Why cant we solve the real estate agent 6% ripoff?

[KeithTalent]

It's 7% here.

KT

 

[MrSquished]

if you are smart, reasonable about price, and do the research AND have the time you can definitely sell your home.

some people are smart but they don't have the time. it's worth it to them to find a good agent to do all the work for them. AND a good realtor should never look at a deal as a one time thing. you want to get referrals down the road from that client. that's how you build a nice big network.

regardless, like in any profession there are good realtors and bad ones. the OP's ignorant post had no idea about commission splits nor about how much time a good realtor puts in to make a deal happen. nor how much time you can put in to have a deal never happen.

edit: also Zillow and Trulia are great resources but often just not correct. a lot of the time that property listed as for sale on those sites is not available anymore.

 

[jpiniero]

edit: also Zillow and Trulia are great resources but often just not correct. a lot of the time that property listed as for sale on those sites is not available anymore.

Redfin is pretty much the only one I use at this point. It's not perfect, but pretty much everything else is nowhere near up to date. I have a suspicion the others leave sold properties on the site to get more hits.

 

[EMPshockwave82]

Figure in the way that the government taxes real estate agents also. My fiance was taxed at 36% after you account for all the write offs that she qualifies for. Nothing like pulling in $50k and having a net of $18k at the end of the year. She would be better off working a regular 8-4 job with how horrible self employment taxes are.

50k at 5% brokerage fees, after paying a referral fees and giving the company she represents their cut was just shy of $3,000,000 in sales. I don't really think that $50k is that much money to manage the sale of $3mil in assets and I think $18k net is ridiculous for how much she works.

 

[randomrogue]

It's interesting because in some countries I have lived in you do 99% of the work online already. I have a folder in my mail that constantly gets updated with all the real estate listings and details in specific cities that I'm interested in overseas. It'll happen here but it might take longer. There's a difference between buying a 700 sq ft flat in Paris and buying property and a 2,500 sq ft house with a pool in the suburbs of Dallas. In Paris I can see a lot of property on my own very quickly using the internet. In Dallas or LA or whatnot I am relying on driving all over the place. Also, it wasn't uncommon for there to be showings in the middle of the week overseas vs just seeing stuff on the weekends here. The market probably matters.

 

[DCal430]

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.

What about the buyers agent?

Here it is 6% because it includes the buyers agent.

 

[alkemyst]

BULLSHIT. 100%.

I have bought and sold eight houses - three of which were out of state - and I had zero issues. Realtors are a god damn waste of money if you have the slightest hint of a brain in most situations. I say 'most' because there are corner cases where they can be of use, but I'm definitely attributing that to 10% or less and that's being generous.

I took the real estate agent training class just so I could effectively have this argument. It was a god damn joke.

I sold my house two months ago on my own and I made just as much as the realtors said I would if I listed with them. They also said if I did FSBO I would make 8-10% less... idiots. I had people show up to buy the house with agents and they started salivating at the 6% commission because they thought I would pay the full amount if they acted as a transaction broker. I told one of them to literally go fuck himself after he started getting belligerent. I then looked at the potential buyers and said if they wanted the house and they wanted to use an agent, they were welcome to buy it as long as they paid for his services because I didn't need him. If they needed his help to find a house, they should pay for that service. Yeah yeah, I know the other side of that argument, but don't waste my time trying to convince me that he's doing me a service as well. One word: Zillow.

Anyway, I ended up selling to a woman who didn't have a realtor and she paid full price because I was willing to be flexible with the whole transaction. She had a few special circumstances that I took time to properly vet and things have been totally smooth. I always use a real estate attorney to draft my contracts and I'm at a 100% success rate with no issues. People are always surprised that I'm able to do it without a realtor, but they just haven't stopped drinking the koolaid yet. Once you realize how fucking worthless they are, it's like a feeling of total and complete enlightenment. Middlemen are the bane of humanity.

For every story like this, there are way more on those who wished they hired an agent or an attorney.

Many people can't even handle their own taxes.

Most agent fees can be negotiated esp in today's market...who may have to shop agents though.

 

[JMapleton]

For every story like this, there are way more on those who wished they hired an agent or an attorney.

Many people can't even handle their own taxes.

Most agent fees can be negotiated esp in today's market...who may have to shop agents though.

MrDudeMan is the dude who roofs his own house, paints his own gutters, fixes his own car and then tells the 90 year old lady next door she's an idiot for not being able to do it herself.

Some people have different skill sets. Some people need realtors. I personal would not because I follow real estate closely. But I know some do need them.

 

[KeithTalent]

I don't need one for buying really, it's pretty easy to figure out what I want and need, but for selling I definitely use one. No way I have the freaking time to do showings and all of the other crap. I am fine paying someone to remove a lot of those headaches for me and to save me a tonne of time.

KT

 

[edro]

I sold my house for $250. You can list it through a listing agent for a flat rate.

Still had to pay the buyer's agent 3% though.

 

[jpiniero]

I sold my house for $250. You can list it through a listing agent for a flat rate.

Still had to pay the buyer's agent 3% though.

I hope the new owner can afford the $1.53 monthly mortgage payment!

 

[rh71]

4% when we sold and bought in 2010. 2% each side, which is then halved by their agency too so 1%. And it could take almost a year to sell/buy. Actually the house we bought was over 1 year since it was only a 2 bed (which we expanded to 2800sqft but you could see it takes the right buyers to come along).

 

[BoberFett]

MrDudeMan is the dude who roofs his own house, paints his own gutters, fixes his own car and then tells the 90 year old lady next door she's an idiot for not being able to do it herself.

Some people have different skill sets. Some people need realtors. I personal would not because I follow real estate closely. But I know some do need them.

Fuck lazy bitches. Who needs middlemen? I mine and refine my own ore, design and manufacture fucking cars from the ground up. I bet that bitch MrDudeMan pays other people to get his cars premade.

 

[BikeJunkie]

Fuck lazy bitches. Who needs middlemen? I mine and refine my own ore, design and manufacture fucking cars from the ground up. I bet that bitch MrDudeMan pays other people to get his cars premade.

I don't care if he performs his own brain surgery. Everything he said about realtors is 100% spot-on.

 

[BikeJunkie]

Figure in the way that the government taxes real estate agents also. My fiance was taxed at 36% after you account for all the write offs that she qualifies for. Nothing like pulling in $50k and having a net of $18k at the end of the year. She would be better off working a regular 8-4 job with how horrible self employment taxes are.

50k at 5% brokerage fees, after paying a referral fees and giving the company she represents their cut was just shy of $3,000,000 in sales. I don't really think that $50k is that much money to manage the sale of $3mil in assets and I think $18k net is ridiculous for how much she works.

Your fiance is lying to you.

First of all, I'm self employed and don't pay near that in taxes. Not even close, and I'm sure she has twice the write-offs I have, if not more.

Second of all, $3M in sales (not managing the sale of assets, by the way - LOL if you think that's what she does) translates to far more than a $50k net. Press the little window button on your keyboard. Type "calc". Then multiply 3M by .01 (an insanely conservative figure for net commission). Hell, figure .5%... or even 0.25%. Oops! I think you and your fiance need to have a little chat.

Lastly, where do these mysterious 8 - 4 jobs that pay more than $50k exist?

 

[EMPshockwave82]

Your fiance is lying to you.

First of all, I'm self employed and don't pay near that in taxes. Not even close, and I'm sure she has twice the write-offs I have, if not more.

Second of all, $3M in sales (not managing the sale of assets, by the way - LOL if you think that's what she does) translates to far more than a $50k net. Press the little window button on your keyboard. Type "calc". Then multiply 3M by .01 (an insanely conservative figure for net commission). Hell, figure .5%... or even 0.25%. Oops! I think you and your fiance need to have a little chat.

Lastly, where do these mysterious 8 - 4 jobs that pay more than $50k exist?

3,000,000 * .02 = 60k
I've worked in a position where I made over 50k working 8-4 and didn't have a single responsibility after I left work. I have several friends who aren't far from 8-4 and make in the 40k-70k range depending on what they do.
She made just over $50k gross and her "taxable income" was just over 18k and she ended up paying a little over $6300 in taxes. (6300/18000 = .35)

You have absolutely no idea what you are talking about.

 

[NetWareHead]

2. Many real estate agents think they're attorneys / contract experts. You know who doesn't charge 6%, but rather $300 and IS an attorney / contract expert? AN ATTORNEY. An agent who thinks they know contract law is fucking dangerous and a total liability to their client. Seriously, people don't need real estate agents, they need real estate attorneys who actually know WTF they're talking about; you can have their expertise (which is also backed by malpractice insurance) for a fraction of the cost you pay for that 45 year old washout who's on their 7th career path.

Many of the contracts/agreements that an agent asks you to sign are already pre-written and reviewed by lawyers for errors etc...

Furthermore there is an attorney review period where both parties have the opportunity to consult their own lawyers and review what they are signing.

Any RE agent I have dealt with, always made the upfront disclosure that they are not attorneys and reminded plenty of times to allow for our own lawyers to review the deal.

 

[BikeJunkie]

3,000,000 * .02 = 60k
I've worked in a position where I made over 50k working 8-4 and didn't have a single responsibility after I left work. I have several friends who aren't far from 8-4 and make in the 40k-70k range depending on what they do.
She made just over $50k gross and her "taxable income" was just over 18k and she ended up paying a little over $6300 in taxes. (6300/18000 = .35)

You have absolutely no idea what you are talking about.

You can't seem to get the story straight on her taxes and income. You said:

Nothing like pulling in $50k and having a net of $18k at the end of the year

That says "I started with 50k, and after taxes I was left with 18k." Naturally, I called bullshit. But now you're saying 18k was her taxable income. BIG difference there, bud. In other words, 6300/50000 = 12.6%, not 35%.

I think her "reator's math" is rubbing off on you

Regardless, why doesn't she take up one of these other magical jobs (the titles of which you've suspiciously omitted from your response)?

 

[BikeJunkie]

Many of the contracts/agreements that an agent asks you to sign are already pre-written and reviewed by lawyers for errors etc...

Correct, but those are never the problem areas of the contract, anyway. The issues come in when realtors hand-write special contingencies and/or demands that go outside the framework of the original contract. And the wording they often use in these scenarios, from a legal standpoint, is bloody hilarious.

Realtor: 6%, no legal expertise, no recourse when their advise or inability to write a proper contract fucks you silly

Attorney: $300 (max), insurance-backed legal expertise, plenty of recourse if they foul up

 

[rh71]

a few things from the last few posts...

- here in NY attorneys are req'd at closings and they run $800+ and often $1500 for the good ones (extremely helpful along the process anyway)
- buyer agents are helpful - in that they can set and manage schedules. For many people they only have time to look at houses on weekends so that's 6+ houses for 2 days with varying schedules from listing agents (their busy days) so not having to have those headaches is a big plus.
- as a seller, we want (more like NEED) to be listed on MLS - which means realtor.
- as a buyer, may as well use a buyer agent since they're free. That is unless not having one would mean the listing agent can reduce the commission for the seller which they may pass that savings onto you (not likely).
- buyer agents are commonly thought to work for the seller since the money comes from the seller/price, but if you think about the difference in $ they pocket between a 500k and 550k sale after their 2% is split again with their company, it is not substantial ($500). They would rather do good by you and make more "tens of thousands" via new and repeat client referrals.

 

[NetWareHead]

Correct, but those are never the problem areas of the contract, anyway. The issues come in when realtors hand-write special contingencies and/or demands that go outside the framework of the original contract. And the wording they often use in these scenarios, from a legal standpoint, is bloody hilarious.

Realtor: 6%, no legal expertise, no recourse when their advise or inability to write a proper contract fucks you silly

Attorney: $300 (max), insurance-backed legal expertise, plenty of recourse if they foul up

And thats why you have an attorney review period to make sure what the RE agent wrote in is kosher. And to make sure the pre-written contract is also kosher. I don't know about the RE agents you have dealt with, but many of the brokerages have a lawyer/legal team that can advise agents and clients of any adhoc changes or "write-ins" to the contracts. And of course, you are still free to use your own lawyer to make sure of all of this.

Your example about using a RE attorney instead of a RE agent is an apples to oranges comparison. An attorney is not going to take the time to show listings, take pictures, open houses etc etc... If he/she did that, that would make them an agent. Attorneys have better things to do.

 

[EMPshockwave82]

You can't seem to get the story straight on her taxes and income. You said:



That says "I started with 50k, and after taxes I was left with 18k." Naturally, I called bullshit. But now you're saying 18k was her taxable income. BIG difference there, bud. In other words, 6300/50000 = 12.6%, not 35%.

I think her "reator's math" is rubbing off on you

Regardless, why doesn't she take up one of these other magical jobs (the titles of which you've suspiciously omitted from your response)?

Look guys, someone who has never misspoken in their entire life.

Actual tax rate after write offs was nearly 35%.

I didn't suspiciously omit any titles. You never asked for any. I'd have to ask exactly what some of their titles are as companies have their own way of doing things.
1. Data Analysis
2. Advertising sales
3. Loan officer
4. Project Analyst - IT Support - $48k (my last job)

Thanks for calling people a liar, being proven wrong, and then not being man enough to acknowledge it. I'd continue with this nonsense but I worked all night. I'm tired and I don't care enough.

 

[BikeJunkie]

I sold my house last month and wanted to interject some of the funny the buyer's agent provided us, but couldn't find the original offer letter. My attorney emailed it to me. Here you go:

1. "Buyers to retain possession of home on the day of possession"

2. "Surround sound system to stay"

Ultimately it cost us about $280 to just have buyer's agents send contracts to him. He would review and then forward to us with his recommendations. Very painless process. So:

1. What the fuck does that even say? He had to get her on the phone to figure it out. She was trying to establish that possession of the house was to take place immediately. He modified it to give us 4 days, and managed to state it in a manner that actually said what he meant.

2. We have two surround systems in the home: 1 in the basement (in-wall speakers) and the related components in a rack, which itself sits on the floor. The second in our great room, which are not in-wall and are all free-standing. We figured she probably meant the in-wall speakers in the basement, but her wording was so ambiguous it could have meant anything. She got pissy with our attorney when he tried to make the contract specific. She said something along the lines of "of course we just mean the speakers." Well you dumbass, this is a LEGAL CONTRACT, not a stupid agreement being forged on a street corner late at night for $20.

 

[BikeJunkie]

And thats why you have an attorney review period.

No shit. But the general point being made here is why even bother with the agent in the first place?! You most certainly need to bring an attorney into the mix anyway, why not save yourself tens of thousands of dollars since he's going to be doing the meat of the agent's work anyway?

Can you take pictures with your camera? Do you have internet access? Can you find yourself an attorney? Guess what: you don't need a $30,000 real estate agent.

 

[NetWareHead]

No shit. But the general point being made here is why even bother with the agent in the first place?! You most certainly need to bring an attorney into the mix anyway, why not save yourself tens of thousands of dollars since he's going to be doing the meat of the agent's work anyway?

Can you take pictures with your camera? Do you have internet access? Can you find yourself an attorney? Guess what: you don't need a $30,000 real estate agent.

And the point made in this thread is that Agents provide a service that is considered valuable by many people. If you dont need one and can list/show your house yourself then that is absolutely your choice.