Realtors take a hit.

[Borderland]

I've wondered why we needed so many real estate agents. The last time I used one was 1995 and I had a pleasant experience. A few years ago, before the black death, we started looking at buying and selling. Contacted a guy a relative knew. I was floored by the fact that this guy was just promoting everything in the area where we were looking. While we were looking at one place he even told me there is no perfect house and this one would be gone in a few days. Total dick head that reminded me of a car saleman. So now I just look at Zillow for listings and might drop in on an open house if I see something that catches my eye. Otherwise I don't need the endless harassment of texts and emails from an idiot.

And the commisions are just stupid. Our house is valued at around 650K, so a 6% commision would be 39K. How much actual work is done for 39K even if that gets spit 3 ways between two agents and a broker. I got this feeling that many people became agents because they didn't want to invest the time and money for a job that paid a lot less. That was during the good times however.

So it looks like the gig is up. Fewer realtors because they just aren't needed anymore. If I use one I'll be sure to negotiate the fee with a contract. And no, I'm not paying a sellers agent or their closing costs. I'm just not that hard up.

https://finance.yahoo.com/news/real-...090000114.html

[DMF13]

IME, the buyer's agent does 90% of the real.work, and the seller's agent really just needs to make sure the photos, and MLS listing, are well done. So, the 2 agents on commission model is a rip off.

I used a flat rate listing service the last time I sold a house, but was advised to pay the full going rate % to the buyer's agent, or the traditional agents might discourage buyers from viewing the property.

That service used a great photographer, and their MLS listing description was also excellent. Because they did that well, we got lots of interest, and the house sold fairly quickly at a good price. However, once the photos, and description, were in the MLS, the listing service didn't have to do anything else until closing. The buyers' agents spent way more time showing the house to buyers. The same was true with homes I bought/sold using the traditional, two agents on commission, process.

As a result, I saved a lot of money using the flat rate service.

Hopefully this change to the real estate business does save people money, but there are a lot of real estate agents that are going to lose money, and many who will probably need to find new jobs.

[rd62]

I think it's a crock of crap. There are some good agents out there but the majority couldn't sell water in a dessert and aren't worth a .1% commission, especially in the age of putting the listing on the internet.

[TGS]

And the commisions are just stupid. Our house is valued at around 650K, so a 6% commision would be 39K. How much actual work is done for 39K even if that gets spit 3 ways between two agents and a broker. I got this feeling that many people became agents because they didn't want to invest the time and money for a job that paid a lot less.

This is probably area-dependent, but I sure as shit wouldn't want the hours of my realtor here in the DC metro area. He has zero days off, and anytime he's awake he is basically "on the job". I would definitely not characterize his job as easy, lazy, lacking work, etc.

I think you might have an incorrect view on what they make, as well. The respective agent doesn't keep his 3%...a large portion of that goes to the agency that the agent works under. Let's say your house sold and the 6% fee was $40k, each agent getting $20k. They're not keeping $20k for themselves. They're also not selling a lot of houses to make a good living without the hussle & bustle that I mentioned. If they're in a competitive market, there's a chance they might directly employ an assistant out of their own salary as well in order to stay competitive.

As for browsing the listings on Redfin, Zillow, etc, they're not as up to date as MLS. The gatekeeping is still very real in that respect, and browsing public-facing sites might work in slow markets. In a competitive fast paced environment, unofficial soft offers are often tendered before the house even opens, with hard offers being dropped by 11am the day of opening, and the house being contingent by noon. The websites that you and I have access to are slow to update and in high drive markets will be listing houses that are basically already sold. So, ignoring the real estate agents and trying to do this yourself isnt a great strategy depending on where you live.

I saw this first hand with a retired cop that came from your area. We hired him as a contractor to work as a digital forensic analyst. He came to the DC area and went over a year without being able to find a home by using your strategy...I'm not sure what ever happened as my work with him on a case came to a close at that point.

Lastly, we need to distinguish between gate keeping and networking. Yeah, sure, there's gate keeping...that's true of any profession, really. However, I also bought into my realtors' professional network which has been worth every penny. I have instant access to a repository of reliable business contacts who aren't going to rip us off, unlike people who have to rely on Google searches or the yellow pages.

More directly to the whole real estate agenting aspect, my realtor also has the professional network of being able to find clients a place before it's even listed. Part of their job is liaising throughout the day with their real estate agent buddies and finding properties through their knowledge of their clients and neighborhoods. Both of these are intangibles that you can't buy into with a friend of a friend or distant family member who sells a few houses a year as a very-part time gig just for friends and families.

We use the phrase, "policing is regional" in a lot of our LE conversations here on the forum. I'll danger that same maxim applies to real estate. So, while your disdain might apply to you, with the "total dick head" you chose to represent you, in your situation, in your area...I'd be hesitant to apply your generalizations to the profession.

[mmc45414]

Never real estate, but I have spent about forty years doing various sales jobs. There is probably some correlation to LE, in that people that are shitty at it are still called salesman/officer. I am probably the easiest guy in the world to sell to (not to be confused with sell, and that is a goofy term, IMO), unless your tradecraft is poor, then I am the dickhead (just had an incredible experience attempting to join a gym...). Just like car sales, real estate is one of those things that probably retains people that might not be all that good at what they do, but they can make a good living by tolerating the baggage of the job, like working shitty hours (maybe another LE correlation...).

And I sure wouldn't want to be in real estate right now, not because of the dang ol internet, but because of rising values and interest rates that have caused a lack of inventory. And the lack of inventory will contribute to sheltering more and more of the low skill dickheads, because you do not really need any sales skills when what little that gets listed starts a bidding war among the few buyers that can swing 8% interest.

I will inherit my mothers home (only child). Depending on when she may pass someday, I might rent it for a while, just so we have a place to land when we might eventually want to downsize without dealing with any of this bullshit.

ETA: One thing this is probably going to do is somewhat gentrify what are/were shitty neighborhoods. A friend bought a place that I thought she had to be high when she bought it, but it has appreciated significantly.

[Borderland]

For sure the market is in the toilet here. April usually kicks off the market because that's when the weather gets decent. Right now there's about 10% of the normal listings and many are sold on contengentcy, which probably is on condition of a buyer selling their home first. I did that with the house we have now in a buyers market. Took me two months to sell and dropped the price to do it. I've always thought selling real estate to be a risky business to be in because of the up and down cycles of real estate sales. We went from one of the hottest markets in the US two years ago to barely alive. Sales happened in a week with cash buyers standing in line and paying 10% premiums just to play.

So it's probably geographically dependent.

[mmc45414]

So it's probably geographically dependent.

Interest rates are not, and they went from being artificially low to being artificially high.
And property taxes keep on rocking up at the same time.
And values are high if you are selling, but high if you are buying. A friend here is moving from his three (maybe four) bedroom two story (with full basement) on ~5 acres to a single story small patio home. He is planning to need to come up with about $150k to make the transition.

[DMF13]

This is probably area-dependent . . . .

Yes, but regardless of area, the listing agent is not really doing enough to justify a 2.5% to 3% commission. The flat fee service I used saved me over $8K v. paying the going listing agent rate, which IIRC was 2.8% in that market. They were licensed agents, and therefore their listings were on the MLS. Did they earn their $3500? Sure, and I would have gladly.paid the $5000 they began charging, after we listed our house, but they certainly didn't do enough to earn nearly $12K in commission.

The buyer's agent got nearly $14K in commission. They did a lot more work than the listing service, but in a "hot" market, I'm not sure they did enough to justify that.

The same was true of every other home purchase I did, but in other markets that I've bought/sold, the only options were FSBO, and traditional commission split between two agents. So I was stuck paying an inflated fee to the listing agent.

The biggest scam is when the listing agent represents the buyer, and seller, and then collects the whole 6-7%.

My first home purchase I found the property, called the listing agent, set up a showing, made an offer contingent on inspection, negotiated after inspection, and then went to closing. The showing to me was the only work the agent did, that wasn't also what she would have done anyway, as the listing agent. She was pissed when I told her my offer included a 3% reduction, because there was no listing agent. She was doubly pissed when I pointed out she had a fiduciary duty to explain that to the seller.

As a seller I want a traditional agent on commission, although I'm not sure 3-3.5% is correct.
As a seller I want to negotiate a fair flat fee.

[0ddl0t]

I know 6% is "the standard," but I've never paid it. Everything is negotiable...

I definitely prefer to work directly with the other party and just use a title company and lawyer, but pocket listings are super common here and sometimes you have to bite the bullet to get access.


As much as I think commissions are crazy in real estate, agents themselves aren't often paid all that well. The commission is usually split 4 ways with the other agent and the 2 brokers, but the agent has most of the expenses and works the most (odd) hours.

[TGS]

As much as I think commissions are crazy in real estate, agents themselves aren't often paid all that well. The commission is usually split 4 ways with the other agent and the 2 brokers, but the agent has most of the expenses and works the most (odd) hours.

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.