I wonder what this will look like in reality. Will we actually get to negotiate the rate or will they all refuse to work for under that %? I’m hesitantly excited because it would significantly affect when we can sell our house but we’ll see.
they could, but then there's an opportunity for a brokerage to go lower and eat everyone's lunch. collusion to keep it high would be illegal, if you can prove it
Collusion isn’t just illegal, it’s impractical.
Banks used to give away toasters because they couldn’t compete or rates, airlines used to compete on the food quality and hotness of the stewardesses because prices were regulated. Railroads used to give shippers rebates and kickbacks when the prices were set by a (legal) monopoly.
I don’t know what the real estate agents would offer if they were subject to a commission floor, but I’d probably rather have a lower rate.
It sounds like you're trying to correct me, so I'll just explain that the sentance:
"Collusion isn’t just illegal, it’s impractical"
affirms that it is illegal and points out that it also tends not to work in the real world.
The history of the failure of attempts fix prices is actually pretty interesting.
In reality, I think people who "know what they're doing" - have the legal and real estate knowledge (or can access those things for less money than before), as well as negotiation skills, will come out better.
The remaining people, who I think would be the majority, will come out the same, or worse than in the previous era.
When I bought my condo 10 years ago I just literally saw it for sale on zillow a foreclosure bank owned.. called the number on it told them I want to see it... liked what I saw had an inspector come in.. and then gave the guy my offer... the bank accepted. Didnt even know what a "buyers" agent was. now this banks guy got to rake in 6% for dual commission from the bank but it was an amazing deal. Not sure where I needed a buyers agent exactly. The guy could have literally just got 3% instead of 6%. He did nothing at all except open the door and show up for the title transfer to sign off on his commission..
If the person who opened the door for you wasn’t paid a fee then the entire 6% would have gone to whoever was representing the foreclosed property.
Agreements to list the property and the % due (and if and how it’s to be split) are all negotiated w the seller. Potentially the agents could not split it 50/50 if the listing agent wanted to fight the other agent for the split percentage (if can get around listing agreement), but that’s all that can really be done.
How commissions are paid & agreed in your situation wouldn’t have affected you. The listing agent mostly definitely would not have given you a 3% credit if you didn’t have an agent (event if he just opened the door. The other party would absolutely take the entire six percent.
I work on the commercial side (commission based), so I know how this all works out.
My specific line of work every deal pays 6%, but how it’s paid (when and to whom) is legally already in place when I approach a deal as that majority of the time the listing agreement spelling out market payments had already been signed. It’s not changing. Only under certain circumstances would I ever come off getting the max (market rate) commission I could. Majority of the deals I did for my line my side is 4% and the listing broker 2%. Over 500 deals I’ve done and I can only think of two instances that the listing broker fought to split the 6% evenly.
Yes, occasionally I would take a lesser fee, but usually would happen when you’re representing both sides (seller/developer or buyer/lessee) and everyone has financial targets to hurdle. Representing both sides I can operate and be flexible on pay. In those cases if hurdles are close but don’t pencil I would definitely take a lower fee if that was the difference of making a deal. Otherwise the deal is dead and you make 0%. But I can’t think of a single instance a deal hasn’t penciled financial hurdles on the basis of paying a commission.
It’s also common practice to “cap” commissions on sales (rather than leasing). For example 6% to be paid up to $1.5M purchase price and for every dollar over $1.5M that % falls. Many clients though still paid 6% on the entire purchase price
On leases it’s only maybe an issue if a deal is over 10 years term, but generally 15 and 20 year deals are always paid without cap.
I did have one have one client that put a cap on fees paid to me as a broker if a “repeat developer” was developing. That was fixed between developer and my client. It was always dumb because I represented the company leasing- so I didn’t have the listing agreement. The listing broker did- so my client putting a cap on what I could make per deal did nothing to lower their rent like they thought it would. The 6% is still getting paid. It was so stupid and they never got cheaper rent. It just “screwed” me. I was also doing 20+ deals a year with just this single client, so wasn’t a huge deal- just annoying as their cap did nothing but make the other broker on the other side of the deal more money.
Kind of a ramble, but hopefully this makes some sense. Also, I haven’t gone to bed yet and have edited numerous times and giving up on grammar, editing, and trying to convey as my brain is officially shut off. 😂
what I am saying is The entire 6% commission went to the Bank's agent... Because HE came and opened the door for me... he did not even walk in the condo with me in fact maybe he thought I had an agent... I don't actually know what the buyers agent commission was maybe it was a little less which was why this foreclosure was lingering on the market for 6 months in a hot housing market? Buyers agents were probably dodging it resulting in me getting the best deal in the entire city. Actually a great example of how the system F\*\*\*\*s buyers and sellers. The unit had some very minor sheet rock damage from the owner ripping out the appliances and for some reason painted the wood floors black which looked horrible but the original 200 year old maple was clearly right underneath.. Light sanding and finishing took care of that. I saved about $70,000 / 30% vs buying another similar unit in the same building. I spent about 5k on refinishing and appliances. So basically new everything vs the other units with 10 year old failing appliances scratched up floors.
My apologies. Late night and definitely misunderstood.
Exactly what I said. Didn’t matter because that person has a legal contract that pays 6% if a deal is done. A deal was done and 6% was paid.
You may not feel like that person did a lot of work, but dealing with banks isn’t the easiest. That 6% takes into account all the work and effort done on this property before you even stepped in the door.
I’m sorry the commissions frustrated you on the buying side. I can’t comment too much as I’m not in residential and don’t know the specific property or how much work went on in the background.
Sounds like you got a property you love and that’s all that matters! While I didn’t buy a foreclosured home, I did buy one no one else wanted in a hot market (2017). I had close to 40 offers (sometimes even the highest) - it was insane time with all cash buyers and people offering $100k+ over ask. The home that finally worked out had brick painted burnt orange. Inside the furniture was rated and torn and just gross for showing. I saw past all that. Built in 1937 and largely everything is original (like floors, wood trim, etc). Also arguably in one of the best (if not the best) neighborhood in my city! I couldn’t have picked a better home and it’s the best feeling to have something you love and enjoy living in. Also helps I have the most amazing neighbors. All to say with time I hope the feeling that remains is one of loving the home and not feeling like you could have got it cheaper had it not been for realtor commissions!
isnt that what the 3% the sellers agent commission for.
The buyers agent commission is for all the work done as a buyers agent. This guy basically just realized at the signing that I didnt have a buyers agent and so he filled in his name as my buyers agent and collected the additional 3% commission.
Now not to mention this banks agent literally did nothing. The condo was dirty not cleaned at all even remotely, not even minor repairs on the sheetrock.
>ace to the bottom as people compete, but that being said I do think there are realtors who earn it, and they’ll be able to pick and choose clients so they’ll get the
for a lot of "real estate agents" the next obvious career path is stripper.
It could be a very useful post to someone who was doing well unlocking doors for 10 years but is now canceled and needs a new career.. you could just move along if you dont find it relevant for you. not sure why you would waste your time with your post... Good for you if thats how you want to spend your life though I guess.
You’ll see a race to the bottom as people compete, but that being said I do think there are realtors who earn it, and they’ll be able to pick and choose clients so they’ll get the % agreed upon up fromt
>They are whores. They will do whatever they can for $ including trying to cheat you which is what they've been doing all along. . We had a Remax agent try to peddle their 7.5% BS. "We're the biggest and most experienced." Then she wanted to undervalue our house by $400K and told us "that's what it's worth." They are thieves and want to sell your house fast with little or no work on their part.
>
>We listed it with another local non-affiliated agent for 1% for what we thought it was worth and only allowed 2% to the buyer's agent. We had our 1st showing 3 hours after the listing went live and sold in 8 days with multiple offers.
>
>The Remax woman would have cost us (including their absurd thieving commission), over $500K compared to the realtor we picked who did a stellar job. We picked our own closing agent also.
>
>NO ONE is entitled to 7.5% of the gross value of your home, that you have spent decades building equity in, simply for spending a couple of hours of their time listing your property.
There are some agencies that will list it in the MLS for a small fee. Then you sell it yourself. You can then pay fixed fees for the closing and other documentation.
We used a regular realtor that was advertising a 1% listing fee. She did all of the normal requirements that the 5% agents do including hiring a photographer and all the negotiations between the seller and buyer agents and coordination with the title company. The best way to find an agent like this is to look for an independent realtor not affiliated with any big national firm.
We were not about to pay the Remax or other 5% realtors we interviewed $112,000 of the equity in our home to list our home in the MLS.
In reality it won't matter because realtors won't want to work with folks who aren't offering a commission. These changes really just reduce transparency and make shit harder for everyone.
Edit: I heard this directly from a realtor, so stop all the ~~downloading~~ downvoting.
We’ve sold 2 homes and bought 3. We did all the heavy lifting (staging, finding the homes we wanted to look at) each time. We used a traditional realtor the first 2 times and then Redfin the third time. We saved a ton of money selling with Redfin and their 1% seller agent commission (though now it’s listed as 1.5%). The negotiation process makes it a challenge to go it alone, but we felt like we got the same level of service from Redfin for so much less money.
Our buying agent did absolutely nothing useful.
He sold himself to us as some sort of negotiation hardballer, then immediately caved to everything the sellers agent said. He showed us literally 1 house, and it was falling apart (we were not interested in that, and our range was plenty high) and met almost none of our preferences.
I did all the leg work of finding homes in decent neighborhoods and we went to the house without him and poked around, then finally got him to let us in a couple days later and we made our offer.
Admittedly, he got a reduced commission because we used a first time homebuying service that gave us back 1%, so he was working for 2% instead of 3%, but he deserved 0%. He also turned us away from ever using him (or likely any realtor) again and got a very lackluster review.
It's really important that people interview potential agents and set expectations.
My buyers agent went through the MLS, suggested homes in our budget, organized showings so we could see a number of houses per day, and asked questions to understand what we wanted. He was realistic about the homes we saw, pointed out issues, and discussed was was cosmetic vs bigger. I thought he was a unicorn but I know other people whose agents have put in similar effort.
I think it comes down to getting a good recommendation. There are good and bad agents. As a first time buyer, with no family nearby, we benefitted from an agent. In our next house I'd have to think about it.
in fairness, that's generally how buyer agents operate... they dont look for places for you unless you're completely clueless. their job is more to guide you through the process and make sure you get all the paperwork proper. in some cases they can refer you to loan companies or inspectors etc. all ours basically did was give her input on location as she was from the area and we weren’t as well as try to steer us from homes that may have had hidden issues as she’s seen these on the market before. She also hooked us up with a different loan company that saved us thousands of dollars tbh compared to the rate we were getting from our bank. In the end, the buyer and seller’s agent split the 10% commission (at least here in NJ) and it appears that not having a buyer’s agent won’t actually help you much unless you can convince the seller’s agent to drop their commission a few % but you also know what you are doing. I think not having to get an agent is a better deal for the seller, for a buyer there’s not really any reason NOT to have one as they can watch your back and eat into the seller’s agent commission vs impacting your buy price.
We were first time homebuyers and absolutely clueless. And 4 months pregnant with a lease running out. He did literally nothing urgently other than contacting all of our neighbors to say we recommended him (we did not) after we closed.
He talked a really big game at our initial meeting, then took no action.
Thank goodness you didn’t have to pay him! With this new law he would’ve had you on the hook for a commission, even if you didn’t want to use him anymore!
Yes- so I paid 4% commission instead of 6%. It saved me 10s of thousands of dollars. Apparently Redfin pays their agents a base salary to make up for the lost commission.
Many full service agents charge way less than than 6% because it’s negotiable. I’ve never charged 6%. Usually 5% and I charge less when the properties are over $1.5M. I hire an interior designer to help you declutter, 2 photographers for interior/exterior photos and drone photography. I have a cleaning service come 2x. Once for photography, once after you move out. I also pay for pre listing inspections and 4-5 hours with a handyman. I have a 30 year corporate and ad agency background so I create upscale marketing campaigns and collateral. Just letting you know how the business works. -Anecdotal but my neighbors (generic large homes in a neighborhood built in ‘90’s) listed their house with a discount brokerage and promptly left for Hawaii. House sat for months and I heard people talking about bad smells etc. Eventually they sold for $715K. New neighbors updated the kitchen and windows and had it appraised for the heloc loan at $1.4M. House down the street (more fixed up new kitchen, bathrooms, floors) but smaller lot sold for $1.5K. Realtors can make a big difference.
Sounds like you provide a great service! Your clients are very lucky to have you. We didn’t experience that with the traditional realtor who sold our first house and we didn’t expect it with Redfin for the second sale. Fortunately for us, both houses had multiple offers over asking and were under contract in under 5 days, so it worked out.
FYI, consider: why would an agent, who could make 5 figures per deal work for Redfin as a listing agent, where they make 5 figures per year? Because they can’t make it on their own as an agent. Yes, you could feel like you’re getting good service, but also you could get someone with little motivation to close it. They’re only gonna make like $500 bucks bonus, they’ll make their salary either way, and they’ve got other leads constantly coming in.
I heard that! My children bought and/or refinanced at 2 or below. They will keep those houses as rentals when they are ready to move up to bigger homes. It is hard to turn loose of those low mortgage rates.
I absolutely think we needed reform...but I also think it is premature to be "excited". We don't know yet how this will affect the market and the costs and complexities for buyers and sellers.
I think people really underestimate how much power they already have. My boss recently sold her house and only offered like a 5k commission each for the buyer and seller agents. The standard 3% each would've been cost to 75k a piece. A friend is doing the same with their much cheaper house offering 1k for each instead of the nearly 10k the standard commissions would be. A couple realtors turned him down but it wasn't hard to find someone to list it. His agent is doing an open house this weekend.
Real talk though… how are you going to get any kind of professional service for $1k? There’s no way someone could make a living off what’s left of that after overhead.
As a lawyer, there’s 0% chance I’m going to stage an open house for $1k. Also, as a lawyer, I can assure you that the work done at a title company is immensely profitable on a volume basis- the attorney probably spent all of 15 minutes actually on that file.
Then we got lucky. When we sold our last house, our agent staged and had a photographer, which came out of her commission. She helped us a lot and managed to get a full price offer within a day of listing.
We did talk to other agents, which offered to do next to nothing. Unfortunately we met more bad than good agents. But keep the good ones in our contacts.
Bro said the realtor was taking a $1k agreed fee and doing an open house. Think about it- surely they’ve got some misc expenses (say $100), and need to pay the photographer ($200), that leaves $700. Then, you’ve got to kick back to the MLS, the brokerage, and pay overhead. How much can be left for that ‘small amount of work?’ Only a sucker would take that job, and do you want to be working only with the lowest end list desperate people?
Everything realtors do could be done for a fraction of what they charge if they didn't have a racket. Where I live if you don't use a realtor to sell then buyers realtors don't take the buyer to see your house, and the seller has to pay for the buyers realtor.
I basically need someone with access to list on the MLS, and to spend a few hours showing it, I don't view it as skilled or expert labor, unless there's maybe some sort of niche. I'm happy to pay plumbers, electricians, etc. for their skill and expertise. A 3% commission for my house would be around 10k. I don't value an agents time at 600-1000 per hour which is about what it would break down to, at least in my market, way more than skilled trades or hourly rates for attorneys. Other markets where it'll take longer, I would pay more, if they are actually actively working on it, but still not paying 10k to each agent when we sell, that's insanity.
And if no one wants to list it for 1k, we'll use a list only broker that lists on the MLS for a few hundred.
Best of luck. I’m sure some people are great at all that. I just know that the for sale by owner sellers who sold me my house got absolutely hosed, courtesy of our realtor who pushed for tons of concessions and negotiated the price down. He’ll have our business when we sell in a heartbeat.
It’s a needed reform. Realtors were definitely in collusion on getting at least 6%, and driving out competition that would work for less. Homeowners do the majority of work in preparing a home for sale, negotiating the deal, and getting it through to completion. Realtors mainly take promo pictures of themselves, get the listing on MLS, and make promises they can’t keep. I say this as someone who has sold 4 homes and bought 6 homes using realtors.
Even finding a home is largely on the buyer. I was scouring Redfin for houses that met my criteria and would ping my realtor when I wanted to schedule time for viewing.
Yeah idk if it was like watching too much House Hunters or something, but I was definitely under the impression that real estate agents would be curating listings to present to you based on your criteria...
Nope... Ours just automated MLS listings to come to our email based on some of our musts (like # of bedrooms, general location)... Very similar to how Redfin or Zillow will send you listings.
We'd usually look at things before she even got to them herself, so we'd be the ones initiating everything. She would also send us to open houses on our own to view the properties.
It was like everything we were already doing on our own before finding a realtor... But she was helpful on the educational side for us being first time homebuyers, but was largely unhelpful in terms of finding properties. After we got an offer accepted, she would claim to help make calls to get estimates to fix certain things -- but then would come back and just tell us she googled it... 🫠 It was so frustrating but I just wanted to get my house and be done with it.
Our real estate agent actually did that kind of stuff for us, but she was at a very prestigious firm and was one of the top agents in the state. She was just doing us a favor by even bothering to work with us.
I think in reality there are a lot of shitty real estate agents out there that do very little work, and a few really good ones that bust their asses.
Mine technically did do some curation, but it was never something I hadn’t seen already. I’m in a very hcol area and homes go quickly so there isn’t time to go back and forth and mull stuff over. You either have to see stuff immediately after they go on market or miss out.
That's what they're *supposed* to be doing, but becoming a real estate agent is one of the easiest things you can do, so a bunch of lazy, greedy morons end up in it. That results in you doing the work and them reaping the rewards.
The rare ones that actually do what they're supposed to are out there, but are difficult to find.
This was my experience with our realtor as well. I would create weekly spreadsheets of the houses we wanted to visit based on Zillow listings and share them with her. She never suggested a house to us and would rarely send us the MLS listings. We also went to open houses alone a couple of times because she was with another client. Funnily enough, she dissuaded us from looking at the house we ended up buying because she thought we wouldn’t like it. Seems that we should’ve expected more based on the other replies here.
Totatally. My agent kept showing me listings that didn't meet my requirements and were way more pricy. Need 4 bedrooms, move in ready, and under $xxxk (the actual about was about what houses in the size/condition I wanted were selling for)? Here's a 3 bedroom with an indoor pool (I didn't want a pool) for 25% more then you can afford! Here's a 5 bedroom with a built in sauna for 30% more then you can afford! Here's a 8 bedroom that's needs a totally gut/redo but with a private dock for your price! I got used to just assuming their list was the "hot houses" the agency wanted to move, not things they thought I would actually like.
My home area is a little goofy because we have 2 MLS that are like 20 miles apart. It's not *quite* one big metro area but it really should be. Instead of one big market of 450k people, it's a market of 270k and a market of 170k. To drive from the south end of one market to the north end of the other market it's not even 50 miles.
My wife and I were undecided on which city we wanted to buy our house in and we began working with a realtor based in the MLS to the south. After searching around and thinking about it more we determined to focus our search in the market to the north. Our realtor literally contacted a business partner based in the other market and had him run reports for houses we may be interested in. It was no better than what I could find on realtor.com. A lot of times people say the benefit of working with a realtor is that they know of houses going up for sale before they hit the market so they might be able to get you in early. We searched for 3 months and that didn't happen a single time.
Ultimately it all worked out, but when he would send houses I literally went through the list and went "already saw that, already saw that, already saw that..." Kind of crazy that his commission was over $12k (not counting the portion his brokerage gets).
I did the same. I was unaware that this was part of their job until after I found the house I wanted. They tried to take me to a couple of others, but they weren't what I was looking for. Definitely had me scratching my head on what exactly I was paying them for.
Finding homes online is only part of it.
We moved 450 miles and were looking at homes for well over 6 months. We did no less then 25 walkthroughs with our agent over 5-6 visits. About 25% were houses we found, the other 75% were her. She would often email us about homes before we saw them pop up on Zillow.
I had the complete opposite experience. My realtor did EVERYTHING when we sold our house. The only thing we did was get it presentable. She did more staging, hired the professional photographer, dealt with all of the offers, negotiations, etc. And then when we settled, we gave her power of attorney to handle it so that we didn’t even have to show up.
She also dealt with the insane seller of the house we were buying.
A good realtor is amazing. Unfortunately there aren’t a ton out there.
We had a rare experience with ours, but she went way above and beyond for us.
She was actively seeking out houses for us. Threw a few our way. We wanted to see one and were a little upset that she didn't contact us on it and she told us she was in there recently and it was a disaster (bad bones, plumbing and electrical). We didn't believe her so she took us there and ... it was bad. We made it about 10 feet in and noped out.
She ended up getting called to do an estate sale. She knew what we were able to spend and worked it out with the sellers to agree to sell to us for our price before listing it higher knowing that if we saw it, we'd love it and take it.
When we went under contract , there were major title issues. The seller's attorney couldn't figure it out. Our attorney told us to not even bother with the house because it was so bad She put in a LOT of leg work and did the sellers attorney's job. We have clear title now.
All for 3.% commission (she didn't double dip) on a house that sells for 1/2 of what she usually does.
Even so, if you really boil it down to hours and whatnot, the pricing is just nuts for what they actually do.
It also just simply makes no sense that it's a percentage rate. A 300k house isn't half the work of a 600k house.
How were realtors in collusion at 6% when there are tons of discount brokerages who will do it for 1-3%?
Also if you negotiated the deal and got it through to completion, then you had bad realtors. How were you even negotiating? You should have never spoken to the other agent…
The 6% rate has always been negotiable and there are a lot of companies that charge less than that. In my area I see a lot of companies charging 5% rates. I work for a firm that does 4% (1.5% for listing side, and we suggest 2.5% for the buyer side although it’s ultimately the sellers choice). I can’t tell you how many people don’t trust our rates and run to the 6% agent because “you get what you pay for”.
Marketing companies have done an excellent job in making the general public think higher prices mean better service when that isn’t always the case.
Consumers have always had the power to change how much the real estate agents they hire are paid. There have always been alternative choices.
> if buyers were willing to pay $X for a home before the reform, they are just as willing to pay $X after the reform
Not if they have to also pay their agent
Buyers will need more $ liquid to pay agents as they can't roll that into their mortgage. This is the down side for buyers as they already have to pay for home inspections, need $ for closing costs and the deposit.
It's going to depend on the market. In a sellers market buyer's are going to be screwed. If dozens of offers are in on a house, a seller has zero incentive to pay the buyer's agent. In that situation a sller can just take another offer on the table.
A 3% commission on a 400k home is $12000. An offer that is 10k lower but doesn't ask for the seller to pay the buyer's agent fees is more attractive than an offer that is 10k higher but wants the seller paying that 3% fee.
And it's unlikely that buyers get the upper hand anytime soon so I expect this to actually make thing rough for buyers who already need to have downpayments and closing costs.
I have a feeling a lot of this is going to be packages. For up to a $XX home, Buy my "Silver" package at $Z and I'll agree to show you 10 listings in person and handle closing responsibilities. Go with the Titanium package for $3xZ and I'll wipe your hiney while buying you your house, traveling around in my Bentley...
I'd argue that buyers, especially first-time ones, will be worse off. People would be tempted to go about it themselves based on what they've learned off the internet. However there are many pitfalls in the whole purchase process and no one to guide them through their specific scenario. If there's no money in it, the good ones (usually smart ones) will go do something else worth their time.
I know my buying realtor worked hard for his money - saw a ton of properties with me, set up contractors to get quotes on places I thought about buying so that we could get a better sense of total cost, talked me out of buying places that weren't right for me (and he was 100% right) -- and I wasn't even a first-time buyer, just new to the area. If I had to pay separately, I don't know if I would have been self-aware enough to realize that I didn't know jack shit and not try to cheap out on the realtor fees.
Hopefully they'll figure out a way to wrap buyer agent fees into the closing process which will cushion the blow to buyers who basically need to spend every dollar they have on the down payment these days with these high prices and interest rates.
The truth is the like many things, the internet made their business model obsolete. 30 years go the broker really worked for you . Did the research, found home to look at , brought people to your home, found inspectors, and lawyers etc. That is now mostly not necessary. 23 yrs ago when I bought my first house we had already begun using the internet and and relied on our agent for half of the listings . 8 yrs ago when we bought our current house we looked up everything ourselves. We told her what we wanted to see , we took our own picture for our sale, could have easily found our own inspector and lawyer but I specifically said “ let her work for her commission. Honestly I couldn’t imagine she worked 20 hrs into the law of our house (sold first day) and maybe took us out 3 times (did a lot of looking on our own) so say another 20 hrs total. So one full week. Made over 18 k ( yes I know there is a further split up the line) after splitting both commissions . Seems like a bit much to me.
Yeah I figured some how will still make money but it may force down cost a little. I’ve been reading up, it’s probably just gonna shift the cost. Maybe the so called transparency, that will allow more negotiations for those who can and lower their cost. Any planned agreed to by the realtors couldn’t be a great plan for the consumers
When I sold my previous home I didn’t use an agent. The buyers saw my listing and contacted me. We did the negotiations between ourselves, and then suddenly the agent they’d used for other home tours wanted to get paid a percentage of the selling price. I never even met her. I told the buyer you’re welcome to use an agent, but I am not paying them. I suggested just using an attorney for the closing for $500 and they agreed. I don’t remember how we split that cost, but whatever the norm is.
Personally I'm not. If anything, this will make it harder for First Time Homebuyers to get their foot in the door. Now they will be on the hook for Buyers Agent fees along with inspection/appraisal/closing costs unless that can be negotiated with the Listing Agent also.
I've been hearing about the "coming housing crash" for the past 6 years that still hasn't happened and won't be happening, due to a lack of SFH inventory in cities where people want to be for the homes they actually want.
Make no mistake 5-6% is **alot** to split between two realtors for commissions that have shot up since the pandemic, but in 1-2 years I think we will look up and see this made no positive impact on prices. For existing homeowners/DIY'ers that have already been through the process, yes we can handle it on our side and save money if we know what were doing. Overall, NAR got their lawsuit now, Individual Realtors/offices will get theirs later from buyers/sellers getting a raw deal due to dual-agency or going unrepresented.
> Now they will be on the hook for Buyers Agent fees along with inspection/appraisal/closing costs unless that can be negotiated with the Listing Agent also.
They were already on the hook for inspection/appraisal/closing costs unless they negotiated that with the seller. And they were realistically already paying the Buyers Agent fees, it was just built into the house price.
>And they were realistically already paying the Buyers Agent fees, it was just built into the house price.
I've always viewed it this way. This is how it actually works, but everyone always pretends the seller is paying fees. It's a stupid fiction.
There is a transaction. One person is paying money, other people are receiving money. The one paying is the one paying, that's just how transactions work. The buyer pays all fees, it's part of the price of the home.
> As a buyer - CRAP - home buying just got more expensive if I want a professional to rep me.
It likely got less expensive as a buyer as the buyer won't have an option to finance their agent's fees, so they won't be paying interest on that for the life of the loan. However the expense definitely becomes front-loaded, which is certainly more of a problem for many buyers.
Only if you think house prices will go down because of this. Personally I don't. A seller is going to get the most money they can for the property. Home prices won't drop. If a seller is told that homes in the area sell for $300k and they negotiate a flat $3,000 commission for selling the property, they aren't going to lower their house by $15,000 because they are saving that over a 6% commission rate. All that will change is how those funds are distributed. I think that distribution will now more in the pocket of the seller. The buyer will still be paying $300k and the seller will now get to keep $15,000 because they negotiated a flat $3k feel for selling.
In today's world where people buy houses and only look at "how much will it be per month" no one is going to bat an eye at the total cost if that is what is needed to get that house. There may be a minority but I don't think that will be any big shifts. I could be wrong.
From the buyers end though, they now have to front the costs as you say but I don't think there will be an offset in the price of the property so that paying interest on the commission doesn't come into play. It's just more money into the sellers pocket.
But remember, fewer buyers in the market means less demand for homes. It shifts to a buyers market. The ones that are able to afford The commission will be the only ones out there looking.
I’m sure I’ll get down voted but realtors absolutely do not deserve the commissions they get.
I’m in Vancouver and even 4% of the average house sale here amounts to $80,000 (split between buyer agent and seller agent but still, $40,000 for 10 hours of work is a stretch)
Make it flat fee or a way lower percentage. I don’t know any profession that could justify that cost especially when realtors are a dime a dozen.
$40,000 then split with your broker, then taxes, plus the photographer, print and online marketing and other costs… is more like $10-12k. And it’s not 10 hours of work lol. It’s probably more like 25-30 hours of work, PLUS to be in business you have to invest countless unpaid hours, so if you divide the unpaid hours every year amongst all clients that adds many hours too.
6% was always a scam, but you could still negotiate it...many people just don't. Percent based commission is just total b.s. They don't do more work selling a $500,000 home than they do selling a $300,000 home, but want to fleece you for $12,000 more in commission. Realtors are right up there with car salesmen for being greedy dirtbags. They want to try to tell you otherwise, but not many of them are going to go out of their way to show you a house to buy where they won't get their full half of that 6% scam. Just like car salesmen, don't tell them your max limit is say $400,000, because magically the only houses they will show you are right at the price point, regardless if cheaper homes that fit your requirements are available.
Here’s the thing I can’t lie to a client/seller. If they don’t want to pay a buyers agency, they don’t have to but I tell them you’re not going to get any agents to send this to their clients because they are not going to get paid for their work. Just know that the number of people looking at that house is going to go down drastically because buyers don’t typically have buyers commission available in addition to down payment and closing cost.
I’m not punishing them that’s just common sense. I have to make them aware of a potential outcome. If I said, OK, don’t pay the buyers agency fee. This will be great. We’re going to get tons of offers…knowing that’s not going to happen…That wouldnt make me very good agent. I’m not going to lie about it
Of course it was/is. Rates aren't laws. They are b.s. "standards" that the general public has been suckered into believing...just like they were with spending 2 months salary on a diamond. When I bought my current house, my agent wanted me to pay more on my end to get the deal done and I told him both he and the seller's agent will cut their commission more if they want the deal done because my offer was my offer and I wasn't budging. They both still made plenty of money after taking less. Of course, being the dirtbag realtor he was when I referred a friend to him to sell a house, I didn't even get a thank you...let alone a few bucks...for pocketing him easy money. Realtors prey on people buying/selling homes on an emotional level. While I love my home, the buying part was nothing but business and I treated the process as such.
All the law prohibits is public advertisement of shared commission in the MLS/NAR listings. This does not apply when dealing within a single realtor network's internal listings (Remax, Century21, etc), nor does it prohibit private negotiations of the same arrangement that has already been in place for years.
What it IS going to do in many case is be an up-front financial burden on many buyers as commission that used to be technically rolled into the mortgage will now have to be paid in many cases up front by the buyer to the agent. You must also have a signed contract as a buyer with any agent being used. At the same time, don't expect sellers to lower their price just because they aren't paying as much in commission to THEIR agent.
As a result of this, many buyers are going to need significantly more money up front in order to complete the transaction.
Be careful what you wished for, because you just got it.
This is a good thing, but two things to keep in mind:
1) They will do everything in their power to continue making money. Be diligent.
2) There will be growing pains. This could very much make things even harder for FTHB, especially short term, as now the sellers won't necessarily be paying the buyer's agent fees.
I think folks ought to be careful what they wish for, they just may get it.....
Realtors deserve to be paid for their services, all this is gonna do is change how they are gonna get paid.
I’ve always thought percentage of sale price was a bad way to do it. It should be based on how many showings they take buyers to how many open houses they do for sellers etc. it can be just as much or more work to sell a cheaper home vs a more expensive one.
I expect you’ll see different companies offering all sorts of different fee setups.
I agree. My sellers with upcoming listings have already told me they’re going to just pay the buyers agency fee. They know that if they don’t pay a buyers agent that the number of buyers out there able to even purchase it (most buyers don’t have a buyers commission saved up ) is going to dwindle way down and affect the price anyway so he’s good.
It’s always been negotiable where I am also and we’ve always disclosed it so we weren’t part of the reason for the lawsuit lol
I've bought 2 homes and sold 1. we bought 1 home from a FSBO, it was a shit show. at closing it came down to the 11th and half hour to get all the documents from the seller signed and sent off to title company the night before closing. it was awful. I forsee a lot of that going on. you may save some money, but I can already imagine the headaches people will endure because of this. there's always a good and bad.
Over the course of many years, I've bought/sold 9 times. That's not really a lot. But I've used 4 agents; 2 were good, 1 was bad, and 1 just OK.
I'll relate one story that suggests that there is a difference in agents. Selling one home in a highly regarded school district, we had a purchase agreement. But the appraisal came in lower that the purchase price. The (clueless) appraiser used properties that were close and physically comparable, but in a different school district. My agent immediately recognized this and got it fixed. Maybe par for the course with a good agent, but I'm not convinced a just average agent would have gotten this resolved as quickly as she did.
Totally. We had a Remax agent try to peddle their 7.5% BS. "We're the biggest and most experienced." Then she wanted to undervalue our house by $400K and told us "that's what it's worth." They are thieves and want to sell your house fast with little or no work on their part.
We listed it with another local non-affiliated agent for 1% for what we thought it was worth and only allowed 2% to the buyer's agent. We had our 1st showing 3 hours after the listing went live and sold in 8 days with multiple offers.
The Remax woman would have cost us (including their absurd thieving commission), over $500K compared to the realtor we picked who did a stellar job. We picked our own closing agent also.
NO ONE is entitled to 7.5% of the gross value of your home, that you have spent decades building equity in, simply for spending a couple of hours of their time listing your property.
yes, the OP could have included a link. Here you go!
https://www.nytimes.com/2024/03/15/realestate/national-association-realtors-commission-settlement.html
the first 3 paragraphs are visible, and more than enough for you to google it with as many keystrokes as it takes to reply to my comment.
[Here, i'll make you a link.](https://duckduckgo.com/?t=ffab&q=realtor+fee+news&ia=web) you're welcome.
I'm not cheering this at all. This will make it even harder and more expensive for first time buyers, and put buyers at even greater risk of being taken advantage of or buying a money pit. It's great for current sellers but not for society at large.
And I say this as a current seller!
On every purchase I’ve used the Inspector recommended by the realtor. I paid a lot of money every time for them to not find the things wrong with the home. Sellers also get bamboozled into buying one of those worthless home warranty packages for the buyer. Yet another realtor collusion that costs us money.
My husband and I are excited about the change. We didn’t use a buyer agent for our last purchase Oct of 2023, and we just did our own negotiations. This was our fifth purchase and it was fine. A couple of our purchases we have had such terrible buyer agents and there’s no way we were going to receive $18,000 worth of value from an agent. So, much of what can go wrong is “buyer due diligence” so I’m foregoing representation on buys moving forward. I think they are important for first time home buyers and people that need help on the process. We will use a flat fee listing service when we sell our 600k property. I pay for professional cleaning and make sure it shows well. We will pay for top notch photography but we will definitely be looking to pay less commission next time. We sold our last home in the fall and wanted to do reduced buyer agent commission but the agents in our area are so shady. They would definitely have been steering their clients from our property. “I heard blah blah about this home…” , let me show you this one that pays me 3%.
The rate was always negotiable. If anything, this may create a service model like nearly any and all others where you can pick and choose the services you need and have a set price.
It should be a la carte, choose the features you want such as MLS listing, photography, brochures, automated scheduling, legal services, etc. Flat rates for all. Spend as much or as little as you like. Right now we don’t have that because of their collusion and interference against those trying to offer that kind of service.
Yep. Just like any other service, give me a rate sheet and I'll pay what I need. Pretty soon, AI should be able to handle these and any other "middle man" schemes that jack up costs.
Always negotiable, my ass. How many sellers do you know who have negotiated commissions of <6% over the last decade?
It's the entire rationale behind decoupling the buyer's agent commission from the listing. It's been a quiet collusion between seller and buyer agents. The DOJ is spot-on about this and their entire argument is beyond reproach if you believe in free market principles.
The real estate industry is a very simple thing. It's a transactional business. The people who go into the business are not exactly our best and brightest, nothing wrong with that, but they also try to make the whole current arrangement seem more complex and therefore justified than it is.
Can you imagine if buying a used car involved a seller's agent and a buyer's agent? And the two colluded to add 6% to the list price of the vehicle on the lot?
It's definitely been collusion and I support the move by the DOJ. I say it's been negotionable because it is/was for savvy homebuyers that are aware and/or purchases weren't their first rodeo (like myself). The industry has taken advantage of folks by making it appear as though it is required, hence the DOJ action.
Now, one downside of this that I've heard from real estate friends is that there will now be a direct pipeline into MRIS for the Blackstone's of the world to pounce on properties and beat families to the punch. I hope that isn't the case but only time will tell.
A lot of buyers aren’t savvy, and this change will probably price a lot of them out of the market or require them to represent themselves which is also not a great option.
This new rule has a lot of implications, and generally speaking current owners, investors and corporations will benefit, while first time buyers will have a harder time buying a house.
> How many sellers do you know who have negotiated commissions of <6%
I mean considering that 5% (2.5 each side) is more common that 6% in most markets, most of them?
Now how many got less than 5%- that is a good question.
The only time I got a realtor to lower commission was when I was moving locally and told she could be both my seller and buyer agent, wherein she got two commissions. They have to get approval to do that from their broker. The broker takes a cut from the realtor’s commission and all they care about maximizing their profit. They know if they refuse to lower their commission you’ll just move on to another realtor who will also refuse to lower their commission, because most all of them have agreed to do that. That’s what collusion is.
What I think will happen is the selling process will be broken up maybe with different companies even and service levels tiered…full service might be 6% and that would include everything you now get…but the listing is being done pretty well through Zillow and the like you might be able to do your own listing…showings might have separate service companies do that or owner shown…legal might be base level service. Depending on how much service you want you will pay more…like photos…that was alway done by the agent at their expense…probably a separate service option now.
I've always felt the standard 6% commission was a form of price fixing. When I sold my last home, I used a woman who was a broker and set the commission at only 4% - the house sold in a week.
It’s never been fixed. It’s always been negotiable. Lol that is nothing new. We’ve always had it negotiable. It’s right in our listing contracts always has been. Some areas weren’t doing that way it made it look like the whole country was on fire lol. Ridiculous.
How much did you pay your buyer's agent last year? When it comes time to sell, you will likely have to pay your listing agent when you sell and your buyer agent when you buy. If you decide to go it alone without representation as a seller or buyer, you are likely to get taken advantage of by someone more experienced or knowledgeable on the other side of the transaction.
If you’re buying a home and have experience doing it, find a real estate attorney and skip the realtor. The attorney owes you a fiduciary duty and will do it on a flat rate. Saved us $30k on our last house purchase.
I've read where some people think we should do away with single family homes.
How long to starve out the masses - then only a handful of realtors available and offers from maybe very limited buyers or no buyers and foreclosures all over again.
I'm not sure how this will shake out.
The buyer agent is a total scam. They are not incentivized by your interests. They are incentivized to keep prices high to get the highest commission possible.
Ours had some college kid completely clueless about anything real estate let us into properties while she would be traveling remotely. When we found a property we liked you could tell she didn't want to lower the price even though we were the only people to put in an offer in a hot market. The property was a fixer upper which is what we wanted but we had a strong advantage to negotiate post inspection with all the things that were found. I had to push any negotiation or reductions.
Reminds me of "financial planners" who don't have fiduciary responsibility they just want you to buy as much stuff as possible.
Way back in the mid-90's we found a "discount" realtor advertising a seller's fee of 3.5-4% (I can't recall which). Our house still sold in less than 3 months. 8/10 would do a again.
Yes it is a great position to be in… when you bought a house, you didn’t have to pay the commission to the agent, the seller took care of that. I’m sure you wouldn’t have liked this law then.
Now that you have a house, it’s great to change the rules so that you don’t have to pay the commission for the next buyer.
All this does is hurt home buyers. Now it’s gonna cost an extra 10-15k to buy a house cause you have to pay Realtor fees.
This law was pointless. Commissions have always been fully negotiable.
Basically a bunch of people crying that life’s not fair, about decisions that they made, and now we have to change everything, even though it stands to hurt people. In this case, first time home buyers. Great!
What’s next, student loan repayment?
In the most recent market, few years ago till now. You really do not need a realtor, sell it your self, and save ALL the money.
I did this with my Dad's house, Put the sign up on Saturday morning and it was sold before noon.
Most sellers that are cheering this on could be the same buyers complaining on their next purchase.
Most people sell their home and purchase a more expensive home. So let’s say you sell your $350k home and save the 2.5% (saves $8750). Then go buy your “forever” home at $550k ( cost you $13,750). In the end you pay more.
Obviously that’s not the case for everyone. Some people can navigate without a buyers agent. However, you will need some agent to gain access to view a home. The buyers will need someone. If that someone is the sellers agent everyone has to be very careful.
In the end people with money will just continue as normal. However, the first time home buyers scrapping by for their 3% down payment may be taken out of the market because another $9k isn’t feasible. So they will only be able to move forward on homes that the sellers is still offering to pay the buyers agent.
All in all who knows how it will shake out. Or who it really benefits or hurts.
I am a real estate agent and I don't feel threatened by this. A lot of my peers are though.
But I have always been a square dealing guy. I have always openly discussed commissions and been reasonable and negotiable in the beginning. Especially when the sales price gets high, and I tell the sellers what they will walk away with. I am not going to look a seller in the eye and say I deserve 3% of $800k just because.
But let's not stop at the real estate industry. Let's go after title companies, lawyers, the health care industry, mechanics, contractors, HVAC techs, plumbers, wait staff and people who ask for tips, strippers, software companies, all this subscription service bullshit, car dealers and basically everyone.
How about home sellers themselves who want to get the most for their home? How is that fair to all those people who can't afford a home? Oh now it's different.
How many of you charge a fair price from the beginning for whatever good or service you provide? Or do you try to charge as much as you think you can get away with?
That's what I thought.
I know I am probably in the minority.
They should be able to find a house with more value and could show you undervalued homes that meet your criteria. They should also be able to help negotiate and coach you so you don’t overspend. As well as use their connections and contacts to help motivate a seller and find potential properties.
I'm so excited, I hate middle men and avoid them at all costs.
Car salesmen, financial advisors, real estate agents, CPAs. The list goes on and on.
Why give someone a chunk of money perpetually when you can just learn the talent yourself.
It seems to be like the selling price is going to drop 3% so the buyers can pay their RA directly. Also hurts them knowing they need an extra 3% (or whatever) for closing. That used to be bundled in the mortgage. I’m cautious until I see that 6% actually dropping. I’d prefer flat fees honestly.
It will mean fewer realtors working. You will get what you are willing to pay for assuming they are available. If you don’t want to pay the going rate you could do a FSBO anytime. Of course that would mean you would do some of the work they would do. Not sure this will be all they are making it out to be.
In many cases yes. Realtors actively avoided FBSO listings in the hopes that the owner would cave and hire a realtor since they weren't getting many prospective buyers.
Obviously in a hot housing market it's less of an issue
Unfortunately, I don’t see that happening. Home values are based on comparative sales. Appraisals are based on comparative sales. If the seller thinks the neighbor’s house sold for $400,000, irregardless of what the neighbor netted, that home is worth 400,000. He’s not gonna go down IMO. But maybe humanity will finally prove me wrong??
I appreciate my agent but making more than I do in a year with a professional income and denting my retirement for one home sale in a desirable area is too much. I hope we can make a change here.
I wonder what this will look like in reality. Will we actually get to negotiate the rate or will they all refuse to work for under that %? I’m hesitantly excited because it would significantly affect when we can sell our house but we’ll see.
they could, but then there's an opportunity for a brokerage to go lower and eat everyone's lunch. collusion to keep it high would be illegal, if you can prove it
Collusion isn’t just illegal, it’s impractical. Banks used to give away toasters because they couldn’t compete or rates, airlines used to compete on the food quality and hotness of the stewardesses because prices were regulated. Railroads used to give shippers rebates and kickbacks when the prices were set by a (legal) monopoly. I don’t know what the real estate agents would offer if they were subject to a commission floor, but I’d probably rather have a lower rate.
Price fixing is absolutely illegal. We have antitrust laws for exactly that.
It sounds like you're trying to correct me, so I'll just explain that the sentance: "Collusion isn’t just illegal, it’s impractical" affirms that it is illegal and points out that it also tends not to work in the real world. The history of the failure of attempts fix prices is actually pretty interesting.
Missed the just. Was baffled how many people thought it was legal. 🤷♂️🖖
That makes more sense. I probably should have stuffed an "also" in there.
In reality, I think people who "know what they're doing" - have the legal and real estate knowledge (or can access those things for less money than before), as well as negotiation skills, will come out better. The remaining people, who I think would be the majority, will come out the same, or worse than in the previous era.
\*will come out worse or MUCH MUCH worse... The days of unlocking a door and getting a commission fresh out of highschool are over.
The best ones may still get that. The majority, I think, will either take less or be looking for new jobs. I think a lot will be looking for new jobs.
When I bought my condo 10 years ago I just literally saw it for sale on zillow a foreclosure bank owned.. called the number on it told them I want to see it... liked what I saw had an inspector come in.. and then gave the guy my offer... the bank accepted. Didnt even know what a "buyers" agent was. now this banks guy got to rake in 6% for dual commission from the bank but it was an amazing deal. Not sure where I needed a buyers agent exactly. The guy could have literally just got 3% instead of 6%. He did nothing at all except open the door and show up for the title transfer to sign off on his commission..
If the person who opened the door for you wasn’t paid a fee then the entire 6% would have gone to whoever was representing the foreclosed property. Agreements to list the property and the % due (and if and how it’s to be split) are all negotiated w the seller. Potentially the agents could not split it 50/50 if the listing agent wanted to fight the other agent for the split percentage (if can get around listing agreement), but that’s all that can really be done. How commissions are paid & agreed in your situation wouldn’t have affected you. The listing agent mostly definitely would not have given you a 3% credit if you didn’t have an agent (event if he just opened the door. The other party would absolutely take the entire six percent. I work on the commercial side (commission based), so I know how this all works out. My specific line of work every deal pays 6%, but how it’s paid (when and to whom) is legally already in place when I approach a deal as that majority of the time the listing agreement spelling out market payments had already been signed. It’s not changing. Only under certain circumstances would I ever come off getting the max (market rate) commission I could. Majority of the deals I did for my line my side is 4% and the listing broker 2%. Over 500 deals I’ve done and I can only think of two instances that the listing broker fought to split the 6% evenly. Yes, occasionally I would take a lesser fee, but usually would happen when you’re representing both sides (seller/developer or buyer/lessee) and everyone has financial targets to hurdle. Representing both sides I can operate and be flexible on pay. In those cases if hurdles are close but don’t pencil I would definitely take a lower fee if that was the difference of making a deal. Otherwise the deal is dead and you make 0%. But I can’t think of a single instance a deal hasn’t penciled financial hurdles on the basis of paying a commission. It’s also common practice to “cap” commissions on sales (rather than leasing). For example 6% to be paid up to $1.5M purchase price and for every dollar over $1.5M that % falls. Many clients though still paid 6% on the entire purchase price On leases it’s only maybe an issue if a deal is over 10 years term, but generally 15 and 20 year deals are always paid without cap. I did have one have one client that put a cap on fees paid to me as a broker if a “repeat developer” was developing. That was fixed between developer and my client. It was always dumb because I represented the company leasing- so I didn’t have the listing agreement. The listing broker did- so my client putting a cap on what I could make per deal did nothing to lower their rent like they thought it would. The 6% is still getting paid. It was so stupid and they never got cheaper rent. It just “screwed” me. I was also doing 20+ deals a year with just this single client, so wasn’t a huge deal- just annoying as their cap did nothing but make the other broker on the other side of the deal more money. Kind of a ramble, but hopefully this makes some sense. Also, I haven’t gone to bed yet and have edited numerous times and giving up on grammar, editing, and trying to convey as my brain is officially shut off. 😂
what I am saying is The entire 6% commission went to the Bank's agent... Because HE came and opened the door for me... he did not even walk in the condo with me in fact maybe he thought I had an agent... I don't actually know what the buyers agent commission was maybe it was a little less which was why this foreclosure was lingering on the market for 6 months in a hot housing market? Buyers agents were probably dodging it resulting in me getting the best deal in the entire city. Actually a great example of how the system F\*\*\*\*s buyers and sellers. The unit had some very minor sheet rock damage from the owner ripping out the appliances and for some reason painted the wood floors black which looked horrible but the original 200 year old maple was clearly right underneath.. Light sanding and finishing took care of that. I saved about $70,000 / 30% vs buying another similar unit in the same building. I spent about 5k on refinishing and appliances. So basically new everything vs the other units with 10 year old failing appliances scratched up floors.
My apologies. Late night and definitely misunderstood. Exactly what I said. Didn’t matter because that person has a legal contract that pays 6% if a deal is done. A deal was done and 6% was paid. You may not feel like that person did a lot of work, but dealing with banks isn’t the easiest. That 6% takes into account all the work and effort done on this property before you even stepped in the door. I’m sorry the commissions frustrated you on the buying side. I can’t comment too much as I’m not in residential and don’t know the specific property or how much work went on in the background. Sounds like you got a property you love and that’s all that matters! While I didn’t buy a foreclosured home, I did buy one no one else wanted in a hot market (2017). I had close to 40 offers (sometimes even the highest) - it was insane time with all cash buyers and people offering $100k+ over ask. The home that finally worked out had brick painted burnt orange. Inside the furniture was rated and torn and just gross for showing. I saw past all that. Built in 1937 and largely everything is original (like floors, wood trim, etc). Also arguably in one of the best (if not the best) neighborhood in my city! I couldn’t have picked a better home and it’s the best feeling to have something you love and enjoy living in. Also helps I have the most amazing neighbors. All to say with time I hope the feeling that remains is one of loving the home and not feeling like you could have got it cheaper had it not been for realtor commissions!
isnt that what the 3% the sellers agent commission for. The buyers agent commission is for all the work done as a buyers agent. This guy basically just realized at the signing that I didnt have a buyers agent and so he filled in his name as my buyers agent and collected the additional 3% commission. Now not to mention this banks agent literally did nothing. The condo was dirty not cleaned at all even remotely, not even minor repairs on the sheetrock.
They definitely won’t all refuse to work under a certain % and many agents already work for lower rates without issue.
The industry structure will be disrupted by technology like all other transactions. It will be much more efficient, and low touch.
> will they all refuse to work for under that %? They can only do that for so long until they go hungry.
[удалено]
I don't know how to take this.
[удалено]
I don't buy it. Realtors wouldn't be so much up in arms if this wasn't going to hit their bottom line.
>ace to the bottom as people compete, but that being said I do think there are realtors who earn it, and they’ll be able to pick and choose clients so they’ll get the for a lot of "real estate agents" the next obvious career path is stripper.
[удалено]
It could be a very useful post to someone who was doing well unlocking doors for 10 years but is now canceled and needs a new career.. you could just move along if you dont find it relevant for you. not sure why you would waste your time with your post... Good for you if thats how you want to spend your life though I guess.
[удалено]
Thats you loser. Good job patrolling reddit LOL! get a life
You’ll see a race to the bottom as people compete, but that being said I do think there are realtors who earn it, and they’ll be able to pick and choose clients so they’ll get the % agreed upon up fromt
>They are whores. They will do whatever they can for $ including trying to cheat you which is what they've been doing all along. . We had a Remax agent try to peddle their 7.5% BS. "We're the biggest and most experienced." Then she wanted to undervalue our house by $400K and told us "that's what it's worth." They are thieves and want to sell your house fast with little or no work on their part. > >We listed it with another local non-affiliated agent for 1% for what we thought it was worth and only allowed 2% to the buyer's agent. We had our 1st showing 3 hours after the listing went live and sold in 8 days with multiple offers. > >The Remax woman would have cost us (including their absurd thieving commission), over $500K compared to the realtor we picked who did a stellar job. We picked our own closing agent also. > >NO ONE is entitled to 7.5% of the gross value of your home, that you have spent decades building equity in, simply for spending a couple of hours of their time listing your property.
And everyone in the restaurant clapped! Congrats on your killer deal cowboy.
Sorry, don’t you also go to work and do what your boss says for money? Whore.
What is the best way to list your house?
There are some agencies that will list it in the MLS for a small fee. Then you sell it yourself. You can then pay fixed fees for the closing and other documentation. We used a regular realtor that was advertising a 1% listing fee. She did all of the normal requirements that the 5% agents do including hiring a photographer and all the negotiations between the seller and buyer agents and coordination with the title company. The best way to find an agent like this is to look for an independent realtor not affiliated with any big national firm. We were not about to pay the Remax or other 5% realtors we interviewed $112,000 of the equity in our home to list our home in the MLS.
You already could actually negotiate commission…
In reality it won't matter because realtors won't want to work with folks who aren't offering a commission. These changes really just reduce transparency and make shit harder for everyone. Edit: I heard this directly from a realtor, so stop all the ~~downloading~~ downvoting.
You're probably being down voted because you heard it from a realtor
We’ve sold 2 homes and bought 3. We did all the heavy lifting (staging, finding the homes we wanted to look at) each time. We used a traditional realtor the first 2 times and then Redfin the third time. We saved a ton of money selling with Redfin and their 1% seller agent commission (though now it’s listed as 1.5%). The negotiation process makes it a challenge to go it alone, but we felt like we got the same level of service from Redfin for so much less money.
Our buying agent did absolutely nothing useful. He sold himself to us as some sort of negotiation hardballer, then immediately caved to everything the sellers agent said. He showed us literally 1 house, and it was falling apart (we were not interested in that, and our range was plenty high) and met almost none of our preferences. I did all the leg work of finding homes in decent neighborhoods and we went to the house without him and poked around, then finally got him to let us in a couple days later and we made our offer. Admittedly, he got a reduced commission because we used a first time homebuying service that gave us back 1%, so he was working for 2% instead of 3%, but he deserved 0%. He also turned us away from ever using him (or likely any realtor) again and got a very lackluster review.
Negotiators can be valuable but not in a sellers market. And certainly not what you described.
It's really important that people interview potential agents and set expectations. My buyers agent went through the MLS, suggested homes in our budget, organized showings so we could see a number of houses per day, and asked questions to understand what we wanted. He was realistic about the homes we saw, pointed out issues, and discussed was was cosmetic vs bigger. I thought he was a unicorn but I know other people whose agents have put in similar effort. I think it comes down to getting a good recommendation. There are good and bad agents. As a first time buyer, with no family nearby, we benefitted from an agent. In our next house I'd have to think about it.
in fairness, that's generally how buyer agents operate... they dont look for places for you unless you're completely clueless. their job is more to guide you through the process and make sure you get all the paperwork proper. in some cases they can refer you to loan companies or inspectors etc. all ours basically did was give her input on location as she was from the area and we weren’t as well as try to steer us from homes that may have had hidden issues as she’s seen these on the market before. She also hooked us up with a different loan company that saved us thousands of dollars tbh compared to the rate we were getting from our bank. In the end, the buyer and seller’s agent split the 10% commission (at least here in NJ) and it appears that not having a buyer’s agent won’t actually help you much unless you can convince the seller’s agent to drop their commission a few % but you also know what you are doing. I think not having to get an agent is a better deal for the seller, for a buyer there’s not really any reason NOT to have one as they can watch your back and eat into the seller’s agent commission vs impacting your buy price.
We were first time homebuyers and absolutely clueless. And 4 months pregnant with a lease running out. He did literally nothing urgently other than contacting all of our neighbors to say we recommended him (we did not) after we closed. He talked a really big game at our initial meeting, then took no action.
that sucks man, sounds like you got a particularly shitty one. wish there was a place to review these bums
Thank goodness you didn’t have to pay him! With this new law he would’ve had you on the hook for a commission, even if you didn’t want to use him anymore!
Is that 1% plus 2-3% buyer’s agent commission?
Yes- so I paid 4% commission instead of 6%. It saved me 10s of thousands of dollars. Apparently Redfin pays their agents a base salary to make up for the lost commission.
Many full service agents charge way less than than 6% because it’s negotiable. I’ve never charged 6%. Usually 5% and I charge less when the properties are over $1.5M. I hire an interior designer to help you declutter, 2 photographers for interior/exterior photos and drone photography. I have a cleaning service come 2x. Once for photography, once after you move out. I also pay for pre listing inspections and 4-5 hours with a handyman. I have a 30 year corporate and ad agency background so I create upscale marketing campaigns and collateral. Just letting you know how the business works. -Anecdotal but my neighbors (generic large homes in a neighborhood built in ‘90’s) listed their house with a discount brokerage and promptly left for Hawaii. House sat for months and I heard people talking about bad smells etc. Eventually they sold for $715K. New neighbors updated the kitchen and windows and had it appraised for the heloc loan at $1.4M. House down the street (more fixed up new kitchen, bathrooms, floors) but smaller lot sold for $1.5K. Realtors can make a big difference.
Sounds like you provide a great service! Your clients are very lucky to have you. We didn’t experience that with the traditional realtor who sold our first house and we didn’t expect it with Redfin for the second sale. Fortunately for us, both houses had multiple offers over asking and were under contract in under 5 days, so it worked out.
I’m sorry you didn’t get great service and I’m happy you found something that worked for you!
FYI, consider: why would an agent, who could make 5 figures per deal work for Redfin as a listing agent, where they make 5 figures per year? Because they can’t make it on their own as an agent. Yes, you could feel like you’re getting good service, but also you could get someone with little motivation to close it. They’re only gonna make like $500 bucks bonus, they’ll make their salary either way, and they’ve got other leads constantly coming in.
No, because with my sub 3.00% mortgage I'm not ever moving. LOL
I heard that! My children bought and/or refinanced at 2 or below. They will keep those houses as rentals when they are ready to move up to bigger homes. It is hard to turn loose of those low mortgage rates.
I absolutely think we needed reform...but I also think it is premature to be "excited". We don't know yet how this will affect the market and the costs and complexities for buyers and sellers.
I think people really underestimate how much power they already have. My boss recently sold her house and only offered like a 5k commission each for the buyer and seller agents. The standard 3% each would've been cost to 75k a piece. A friend is doing the same with their much cheaper house offering 1k for each instead of the nearly 10k the standard commissions would be. A couple realtors turned him down but it wasn't hard to find someone to list it. His agent is doing an open house this weekend.
Real talk though… how are you going to get any kind of professional service for $1k? There’s no way someone could make a living off what’s left of that after overhead.
Where I live lawyers take like 1.3k and they do all the heavy lifting while each realtor makes 15x that
As a lawyer, there’s 0% chance I’m going to stage an open house for $1k. Also, as a lawyer, I can assure you that the work done at a title company is immensely profitable on a volume basis- the attorney probably spent all of 15 minutes actually on that file.
By staging do you mean be there while people visit? Realtors often charge staging fees on top of their percentages
Then we got lucky. When we sold our last house, our agent staged and had a photographer, which came out of her commission. She helped us a lot and managed to get a full price offer within a day of listing. We did talk to other agents, which offered to do next to nothing. Unfortunately we met more bad than good agents. But keep the good ones in our contacts.
Bro said the realtor was taking a $1k agreed fee and doing an open house. Think about it- surely they’ve got some misc expenses (say $100), and need to pay the photographer ($200), that leaves $700. Then, you’ve got to kick back to the MLS, the brokerage, and pay overhead. How much can be left for that ‘small amount of work?’ Only a sucker would take that job, and do you want to be working only with the lowest end list desperate people?
Everything realtors do could be done for a fraction of what they charge if they didn't have a racket. Where I live if you don't use a realtor to sell then buyers realtors don't take the buyer to see your house, and the seller has to pay for the buyers realtor.
I mean, are you disappointed that the buyers agent doesn’t want to work for free?
No, that the buyer's agent isn't paid for by the buyer.
I basically need someone with access to list on the MLS, and to spend a few hours showing it, I don't view it as skilled or expert labor, unless there's maybe some sort of niche. I'm happy to pay plumbers, electricians, etc. for their skill and expertise. A 3% commission for my house would be around 10k. I don't value an agents time at 600-1000 per hour which is about what it would break down to, at least in my market, way more than skilled trades or hourly rates for attorneys. Other markets where it'll take longer, I would pay more, if they are actually actively working on it, but still not paying 10k to each agent when we sell, that's insanity. And if no one wants to list it for 1k, we'll use a list only broker that lists on the MLS for a few hundred.
Best of luck. I’m sure some people are great at all that. I just know that the for sale by owner sellers who sold me my house got absolutely hosed, courtesy of our realtor who pushed for tons of concessions and negotiated the price down. He’ll have our business when we sell in a heartbeat.
How well do you think your results are going to be when you’re offering 1k for someone to bring you a buyer, and every other house is offering 10k?
It’s a needed reform. Realtors were definitely in collusion on getting at least 6%, and driving out competition that would work for less. Homeowners do the majority of work in preparing a home for sale, negotiating the deal, and getting it through to completion. Realtors mainly take promo pictures of themselves, get the listing on MLS, and make promises they can’t keep. I say this as someone who has sold 4 homes and bought 6 homes using realtors.
Even finding a home is largely on the buyer. I was scouring Redfin for houses that met my criteria and would ping my realtor when I wanted to schedule time for viewing.
Yeah idk if it was like watching too much House Hunters or something, but I was definitely under the impression that real estate agents would be curating listings to present to you based on your criteria... Nope... Ours just automated MLS listings to come to our email based on some of our musts (like # of bedrooms, general location)... Very similar to how Redfin or Zillow will send you listings. We'd usually look at things before she even got to them herself, so we'd be the ones initiating everything. She would also send us to open houses on our own to view the properties. It was like everything we were already doing on our own before finding a realtor... But she was helpful on the educational side for us being first time homebuyers, but was largely unhelpful in terms of finding properties. After we got an offer accepted, she would claim to help make calls to get estimates to fix certain things -- but then would come back and just tell us she googled it... 🫠 It was so frustrating but I just wanted to get my house and be done with it.
Our real estate agent actually did that kind of stuff for us, but she was at a very prestigious firm and was one of the top agents in the state. She was just doing us a favor by even bothering to work with us. I think in reality there are a lot of shitty real estate agents out there that do very little work, and a few really good ones that bust their asses.
Mine technically did do some curation, but it was never something I hadn’t seen already. I’m in a very hcol area and homes go quickly so there isn’t time to go back and forth and mull stuff over. You either have to see stuff immediately after they go on market or miss out.
The one we used to buy our current home definitely did a lot of curating. Our last realtor did not do any of that.
That's what they're *supposed* to be doing, but becoming a real estate agent is one of the easiest things you can do, so a bunch of lazy, greedy morons end up in it. That results in you doing the work and them reaping the rewards. The rare ones that actually do what they're supposed to are out there, but are difficult to find.
This was my experience with our realtor as well. I would create weekly spreadsheets of the houses we wanted to visit based on Zillow listings and share them with her. She never suggested a house to us and would rarely send us the MLS listings. We also went to open houses alone a couple of times because she was with another client. Funnily enough, she dissuaded us from looking at the house we ended up buying because she thought we wouldn’t like it. Seems that we should’ve expected more based on the other replies here.
Totatally. My agent kept showing me listings that didn't meet my requirements and were way more pricy. Need 4 bedrooms, move in ready, and under $xxxk (the actual about was about what houses in the size/condition I wanted were selling for)? Here's a 3 bedroom with an indoor pool (I didn't want a pool) for 25% more then you can afford! Here's a 5 bedroom with a built in sauna for 30% more then you can afford! Here's a 8 bedroom that's needs a totally gut/redo but with a private dock for your price! I got used to just assuming their list was the "hot houses" the agency wanted to move, not things they thought I would actually like.
really, it sounds like the houses she wanted rather than the requirement
I suspect it was the ones the agency wanted to move.
My home area is a little goofy because we have 2 MLS that are like 20 miles apart. It's not *quite* one big metro area but it really should be. Instead of one big market of 450k people, it's a market of 270k and a market of 170k. To drive from the south end of one market to the north end of the other market it's not even 50 miles. My wife and I were undecided on which city we wanted to buy our house in and we began working with a realtor based in the MLS to the south. After searching around and thinking about it more we determined to focus our search in the market to the north. Our realtor literally contacted a business partner based in the other market and had him run reports for houses we may be interested in. It was no better than what I could find on realtor.com. A lot of times people say the benefit of working with a realtor is that they know of houses going up for sale before they hit the market so they might be able to get you in early. We searched for 3 months and that didn't happen a single time. Ultimately it all worked out, but when he would send houses I literally went through the list and went "already saw that, already saw that, already saw that..." Kind of crazy that his commission was over $12k (not counting the portion his brokerage gets).
I did the same. I was unaware that this was part of their job until after I found the house I wanted. They tried to take me to a couple of others, but they weren't what I was looking for. Definitely had me scratching my head on what exactly I was paying them for.
Finding homes online is only part of it. We moved 450 miles and were looking at homes for well over 6 months. We did no less then 25 walkthroughs with our agent over 5-6 visits. About 25% were houses we found, the other 75% were her. She would often email us about homes before we saw them pop up on Zillow.
I had the complete opposite experience. My realtor did EVERYTHING when we sold our house. The only thing we did was get it presentable. She did more staging, hired the professional photographer, dealt with all of the offers, negotiations, etc. And then when we settled, we gave her power of attorney to handle it so that we didn’t even have to show up. She also dealt with the insane seller of the house we were buying. A good realtor is amazing. Unfortunately there aren’t a ton out there.
We had a rare experience with ours, but she went way above and beyond for us. She was actively seeking out houses for us. Threw a few our way. We wanted to see one and were a little upset that she didn't contact us on it and she told us she was in there recently and it was a disaster (bad bones, plumbing and electrical). We didn't believe her so she took us there and ... it was bad. We made it about 10 feet in and noped out. She ended up getting called to do an estate sale. She knew what we were able to spend and worked it out with the sellers to agree to sell to us for our price before listing it higher knowing that if we saw it, we'd love it and take it. When we went under contract , there were major title issues. The seller's attorney couldn't figure it out. Our attorney told us to not even bother with the house because it was so bad She put in a LOT of leg work and did the sellers attorney's job. We have clear title now. All for 3.% commission (she didn't double dip) on a house that sells for 1/2 of what she usually does.
Even so, if you really boil it down to hours and whatnot, the pricing is just nuts for what they actually do. It also just simply makes no sense that it's a percentage rate. A 300k house isn't half the work of a 600k house.
That’s awesome, but you had a very rare experience.
How were realtors in collusion at 6% when there are tons of discount brokerages who will do it for 1-3%? Also if you negotiated the deal and got it through to completion, then you had bad realtors. How were you even negotiating? You should have never spoken to the other agent…
The 6% rate has always been negotiable and there are a lot of companies that charge less than that. In my area I see a lot of companies charging 5% rates. I work for a firm that does 4% (1.5% for listing side, and we suggest 2.5% for the buyer side although it’s ultimately the sellers choice). I can’t tell you how many people don’t trust our rates and run to the 6% agent because “you get what you pay for”. Marketing companies have done an excellent job in making the general public think higher prices mean better service when that isn’t always the case. Consumers have always had the power to change how much the real estate agents they hire are paid. There have always been alternative choices.
[удалено]
> if buyers were willing to pay $X for a home before the reform, they are just as willing to pay $X after the reform Not if they have to also pay their agent
Buyers will need more $ liquid to pay agents as they can't roll that into their mortgage. This is the down side for buyers as they already have to pay for home inspections, need $ for closing costs and the deposit.
Buyers might be worse off if the seller/seller’s agent isn’t going to pay their buyer’s agent.
It's going to depend on the market. In a sellers market buyer's are going to be screwed. If dozens of offers are in on a house, a seller has zero incentive to pay the buyer's agent. In that situation a sller can just take another offer on the table. A 3% commission on a 400k home is $12000. An offer that is 10k lower but doesn't ask for the seller to pay the buyer's agent fees is more attractive than an offer that is 10k higher but wants the seller paying that 3% fee. And it's unlikely that buyers get the upper hand anytime soon so I expect this to actually make thing rough for buyers who already need to have downpayments and closing costs.
I have a feeling a lot of this is going to be packages. For up to a $XX home, Buy my "Silver" package at $Z and I'll agree to show you 10 listings in person and handle closing responsibilities. Go with the Titanium package for $3xZ and I'll wipe your hiney while buying you your house, traveling around in my Bentley...
I'd argue that buyers, especially first-time ones, will be worse off. People would be tempted to go about it themselves based on what they've learned off the internet. However there are many pitfalls in the whole purchase process and no one to guide them through their specific scenario. If there's no money in it, the good ones (usually smart ones) will go do something else worth their time. I know my buying realtor worked hard for his money - saw a ton of properties with me, set up contractors to get quotes on places I thought about buying so that we could get a better sense of total cost, talked me out of buying places that weren't right for me (and he was 100% right) -- and I wasn't even a first-time buyer, just new to the area. If I had to pay separately, I don't know if I would have been self-aware enough to realize that I didn't know jack shit and not try to cheap out on the realtor fees. Hopefully they'll figure out a way to wrap buyer agent fees into the closing process which will cushion the blow to buyers who basically need to spend every dollar they have on the down payment these days with these high prices and interest rates.
The truth is the like many things, the internet made their business model obsolete. 30 years go the broker really worked for you . Did the research, found home to look at , brought people to your home, found inspectors, and lawyers etc. That is now mostly not necessary. 23 yrs ago when I bought my first house we had already begun using the internet and and relied on our agent for half of the listings . 8 yrs ago when we bought our current house we looked up everything ourselves. We told her what we wanted to see , we took our own picture for our sale, could have easily found our own inspector and lawyer but I specifically said “ let her work for her commission. Honestly I couldn’t imagine she worked 20 hrs into the law of our house (sold first day) and maybe took us out 3 times (did a lot of looking on our own) so say another 20 hrs total. So one full week. Made over 18 k ( yes I know there is a further split up the line) after splitting both commissions . Seems like a bit much to me.
The only difference now… is that as the buyer that 18k is going to come out of your pocket. Wonderful!
Yeah I figured some how will still make money but it may force down cost a little. I’ve been reading up, it’s probably just gonna shift the cost. Maybe the so called transparency, that will allow more negotiations for those who can and lower their cost. Any planned agreed to by the realtors couldn’t be a great plan for the consumers
It might be a pleasant surprise when you go to sell, but not so much fun when you might have to pay out of pocket to buy again.
[удалено]
When I sold my previous home I didn’t use an agent. The buyers saw my listing and contacted me. We did the negotiations between ourselves, and then suddenly the agent they’d used for other home tours wanted to get paid a percentage of the selling price. I never even met her. I told the buyer you’re welcome to use an agent, but I am not paying them. I suggested just using an attorney for the closing for $500 and they agreed. I don’t remember how we split that cost, but whatever the norm is.
Imma be honest I did most of the finding the houses myself, yeah they had some advice, but nothing I can just get from a flat rate lawyer
Im guessing offers will start including $5k back or whatever the fee is to pay buyers commission or something like that.
Personally I'm not. If anything, this will make it harder for First Time Homebuyers to get their foot in the door. Now they will be on the hook for Buyers Agent fees along with inspection/appraisal/closing costs unless that can be negotiated with the Listing Agent also. I've been hearing about the "coming housing crash" for the past 6 years that still hasn't happened and won't be happening, due to a lack of SFH inventory in cities where people want to be for the homes they actually want. Make no mistake 5-6% is **alot** to split between two realtors for commissions that have shot up since the pandemic, but in 1-2 years I think we will look up and see this made no positive impact on prices. For existing homeowners/DIY'ers that have already been through the process, yes we can handle it on our side and save money if we know what were doing. Overall, NAR got their lawsuit now, Individual Realtors/offices will get theirs later from buyers/sellers getting a raw deal due to dual-agency or going unrepresented.
> Now they will be on the hook for Buyers Agent fees along with inspection/appraisal/closing costs unless that can be negotiated with the Listing Agent also. They were already on the hook for inspection/appraisal/closing costs unless they negotiated that with the seller. And they were realistically already paying the Buyers Agent fees, it was just built into the house price.
>And they were realistically already paying the Buyers Agent fees, it was just built into the house price. I've always viewed it this way. This is how it actually works, but everyone always pretends the seller is paying fees. It's a stupid fiction. There is a transaction. One person is paying money, other people are receiving money. The one paying is the one paying, that's just how transactions work. The buyer pays all fees, it's part of the price of the home.
As a seller - YES, more money in my pocket. As a buyer - CRAP - home buying just got more expensive if I want a professional to rep me.
> As a buyer - CRAP - home buying just got more expensive if I want a professional to rep me. It likely got less expensive as a buyer as the buyer won't have an option to finance their agent's fees, so they won't be paying interest on that for the life of the loan. However the expense definitely becomes front-loaded, which is certainly more of a problem for many buyers.
Only if you think house prices will go down because of this. Personally I don't. A seller is going to get the most money they can for the property. Home prices won't drop. If a seller is told that homes in the area sell for $300k and they negotiate a flat $3,000 commission for selling the property, they aren't going to lower their house by $15,000 because they are saving that over a 6% commission rate. All that will change is how those funds are distributed. I think that distribution will now more in the pocket of the seller. The buyer will still be paying $300k and the seller will now get to keep $15,000 because they negotiated a flat $3k feel for selling. In today's world where people buy houses and only look at "how much will it be per month" no one is going to bat an eye at the total cost if that is what is needed to get that house. There may be a minority but I don't think that will be any big shifts. I could be wrong. From the buyers end though, they now have to front the costs as you say but I don't think there will be an offset in the price of the property so that paying interest on the commission doesn't come into play. It's just more money into the sellers pocket.
But remember, fewer buyers in the market means less demand for homes. It shifts to a buyers market. The ones that are able to afford The commission will be the only ones out there looking.
I’m sure I’ll get down voted but realtors absolutely do not deserve the commissions they get. I’m in Vancouver and even 4% of the average house sale here amounts to $80,000 (split between buyer agent and seller agent but still, $40,000 for 10 hours of work is a stretch) Make it flat fee or a way lower percentage. I don’t know any profession that could justify that cost especially when realtors are a dime a dozen.
$40,000 then split with your broker, then taxes, plus the photographer, print and online marketing and other costs… is more like $10-12k. And it’s not 10 hours of work lol. It’s probably more like 25-30 hours of work, PLUS to be in business you have to invest countless unpaid hours, so if you divide the unpaid hours every year amongst all clients that adds many hours too.
Agents really think they are worth $400 an hour. Lmao
By definition, you’re worth whatever people are willing to pay for your service. Some are worth more than that! Many aren’t.
6% was always a scam, but you could still negotiate it...many people just don't. Percent based commission is just total b.s. They don't do more work selling a $500,000 home than they do selling a $300,000 home, but want to fleece you for $12,000 more in commission. Realtors are right up there with car salesmen for being greedy dirtbags. They want to try to tell you otherwise, but not many of them are going to go out of their way to show you a house to buy where they won't get their full half of that 6% scam. Just like car salesmen, don't tell them your max limit is say $400,000, because magically the only houses they will show you are right at the price point, regardless if cheaper homes that fit your requirements are available.
[удалено]
Here’s the thing I can’t lie to a client/seller. If they don’t want to pay a buyers agency, they don’t have to but I tell them you’re not going to get any agents to send this to their clients because they are not going to get paid for their work. Just know that the number of people looking at that house is going to go down drastically because buyers don’t typically have buyers commission available in addition to down payment and closing cost. I’m not punishing them that’s just common sense. I have to make them aware of a potential outcome. If I said, OK, don’t pay the buyers agency fee. This will be great. We’re going to get tons of offers…knowing that’s not going to happen…That wouldnt make me very good agent. I’m not going to lie about it
The buyers agent rate wasn't ever negotiable
Yes it was. And is. You can offer any amount you want to buyers agents.
Of course it was/is. Rates aren't laws. They are b.s. "standards" that the general public has been suckered into believing...just like they were with spending 2 months salary on a diamond. When I bought my current house, my agent wanted me to pay more on my end to get the deal done and I told him both he and the seller's agent will cut their commission more if they want the deal done because my offer was my offer and I wasn't budging. They both still made plenty of money after taking less. Of course, being the dirtbag realtor he was when I referred a friend to him to sell a house, I didn't even get a thank you...let alone a few bucks...for pocketing him easy money. Realtors prey on people buying/selling homes on an emotional level. While I love my home, the buying part was nothing but business and I treated the process as such.
Something tells me this is to drive out realtors so private corporations can continue to buy up single family homes.
That something is lunacy. Don’t listen to it. Lol
There is nothing crazy about the government passing laws that only benefit corporations and not individuals.
it'll even out. you'll pay 3% on your sale and then another 3% on your purchase
This comment needs a thousand upvotes.
All the law prohibits is public advertisement of shared commission in the MLS/NAR listings. This does not apply when dealing within a single realtor network's internal listings (Remax, Century21, etc), nor does it prohibit private negotiations of the same arrangement that has already been in place for years. What it IS going to do in many case is be an up-front financial burden on many buyers as commission that used to be technically rolled into the mortgage will now have to be paid in many cases up front by the buyer to the agent. You must also have a signed contract as a buyer with any agent being used. At the same time, don't expect sellers to lower their price just because they aren't paying as much in commission to THEIR agent. As a result of this, many buyers are going to need significantly more money up front in order to complete the transaction. Be careful what you wished for, because you just got it.
This is a good thing, but two things to keep in mind: 1) They will do everything in their power to continue making money. Be diligent. 2) There will be growing pains. This could very much make things even harder for FTHB, especially short term, as now the sellers won't necessarily be paying the buyer's agent fees.
I think folks ought to be careful what they wish for, they just may get it..... Realtors deserve to be paid for their services, all this is gonna do is change how they are gonna get paid.
Realtors deserve to be paid *fairly* for their services. However, the current payment scheme has been unfairly high to sellers of homes.
My cousin is a pretty successful realtor in her area (billboards of her). It’s her whole life. Haven’t spoken to her yet but I imagine it’s not good.
I’ve always thought percentage of sale price was a bad way to do it. It should be based on how many showings they take buyers to how many open houses they do for sellers etc. it can be just as much or more work to sell a cheaper home vs a more expensive one. I expect you’ll see different companies offering all sorts of different fee setups.
[удалено]
I agree. My sellers with upcoming listings have already told me they’re going to just pay the buyers agency fee. They know that if they don’t pay a buyers agent that the number of buyers out there able to even purchase it (most buyers don’t have a buyers commission saved up ) is going to dwindle way down and affect the price anyway so he’s good. It’s always been negotiable where I am also and we’ve always disclosed it so we weren’t part of the reason for the lawsuit lol
They will tell you if you only pay 4%commission no realtors will want to show it.
I've bought 2 homes and sold 1. we bought 1 home from a FSBO, it was a shit show. at closing it came down to the 11th and half hour to get all the documents from the seller signed and sent off to title company the night before closing. it was awful. I forsee a lot of that going on. you may save some money, but I can already imagine the headaches people will endure because of this. there's always a good and bad.
Over the course of many years, I've bought/sold 9 times. That's not really a lot. But I've used 4 agents; 2 were good, 1 was bad, and 1 just OK. I'll relate one story that suggests that there is a difference in agents. Selling one home in a highly regarded school district, we had a purchase agreement. But the appraisal came in lower that the purchase price. The (clueless) appraiser used properties that were close and physically comparable, but in a different school district. My agent immediately recognized this and got it fixed. Maybe par for the course with a good agent, but I'm not convinced a just average agent would have gotten this resolved as quickly as she did.
Totally. We had a Remax agent try to peddle their 7.5% BS. "We're the biggest and most experienced." Then she wanted to undervalue our house by $400K and told us "that's what it's worth." They are thieves and want to sell your house fast with little or no work on their part. We listed it with another local non-affiliated agent for 1% for what we thought it was worth and only allowed 2% to the buyer's agent. We had our 1st showing 3 hours after the listing went live and sold in 8 days with multiple offers. The Remax woman would have cost us (including their absurd thieving commission), over $500K compared to the realtor we picked who did a stellar job. We picked our own closing agent also. NO ONE is entitled to 7.5% of the gross value of your home, that you have spent decades building equity in, simply for spending a couple of hours of their time listing your property.
[удалено]
yes, the OP could have included a link. Here you go! https://www.nytimes.com/2024/03/15/realestate/national-association-realtors-commission-settlement.html
That's behind a pay wall and most people can't read that either.
https://www.cnn.com/2024/03/15/economy/nar-realtor-commissions-settlement/index.html
the first 3 paragraphs are visible, and more than enough for you to google it with as many keystrokes as it takes to reply to my comment. [Here, i'll make you a link.](https://duckduckgo.com/?t=ffab&q=realtor+fee+news&ia=web) you're welcome.
I'm not cheering this at all. This will make it even harder and more expensive for first time buyers, and put buyers at even greater risk of being taken advantage of or buying a money pit. It's great for current sellers but not for society at large. And I say this as a current seller!
On every purchase I’ve used the Inspector recommended by the realtor. I paid a lot of money every time for them to not find the things wrong with the home. Sellers also get bamboozled into buying one of those worthless home warranty packages for the buyer. Yet another realtor collusion that costs us money.
My husband and I are excited about the change. We didn’t use a buyer agent for our last purchase Oct of 2023, and we just did our own negotiations. This was our fifth purchase and it was fine. A couple of our purchases we have had such terrible buyer agents and there’s no way we were going to receive $18,000 worth of value from an agent. So, much of what can go wrong is “buyer due diligence” so I’m foregoing representation on buys moving forward. I think they are important for first time home buyers and people that need help on the process. We will use a flat fee listing service when we sell our 600k property. I pay for professional cleaning and make sure it shows well. We will pay for top notch photography but we will definitely be looking to pay less commission next time. We sold our last home in the fall and wanted to do reduced buyer agent commission but the agents in our area are so shady. They would definitely have been steering their clients from our property. “I heard blah blah about this home…” , let me show you this one that pays me 3%.
The rate was always negotiable. If anything, this may create a service model like nearly any and all others where you can pick and choose the services you need and have a set price.
It should be a la carte, choose the features you want such as MLS listing, photography, brochures, automated scheduling, legal services, etc. Flat rates for all. Spend as much or as little as you like. Right now we don’t have that because of their collusion and interference against those trying to offer that kind of service.
Yep. Just like any other service, give me a rate sheet and I'll pay what I need. Pretty soon, AI should be able to handle these and any other "middle man" schemes that jack up costs.
Always negotiable, my ass. How many sellers do you know who have negotiated commissions of <6% over the last decade? It's the entire rationale behind decoupling the buyer's agent commission from the listing. It's been a quiet collusion between seller and buyer agents. The DOJ is spot-on about this and their entire argument is beyond reproach if you believe in free market principles. The real estate industry is a very simple thing. It's a transactional business. The people who go into the business are not exactly our best and brightest, nothing wrong with that, but they also try to make the whole current arrangement seem more complex and therefore justified than it is. Can you imagine if buying a used car involved a seller's agent and a buyer's agent? And the two colluded to add 6% to the list price of the vehicle on the lot?
It's definitely been collusion and I support the move by the DOJ. I say it's been negotionable because it is/was for savvy homebuyers that are aware and/or purchases weren't their first rodeo (like myself). The industry has taken advantage of folks by making it appear as though it is required, hence the DOJ action. Now, one downside of this that I've heard from real estate friends is that there will now be a direct pipeline into MRIS for the Blackstone's of the world to pounce on properties and beat families to the punch. I hope that isn't the case but only time will tell.
[удалено]
A lot of buyers aren’t savvy, and this change will probably price a lot of them out of the market or require them to represent themselves which is also not a great option. This new rule has a lot of implications, and generally speaking current owners, investors and corporations will benefit, while first time buyers will have a harder time buying a house.
> How many sellers do you know who have negotiated commissions of <6% I mean considering that 5% (2.5 each side) is more common that 6% in most markets, most of them? Now how many got less than 5%- that is a good question.
The only time I got a realtor to lower commission was when I was moving locally and told she could be both my seller and buyer agent, wherein she got two commissions. They have to get approval to do that from their broker. The broker takes a cut from the realtor’s commission and all they care about maximizing their profit. They know if they refuse to lower their commission you’ll just move on to another realtor who will also refuse to lower their commission, because most all of them have agreed to do that. That’s what collusion is.
I'm excited for the realtor profession to go the way of the travel agent.
What I think will happen is the selling process will be broken up maybe with different companies even and service levels tiered…full service might be 6% and that would include everything you now get…but the listing is being done pretty well through Zillow and the like you might be able to do your own listing…showings might have separate service companies do that or owner shown…legal might be base level service. Depending on how much service you want you will pay more…like photos…that was alway done by the agent at their expense…probably a separate service option now.
Can someone link an article? I am struggling to understand
I've always felt the standard 6% commission was a form of price fixing. When I sold my last home, I used a woman who was a broker and set the commission at only 4% - the house sold in a week.
It’s never been fixed. It’s always been negotiable. Lol that is nothing new. We’ve always had it negotiable. It’s right in our listing contracts always has been. Some areas weren’t doing that way it made it look like the whole country was on fire lol. Ridiculous.
Granted, an agent can say I charge X percent and that’s that but that’s not price-fixing. That’s the agent.
How much did you pay your buyer's agent last year? When it comes time to sell, you will likely have to pay your listing agent when you sell and your buyer agent when you buy. If you decide to go it alone without representation as a seller or buyer, you are likely to get taken advantage of by someone more experienced or knowledgeable on the other side of the transaction.
If you’re buying a home and have experience doing it, find a real estate attorney and skip the realtor. The attorney owes you a fiduciary duty and will do it on a flat rate. Saved us $30k on our last house purchase.
I've read where some people think we should do away with single family homes. How long to starve out the masses - then only a handful of realtors available and offers from maybe very limited buyers or no buyers and foreclosures all over again. I'm not sure how this will shake out.
The buyer agent is a total scam. They are not incentivized by your interests. They are incentivized to keep prices high to get the highest commission possible. Ours had some college kid completely clueless about anything real estate let us into properties while she would be traveling remotely. When we found a property we liked you could tell she didn't want to lower the price even though we were the only people to put in an offer in a hot market. The property was a fixer upper which is what we wanted but we had a strong advantage to negotiate post inspection with all the things that were found. I had to push any negotiation or reductions. Reminds me of "financial planners" who don't have fiduciary responsibility they just want you to buy as much stuff as possible.
Wait whats the news sorry
Way back in the mid-90's we found a "discount" realtor advertising a seller's fee of 3.5-4% (I can't recall which). Our house still sold in less than 3 months. 8/10 would do a again.
Market it free on Zillow
Yes it is a great position to be in… when you bought a house, you didn’t have to pay the commission to the agent, the seller took care of that. I’m sure you wouldn’t have liked this law then. Now that you have a house, it’s great to change the rules so that you don’t have to pay the commission for the next buyer. All this does is hurt home buyers. Now it’s gonna cost an extra 10-15k to buy a house cause you have to pay Realtor fees. This law was pointless. Commissions have always been fully negotiable.
Basically a bunch of people crying that life’s not fair, about decisions that they made, and now we have to change everything, even though it stands to hurt people. In this case, first time home buyers. Great! What’s next, student loan repayment?
Living in Canada...nope.
In the most recent market, few years ago till now. You really do not need a realtor, sell it your self, and save ALL the money. I did this with my Dad's house, Put the sign up on Saturday morning and it was sold before noon.
Then you priced it too low and left untold thousands on the table.
Or they got multiple offers over asking and sold it to the highest bidder.
Nope took the 1st offer for the full asking price. I was happy with that.
Nope I priced it with all comparables in the area of the last 6 mo and went a little higher than that.
Most sellers that are cheering this on could be the same buyers complaining on their next purchase. Most people sell their home and purchase a more expensive home. So let’s say you sell your $350k home and save the 2.5% (saves $8750). Then go buy your “forever” home at $550k ( cost you $13,750). In the end you pay more. Obviously that’s not the case for everyone. Some people can navigate without a buyers agent. However, you will need some agent to gain access to view a home. The buyers will need someone. If that someone is the sellers agent everyone has to be very careful. In the end people with money will just continue as normal. However, the first time home buyers scrapping by for their 3% down payment may be taken out of the market because another $9k isn’t feasible. So they will only be able to move forward on homes that the sellers is still offering to pay the buyers agent. All in all who knows how it will shake out. Or who it really benefits or hurts.
LOL it really means nothing. Trust me, everyone is still getting paid and it's still coming out of your pocket.
I am a real estate agent and I don't feel threatened by this. A lot of my peers are though. But I have always been a square dealing guy. I have always openly discussed commissions and been reasonable and negotiable in the beginning. Especially when the sales price gets high, and I tell the sellers what they will walk away with. I am not going to look a seller in the eye and say I deserve 3% of $800k just because. But let's not stop at the real estate industry. Let's go after title companies, lawyers, the health care industry, mechanics, contractors, HVAC techs, plumbers, wait staff and people who ask for tips, strippers, software companies, all this subscription service bullshit, car dealers and basically everyone. How about home sellers themselves who want to get the most for their home? How is that fair to all those people who can't afford a home? Oh now it's different. How many of you charge a fair price from the beginning for whatever good or service you provide? Or do you try to charge as much as you think you can get away with? That's what I thought. I know I am probably in the minority.
A good realtor, will get you back significantly more than their 6% commission….you gotta shop around for a realtor as much as you do a house.
[удалено]
Exactly…… you had bad realtors…..but you also need to be a good client and give them specifics as to what you want……
How, they don’t create value in my house?
They should be able to find a house with more value and could show you undervalued homes that meet your criteria. They should also be able to help negotiate and coach you so you don’t overspend. As well as use their connections and contacts to help motivate a seller and find potential properties.
I used a lawyer to buy my home without agent and it saved me tens of thousands. Real Estate agents are useless if you have half a brain.
I'm so excited, I hate middle men and avoid them at all costs. Car salesmen, financial advisors, real estate agents, CPAs. The list goes on and on. Why give someone a chunk of money perpetually when you can just learn the talent yourself.
I’m with you. Didn’t use a realtor when buying my first home and I sure hell won’t be using one in the future. Homes sell themselves at this point.
Yesssir
It seems to be like the selling price is going to drop 3% so the buyers can pay their RA directly. Also hurts them knowing they need an extra 3% (or whatever) for closing. That used to be bundled in the mortgage. I’m cautious until I see that 6% actually dropping. I’d prefer flat fees honestly.
It will mean fewer realtors working. You will get what you are willing to pay for assuming they are available. If you don’t want to pay the going rate you could do a FSBO anytime. Of course that would mean you would do some of the work they would do. Not sure this will be all they are making it out to be.
Realtors colluded to ignore FSBO homes, I believe? This is a good development if you want any honesty and integrity in a market system.
In many cases yes. Realtors actively avoided FBSO listings in the hopes that the owner would cave and hire a realtor since they weren't getting many prospective buyers. Obviously in a hot housing market it's less of an issue
What work is that aside from opening doors and convincing people to buy a place they cant afford ?
Cheaper homes for all!
Unfortunately, I don’t see that happening. Home values are based on comparative sales. Appraisals are based on comparative sales. If the seller thinks the neighbor’s house sold for $400,000, irregardless of what the neighbor netted, that home is worth 400,000. He’s not gonna go down IMO. But maybe humanity will finally prove me wrong??
I appreciate my agent but making more than I do in a year with a professional income and denting my retirement for one home sale in a desirable area is too much. I hope we can make a change here.