyer’s agent in their sale price. But over time, new brokerage business models could emerge that make it easier for buyers to choose low-cost options "could" not "should" or will. Except for a huge payout for the lawyers, I don't see how this ruling is going to affect home buyers, or sellers in the near future. There would have to be a law put in place, so going forward it's still an agreement between private parties to sell or buy a house. I'm also troubled by what the Wall Street Journal claims is that this might push a lot of young realtors out of the career field. That can't be seen as a positive outcome. Overall, I'm still unclear exactly how this is going to help anyone. Especially for the overwhelming majority of buyers and sellers who DON'T want to be their own agent, and want to hire the best realtor to do it for them. I remember when this first came out and lots of people on HN said I'll just be my own agent. Well, that's fine, but that's not an option for most people. I think regardless there will still be plenty of realtors doing business, and they will still make bank.

ssharp 3y ago
This ruling helps eliminate incentives that prevented innovation in agent services. There was zero need to innovate because Realtor controlled the entire market and nobody wanted to give up the cash cow, even though the only people it was really good for was agents. > I'm also troubled by what the Wall Street Journal claims is that this might push a lot of young realtors out of the career field. That can't be seen as a positive outcome. I guess that's one way to look at it. This was a service that provided very little value to the people needing the service but there was not really a feasible alternative. Sure some young people who find success in the field may no longer be able to but we shouldn't prop up nefarious businesses just to keep jobs going. Rather, what should be more likely to happen now is that young people will be able to move into this space and start out innovating the old practices, carve out a more impactful and scalable business model for themselves, and still do very well. > Overall, I'm still unclear exactly how this is going to help anyone. Especially for the overwhelming majority of buyers and sellers who DON'T want to be their own agent, and want to hire the best realtor to do it for them. I remember when this first came out and lots of people on HN said I'll just be my own agent. Well, that's fine, but that's not an option for most people. This option will almost certainly still be available and will now cost less. If you ever want to hear someone spout of a truckload of B.S., just ask an agent why a 3% commission is justified on either end of the transaction. The value simply isn't there and it's a huge benefit that this initial hurdle has been toppled.

throwaway99110x 3y ago

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1vuio0pswjnm7 3y ago

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1vuio0pswjnm7 3y ago
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- marklyon 3y ago
  Why do you keep spamming your scripts? Anyone who cares doesn't need your "help".

neonate 3y ago

https://archive.ph/Kq5dE https://archive.ph/Kq5dE

nojvek 3y ago

Wonderful news. Real estate agent fees are ludicrous for the amount of work they do. Efficient markets are better markets.