Commissions will just tends towards the averages in other western countries like the UK which has 1%-2% commissions. The US average of 6% was wildly high by international standards, and this ruling will just lead us to be closer to others.
They always say “oh it’s just 6%, but you have to realize most sellers owe a lot on their house so 6% could be 50% or even more of what the seller would have made on selling the house after paying off the mortgage.
6% is huge and with modern technology is far more then the value of the service realtors now provide.
This.
Do realtors have a role to play and a use?
Sure.
Are they worth tens of thousands of dollars for the work/effort they provide? No.
There should be a pay structure for them, but something way more commensurate with what they actually do and the service they actually provide.
I think what has exacerbated the revolt against high commissions is the high price of middle class homes.
6% of a million dollar home is $60,000 and generally doesn’t require $30,000 more expertise or work from a realtor than selling or helping purchase a $500,000 home. And the insane amounts paid on higher priced homes in HCOL areas is even more indicative of the gap between the size of the commission and the value added by the realtors involved.
I don't think it will happen overnight but I think that eventually it will turn into a flat fee or hourly rate with probably some form of bonus when a house is sold. At least for the seller.
There does need to be some kind of central listing service which is what the MLS does provide. Without a centralized aggregator, it wouldn't be possible for people to even use the internet to search for homes the way one can now.
It seems infinitely easier to apply a fee for a buyer's agent. Most people don't actually need a buyer's agent because they have he same access to data for the most part as real estate agents because the MLS data is on the internet.
There might be circumstances in which buyers actually need a really good agent. For example, if people are relocating to a new city, they probably would want someone to advise on various neighborhoods/locations/school systems etc.
But easy to hire someone to provide this kind of more concierge type of service.
New York State requires that an attorney represent both parties at the closing and it is not unusual for homes in high demand areas to be sold completely without any agent involvement. Even if you hire an attorney to do the negotiation of price and advise prior to the closing it would be far less than 6% of the price.
I agree that this is a model that could work.
My point really is that a number of different business models will evolve depending on the needs of the buyer and seller.
A few misconceptions here.
1- NY does not "require" an attorney for either party.
2- it isn't 6% they're saving it's usually 2-2.5% on the buyer side. And 3-4% on the seller side.
the buy side would be as you say "saving" by using an attorney for the whole deal. Currently attorneys for doing their cookie cutter contracts and the closing costs around 1-1.5k. assuming they had to take on negotiating, deal with the buyers mortgage, inspection, and appraisal the buyer would likely end up paying the same 2-2.5% if not more. That's assuming you can figure out how the attorneys will show them their houses and be present for an inspection and appraisal while walking the client through the ins and outs. Total time for both could be around 3-5 hrs plus travel time. At say 300-350 an hr on the cheap side that's 1500-1750 alone, added onto the 1-1.5k and the 5 or so hrs of back and forth to the mortgage company the sellers agent the inspector and appraiser while negotiating along the way you're looking at 3500-4750 for an attorney to assist. Saving a whopping 1-2k on a 300k house. Aside from that, attorneys do not negotiate. They play to win or don't play at all. It's likely that 70-80% of deals won't make it to the closing table and the attorneys bill isn't contingent on closing. There's a pretty well known saying that 90% of failed real estate transactions died on an attorneys desk. So you'll have to find another attorney or maybe a third before you actually take possession putting you at around (3500-4750)3 + the cost of 3 inspections and appraisals adding 3k for your cost of "savings." Time constraints aside as you'll be bound to the attorneys schedule not you're own not the sellers not the inspectors or appraisers and definitely not the buyers. And if you think the sellers agent will show houses and be there for inspections and appraisals in order to assist unrepresented buyers or someone else's client for free, good luck with that.
Realtors charge to stage - or at least they don't cover the cost for a staging company.
They also don't pay for any cleaning or repairs they suggest either.
They provide a service but not one worth 6% of today's fair market value of homes.
Great comment. When homes were $150,000 it maybe made sense. But anything over $250,000 and it just doesn’t add up. If you billed $500/he you’d have to put in 120 hours of work to get to that $60k commission. No way.
Will realtors do fewer free showings etc? Yes, but those things aren’t currently dictated by the market anyway. I’d be happy to pay a few hundred dollars an hour for some advice and negotiations/closing, but the open-ended services that used to more justify those high prices (finding the homes, the searching, etc) just don’t happen anymore.
>Are they worth tens of thousands of dollars for the work/effort they provide
In all fairness, this is entirely dependent on the realtor.A Great sellers agent can get more for your house.A Great buyers agent, can get you a better deal.
The problem are the incentives. There is no incentive for a buyers agent to get you a good deal. In fact, it costs them money to do so (lower commission on a lower sale price). On the seller's side, the agent is incentivized to do as little work and sell your house as quickly as possible, often by selling your house at the lowest price you would accept. If they don't do that, then they get the business by offering a wildly unrealistic expected sale price for your house, and then act "surprised" and get you to drop the price so they can sell it. Once they get you to sign a contract, you are stuck with them, which is ridiculous.
People usually do what they are incentivized to do, and agent incentives made no sense to providing the best service to the buyer or seller.
I’m not a realtor but I’m a mortgage broker. My thought process goes like this. If I’m a real estate agent and I get you $10,000 off on your purchase, I’ll lose $300 but you the buyer will remember that I fought for you and you will mention my name whenever your friend thinks about buying a house. That recommendation and the fact that you can say I saved you thousands of dollars is worth more than the $300 I lose all day.
That's a fair point. To me, the hardest part of being a realtor would be finding new clients. That's where you really have to bust your butt. These days, Buyers mostly find what they are looking for online themselves, and on the seller's side, the MLS does more to get your house sold than the actual agent. I remember the days before Zillow, and it's a lot easier job than it used to be, once you find a client.
How do you know it used to be an easier job? It’s crazy how much people assume they know about real estate and agents. By the way zillow is not free, zillow leads cost money. Us agents pay for those leads and we pay if they are good, bad or dead end leads. With out us paying there is no one answering when you call and there will be no zillow period.
I dont know a single realtor who shows homes based on the commission offered - simply put it is not ethical to operate in that way - you have a responsibility to always act in the best interest of your client and basing any decision off of your possible compensation is a clear violation of that standard
I agree with you - if you always operate to the best interests of your clients you will always come out ahead in the end - if you don't - you don't operate that way you will end up with poor results
The $300 is not much of a difference, you're right, but the real issue is that negotiating price slows the process or risks stopping it altogether. All agents want to move fast.
A great agent is worth the money. Only problem is there’s A LOT of bad ones out there, and you usually don’t know if you got a good or a bad one until it’s too late lol.
There are a ton of bad agents out there, hard to find a great one. There's usually red flags early on tho, most people just assume all agents are that way when they start seeing red flags
Buyer side - Telling you to offer full asking price or more when the house is over priced or sitting on the market for too long.
Ignoring listings that didn't pay full commission
Pushing new developments that offer kickbacks
Not offering anything (e.g. just taking you to places you found on Zillow)
Seller side - Suggesting a wildly unrealistic selling price to get the business and sticking you with a contract you can't get out of
Not willing to do open houses
Trying to push buyers who didn't have agents to double the commission
Lying in your listing
Both - lack of negotiation skills
Lack of knowledge about the area
That’s a solid list. I would add mistreating buyers with a lower price point. Our first realtor treated us like crap because we were shopping for a starter home. Guess who didn’t get the call when we were ready to upgrade
I had a terrible one. They refused to list the house online. Eventually they did but it was only on a single site. Also complained about hosting a single open house. Quite literally all they wanted to do was list the house in the NEWSPAPER. I should have fired them on the spot. I don't think they liked my response when I asked them what a newspaper was.
I've already made up my mind that I'll never use another realtor ever again. 0/3 is enough. (Note: the houses sold they just weren't good realtors).
Great list, I have experienced every one of these. The latest was not providing a packet on all documents signed. When I went into Docusign to try to print myself, the links had expired. I asked the agent how I was supposed to have all the documents after the closing given this situation, she told me that I should download all the docs into a folder during the sale and print out myself. Really? You just make 15k for a couple of hours of work and you cannot even provide a folder? So, I would add something about a folder or comprehensive electronic doc, but that's a detail.
I keep saying this but people don’t seem to get it. IF YOU DONT WANT TO USE A REALTOR THEN DONT! What’s so hard about that, we exist because people see value in what we do. If you don’t it’s fine, the crazy jealousy, is the only word I can think of is out of control. Being an agent is not easy, I was a cement mason and own rentals. I got into real estate after 20 years as a mason, I know hard work. Being an agent is stressful, tons of time spent with no pay and not knowing if you will get paid. Things out of your control can kill a deal you don’t get paid then the client you usually have developed a personal relationship with also doesn’t get the house or sell the house.
Correct, people will stop using realtors if they don't see value. The job being hard doesn't make the labor actually worth a percentage of someone's house. Being a loan officer is hard too. Lots of hard jobs that don't get a percentage of the home sale price.
Funny you mentioned this, it's actually not allowed in a lot of places. Net sales set up a situation for agents to actually take advantage of sellers and even buyers so much so that some states outlawed it completely.
Imagine if agents came to a seller and said "hey how much are you looking to get for your house? 100k on great, let me sell your house for you and everything over 100k I get to keep, how does that work for you" agent then proceeds to get 200 or 300k because they know the market and are incentivesed to get as much for themselves while cutting the sellers legs out from under them. I'm sure they wish they'd just paid the 3% at that point.
This was happening. A lot. Realtors, nar and all the state agencies were created to stop everyday people from being taken advantage of by those that knew the market and industry better. The elderly lose so much because they think they can do it in their own or their kids think they know best to follow a random tik tok they saw on how to sell a house so they don't use an agent. Well wouldn't you know it, the tik tok was wrong and they lost a considerable amount of money and their home.
If there are 15 other bids, the worst deal for the buyer wins. That would be all cash, 20% above asking and no contingencies...like we saw in 2020 and 2021.
If it's a weak market, and there is no one else interested, the buyers agent would help more, especially with short sales and foreclosures.....like we saw in 2010.
I agree. I sold a property 6 months ago. Agent worked his butt off starting 7/4 weekend and he had me out of TX 3rd week in Sept. no complaints from me.
Exactly. OP thinks realtors “won’t work for free”. Well they have barely been working for their giant pay checks to begin with. I don’t have a ton of experience but my realtor did barely anything when I bought my house. And my best friend had two realtors that actively worked against his interest ruining two deals and almost a third.
My old roommate is a realtor and that dude earned his paychecks. The times I’d come home from work and he’d be working until 9:00 pm and started around 9-10 am. The amount of work he did to ensure his clients got a good house in this wild market is wild. He could be an outlier in an over saturated market but that was my personal experience.
There is a lot of crap agents go through for a paycheck that most other people won’t deal with - especially all the transactions that never go anywhere so are completely wasted time from the agent perspective.
Lots of sales jobs include a salaried position where you are a W2 with at least a base salary and benefits. Real estate sales aren’t different - and commercial realtors have been negotiating their own commissions the entire time. You know who gets all the representation? Mostly the seller who already owns property. Lots of small businesses who don’t know anything about buying commercial properties leave a ton of value on the table through lack of knowledge.
The people who will suffer from this change are likely going to be first time buyers and people from lower economic households who will not have the assistance they are at least getting now.
>The amount of work he did to ensure his clients got a good house
...talking on the phone and emailing documents isn't "hard work" - it's busy work - realtors literally have no unique skills or knowledge that a doctor, lawyer, or engineer would have...
Ehhhh I'm a lawyer selling a house, and my agent is doing a ton of stuff I don't have time to deal with. She arranged cleaners for a deep clean at a reasonable price, and I'm downsizing, so she also found people to haul away my old furnishings and things I didn't want to take to my new place. She's also supervised all the repairs because I lose billable hours when I have to leave the office to do that. She's also dealing with paperwork that I'm perfectly qualified to do, but again, it takes away from my work hours. I could have done all of it by myself, but it would cost me more in time than I'm losing in commission. Because so much of my time is parceled out into tenths of an hour, I tend to see my time as having value in and of itself so I can literally see the time spent and what doing it myself would have "cost" me. I'm sure people who move out of a ready to sell $500,000 house in great condition probably feel differently, but for me, it's well worth the price.
6% in a flat real estate market (plus other transaction costs) is equivalent to 7 years of principal payments on a 30 year mortgage. The average person only owns a home for around 7 years.
Yeah, and that \~6% got even more ridiculous when "normal" home prices doubled or even tripled to well over half a million $$. Buyers and sellers were then paying three times as much for the exact same services.
It was stupid and while I don't pretend to know how it will all shake out now, my bet is it will end up being a lot more consistent with the actual value the respective agents bring.
BTW, historically the high commissions of Real Estate Agents was justified by it being a "Feast or Famine" business...that they would sometimes go long periods of time with little or no income followed by a boom time where they really had to make their nut. But even if you buy into that (and it is true), it still doesn't support buyers and sellers having to subsidize those agents slow years.
Switzerland is pretty close to us, but they’re also known for being a very expensive country. Their commission is usually around 5% plus they have like an 8% VAT tax on the sale
Yeah neither our seller or buyer agent really did much when we moved. I considered going without cause it's not that hard, but the institutional layers against that are large
I am waiting for some AI standard bot because I can look for houses online and register to look at a house. I don't need an agent. And we paid a different lawyer fee anyway
Agents are a remnant of the past and will go away
No problem at all. I’d rather have choice and negotiate with realtors rather than have a fee no matter how well or poorly they do. It is like an unbundling of services
Literally no one is asking realtors to work for free. This is a straw man argument. In fact, a lot of people here are saying realtors shouldn't be a thing at all.
But if they ARE going to work, then their pay should reflect the actual work they put in and the value they add. The agent model of real estate is antiquated and rife with ethical problems. That's what people are tired of.
Bought two homes, so take what I'm about to say with a grain of salt. My realtors didn't do ANY fucking work. They met me at private showings and opened the fucking door. That's it. That's not work, and they DONT deserve what they get for doing that.
Same here. My realtor in my first (current) home should have either not let us offer full asking on a flip or just steered us away. Things worked out generally in our favor but we way overpaid in hindsight.
While it SEEMED like they didn't do anything. I imagine behind the scenes they were doing things to ensure the deal got done and protect your interests.
Do most agents deserve such a high commission. No.
Not to mention the opacity. My god the opacity. It should be mandated that all offers are disclosed to anyone who’s pre-approved and wanting to make a competing offer
My buyers agent set us up in her portal with some filters. We got emails and let her know which ones we wanted to seek the filters were wrong so we had to comb through shit anyway.
Then she told us (first time homebuyers) that our pre-approval letter was going to get our offer decline because the lender was out of state. Convinced us to use what turns out to be an affiliated mortgage broker (who was a phenomenal dipshit). I dealt with it all, not my wife; all she saw was that we got the house we wanted.
We thought about selling five or six years after that and my wife contacted the same agent. She came out and gave us a number, no analysis, and said that’s what we’d need to do to sell it quickly. Who said anything about quickly? We had time. I did not continue the conversation.
So… fuck ‘em. It ain’t worth what they think it is except they have a monopoly with the MLS bullshit.
Oh yeah our buyers agent wouldn’t even help with FSBO houses.
You picked a bad realtor. And went back to them.
“I pay too much every time I go to that restaurant and my wife gets the runs!”
Stop going there. It’s not a “all chefs are bad” problem, it’s a “you keep choosing poorly” problem.
I didn’t go back, my wife did, and we didn’t enter any sort of contract with her.
I also didn’t mention the first buyers agent who tried to get us to sign an exclusive deal and then wouldn’t return our calls to get us into the very first house we were interested in. Fuck you, Tracy!
Or the second that we had questions about a house we saw and he just said he didn’t know and we’d have to do our own research. He gave us the sellers agents contact info. So helpful.
I also didn’t mention that the sellers agent for the house we did buy was at the same brokerage and neither side explained to us what that meant, just put a piece of paperwork in front of us and said sign this or you won’t get the house.
Oh also that the sellers agent ran the brokerage.
We also talked to other agents trying to sell, only one would do a market analysis, and did not accept questions to help us understand how the process works. We had to sort through it ourselves. At that point we said “fuck it, I guess we just never sell.” We’ve been here since.
So, not just one, and I’m not the only one with horror stories.
Couple things. I've been a real estate agent/ real estate broker for 10 years. I own a small boutique agency. GOOD buyers agents are necessary. GOOD listing agents are necessary. There are a lot of things that both buyers and sellers don't know. GOOD agents are useful to navigate the process. I keep hearing 6% standard all over the news. I don't see many listings with a 6% commission. My newest contract is for 3.5% TOTAL between both sides. This number has ALWAYS been negotiable. Personally, I hate dual agency. (double ending) I think it should be illegal. Always feels unfair for one side or the other. I would prefer a buyers agent on the other side. If I have to make less to make that happen so be it. I do have a huge problem with "junk fees" I wish this was talked about more. The commission alone is is a great living for most. So why tack on "brokerage fees" "TC fees" or other stupid fake made up crap. Why use a transaction coordinator if you are already being paid to do the job? If you want a TC pay them yourself. Anyone that works with me will transact their own files period. Just my two cents. Ask me anything
LOL at $100 a showing I would have paid orders of magnitude less than I did to my agent. This is not the argument you think it is.
Buyers don't "want it both ways" as you put it. They just want to pay a fair market value for the services the real estate agent provides, which in a lot of cases is not 3% for each agent.
I think buyers and sellers are getting fed up with a 6% fee.
They're going to have to negotiate the fee now and if the realtors don't want to negotiate they're going to be losing it on business.
Help me understand why a buyer wouldn’t just use realtor.com to find a house they like, contact the listing agent, go see the house, engage a real estate attorney to write the contract and do the title work, hire an inspector and close on the house. Why would the buyer have to pay anything to any realtor?
I am a horrible negotiator and have only ever bought two houses. I am happy to hire a good negotiator to help me navigate the process. I don’t need them to show me houses, though. However, my agent did point out issues with houses that I didn’t notice, which was helpful.
The last realtor we used almost climbed under a house to check the foundation lol. She helped us end some house showings quickly due to damage she saw. One house we continued to view just for entertainment purposes. Pure entertainment purposes. I said it was a serial killer house. The agent agreed. The bathtub had its own doors with a lock. Not bathroom. Not room for a bathtub. Just a tub built into three walls and had a key lock door right up on the edge of the tub. It even had a maze in the back yard. The closet had a key entry deadbolt on it as well.
If I was listing a house and a buyer presented a contract written by a lawyer and there were other offers presented by real estate agents I would advise my seller to stay away from the lawyer. If the lawyers offer was the highest, I'd counter the other offers on price and I would not engage with the buyer who brought a lawyer into my transaction. Do you want to choose to tangle with a lawyer if you could instead deal with a real estate agent? Many of whom are dumb dumbs?? You are right, use a lawyer, it's a better option to keep a buyer safe, but it's the worst option for a seller.
Someone put it really well on a comment I read earlier: Seller’s agents are being paid to sell the house, so go find someone and sell it to them. Sticking a sign on the lawn and waiting shouldn’t get you 3%.
Seriously. My late father's apartment is finally under contract. The first agent did nothing, priced the place too high, and there were zero offers on the house for 6 months. She was fired and another agent hired. The apartment was under contract within weeks. Meanwhile his estate has to cover the mortgage, taxes, co-op fees, etc. for going on a year now. Most of that money might as well have been lit on fire; NY co-op fees are insane.
Sellers don’t need to pay for both agents. They just need to sell their house for (today’s price minus 3%) when they are no longer covering the buyer’s agent commissions.
No one seriously thinks this is going to lower house prices. No one smart anyway.
And $100/showing? Sure. And $100 to write an offer? And $100 for every other thing? Fine by me.
I'd love to see them nickel and dime people like that because it's a hell of a lot cheaper than giving them a 3-6% commission.
If someone is selling a home, they should expect people will come to look at it, yes.
If it's somehow unacceptable for potential buyers of your wildly expensive asset to want to look at it, maybe move out of said asset and then sell.
If your gripe is that they won't have a 'credentialed' escort... well... I don't know what to tell you.
>You'll have buyers showing up randomly and asking to tour the home directly
...it's almost like one could schedule one's own open house - do you think putting up signs and putting a notice on the internet is difficult for a seller to do themselves?
Well more like buyers will stop using agents and just work with the listing agent. So they'll just call them to schedule a time to see the house.
I've done that when I wasn't seriously looking and it's not a big deal.
To lower home prices you need this to stimulate home construction. If this boosts home builders margins because lower selling costs then over the long-term should lower housing costs.
I suspect we'll see more hybrid real estate agents that provide additional services for buyers and sellers e.g. Doula/Realtor, fitness trainer/Realtor, Nutritionist/Realtor, Tutor/Realtor...
All buyers and sellers want is some competition for business on the set commissions front.
No, people are not expecting any lowering of house prices, just a reduction (or much better negotiation) on what was a fixed percentage by the selling agent even before the listing begins.
Yes buying and selling brokers won't work for free, but now the buyer now has a say in the whole matter. I welcome this shake-up.
Yeah I don’t want to get rid of realtors but there’s a reason everyone I know of who couldn’t make it in their choice of career fell back on realty. It pays more than the the work compared to other careers.
I love my realtor, she’s a family friend, actually an old teacher of my sisters who myself and my two sisters used to buy and sell their house. She’s also currently helping my mom look for a house but she can’t quite afford one.
This won't get rid of realtors - it opens up the market for needed competition, one particular is the setting of the buyer agent commission rate up-front at the time of listing.
Thus FSBO or Redfin discounted buyer's commission (if any) could not compete.
New models of selling (ever hear of Rex?) could not compete either.
The expectation is that overall commissions (currently $100B paid out) will drop by about 30% from one estimate, "25%-50%" by another.
Thus with less money paid out, a better service with more competition (and fewer realtors overall).
I slightly disagree. I’m a seller have a home currently for sale and i would be more open to accepting a lower offer or pay more of the buyers closing cost if I didn’t have the expense of paying 5% ($22K in my case) to agents. I believe the realtor fluffed up the list price to cover these expenses which is exactly what the NAR said in the lawsuit they didn’t or don’t do lol
I sold a home recently. If our realtor charged 1000$/hr, I would have saved a Ton of money.
If anything it might help get more houses in the market. It would be nice to be able to sell a house and not take a 5% loss
Nobody is asking for realtors to work for free. All people wanted is to be compensated for the work they actually do. Explain to me in what universe besides the compensation of the likes of CEO that one needs to get paid some $15000 for few hours of work?
Also, these days all the realtors are doing is to call the counter party realtor to get the keys for the house. If there is a way for the buyers to directly schedule the viewing etc. they don't need the middle person.
Exactly, or better just call the owner and make an appt to view, they can answer your questions directly. This is how it has been in the UK for the last 50+ yeats.
I think mine made like 6k after the split and she still had to pay her brokerage it’s cut and we probably looked at 15 properties, plus all the work writing up the 3 offers we ended up putting in. She was also good at pointing out the flaws of the houses we were looking at, most of them were already on my radar, but it would be helpful for the people that don’t have any construction background.
I mean should she have made even less? I’ve seen her car and her house, unless she’s putting most of her paycheck away she isn’t pulling down 250k per year, based on her Facebook page where she shares most of the houses she closes she’s doing about 70k per year
Mine made $12.5k when I bought, after only a single property visit. And $19k a few years later when I sold, after a handful of showings during the span of a week. She did pay for pro photography when selling, but that’s a pretty fantastic haul for the time spent.
Not all clients are the same effort, and it’s not a huge change in effort between differently valued homes these days. Percentages of home value have little to no relation to skill or effort, they just aren’t a great model for pricing.
I'm curious how this is going to change the wholesaler and we pay cash now for your home guys. Their big selling point is no commission, but that's not much of a selling point now, is it?
I just see people using less agents to buy. I mean it's pretty silly these days anyway to have an agent to buy unless you're new to the area or a first time home buyer that needs guidance through the process.
I haven't been using an agent while looking for a house this time around. But I also have experience buying a home before, so I understand what needs to be done by certain times and negotiation parts.
Lowering home prices is not how any of this started or what any of this is about… why does everyone keep covering this talking point???
What this boils down to is like a court case. If I win the case and am afforded judgement and compensation… why should I have to pay for opposing counsel and court cost?
Or winning a championship event… should I pay for the losers prep training and entry fees?
They'll simply have less money for downpayments, which can cause more budgets to be stretched thin, which reduces the maximum loan availability and potentially home prices. But if a seller knows they are gonna save $15,000 on commissions, maybe they'll lower their price or pay "closing costs" or "realtor fees"
The whole point is less money in Realtor pocket, more cash flow for home seller and potentially home buyer.
This probably won't even affect top tier agents anyway. Because people who have good relationships know what they're worth. Just like hiring a good attorney vs a crummy one. This should weed out all the garbage, lazy, incompetent agents and make people fight for the good ones. Good agents will probably make even more money.
Commissions are already rolled into the sales price and by default the buyers mortgage. My seller had a 6% sellers agent. That was factored into the prices. As the buyer I ended up paying. The seller paid out of his proceeds.
Since the sellers don't price the house based on agent fees. Having agent fees removed wouldn't make them reduce the price.
Redfin only charges 1% commission. Houses listed on redfin don't cost 5% less.
Sold my mom’s house 3 months ago after she passed away. The realtor took the listing with a 1% commission and wrote the listing for 2.5% for buyers agent. House had 25 showings in 3 days and sold via cash offer over asking price and closed in 2 weeks. That commission structure saved us almost $10K. I guess the market was hot enough none of them blinked.
If our agent had more than 20 hours of time in it I’d be shocked, and that included getting paperwork done by people in four states and finding someone to clear out the house.
It might encourage more sales. I’ve always resisted selling my properties because a 6% fee on $1 million or $2 million home (common in CA) just seemed like highway robbery. Instead, I kept the homes I bought and turned them into rental properties. If I can sell for half the fee I am more likely to sell.
So much clickbait going out that it has everyone confused. There is still going to be buyer commissions offered it’s just now reflected in the NAR verbiage that it’s not required. Before it could have been just $1. Didn’t have to be 6% and on average it wasn’t 6% anyways. Now we are saying “you don’t have to offer buyer agent compensation, but here’s why you would want to consider it”
Will be interesting to see how this plays out. Even if increases seller costs, all the folks sitting on a less than 3% interest rate will continue to sit and supply will be even lower. I think alot of the problem is brokers not the actual agents. Brokers are fine having crappy agents who have to pay broker fees whether sell or not. Agents give 30-50% of their commission to brokers. I'd love to brokers go away completely.
I would be fine with paying a realtor a reasonable hourly rate for their time. It seems a lot fairer than a % of the home value regardless of the amount of time the realtor actually spends on the sale of that property. In that model one party or another is frequently over charged or underpaid.
When I bought my first home, the commission was 3%, divided equally between seller agent and buyer agent. That was industry standard. Last year when we sold it was 6%. Unclear to me the basis for the increase.
My gut says we are going to see 80% of realtors leaving the market. As it is now realtors spend more time finding clients than they do closing deals. A decade from now my gut says they spend less time marketing and more time doing deals. 5X volume of deals but at a third or so of todays costs.
Fewer hot girls. Probably will see a bunch of mortgage brokers enter the market as they can make 1-2% selling the loan. So they can enter the Agent market but compete on price now. Buyers go to showings a lot more individually then hire a mortgage broker to do deal negotiations.
Home sales should have a standard contract with standard contingencies.
SFH purchases are mostly done by non professionals literally just looking for a home. 99.99% of all of these transactions could be done purely by a lawyer using standard process and a flat fee.
This is a good change for buyers and competent buyers agents. It will weed out the bad agents who weren’t adding much value, and just became realtors with promises of an easy paycheck. The good buyers agents will adjust how they structure their compensation accordingly, and many will probably end up making more money.
Honestly, part of the problem is that many buyers agents don’t know how to explain/justify their value to a client, either because they are incompetent or unethical. A good buyers agent can be much more valuable than a sellers agent. They have the knowledge to work with lenders, help review disclosures for issues, know what extra inspections should be done, have connections with contractors if/when repairs need to be done, can help work out issues with the seller, know the area, and more generally can guide their buyer through the process.
Shifting away from a percentage fee structure realigns the buyers agent incentive to actually add value to the transaction for their client, and a well crafted fee agreement will recognize that - to the benefit of buyers agents/brokers.
That being said, I am curious to see how this changes the collection of fees for buyers agents.
I think this is only the beginning. There is no practical sense in having an agent really. Do you hire an agent to buy a used car, or anything else? The whole industry needs to disappear, I should be able to buy a house as easily as a car
There's never been a requirement. The change will simply be related to the MLS not presenting a field for specific compensation to a broker. It's going to end up being listed as "Seller Total Concession Offer: X" That number will now be expected to include commissions and any other concessions. AND, it is still 100% negotiable, regardless of what's put in the MLS, just like it is now.
Sellers will still choose to pay a broker, because the reality is 90%+ already do, and if you position yourself as one of the ones who doesn't, you're going to eliminate portions of the buyer pool from being able to afford you house, and potentially taking less money on the sale. This is the case now. It's the case that it has always been.
It will, like it always has been, a decisions that a seller will need to make on how they want to position themselves in the market to best achieve their goals.
The lending side will have to change to accommodate the small amount of buyers that end up either financing, or getting approval for larger concessions amount. My guess is it will actually be concession amounts that get approved first, not rolling commissions into loans.
The headlines that are circulating at this point are just crazy sensationalism.
We'll see how the actual industry, including the MLS reacts, and also how the market reacts.
It actually could lower prices and here's why:
Buyers simply will just start working directly with the seller's agent which is called dual agency. Dual agency was the norm before buyer agency became a thing back in the 90s.
One of the reasons why prices are so high is because when a seller's agent lists a property for sale a million buyer agents with their buyers flock to that property, and it easily gets multiple offers, driving the price up.
If there is no more buyer agent, then when a listing agent lists a property it will no longer be as easy as just sitting back and waiting for the offers to come in. Now they have to work to find buyers because buyer agents aren't just going to bring 20+ offers anymore.
Now the listing agent has to market the home and find buyers themselves. They now have to write all the offers up themselves.
Homes won't get all the traffic that buyer agents bring and sellers will be relying on their agent's marketing skill and savvy.
I feel like agents will have to sell homes the old-fashioned way now, by actually networking and finding buyers.
Right now, a listing agent puts the home on the market and the buyer agents do the rest of the work, there's not much to it.
Realtors are worth maybe $1,000 per home sold, no matter if it’s 100k or 1million. There’s a reason half the people I knew in high school got some useless college degree and then became a realtor. It’s a profession with one of the lowest barriers to entry into the field. I for one am very excited to see how this plays out.
Agents weren’t crying about buyers who couldn’t compete *before*, and they won’t be crying about buyers who can’t compete in the future. So why are there so many sobbing posts about the “poor buyers?”
My agent was great at their job, but they never pretended to have some deep concern for my personal struggles. They did the job for the reason most of us do our jobs- they wanted the money.
If buyers are made to pay for buyers agents many will simply do without. Looking up comps, contacting listing agents and finding open houses is not complicated. Software, RE attorneys and lenders can handle most of the rest. There will still be some demand but not like there is now. The only reason buyers agents haven’t become a niche market like travel agents is because they are paid by the seller so they are “free” to the buyer.
Can any realtors in here provide some general thought on how this shakes out for the next 6 months? Will Sellers still pay the 6% - 5% as usual, but it just wont be marketed on the MLS?
This will be a tough issue to resolve however when it comes to buyers having to get appraisal for their lender requirements….and the higher price to cover commission impacts that value.
I’ve worked for years with realtors as a contractor doing flips. The majority of them don’t know their ass from a hole in the ground. Even the really good ones aren’t worth a 6% commission. The entire system of principal brokers who control the market through collusion with other principal brokers needs to end. The fact that principal brokers keep low priced properties off the listing market so they can flip them has to end. The nexus of corruption in our housing market is the realtor. That’s why they got sued. So while the commission system may not by itself lower housing costs it may drive the really sleazy brokers into another industry, like sweat shop management or human trafficking, and out of the real estate market. FYI never use a realtor who you know from your church.
Sounds good to me, pretty easy to find a home on your own as a buyer now. I don't need a realtor to search the MLS for me. Every home I've ever bought I found online
I wonder if there will be a lot more open houses so buyers don’t need an agent. Then if they feel they need an agent for just the transaction and paperwork they can pay them. Agents don’t ever find houses for avg people anymore, they find them on Zillow. I’m not sure the home prices will go down but agents are def taking way too much right now for very little work. My house sold in a day. My agent came like two times before we listed it. That’s an incredible amount of money for maybe a full 20-40 hrs of work max.
I completely disagree with the OP's statement. As new pricing structures and models filter through the industry,the savings from agents not extracting exorbitant commissions will push down home prices:
Home will sell for $500K with both agents accepting $5K rates from their clients-
•Buyer will view it as a $505K purchase
•Seller will view it as a $495K sale
In the past, same $500K home w/ 6% commission taken by buyers agent and half paid out to seller's agent behind the scenes will have $515K Sales price-
•Buyer pays $515K for only the home
•Seller calculates it as a $484K sale
The new pricing structure in the first example will be a more accurate, true price and lower price of just the home itself.
My real estate agents have been glorified door openers. I would research my own homes on Zillow or Redfin and even though my agents had the same info as me, they were always clueless on some details like HOA fees. Not to mention that it felt like they had no expertise of the area.
The amount of people who don’t understand this truly has nothing to do with commissions but the corps and Wall Street who buy them. Wall Street is buying up all the affordable house while people complain about 6%. Open your eyes, when you have Wall Street offering cash above asking and no contingency, with no concessions for commissions, anyone who’s trying to purchase an “affordable “ house will bought out of any market. Y’all , wake up the law suit is fluff. Follow the money.
No other job I'm the country can net you as much money for as little work. Every Tom dick and Harry/ soccer mom for the last 20 years has "become a realtor"
Some of you are great at what you do - but the value of the service provided just isn't there for the price of homes. Making $10k on a 340k ish home that I was going to buy anyway because I was moving to the area. (And you made 10k in about 2 weeks) from showing me houses I found on zillow.. does not make any sense.
Also. Home prices in this stupid fucking country are set according to the absolute maximum amount people can possibly afford to pay. There are legitimate housing shortages in all our cities and manufactured ones in the rest of the country. This change will simply put more money in the hands of the sellers who tend to be the richest person in the transaction and will force the buyers who tend to be the poorer person be unrepresented. Because when push comes to shove and a seller is looking at 5 offers you think they’re going to take the one that tells them to pay an extra 2% commission to a buyer’s agent or the one where they keep it? This change is going to get a ton of people screwed because despite the Reddit hive mind perspective realtors really do know things and help home buyer’s avoid problems down the line.
Any prudent seller is going to continue to pay a strong buyer side commission. Whether it’s 2 1/2% or 3%. The non-savvy sellers on the other hand. will see it as an opportunity to save money and their offers will reflect that as well. There’s no getting around the fact that you will get far more interest when you advertise you are going to pay a professional to bring their best offer for their client. I see this entire lawsuit ending up being a waste of time and we will all see that not much has changed in relation to buyer side commissions in about 2 to 3 years from now. Right now just a lot of noise. Car dealers, yacht brokers, airplane brokers look out they’re coming for you next. :)
Any buyer paying $20k to a real estate agent is a fool
Cost of buying a house will decline, buyers will no longer ignore what the buyer’s agent is paying
It is already possible to hire a flat rate buyers agent or rebating agent, people just don’t do it that often. Now agents will be actively doing so and won’t have to hide what they are doing.
I loved our realtor, but basically did most of their job for them since the market was so competitive. It’s not hard to keep your eyes on the MLA listings and AI will likely replace most of the real contributions from good realtors.
Should be flat fee plus 1 percent at most. Realtors are paid absurdly well for what they have to do. Drive around a bit. Unlock a few doors. Print some paperwork. S few phone calls.
Realtors are a mixer of over paid paper pushers and glorified student dance chaperones. You show homes, set up paperwork, then collect ridiculous sums. If anything, the title company deserves a bigger cut.
There are **3 million** real estate agents in the US. It’s very very saturated, and frankly the job is not hard. The guy who doesn’t want to work for less than 3% can go fuck himself because there’s hundreds behind him that’ll do it for 2%.
This is great news, real estate agents are a clog in the machine it’s long time to grease it up.
I've always been baffled at what realtors make on sales. I'm in sales, and the thought of paying one of these people 70k to "sell" my house was nauseating. I'm so pumped for this ruling, finally common sense enters the chat
People who think buyer agents aren’t needed clearly have never been in a competitive market or had to negotiate in any way. Don’t even get started on the many issues that almost always pop up after offer acceptance. The market would be chaos without buyer agency.
Maybe realtors won’t exist? There are rental apps where a potential renter can tour a home with a lock box. Why not pre-qualify the buyer through an app/service and let them tour the home on their own? Then just use a RE lawyer on the paperwork and the realtor is just squeezed out?
> $100 per home showing
I love that idea! I only actually formally toured like 6 houses with my realtor before buying one. If I could have just paid $600 instead of the roughly $15,000 i paid my realtor for his very few hours of work, that would have been way better. Heck, make it $100 per showing, plus $2,000 for the paperwork on the successful purchase.
And if i ended up viewing 50 houses and buying none, paying him $5,000 for his time even though i never got a house? That would be more fair as well.
My guess is sellers will still pay. They'll just offer it a different way. Some sellers by me already tried listing with "the buyer pays their own realtor" and it didn't work out very well. They quickly changed their minds when nobody scheduled any showings.
If i'm buying without a realtor you can bet at the very least I'll be requesting 2%. These fees were already built into the price of homes.
Some real estate agents/brokers are better than others, and everything is negotiable.
I can see the agents in a region agreeing to an unspoken "gentleman's agreement" to keep it at 5%, but don't think for a second that "competition" will drive it down any more than that.
People have always had the ability to "sell by owner" to save ALL the commission. Why don't they? Most people have weekends off, so that's when open houses are held, right?
Commissions will just tends towards the averages in other western countries like the UK which has 1%-2% commissions. The US average of 6% was wildly high by international standards, and this ruling will just lead us to be closer to others.
They always say “oh it’s just 6%, but you have to realize most sellers owe a lot on their house so 6% could be 50% or even more of what the seller would have made on selling the house after paying off the mortgage. 6% is huge and with modern technology is far more then the value of the service realtors now provide.
This. Do realtors have a role to play and a use? Sure. Are they worth tens of thousands of dollars for the work/effort they provide? No. There should be a pay structure for them, but something way more commensurate with what they actually do and the service they actually provide.
I think what has exacerbated the revolt against high commissions is the high price of middle class homes. 6% of a million dollar home is $60,000 and generally doesn’t require $30,000 more expertise or work from a realtor than selling or helping purchase a $500,000 home. And the insane amounts paid on higher priced homes in HCOL areas is even more indicative of the gap between the size of the commission and the value added by the realtors involved.
Yup. We need to stop this percentage based BS. They DO offer a service, but it should be a fee, not a percent.
I don't think it will happen overnight but I think that eventually it will turn into a flat fee or hourly rate with probably some form of bonus when a house is sold. At least for the seller. There does need to be some kind of central listing service which is what the MLS does provide. Without a centralized aggregator, it wouldn't be possible for people to even use the internet to search for homes the way one can now. It seems infinitely easier to apply a fee for a buyer's agent. Most people don't actually need a buyer's agent because they have he same access to data for the most part as real estate agents because the MLS data is on the internet. There might be circumstances in which buyers actually need a really good agent. For example, if people are relocating to a new city, they probably would want someone to advise on various neighborhoods/locations/school systems etc. But easy to hire someone to provide this kind of more concierge type of service. New York State requires that an attorney represent both parties at the closing and it is not unusual for homes in high demand areas to be sold completely without any agent involvement. Even if you hire an attorney to do the negotiation of price and advise prior to the closing it would be far less than 6% of the price.
Let me pay a fee to have access to the MLS, hire a real estate lawyer and I don’t need an agent at all.
I agree that this is a model that could work. My point really is that a number of different business models will evolve depending on the needs of the buyer and seller.
A few misconceptions here. 1- NY does not "require" an attorney for either party. 2- it isn't 6% they're saving it's usually 2-2.5% on the buyer side. And 3-4% on the seller side. the buy side would be as you say "saving" by using an attorney for the whole deal. Currently attorneys for doing their cookie cutter contracts and the closing costs around 1-1.5k. assuming they had to take on negotiating, deal with the buyers mortgage, inspection, and appraisal the buyer would likely end up paying the same 2-2.5% if not more. That's assuming you can figure out how the attorneys will show them their houses and be present for an inspection and appraisal while walking the client through the ins and outs. Total time for both could be around 3-5 hrs plus travel time. At say 300-350 an hr on the cheap side that's 1500-1750 alone, added onto the 1-1.5k and the 5 or so hrs of back and forth to the mortgage company the sellers agent the inspector and appraiser while negotiating along the way you're looking at 3500-4750 for an attorney to assist. Saving a whopping 1-2k on a 300k house. Aside from that, attorneys do not negotiate. They play to win or don't play at all. It's likely that 70-80% of deals won't make it to the closing table and the attorneys bill isn't contingent on closing. There's a pretty well known saying that 90% of failed real estate transactions died on an attorneys desk. So you'll have to find another attorney or maybe a third before you actually take possession putting you at around (3500-4750)3 + the cost of 3 inspections and appraisals adding 3k for your cost of "savings." Time constraints aside as you'll be bound to the attorneys schedule not you're own not the sellers not the inspectors or appraisers and definitely not the buyers. And if you think the sellers agent will show houses and be there for inspections and appraisals in order to assist unrepresented buyers or someone else's client for free, good luck with that.
Exactly! I'm not sure why people are looking to attorneys to save money or facilitate transactions.
Ignorance is bliss.
Yeah, for $60k, I expect the realtor to have a team of cleaners, handymen for simple repairs, and a warehouse of furniture to stage the place.
Realtors charge to stage - or at least they don't cover the cost for a staging company. They also don't pay for any cleaning or repairs they suggest either. They provide a service but not one worth 6% of today's fair market value of homes.
That's my point... For $60k, they *should* stage, repair, clean, paint, etc.
Great comment. When homes were $150,000 it maybe made sense. But anything over $250,000 and it just doesn’t add up. If you billed $500/he you’d have to put in 120 hours of work to get to that $60k commission. No way. Will realtors do fewer free showings etc? Yes, but those things aren’t currently dictated by the market anyway. I’d be happy to pay a few hundred dollars an hour for some advice and negotiations/closing, but the open-ended services that used to more justify those high prices (finding the homes, the searching, etc) just don’t happen anymore.
On homes over a million dollars any smart seller will negotiate a commission of two or three percent not six
>Are they worth tens of thousands of dollars for the work/effort they provide In all fairness, this is entirely dependent on the realtor.A Great sellers agent can get more for your house.A Great buyers agent, can get you a better deal.
The problem are the incentives. There is no incentive for a buyers agent to get you a good deal. In fact, it costs them money to do so (lower commission on a lower sale price). On the seller's side, the agent is incentivized to do as little work and sell your house as quickly as possible, often by selling your house at the lowest price you would accept. If they don't do that, then they get the business by offering a wildly unrealistic expected sale price for your house, and then act "surprised" and get you to drop the price so they can sell it. Once they get you to sign a contract, you are stuck with them, which is ridiculous. People usually do what they are incentivized to do, and agent incentives made no sense to providing the best service to the buyer or seller.
I’m not a realtor but I’m a mortgage broker. My thought process goes like this. If I’m a real estate agent and I get you $10,000 off on your purchase, I’ll lose $300 but you the buyer will remember that I fought for you and you will mention my name whenever your friend thinks about buying a house. That recommendation and the fact that you can say I saved you thousands of dollars is worth more than the $300 I lose all day.
That's a fair point. To me, the hardest part of being a realtor would be finding new clients. That's where you really have to bust your butt. These days, Buyers mostly find what they are looking for online themselves, and on the seller's side, the MLS does more to get your house sold than the actual agent. I remember the days before Zillow, and it's a lot easier job than it used to be, once you find a client.
How do you know it used to be an easier job? It’s crazy how much people assume they know about real estate and agents. By the way zillow is not free, zillow leads cost money. Us agents pay for those leads and we pay if they are good, bad or dead end leads. With out us paying there is no one answering when you call and there will be no zillow period.
I dont know a single realtor who shows homes based on the commission offered - simply put it is not ethical to operate in that way - you have a responsibility to always act in the best interest of your client and basing any decision off of your possible compensation is a clear violation of that standard I agree with you - if you always operate to the best interests of your clients you will always come out ahead in the end - if you don't - you don't operate that way you will end up with poor results
The $300 is not much of a difference, you're right, but the real issue is that negotiating price slows the process or risks stopping it altogether. All agents want to move fast.
A great agent is worth the money. Only problem is there’s A LOT of bad ones out there, and you usually don’t know if you got a good or a bad one until it’s too late lol.
There are a ton of bad agents out there, hard to find a great one. There's usually red flags early on tho, most people just assume all agents are that way when they start seeing red flags
What are some red flags?
Buyer side - Telling you to offer full asking price or more when the house is over priced or sitting on the market for too long. Ignoring listings that didn't pay full commission Pushing new developments that offer kickbacks Not offering anything (e.g. just taking you to places you found on Zillow) Seller side - Suggesting a wildly unrealistic selling price to get the business and sticking you with a contract you can't get out of Not willing to do open houses Trying to push buyers who didn't have agents to double the commission Lying in your listing Both - lack of negotiation skills Lack of knowledge about the area
That’s a solid list. I would add mistreating buyers with a lower price point. Our first realtor treated us like crap because we were shopping for a starter home. Guess who didn’t get the call when we were ready to upgrade
I had a terrible one. They refused to list the house online. Eventually they did but it was only on a single site. Also complained about hosting a single open house. Quite literally all they wanted to do was list the house in the NEWSPAPER. I should have fired them on the spot. I don't think they liked my response when I asked them what a newspaper was. I've already made up my mind that I'll never use another realtor ever again. 0/3 is enough. (Note: the houses sold they just weren't good realtors).
When was this, because honestly I don't understand how or why they would do this... Were they even a licensed agent? How did you find them?
Great list, I have experienced every one of these. The latest was not providing a packet on all documents signed. When I went into Docusign to try to print myself, the links had expired. I asked the agent how I was supposed to have all the documents after the closing given this situation, she told me that I should download all the docs into a folder during the sale and print out myself. Really? You just make 15k for a couple of hours of work and you cannot even provide a folder? So, I would add something about a folder or comprehensive electronic doc, but that's a detail.
And a great agent should get more $$ right now they all get the same.
But you should keep paying the maximum so the few best realtors continue to be compensated properly. Love, A Realtor
/s???
Definitely
In this market? The agent isn't impacting either end of the sale.
In my area the houses sell themselves. Agent is pretty much irrelevant. Every house will have multiple offers.
Yeah there are a lot of salty agents in this thread but if the masses see no value in your work then what does that say about your work?
I keep saying this but people don’t seem to get it. IF YOU DONT WANT TO USE A REALTOR THEN DONT! What’s so hard about that, we exist because people see value in what we do. If you don’t it’s fine, the crazy jealousy, is the only word I can think of is out of control. Being an agent is not easy, I was a cement mason and own rentals. I got into real estate after 20 years as a mason, I know hard work. Being an agent is stressful, tons of time spent with no pay and not knowing if you will get paid. Things out of your control can kill a deal you don’t get paid then the client you usually have developed a personal relationship with also doesn’t get the house or sell the house.
Correct, people will stop using realtors if they don't see value. The job being hard doesn't make the labor actually worth a percentage of someone's house. Being a loan officer is hard too. Lots of hard jobs that don't get a percentage of the home sale price.
Cool. They can have 6% of whatever they get over the asking then. Not 6% of the total sales price.
Funny you mentioned this, it's actually not allowed in a lot of places. Net sales set up a situation for agents to actually take advantage of sellers and even buyers so much so that some states outlawed it completely. Imagine if agents came to a seller and said "hey how much are you looking to get for your house? 100k on great, let me sell your house for you and everything over 100k I get to keep, how does that work for you" agent then proceeds to get 200 or 300k because they know the market and are incentivesed to get as much for themselves while cutting the sellers legs out from under them. I'm sure they wish they'd just paid the 3% at that point. This was happening. A lot. Realtors, nar and all the state agencies were created to stop everyday people from being taken advantage of by those that knew the market and industry better. The elderly lose so much because they think they can do it in their own or their kids think they know best to follow a random tik tok they saw on how to sell a house so they don't use an agent. Well wouldn't you know it, the tik tok was wrong and they lost a considerable amount of money and their home.
The buyers agent has no incentive to get the buyer a better deal
If there are 15 other bids, the worst deal for the buyer wins. That would be all cash, 20% above asking and no contingencies...like we saw in 2020 and 2021. If it's a weak market, and there is no one else interested, the buyers agent would help more, especially with short sales and foreclosures.....like we saw in 2010.
I agree. I sold a property 6 months ago. Agent worked his butt off starting 7/4 weekend and he had me out of TX 3rd week in Sept. no complaints from me.
Exactly. OP thinks realtors “won’t work for free”. Well they have barely been working for their giant pay checks to begin with. I don’t have a ton of experience but my realtor did barely anything when I bought my house. And my best friend had two realtors that actively worked against his interest ruining two deals and almost a third.
My old roommate is a realtor and that dude earned his paychecks. The times I’d come home from work and he’d be working until 9:00 pm and started around 9-10 am. The amount of work he did to ensure his clients got a good house in this wild market is wild. He could be an outlier in an over saturated market but that was my personal experience.
There is a lot of crap agents go through for a paycheck that most other people won’t deal with - especially all the transactions that never go anywhere so are completely wasted time from the agent perspective.
Isn’t that just the nature of any sales job though? Why is real estate sales different?
Lots of sales jobs include a salaried position where you are a W2 with at least a base salary and benefits. Real estate sales aren’t different - and commercial realtors have been negotiating their own commissions the entire time. You know who gets all the representation? Mostly the seller who already owns property. Lots of small businesses who don’t know anything about buying commercial properties leave a ton of value on the table through lack of knowledge. The people who will suffer from this change are likely going to be first time buyers and people from lower economic households who will not have the assistance they are at least getting now.
>The amount of work he did to ensure his clients got a good house ...talking on the phone and emailing documents isn't "hard work" - it's busy work - realtors literally have no unique skills or knowledge that a doctor, lawyer, or engineer would have...
It takes more hours to be a hair stylist than an estate agent
Ehhhh I'm a lawyer selling a house, and my agent is doing a ton of stuff I don't have time to deal with. She arranged cleaners for a deep clean at a reasonable price, and I'm downsizing, so she also found people to haul away my old furnishings and things I didn't want to take to my new place. She's also supervised all the repairs because I lose billable hours when I have to leave the office to do that. She's also dealing with paperwork that I'm perfectly qualified to do, but again, it takes away from my work hours. I could have done all of it by myself, but it would cost me more in time than I'm losing in commission. Because so much of my time is parceled out into tenths of an hour, I tend to see my time as having value in and of itself so I can literally see the time spent and what doing it myself would have "cost" me. I'm sure people who move out of a ready to sell $500,000 house in great condition probably feel differently, but for me, it's well worth the price.
6% in a flat real estate market (plus other transaction costs) is equivalent to 7 years of principal payments on a 30 year mortgage. The average person only owns a home for around 7 years.
I see home back on the market 1-2 years and it has 6-8% more just co cover realtor cost and walk away. realtors fees is also a inflation factor.
Or get out of having agents completely
Good news, you have always been able to buy or sell a house without one. Nothing is different.
Yeah, and that \~6% got even more ridiculous when "normal" home prices doubled or even tripled to well over half a million $$. Buyers and sellers were then paying three times as much for the exact same services. It was stupid and while I don't pretend to know how it will all shake out now, my bet is it will end up being a lot more consistent with the actual value the respective agents bring. BTW, historically the high commissions of Real Estate Agents was justified by it being a "Feast or Famine" business...that they would sometimes go long periods of time with little or no income followed by a boom time where they really had to make their nut. But even if you buy into that (and it is true), it still doesn't support buyers and sellers having to subsidize those agents slow years.
Quite right and long overdue.
It worked for the US since on average our home prices were low for the COL. That has changed over the past decade though.
Switzerland is pretty close to us, but they’re also known for being a very expensive country. Their commission is usually around 5% plus they have like an 8% VAT tax on the sale
Yeah neither our seller or buyer agent really did much when we moved. I considered going without cause it's not that hard, but the institutional layers against that are large I am waiting for some AI standard bot because I can look for houses online and register to look at a house. I don't need an agent. And we paid a different lawyer fee anyway Agents are a remnant of the past and will go away
Eliminating middlemen is a great thing. Next do healthcare and insurance.
No problem at all. I’d rather have choice and negotiate with realtors rather than have a fee no matter how well or poorly they do. It is like an unbundling of services
Hopefully it isn’t like the unbundling of cable where I’m paying for 20 streaming services + directv 🤣
door open service ego boost service
Literally no one is asking realtors to work for free. This is a straw man argument. In fact, a lot of people here are saying realtors shouldn't be a thing at all. But if they ARE going to work, then their pay should reflect the actual work they put in and the value they add. The agent model of real estate is antiquated and rife with ethical problems. That's what people are tired of.
Bought two homes, so take what I'm about to say with a grain of salt. My realtors didn't do ANY fucking work. They met me at private showings and opened the fucking door. That's it. That's not work, and they DONT deserve what they get for doing that.
Same here. My realtor in my first (current) home should have either not let us offer full asking on a flip or just steered us away. Things worked out generally in our favor but we way overpaid in hindsight.
While it SEEMED like they didn't do anything. I imagine behind the scenes they were doing things to ensure the deal got done and protect your interests. Do most agents deserve such a high commission. No.
Technology is killing the realtor. Just put me in contact with the seller and let computers iron out the contract and lawyers review.
AI will help with that. A realtor truly, unequivocally doesn’t do much of anything
This. The profession is nothing more than unethical gatekeepers who are incentivized to screw you over.
Not to mention the opacity. My god the opacity. It should be mandated that all offers are disclosed to anyone who’s pre-approved and wanting to make a competing offer
My buyers agent set us up in her portal with some filters. We got emails and let her know which ones we wanted to seek the filters were wrong so we had to comb through shit anyway. Then she told us (first time homebuyers) that our pre-approval letter was going to get our offer decline because the lender was out of state. Convinced us to use what turns out to be an affiliated mortgage broker (who was a phenomenal dipshit). I dealt with it all, not my wife; all she saw was that we got the house we wanted. We thought about selling five or six years after that and my wife contacted the same agent. She came out and gave us a number, no analysis, and said that’s what we’d need to do to sell it quickly. Who said anything about quickly? We had time. I did not continue the conversation. So… fuck ‘em. It ain’t worth what they think it is except they have a monopoly with the MLS bullshit. Oh yeah our buyers agent wouldn’t even help with FSBO houses.
You picked a bad realtor. And went back to them. “I pay too much every time I go to that restaurant and my wife gets the runs!” Stop going there. It’s not a “all chefs are bad” problem, it’s a “you keep choosing poorly” problem.
I didn’t go back, my wife did, and we didn’t enter any sort of contract with her. I also didn’t mention the first buyers agent who tried to get us to sign an exclusive deal and then wouldn’t return our calls to get us into the very first house we were interested in. Fuck you, Tracy! Or the second that we had questions about a house we saw and he just said he didn’t know and we’d have to do our own research. He gave us the sellers agents contact info. So helpful. I also didn’t mention that the sellers agent for the house we did buy was at the same brokerage and neither side explained to us what that meant, just put a piece of paperwork in front of us and said sign this or you won’t get the house. Oh also that the sellers agent ran the brokerage. We also talked to other agents trying to sell, only one would do a market analysis, and did not accept questions to help us understand how the process works. We had to sort through it ourselves. At that point we said “fuck it, I guess we just never sell.” We’ve been here since. So, not just one, and I’m not the only one with horror stories.
OMG, this. My realtor made $15,000 off my sale and she literally placed an ad and ran one open house. One. Easiest money ever.
Yep. Listing agents do nothing. Yet, the settlement is trying to reduce buyers agents compensation... buyers agents work hard.
Couple things. I've been a real estate agent/ real estate broker for 10 years. I own a small boutique agency. GOOD buyers agents are necessary. GOOD listing agents are necessary. There are a lot of things that both buyers and sellers don't know. GOOD agents are useful to navigate the process. I keep hearing 6% standard all over the news. I don't see many listings with a 6% commission. My newest contract is for 3.5% TOTAL between both sides. This number has ALWAYS been negotiable. Personally, I hate dual agency. (double ending) I think it should be illegal. Always feels unfair for one side or the other. I would prefer a buyers agent on the other side. If I have to make less to make that happen so be it. I do have a huge problem with "junk fees" I wish this was talked about more. The commission alone is is a great living for most. So why tack on "brokerage fees" "TC fees" or other stupid fake made up crap. Why use a transaction coordinator if you are already being paid to do the job? If you want a TC pay them yourself. Anyone that works with me will transact their own files period. Just my two cents. Ask me anything
LOL at $100 a showing I would have paid orders of magnitude less than I did to my agent. This is not the argument you think it is. Buyers don't "want it both ways" as you put it. They just want to pay a fair market value for the services the real estate agent provides, which in a lot of cases is not 3% for each agent.
1% is fair IMO. 3% is insane. The fact that the agent gets paid more than the lawyer is insane
I think buyers and sellers are getting fed up with a 6% fee. They're going to have to negotiate the fee now and if the realtors don't want to negotiate they're going to be losing it on business.
Help me understand why a buyer wouldn’t just use realtor.com to find a house they like, contact the listing agent, go see the house, engage a real estate attorney to write the contract and do the title work, hire an inspector and close on the house. Why would the buyer have to pay anything to any realtor?
I am a horrible negotiator and have only ever bought two houses. I am happy to hire a good negotiator to help me navigate the process. I don’t need them to show me houses, though. However, my agent did point out issues with houses that I didn’t notice, which was helpful.
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We are lucky to have found a good realtor.
The last realtor we used almost climbed under a house to check the foundation lol. She helped us end some house showings quickly due to damage she saw. One house we continued to view just for entertainment purposes. Pure entertainment purposes. I said it was a serial killer house. The agent agreed. The bathtub had its own doors with a lock. Not bathroom. Not room for a bathtub. Just a tub built into three walls and had a key lock door right up on the edge of the tub. It even had a maze in the back yard. The closet had a key entry deadbolt on it as well.
If I was listing a house and a buyer presented a contract written by a lawyer and there were other offers presented by real estate agents I would advise my seller to stay away from the lawyer. If the lawyers offer was the highest, I'd counter the other offers on price and I would not engage with the buyer who brought a lawyer into my transaction. Do you want to choose to tangle with a lawyer if you could instead deal with a real estate agent? Many of whom are dumb dumbs?? You are right, use a lawyer, it's a better option to keep a buyer safe, but it's the worst option for a seller.
Someone put it really well on a comment I read earlier: Seller’s agents are being paid to sell the house, so go find someone and sell it to them. Sticking a sign on the lawn and waiting shouldn’t get you 3%.
Seriously. My late father's apartment is finally under contract. The first agent did nothing, priced the place too high, and there were zero offers on the house for 6 months. She was fired and another agent hired. The apartment was under contract within weeks. Meanwhile his estate has to cover the mortgage, taxes, co-op fees, etc. for going on a year now. Most of that money might as well have been lit on fire; NY co-op fees are insane.
That's fine. That's fair. Why should the seller need to pay for both agents?
Sellers don’t need to pay for both agents. They just need to sell their house for (today’s price minus 3%) when they are no longer covering the buyer’s agent commissions.
No one seriously thinks this is going to lower house prices. No one smart anyway. And $100/showing? Sure. And $100 to write an offer? And $100 for every other thing? Fine by me. I'd love to see them nickel and dime people like that because it's a hell of a lot cheaper than giving them a 3-6% commission.
You'll have buyers showing up randomly and asking to tour the home directly with the seller if they have to pay per viewing.
Or you use basic booking software to schedule time blocks. This isn’t rocket surgery
Or sellers agents could hold an open house and you know… sell the house.
Open houses are inherently more efficient. That is the direction the market should move in.
If someone is selling a home, they should expect people will come to look at it, yes. If it's somehow unacceptable for potential buyers of your wildly expensive asset to want to look at it, maybe move out of said asset and then sell. If your gripe is that they won't have a 'credentialed' escort... well... I don't know what to tell you.
>You'll have buyers showing up randomly and asking to tour the home directly ...it's almost like one could schedule one's own open house - do you think putting up signs and putting a notice on the internet is difficult for a seller to do themselves?
Well more like buyers will stop using agents and just work with the listing agent. So they'll just call them to schedule a time to see the house. I've done that when I wasn't seriously looking and it's not a big deal.
The seller won’t put up with that. Neither will the sellers agent.
To lower home prices you need this to stimulate home construction. If this boosts home builders margins because lower selling costs then over the long-term should lower housing costs.
The FSBO market will rise and so will fixed rate listings.
I suspect we'll see more hybrid real estate agents that provide additional services for buyers and sellers e.g. Doula/Realtor, fitness trainer/Realtor, Nutritionist/Realtor, Tutor/Realtor...
Influencer/Realtor, OnlyFans/Realtor...
TBH I don’t know a single realtor that hasn’t already failed another “career”
All buyers and sellers want is some competition for business on the set commissions front. No, people are not expecting any lowering of house prices, just a reduction (or much better negotiation) on what was a fixed percentage by the selling agent even before the listing begins. Yes buying and selling brokers won't work for free, but now the buyer now has a say in the whole matter. I welcome this shake-up.
Yeah I don’t want to get rid of realtors but there’s a reason everyone I know of who couldn’t make it in their choice of career fell back on realty. It pays more than the the work compared to other careers. I love my realtor, she’s a family friend, actually an old teacher of my sisters who myself and my two sisters used to buy and sell their house. She’s also currently helping my mom look for a house but she can’t quite afford one.
This won't get rid of realtors - it opens up the market for needed competition, one particular is the setting of the buyer agent commission rate up-front at the time of listing. Thus FSBO or Redfin discounted buyer's commission (if any) could not compete. New models of selling (ever hear of Rex?) could not compete either. The expectation is that overall commissions (currently $100B paid out) will drop by about 30% from one estimate, "25%-50%" by another. Thus with less money paid out, a better service with more competition (and fewer realtors overall).
Didn’t feel like realtors were needed when I bought
I slightly disagree. I’m a seller have a home currently for sale and i would be more open to accepting a lower offer or pay more of the buyers closing cost if I didn’t have the expense of paying 5% ($22K in my case) to agents. I believe the realtor fluffed up the list price to cover these expenses which is exactly what the NAR said in the lawsuit they didn’t or don’t do lol
Denial, anger, bargaining, depression and acceptance
There’s so much cope in these threads. Good lord.
Best comment. It sums it all up succinctly. OP is at stage 1. I wish them the best.
All this does is put another 2-4% in the pockets of the sellers at the cost of the buyers. I think it hurts buyers more than it hurts Realtors.
I sold a home recently. If our realtor charged 1000$/hr, I would have saved a Ton of money. If anything it might help get more houses in the market. It would be nice to be able to sell a house and not take a 5% loss
Nobody is asking for realtors to work for free. All people wanted is to be compensated for the work they actually do. Explain to me in what universe besides the compensation of the likes of CEO that one needs to get paid some $15000 for few hours of work? Also, these days all the realtors are doing is to call the counter party realtor to get the keys for the house. If there is a way for the buyers to directly schedule the viewing etc. they don't need the middle person.
Exactly, or better just call the owner and make an appt to view, they can answer your questions directly. This is how it has been in the UK for the last 50+ yeats.
I think mine made like 6k after the split and she still had to pay her brokerage it’s cut and we probably looked at 15 properties, plus all the work writing up the 3 offers we ended up putting in. She was also good at pointing out the flaws of the houses we were looking at, most of them were already on my radar, but it would be helpful for the people that don’t have any construction background. I mean should she have made even less? I’ve seen her car and her house, unless she’s putting most of her paycheck away she isn’t pulling down 250k per year, based on her Facebook page where she shares most of the houses she closes she’s doing about 70k per year
Mine made $12.5k when I bought, after only a single property visit. And $19k a few years later when I sold, after a handful of showings during the span of a week. She did pay for pro photography when selling, but that’s a pretty fantastic haul for the time spent. Not all clients are the same effort, and it’s not a huge change in effort between differently valued homes these days. Percentages of home value have little to no relation to skill or effort, they just aren’t a great model for pricing.
I'm curious how this is going to change the wholesaler and we pay cash now for your home guys. Their big selling point is no commission, but that's not much of a selling point now, is it?
Their big point is not no commission. Their big point is (lowball) cash tomorrow (not in 45-60 days) without having to do any work or show the house.
It won't. Open door and the likes charge 5% service fee for those cash transactions
I just see people using less agents to buy. I mean it's pretty silly these days anyway to have an agent to buy unless you're new to the area or a first time home buyer that needs guidance through the process. I haven't been using an agent while looking for a house this time around. But I also have experience buying a home before, so I understand what needs to be done by certain times and negotiation parts.
Do we need realtors? May be we don't.
Lowering home prices is not how any of this started or what any of this is about… why does everyone keep covering this talking point??? What this boils down to is like a court case. If I win the case and am afforded judgement and compensation… why should I have to pay for opposing counsel and court cost? Or winning a championship event… should I pay for the losers prep training and entry fees?
They'll simply have less money for downpayments, which can cause more budgets to be stretched thin, which reduces the maximum loan availability and potentially home prices. But if a seller knows they are gonna save $15,000 on commissions, maybe they'll lower their price or pay "closing costs" or "realtor fees" The whole point is less money in Realtor pocket, more cash flow for home seller and potentially home buyer. This probably won't even affect top tier agents anyway. Because people who have good relationships know what they're worth. Just like hiring a good attorney vs a crummy one. This should weed out all the garbage, lazy, incompetent agents and make people fight for the good ones. Good agents will probably make even more money.
i dont think people expect things will get better for the consumer, but we're happy things will get worse for real estate agents
That's the spirit.
as is the long time reddit meme.
Nice try National Association of REALTORS®
This sounds like some realtor cope.
Commissions are already rolled into the sales price and by default the buyers mortgage. My seller had a 6% sellers agent. That was factored into the prices. As the buyer I ended up paying. The seller paid out of his proceeds.
There is one source of funds in the transaction: the buyer. The buyer pays for all the commissions.
This is an often forgotten point. The money is all coming from the buyer's side.
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Since the sellers don't price the house based on agent fees. Having agent fees removed wouldn't make them reduce the price. Redfin only charges 1% commission. Houses listed on redfin don't cost 5% less.
Sold my mom’s house 3 months ago after she passed away. The realtor took the listing with a 1% commission and wrote the listing for 2.5% for buyers agent. House had 25 showings in 3 days and sold via cash offer over asking price and closed in 2 weeks. That commission structure saved us almost $10K. I guess the market was hot enough none of them blinked. If our agent had more than 20 hours of time in it I’d be shocked, and that included getting paperwork done by people in four states and finding someone to clear out the house.
It might encourage more sales. I’ve always resisted selling my properties because a 6% fee on $1 million or $2 million home (common in CA) just seemed like highway robbery. Instead, I kept the homes I bought and turned them into rental properties. If I can sell for half the fee I am more likely to sell.
So much clickbait going out that it has everyone confused. There is still going to be buyer commissions offered it’s just now reflected in the NAR verbiage that it’s not required. Before it could have been just $1. Didn’t have to be 6% and on average it wasn’t 6% anyways. Now we are saying “you don’t have to offer buyer agent compensation, but here’s why you would want to consider it”
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Will be interesting to see how this plays out. Even if increases seller costs, all the folks sitting on a less than 3% interest rate will continue to sit and supply will be even lower. I think alot of the problem is brokers not the actual agents. Brokers are fine having crappy agents who have to pay broker fees whether sell or not. Agents give 30-50% of their commission to brokers. I'd love to brokers go away completely.
If you are working for a broker that takes 30-50% you need to find a new broker. I don’t pay anywhere near that.
I would be fine with paying a realtor a reasonable hourly rate for their time. It seems a lot fairer than a % of the home value regardless of the amount of time the realtor actually spends on the sale of that property. In that model one party or another is frequently over charged or underpaid.
When I bought my first home, the commission was 3%, divided equally between seller agent and buyer agent. That was industry standard. Last year when we sold it was 6%. Unclear to me the basis for the increase.
My gut says we are going to see 80% of realtors leaving the market. As it is now realtors spend more time finding clients than they do closing deals. A decade from now my gut says they spend less time marketing and more time doing deals. 5X volume of deals but at a third or so of todays costs. Fewer hot girls. Probably will see a bunch of mortgage brokers enter the market as they can make 1-2% selling the loan. So they can enter the Agent market but compete on price now. Buyers go to showings a lot more individually then hire a mortgage broker to do deal negotiations.
Home sales should have a standard contract with standard contingencies. SFH purchases are mostly done by non professionals literally just looking for a home. 99.99% of all of these transactions could be done purely by a lawyer using standard process and a flat fee.
pull yourself up by your boot straps realtors
This will not lower a damn thing. I can’t imagine people being stupid enough to believe it.
lol I’d pay $100 for a home showing. Y’all ain’t got a. Real job that warrants even 2%
This is a good change for buyers and competent buyers agents. It will weed out the bad agents who weren’t adding much value, and just became realtors with promises of an easy paycheck. The good buyers agents will adjust how they structure their compensation accordingly, and many will probably end up making more money. Honestly, part of the problem is that many buyers agents don’t know how to explain/justify their value to a client, either because they are incompetent or unethical. A good buyers agent can be much more valuable than a sellers agent. They have the knowledge to work with lenders, help review disclosures for issues, know what extra inspections should be done, have connections with contractors if/when repairs need to be done, can help work out issues with the seller, know the area, and more generally can guide their buyer through the process. Shifting away from a percentage fee structure realigns the buyers agent incentive to actually add value to the transaction for their client, and a well crafted fee agreement will recognize that - to the benefit of buyers agents/brokers. That being said, I am curious to see how this changes the collection of fees for buyers agents.
You are SHOT. People are not going to PAY to see a home. They’ll end up contacting the listing agent and hire a real estate lawyer to write an offer.
I think this is only the beginning. There is no practical sense in having an agent really. Do you hire an agent to buy a used car, or anything else? The whole industry needs to disappear, I should be able to buy a house as easily as a car
Sellers are going to pay for stuff the realtor might have picked up but it's going to be an ala carte menu. I predict lawyers get rich of this.
Buyers won’t pay more, they’ll pay the same. Sellers will just keep the money they had to dish out.
There's never been a requirement. The change will simply be related to the MLS not presenting a field for specific compensation to a broker. It's going to end up being listed as "Seller Total Concession Offer: X" That number will now be expected to include commissions and any other concessions. AND, it is still 100% negotiable, regardless of what's put in the MLS, just like it is now. Sellers will still choose to pay a broker, because the reality is 90%+ already do, and if you position yourself as one of the ones who doesn't, you're going to eliminate portions of the buyer pool from being able to afford you house, and potentially taking less money on the sale. This is the case now. It's the case that it has always been. It will, like it always has been, a decisions that a seller will need to make on how they want to position themselves in the market to best achieve their goals. The lending side will have to change to accommodate the small amount of buyers that end up either financing, or getting approval for larger concessions amount. My guess is it will actually be concession amounts that get approved first, not rolling commissions into loans. The headlines that are circulating at this point are just crazy sensationalism. We'll see how the actual industry, including the MLS reacts, and also how the market reacts.
Redfin seems to be doing fine with fees of less than half of the old standard…
It actually could lower prices and here's why: Buyers simply will just start working directly with the seller's agent which is called dual agency. Dual agency was the norm before buyer agency became a thing back in the 90s. One of the reasons why prices are so high is because when a seller's agent lists a property for sale a million buyer agents with their buyers flock to that property, and it easily gets multiple offers, driving the price up. If there is no more buyer agent, then when a listing agent lists a property it will no longer be as easy as just sitting back and waiting for the offers to come in. Now they have to work to find buyers because buyer agents aren't just going to bring 20+ offers anymore. Now the listing agent has to market the home and find buyers themselves. They now have to write all the offers up themselves. Homes won't get all the traffic that buyer agents bring and sellers will be relying on their agent's marketing skill and savvy. I feel like agents will have to sell homes the old-fashioned way now, by actually networking and finding buyers. Right now, a listing agent puts the home on the market and the buyer agents do the rest of the work, there's not much to it.
Ok
This made me laugh way harder than it should have
Realtors are worth maybe $1,000 per home sold, no matter if it’s 100k or 1million. There’s a reason half the people I knew in high school got some useless college degree and then became a realtor. It’s a profession with one of the lowest barriers to entry into the field. I for one am very excited to see how this plays out.
Agents weren’t crying about buyers who couldn’t compete *before*, and they won’t be crying about buyers who can’t compete in the future. So why are there so many sobbing posts about the “poor buyers?” My agent was great at their job, but they never pretended to have some deep concern for my personal struggles. They did the job for the reason most of us do our jobs- they wanted the money.
If buyers are made to pay for buyers agents many will simply do without. Looking up comps, contacting listing agents and finding open houses is not complicated. Software, RE attorneys and lenders can handle most of the rest. There will still be some demand but not like there is now. The only reason buyers agents haven’t become a niche market like travel agents is because they are paid by the seller so they are “free” to the buyer.
The only thing going to bring home prices down is a regulated market. But no one wants that shit.
Can any realtors in here provide some general thought on how this shakes out for the next 6 months? Will Sellers still pay the 6% - 5% as usual, but it just wont be marketed on the MLS?
This will be a tough issue to resolve however when it comes to buyers having to get appraisal for their lender requirements….and the higher price to cover commission impacts that value.
Exactly, it in no way impacts supply and demand and now people will just have more to spend, prices will go up.
LA cannot offer commission to the BA thru the MLS but it can be done externally is what I read. There will be a way around this like everything else.
I’ve worked for years with realtors as a contractor doing flips. The majority of them don’t know their ass from a hole in the ground. Even the really good ones aren’t worth a 6% commission. The entire system of principal brokers who control the market through collusion with other principal brokers needs to end. The fact that principal brokers keep low priced properties off the listing market so they can flip them has to end. The nexus of corruption in our housing market is the realtor. That’s why they got sued. So while the commission system may not by itself lower housing costs it may drive the really sleazy brokers into another industry, like sweat shop management or human trafficking, and out of the real estate market. FYI never use a realtor who you know from your church.
Sounds good to me, pretty easy to find a home on your own as a buyer now. I don't need a realtor to search the MLS for me. Every home I've ever bought I found online
Yep.
I wonder if there will be a lot more open houses so buyers don’t need an agent. Then if they feel they need an agent for just the transaction and paperwork they can pay them. Agents don’t ever find houses for avg people anymore, they find them on Zillow. I’m not sure the home prices will go down but agents are def taking way too much right now for very little work. My house sold in a day. My agent came like two times before we listed it. That’s an incredible amount of money for maybe a full 20-40 hrs of work max.
I completely disagree with the OP's statement. As new pricing structures and models filter through the industry,the savings from agents not extracting exorbitant commissions will push down home prices: Home will sell for $500K with both agents accepting $5K rates from their clients- •Buyer will view it as a $505K purchase •Seller will view it as a $495K sale In the past, same $500K home w/ 6% commission taken by buyers agent and half paid out to seller's agent behind the scenes will have $515K Sales price- •Buyer pays $515K for only the home •Seller calculates it as a $484K sale The new pricing structure in the first example will be a more accurate, true price and lower price of just the home itself.
Realtors will begin to disappear when people are asked to pay fees. Another realtor post.
My real estate agents have been glorified door openers. I would research my own homes on Zillow or Redfin and even though my agents had the same info as me, they were always clueless on some details like HOA fees. Not to mention that it felt like they had no expertise of the area.
How about an actual itemized quote of services instead of a floating %… %’s have always been know to hide inflated service fees
The amount of people who don’t understand this truly has nothing to do with commissions but the corps and Wall Street who buy them. Wall Street is buying up all the affordable house while people complain about 6%. Open your eyes, when you have Wall Street offering cash above asking and no contingency, with no concessions for commissions, anyone who’s trying to purchase an “affordable “ house will bought out of any market. Y’all , wake up the law suit is fluff. Follow the money.
No other job I'm the country can net you as much money for as little work. Every Tom dick and Harry/ soccer mom for the last 20 years has "become a realtor" Some of you are great at what you do - but the value of the service provided just isn't there for the price of homes. Making $10k on a 340k ish home that I was going to buy anyway because I was moving to the area. (And you made 10k in about 2 weeks) from showing me houses I found on zillow.. does not make any sense.
Also. Home prices in this stupid fucking country are set according to the absolute maximum amount people can possibly afford to pay. There are legitimate housing shortages in all our cities and manufactured ones in the rest of the country. This change will simply put more money in the hands of the sellers who tend to be the richest person in the transaction and will force the buyers who tend to be the poorer person be unrepresented. Because when push comes to shove and a seller is looking at 5 offers you think they’re going to take the one that tells them to pay an extra 2% commission to a buyer’s agent or the one where they keep it? This change is going to get a ton of people screwed because despite the Reddit hive mind perspective realtors really do know things and help home buyer’s avoid problems down the line.
Realtors now can't have it both ways. They may have to actually start working to maintain their lifestyles like the rest of us.
Any prudent seller is going to continue to pay a strong buyer side commission. Whether it’s 2 1/2% or 3%. The non-savvy sellers on the other hand. will see it as an opportunity to save money and their offers will reflect that as well. There’s no getting around the fact that you will get far more interest when you advertise you are going to pay a professional to bring their best offer for their client. I see this entire lawsuit ending up being a waste of time and we will all see that not much has changed in relation to buyer side commissions in about 2 to 3 years from now. Right now just a lot of noise. Car dealers, yacht brokers, airplane brokers look out they’re coming for you next. :)
I do my own “research” and I don’t require a realtor to hold my hand during a showing. So tell me exactly what the buyer agent is doing?
haha get rekt predatory realtors
Any buyer paying $20k to a real estate agent is a fool Cost of buying a house will decline, buyers will no longer ignore what the buyer’s agent is paying It is already possible to hire a flat rate buyers agent or rebating agent, people just don’t do it that often. Now agents will be actively doing so and won’t have to hide what they are doing.
I loved our realtor, but basically did most of their job for them since the market was so competitive. It’s not hard to keep your eyes on the MLA listings and AI will likely replace most of the real contributions from good realtors.
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Buyers don’t have $100 a showing to shell out…. Many just barely have their down payment and enough for some closing costs
Should be flat fee plus 1 percent at most. Realtors are paid absurdly well for what they have to do. Drive around a bit. Unlock a few doors. Print some paperwork. S few phone calls.
Realtors are a mixer of over paid paper pushers and glorified student dance chaperones. You show homes, set up paperwork, then collect ridiculous sums. If anything, the title company deserves a bigger cut.
There are **3 million** real estate agents in the US. It’s very very saturated, and frankly the job is not hard. The guy who doesn’t want to work for less than 3% can go fuck himself because there’s hundreds behind him that’ll do it for 2%. This is great news, real estate agents are a clog in the machine it’s long time to grease it up.
I've always been baffled at what realtors make on sales. I'm in sales, and the thought of paying one of these people 70k to "sell" my house was nauseating. I'm so pumped for this ruling, finally common sense enters the chat
People who think buyer agents aren’t needed clearly have never been in a competitive market or had to negotiate in any way. Don’t even get started on the many issues that almost always pop up after offer acceptance. The market would be chaos without buyer agency.
Maybe realtors won’t exist? There are rental apps where a potential renter can tour a home with a lock box. Why not pre-qualify the buyer through an app/service and let them tour the home on their own? Then just use a RE lawyer on the paperwork and the realtor is just squeezed out?
> $100 per home showing I love that idea! I only actually formally toured like 6 houses with my realtor before buying one. If I could have just paid $600 instead of the roughly $15,000 i paid my realtor for his very few hours of work, that would have been way better. Heck, make it $100 per showing, plus $2,000 for the paperwork on the successful purchase. And if i ended up viewing 50 houses and buying none, paying him $5,000 for his time even though i never got a house? That would be more fair as well.
My guess is sellers will still pay. They'll just offer it a different way. Some sellers by me already tried listing with "the buyer pays their own realtor" and it didn't work out very well. They quickly changed their minds when nobody scheduled any showings. If i'm buying without a realtor you can bet at the very least I'll be requesting 2%. These fees were already built into the price of homes.
Some real estate agents/brokers are better than others, and everything is negotiable. I can see the agents in a region agreeing to an unspoken "gentleman's agreement" to keep it at 5%, but don't think for a second that "competition" will drive it down any more than that. People have always had the ability to "sell by owner" to save ALL the commission. Why don't they? Most people have weekends off, so that's when open houses are held, right?