Realtors take a hit.

[Borderland]

Here's what a million bucks can get you in my town:

https://www.zillow.com/homedetails/1...2/594387_zpid/

https://www.zillow.com/homedetails/1...82447081_zpid/

Paying the percentage, when median price hit a million bucks a couple years ago, sucks. There's a few realtors out here charging a flat amount, and they are busy, from what I understand

Dole St. That's a nice little shack. What would a weekly rental on something like that be?

[RoyGBiv]

Remember, you're not paying 6% to the agents.

You're in sales, right? What does the compensation package look like for someone in your field if commission only? With that in mind, what should real estate agents be taking home, in your opinion?

My last sale i paid a $500 MLS listing fee plus 2% to the buyers agent. About 8k. My current house was fsbo, zero agent fees 15+ tears ago.

[rob_s]

Right. While @DMF13 makes some good points regarding the flat rate listing model, it's still important to note that the agents aren't making nearly as much money as people here seem to be assuming. It's common for brokers to take 50-70% of the commission up to a cap. High performers which exceed that cap may or may not get 100% for all sales after the cap, but it's still common for them to be charged a transaction fee of $1000 or so by the brokerage. They also may not cover the agents' expenses, such as signage, gas, tolls and parking, representational items, benefits and healthcare, etc.

I guess I just see a lot of animosity towards the agents, just like how there's this bullshit commie anti-landowner shit going around. It's important to note that these agents aren't fat cats just sitting on mounds of money; out of a $14k commission, that agent might only be taking home a few thousand. An average "successful", real estate agent working full time might have 2 transactions a month. A first year real estate agent typically only sells 2-5 houses a year, or works as an unlicensed assistant under a high performing agent who is making a few hundred thousand a year and pays the assistant directly from their own sales. In total, most real estate agents in interior-US markets aren't breaking 6 figures. Ones in higher demand coastal markets will as long as they don't suck, but they're also tending to clients non-stop, 7 days a week. There's quite a bit of work that goes into getting clients and making sales if you actually want to be a high performer making bank that people seem to be assuming is the case of agents. There's lot of money to be made, but there's lots of competition as well that prevents you from making that money unless you are actually good.

The agents that I think a lot of people are imagining in their head...the ones doing it part time for friends and family, the retired military dudes that can't figure out what else to do with their life...yeah, those agents arent making enough to break the poverty line. ETA: the vast majority of real estate agents quit in their first year; restaurants tend to be more successful business ventures than becoming a rela estate agent. This Idea that the industry is propped up on shitty agents just hanging around without doing anything and making good money is straight up lies.

So, which of your family me,bets are real estate agents?

[RoyGBiv]

You're in sales, right? What does the compensation package look like for someone in your field if commission only? With that in mind, what should real estate agents be taking home, in your opinion?

I didn't answer your question directly earlier for 2 reasons...
1. Typing on my tablet at 1AM sucks.
2. I wanted to give it some thought.... you ask a fair question and my initial thoughts were a bunch of "but-my-situation-is-different-ism", which it is, and it isn't.

For many years, MLS was locked. The only way to get listed was by hiring a "listing agent", aka "sellers agent".... If you are selling an entry, or mid-market house, you probably have a huge percentage of your net worth tied up in it and the best way to sell it had a gatekeeper that took a big bite out of your equity. I understand where an up-market seller would want to use a sellers agent for advice and even hands on work to set pricing, staging (selling an empty house after you've relocated seems a great example of a good use of a selling agent... this would apply to any price property), respond to offers, keep the grass mowed, advertising, etc.

But, if you are still living in the property and don't require assistance with most of that, then, paying the Gatekeeper a chunk of equity to get on MLS is not a great investment (understatement of the day). Rue the days of newspaper ads...!!... Rejoice the days of Craigslist and online marketing...!! The gatekeeper lost a lot of power and some gatekeepers realized they could make a quick buck just doing MLS listings, maybe even double-dip by sending you early buyers in the day or two between hiring them and the listing going active. So now we're in the age of only taking on the expense of a selling agent if you actually need something beyond getting into MLS... 50% of the commission saved.

In my work world, commission-based sales reps range from commission-only (higher percentage.. 3-5-7%, depending on a variety of factors) to draw-plus-commission (usually lower percentage.. 1-2-3%, again .. depending..). There are a ton of factors that go into that decision... Average sale, average margins, market share, cost of advertising, etc... Industry expertise and customer portfolio are huge factors...

This is where it's easy to get caught up in but-me-ism....

My reality is that I can sell my own house.... There's no reason for me to pay for an agent on that side of the equation. YMMV, of course... On the other side of the equation, are buyers that may or may not need help buying... Someone coming into town for a week, ahead of a corporate relo.... A first time buyer... a buyer that doesn't have the knowledge to value a purchase, negotiate a price or wade through the purchase process (contract, earnest, downpayment, inspection, re-negotiation, mortgage, repairs/refurb, closing, moving, insurance...). I definitely see value-add on this side of the equation for engaging a buyers agent...

The question then is... "What's a fair cut?".... I'm trying to recall how I worded the MLS listing last time, but it was something along the line of "... if you are working with an agent we're paying 2%..." (not a direct quote)... The implication being that if you had found us searching MLS you could save 2% by contacting us directly.... Like anything else, if you can handle the details of the transaction, you don't need to pay someone to do it for you... if you get value from an assistant, there's a price to pay for that... In a market full of RE agents and buyers (especially now with so many corporate buyers), not viewing RE commissions as negotiable is financially unwise.

[Borderland]

My last sale i paid a $500 MLS listing fee plus 2% to the buyers agent. About 8k. My current house was fsbo, zero agent fees 15+ tears ago.

That's probably about where realtors will end up. I've often considered a FSBO because of the realtor fees. We had two realtors appraise or place a few years ago. I asked one about the cost to buy and sell in the same area and they said about 11% with all associated costs. I didn't think that was reasonable.

Attorneys can write a real estate contract. Here's an ad in WA.

Selling a Home FSBO
If you are selling your own home, it’s possible to do so without a real estate agent. Our lawyers can draft or review your Washington State purchase and sale agreement so you understand what you are getting into. Our attorneys are here to answer any questions you may have throughout the transaction.

I think title insurance and escrow can be handled much like finding an attorney.

So really, all you are paying a realtor for is marketing if you aren't relocating. The 2% being that many buyers are going to use an agent who does marketing for you. At least that's how I see it.

[Tuefelhunden]

Like them or hate them the realtor game is a true meritocracy. If you don't hustle your butt off you get canned by the agency, the client or you starve out. I've used realtors and brokers several times and had a mostly positive experience. The commission can be a hard swallow but if they are good they earn it and usually will drop a point especially for repeat clients. If nothing else having to deal with people at their very worst has to be worth something.

[RoyGBiv]

Attorneys can write a real estate contract. Here's an ad in WA.




I think title insurance and escrow can be handled much like finding an attorney.

Texas rules HEAVILY favor realtors and builders (vs owners and buyers)... Speaking as someone who had to sue their builder for a major construction defect and a warranty they failed to honor.... and won.

That said, I guess Texas doesn't like RE lawyers, because the state publishes boilerplate contracts that are easy for FSBO to use...
https://www.trec.texas.gov/agency-information/contracts

But.... Title insurance is a total scam here...
On a 500K house (low mid market), title insurance is almost $3,000, not including the fees charged by agencies.
https://www.tdi.texas.gov/title/titlerates2019.html

In NC, the cost on the same 500k house would be $645 plus fees.
https://barristerstitle.com/rates/

[Borderland]

Texas rules HEAVILY favor realtors and builders (vs owners and buyers)... Speaking as someone who had to sue their builder for a major construction defect and a warranty they failed to honor.... and won.

That said, I guess Texas doesn't like RE lawyers, because the state publishes boilerplate contracts that are easy for FSBO to use...
https://www.trec.texas.gov/agency-information/contracts

But.... Title insurance is a total scam here...
On a 500K house (low mid market), title insurance is almost $3,000, not including the fees charged by agencies.
https://www.tdi.texas.gov/title/titlerates2019.html

In NC, the cost on the same 500k house would be $645 plus fees.
https://barristerstitle.com/rates/

Title ins here is 0.5-1%. So we get bent over pretty hard also. We have many Title ins. companies.

[RoyGBiv]

Title ins here is 0.5-1%. So we get bent over pretty hard also. We have many Title ins. companies.

Similar to here... Ouchie!

I asked the title insurance company why the cost was so high, when they did the same work on the same house less than 18 months earlier... (our sellers had moved here on a work relo, then got a promotion back to HQ 18 months later)..

I know..... new policy, pay again.
I think they gave us a few buck off their fees though... IIRC.

[TGS]

So, which of your family me,bets are real estate agents?

None, honestly. There's a few guys I was in the military with who became real estate agents, and they're not people I generally keep in touch with because part time real estate agents are the same sorts of personalities that get into MLM and other get rich quick schemes.

However, I find the prevailing "fuck that guy" attitude to be annoying, particularly when people are talking out of their ass with comically outdated experiences and/or really bad info about what they think people are getting paid. In all walks of life, nobody seems to think anyone else deserves to be paid what they're getting paid....except for themselves. It's grating.