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

[randomrogue]

What do you mean by the first and second points? Not trying to be argumentative but I've got a feeling that the US market works very differently to the UK one.

Do you not use websites like http://www.rightmove.co.uk? Why would other estate agents need to see it if the general public can just look it up?

I bought my present house by knocking on the door and sorting out a viewing on the spot.

The US doesn't really do that yet. That's what I was talking about earlier.

Step 1: Go on the web and look at your local/national website for listing properties. Use the search filters to find properties that fit what you're looking for.

Step 2: Contact the buyer or go to the dates they're showing.

Step 3: Once you find the property you want, buy it. Sure get a lawyer and do it properly but there is no need for some guy in a Mercedes to drive you around telling you "This is fabulous! Prices are rising! You should buy right now!"

In the US we try to keep things "secret" or make them seem complicated. However now you can list on the MLS for a nominal fee without going through an agent.

That means that you can buy and sell using the internet like people do overseas but people still think they NEED an agent. In some cases this is true though. There's no way my elderly parents could relearn how to sell a home at this point. They're way too stubborn and would rather pay the extra money.

 

[BoberFett]

Why do you keep resorting to putting words in people's mouths? That's not what he said. And you're not stupid: clearly you know that buyers have access to the Internet, too, right?

I'll ask again: what is/are your relationship(s) to realtors? Time for some disclosure here. We take the time to refute your points, you offer no counter argument of any substance, and just move on to the next platitude. Come on man, you're better than this.

I was in real estate for a while. Burned out on IT after many long years as a developer, tried real estate during the boom and bust, back in IT management now.

I'm not putting words in anybody's mouth. 20 showings in two weeks means that buyers were interested in the house based on an initial internet/MLS listing, then wanted to see it in person. So clearly the internet listing did what it was supposed to, generate interest. Then you need to show it in person. If those people don't have realtors who are being paid to do their work, then it means you're doing that work yourself. So in fact the fact that some people can sell FSBO is reliant on the fact that buyers have an agent, or want to do it themselves.

Those aren't words in anybody's mouth, they're simple statements of fact.

 

[Greenman]

It's delusional to think most agents are making $1000's / hour. Many homes are sitting on MLS for 100's of days. There would be a lot of time put in over that time period.

If one has the time to burn, so be it. There are agents out there struggling to make ends meet.

They're struggling because there are far to many agents for the number of homes sold.
Average time on the market in my county is 22 days, average selling price is $970k. Thats just under $60k the two agents split, and right around $1300 a day each. So 3 sales a year, 66 days of work, pays your bills. Thats 3 months working normal hours for a gross income of just under $90k. The reason it doesn't work like that for most agents is because there are 4 of them for every home sold.

 

[MrSquished]

It was only the 3rd home she showed me after she had been my realtor for 2 weeks.. soo0o0o no probably not

they have it right. not that you are a pain in the arse but that you probably had unrealistic expectations. part of our job is to know the market and if we know what you want at the price you have to pay, sometimes we will show you a property so you can see that perhaps what you want at the price you want it is just not realistic.

nothing wrong with that, nor is it insulting, it's called a realtor doing their job.

 

[alkemyst]

They're struggling because there are far to many agents for the number of homes sold.
Average time on the market in my county is 22 days, average selling price is $970k. Thats just under $60k the two agents split, and right around $1300 a day each. So 3 sales a year, 66 days of work, pays your bills. Thats 3 months working normal hours for a gross income of just under $90k. The reason it doesn't work like that for most agents is because there are 4 of them for every home sold.

None of us have proof of that.

 

[alkemyst]

No one said they're making thousands per hour. You're confused.

If I list my house with a realtor, it COSTS me thousands per hour compared to if I would have listed it myself. An agent selling a house doesn't have a ton of time committed to the sale even if it's on the market for hundreds of days. They spend some time doing paperwork and helping you get the house ready to sell, but then they do very little especially as a seller's agent. The amount they collect as commission is spread among various other parties, so while they aren't making thousands per hour, it's still costing me that much. Buyer's agents are more invested in terms of time, so that's different in concept, but not in practice imo.

Maybe I spent relatively little time selling my house (approximately 30 hours not including the services I purchased (stager, cleaners, etc.)), but it didn't feel that way. The house I sold before that moved in a similar amount of time, but it cost less so the savings wasn't quite as high (still over 700/hour, though).

I have almost no free time to burn. I can make time for the this, though.

You need to re-read everything.

It's great you can MAKE time.

I need that fucking magic.

 

[Aharami]

Relevant http://techcrunch.com/2014/07/07/opendoor/?ncid=twittersocialshare

 

[MrSquished]

I think the overarching problem a lot of people have with realtors is that there really isn't any skill involved, and as time goes on, the complexity (or the false front of complexity) is disappearing as well. Some guy earlier in the thread parroted on about how realtors can push your home sale to "hundreds of websites" or some nonsense. Yeah, it's called "MLS", and those "hundreds of websites" pull from MLS. There's no voodoo there, but realtors would have everyone believe that their craft is that of mysterious black magic that only a select few are capable of. Not so.

some sites pull from the MLS but not hundreds. the NYT or Wall Street Journal are certainly not mining the MLS, which we push to. in addition i know agents who spend their own money on addtional services which get their mls listings pushed out to even more sites than our firm does already.

and i get sent leads from Zillow and Trulia - 50% at least are not up to date. half have been sold or taken off of the market. i've seen so many errors on those sites it's not even funny. but they are decent starting off tools.

we get you think realtors are worthless, and some are for sure, but you don't know john Q public. it's great that some people do have the smarts and research skills, and time, to buy or sell on their own. go for it.

but guess what, a lot don't. they need a realtor. and some that can? well they don't have the time. unfortunately for you, realtors are still a necessity. i know that bothers you but it's just the truth.

 

[MrSquished]

They're struggling because there are far to many agents for the number of homes sold.
Average time on the market in my county is 22 days, average selling price is $970k. Thats just under $60k the two agents split, and right around $1300 a day each. So 3 sales a year, 66 days of work, pays your bills. Thats 3 months working normal hours for a gross income of just under $90k. The reason it doesn't work like that for most agents is because there are 4 of them for every home sold.

ok so you pulled an average days on market number and did some math.

guess what, markets change. DOM changes all the time. you can't just pick one static DOM and now extrapolate that across all agents.

an average market is about 5-6 months absorption rate - which is how many months it would take to sell all available inventory in that market. anything under 3 months is a sellers market. 1 month is pretty nuts.

anything closer to 7-8 months, that's a buyers market.

the market fluctuates between all those points. you can't just take your current 22 day DOM and apply it to anytime anywhere. it's ridiculous.

 

[rh71]

My wife and I used a realtor to buy our first home. She was ok. We were a young naive couple and were ripe for the picking. IMO she pressured us into the sale, even when we raised a concern about having the funds available for the closing. She asked us if we could borrow from our parents? The was the first red flag. We did an inspection (built in 1943) and the home came back up some slightly major things, but she didn't make any recommendations on getting any of it fixed by the current owner. Red flag #2.

You didn't interview your prospects did you? You just took anyone and asked them to work for you?

 

[FelixDeCat]

Yeah, the whole real estate agent thing is bordering on a major scam / fraud. We need Obama to write an executive order limiting commissions to no more than $500 + reimburse expenses.

Take it or leave it.

ps. You have to remember, back in the day mortgages ran something like $10,000, $25,000 or really expensive homes might have a $100,000 mortgage (1950s - 1970s). Back then a high percent was more acceptable because at most we were only talking $500 + expenses.

Nowadays with 'investors' paying ridiculous prices for real estate ($700,000, etc), those fees are just plain robbery.

 

[LegendKiller]

I don't think realtors are worthless, but I don't think they should get 6% of the price without limit. If I look at how much that adds up for my house, especially once you add in both sides, it's a ridiculous amount paid for what essentially amounts to graft at a certain point.

 

[xeemzor]

Is there anyway to negotiate a lower fee on high dollar properties?

 

[MrSquished]

Is there anyway to negotiate a lower fee on high dollar properties?

i see 5% a decent amount of the time. this is in NY metro. don't really see many 4% but you do rarely.

 

[alkemyst]

I don't think realtors are worthless, but I don't think they should get 6% of the price without limit. If I look at how much that adds up for my house, especially once you add in both sides, it's a ridiculous amount paid for what essentially amounts to graft at a certain point.

Well it's usually 3% to any one entity, it's rare the listing agent and selling agent are the same firm.

 

[alkemyst]

Is there anyway to negotiate a lower fee on high dollar properties?

There is a way to negotiate always.

On high dollar properties most just look at the commissions as sale tax and want that property sold so they can get out of the maintenance and other needs those high dollar properties have.

Your view of high dollar and mine may be different.

 

[LegendKiller]

Well it's usually 3% to any one entity, it's rare the listing agent and selling agent are the same firm.

I dont really care who gets it, the total amount is just stupid.

 

[alkemyst]

I dont really care who gets it, the total amount is just stupid.

People think tipping is stupid.

Cars that cost more than a few hundred bucks stupid.

etc.


If you don't agree, choose to figure it out on your own.

It's usually less than sales tax for most on their largest purchase in their lives.

I have dealt with terrible agents. My parents had (at the time) a good family friend that was an agent. My dad put her name down on a house he picked out in a new community (it didn't cost him a dime). She got about $10,000 nearly a decade ago and she never did anything.

He wanted her find a renter his townhouse and she asked him for $2000 to do it. My dad and myself stopped talking to her. She makes easily a few hundred thousand a year. She has no manners.

Fortunately just word of mouth and the location was great got his townhouse rented.

Unfortunately, renting wasn't that great on a high value property. My dad just sold it the following year and cashed out.

 

[BikeJunkie]

I was in real estate for a while.

No shit?

 

[BoberFett]

No shit?

Blow me.

Are you that asshole with a shitty haircut telling hairstylists that they should eliminated just because you discovered the Flowbee?

Shit, think if everyone saved thousands of dollars in a lifetime that way.

Barbers should be outlawed.

 

[randomrogue]

Tipping and paying for a real estate agent are kinda different things regardless. If anything the need to tip is testament to people not receiving a living wage by their employer.

 

[BikeJunkie]

Blow me.

Are you that asshole with a shitty haircut telling hairstylists that they should eliminated just because you discovered the Flowbee?

Shit, think if everyone saved thousands of dollars in a lifetime that way.

Barbers should be outlawed.

Yay more strawmen! I see I struck a nerve, though. Come on, you need to get back to your old objective self and recognize that you have a helluva horse in this race (personal pride and ego, to name two) and it's severely coloring your perspective. Like I said before, what you've said in this thread rests in stark contrast to your political and economical beliefs, and I'm not the only one who noticed it.

But since you're probably not going to be climbing down off that horse, let's put this to bed: You used to be a realtor. You don't want to feel bad about it. Got it :thumbsup:

Now go find me more Dwight Schrute pics.

 

[BikeJunkie]

Tipping and paying for a real estate agent are kinda different things regardless. If anything the need to tip is testament to people not receiving a living wage by their employer.

Pfft... look at you with your newfangled logic and common sense and stuff... you knock it off you *fingerwag*

 

[NetWareHead]

I was in real estate for a while. Burned out on IT after many long years as a developer, tried real estate during the boom and bust, back in IT management now.

I'm not putting words in anybody's mouth. 20 showings in two weeks means that buyers were interested in the house based on an initial internet/MLS listing, then wanted to see it in person. So clearly the internet listing did what it was supposed to, generate interest. Then you need to show it in person. If those people don't have realtors who are being paid to do their work, then it means you're doing that work yourself. So in fact the fact that some people can sell FSBO is reliant on the fact that buyers have an agent, or want to do it themselves.

Those aren't words in anybody's mouth, they're simple statements of fact.

Great point right there. You may refuse to use a realtor bc you can do the work yourself but the buyer of your property may have been exposed to your house via a realtor.

 

[BikeJunkie]

Great point right there. You may refuse to use a realtor bc you can do the work yourself but the buyer of your property may have been exposed to your house via a realtor.

That kind of falls under the "obvious" category. If they were brought to your house via a realtor, it's really of no consequence. Things will still move 50% quicker than if you both had realtors, and you'll be out 3% versus 6%, provided you're willing to co-op (which I always have; it's worked out quite well).

What we have here in this thread are the standard talking points that are passed around at your local monthly realtor's meeting. Note that they completely lack substance. You have several people in this thread who have FSBO'd numerous times, and continue to do it because it's easy and far more profitable (and comparing realtor's fees to tips is stupid and absurd). If you've tried using a realtor several times AND tried FSBO several times, then by all means, tell us all about your experience. But if you've only used a realtor (or you've only BEEN a realtor), then you haven't a leg to stand on.