In the UK it's more like 1~2% for sole agent, or 2+% if it's multiple agents.
The US sounds like a joke.
The US sounds like a joke.
Real estate agents are making a killing here for very little work. Houses usually sell within a week. Not unheard of for them to be pulling over $100k. Keep in mind though that any expenses are taken from that 6%, so it's not all profit. Things like dressing the house for selling, showings, paper work, travel, etc.
you have no idea how much work realtors do. at all. i do. the good agents bust their asses. we can work with buyer's for months and months to make a sale, researching comps so they pay a fair price, showing them places, we do open houses, we are there during home inspections, we preview properties, and on and on and on. especially with first time homebuyers there is a ton of work involved. renters are also a bunch of work for very little money.
we also make sure we bring you qualified buyers, pre-approved for the purchase price, so we don't waste our time or your time. we do a lot of work behind the scenes to make sure things move along as the poster above said.
and you are completely oblivious to the commission process which puts your entire premise in a shady light because when you come from ignorance, your general point is already on loose ground.
the agent doesn't get the full 3%. that money goes to their brokerage firm who then takes a cut. newer agents work on a 50/50 cut so half that goes to the broker. some firms charge fees as well - for example one agency i knows first takes 6% of the commission brought back to them to cover marketing costs, then does the split with the agent. and that money is taxed FYI. so it whittles away. so take that 15K, take out 6%leaves you with 14k. divide that by 2 for the split with the agency, leaves you with 7K. which is taxable. so at the end of the day, yeah, it's closer to your 5k number that you think they deserve for a sale on a home of that price.
also what you get when you work with an agency is promotion. we list something and it gets pushed to hundreds of sites.
and like the poster above said we filter out the idiots for you. that's a fucking pain in the ass.
good agents also spend additional money such as hiring a photographer if they are a good agent. they pay for marketing materials, firms cover only so much.
and in a hot market, like now in jersey city, with the marketing power of a good agent and agency, you will get so many more offers. 1/3 of condo sales recently in JC have sold for over asking price. and the realtors juggle all that as well.
and in my recent searches for buyers, you are starting to see a 5% commission one some listings.
and you think agents do a few minutes of work after an offer is accepted? most closings take 5-6 weeks. what do you think is going on during that time? yeah, work. for the agent. if it was a simple few minute process closings would take a day. you are clueless brother.
My wife is a Realtor and she has her brokers license. There are a lot of expenses associated with this profession including income tax and self employment tax. She works her ass off too... and it's more like 5% here of which she gets half. She takes home a little over 70% of that. But like I said, there are expenses.
There are no lawyers involved in the process here so she pretty much handles all the paperwork for the entire transaction.
:biggrin:
I'm sure you could have gone on for another five or six hundred words of that nonsense and still not have said much of anything.
Most profession's do not have to try so hard to justify their value.
there is great potential for app developer to streamline this whole thing, and make $$$...
Actually, if you knew anything about real estate, you would know that he's posting the truth.
That's the truth. I'll be closing next week on a second home out of state. The seller also lives in a different state than the home is located. The condo is being purchased turn key. My agent brought up that there should be an itemized list of the contents early in the process. As we moved along, it became necessary to have that list. When I mentioned that the seller is out of state, my agent immediately volunteered to gain entry and make that list. In my opinion, that, is going above and beyond. He had it done the next day and that was over a month ago.Not all agents are good ones but the good ones are worth their commission and more.
there is great potential for app developer to streamline this whole thing, and make $$$...
there is great potential for app developer to streamline this whole thing, and make $$$...
As far as what goes into selling real estate lets not blow it out of proportion. You can buy a book, take a few courses, take the test, and get started quite easily. It's not rocket science. They probably should make it more difficult so that you would have a higher level of quality in agents. Most seem to just hope you'll buy or sell and don't put the extra effort in. Even in the million dollar range. Most try to encourage a seller to drop their price to sell it faster or to just buy now because prices will surely rise. It's the American dream right? You gotta buy the house NOW. Plus no real estate agent wants to spend months trying to sell a house when they can just drop the price and sell it quickly on your dime. They'll always try that approach if they can.
There has to be some personal responsibility though. Get a good agent who isn't lazy and make sure your home is ready to be sold. If you're buying do some reading and figure out what you want before making the real estate agent try to read your friggin' mind.
One solution is for the govt to tax anything over $5k commission.
every $5k in commission is a 10% tax, max at 50%.
might encourage $4995 flat fees for full service?
I studied real estate in graduate school for fun and although I understand the amount of work that goes into it my gripe is that there is far too much "Yeah this property is fabulous - you should buy it" when it's a complete piece of shit. For the amount of money they're making they should not encourage people to put their property up for sale when it hasn't been renovated since the 1960's unless it's at a substantial discount and they shouldn't show those properties unless they are at a substantial discount and the client asks to see these. Granted it's been a couple years since I was looking but I really hope that the housing bubble pop corrected some of these practices.
Have licensed realtors (from each state) handle the final sale, ala red light ticket systems where a cop has to review the tape.It's been tried. The market is regulated and realtors are licensed. It's sort of the same issue Tesla was running into trying to get permission to bypass the dealer system.
OTOH, I had a real estate agent tell me that another couple complained because the kitchen didn't have granite countertops. This was a bargain basement condo that the seller is already losing 30% on. It was perfectly fine, just not granite. I've also seen a couple condos where they obviously unnecessarily upgraded things to justify a higher price and that can be a turnoff.For the amount of money they're making they should not encourage people to put their property up for sale when it hasn't been renovated since the 1960's unless it's at a substantial discount and they shouldn't show those properties unless they are at a substantial discount and the client asks to see these. Granted it's been a couple years since I was looking but I really hope that the housing bubble pop corrected some of these practices.
why is income tax brought into this?
EVERYONE pay incomes taxes, like all jobs unless you are uber rich or uber poor