Buyers didn't used to come out of pocket for it. Now that a buyers agent might effectively double closing costs (as we're seeing here) there will definitely be more unrepresented buyers, and more agents moving out of the industry as that happens.
> Pay me 7k to unlock 1-5 houses you find yourself on Zillow, and in return I'll pay my buddy to 'inspect' one and make a half-dozen phone calls on your behalf.
Do listing agents now need a buyer agency agreement signed if they show a prospective buyer the house? Cause this settlement seems to say realtors now need a buyers agency agreement signed that says what they will be paid by the buyer before showing any houses.
I've gone this route for a long time. Buyer's agents have been 95% dead weight since online listings came out. If you use the seller's agent they really want to make a deal with you as they get double commission.
In some states they end up changing into a transaction broker and that will change what level of duty he owes to each participant so they get to sort of ignore that in a way.
Dual agency has always existed as a conflict of interest. Thats why all parties involved have to agree to it. An agent can’t represent a seller and a buyer in the same transaction without informing the buyer that he also represents the seller and vice versa. Some people don’t want their listing agent representing the buyer because, again, it’s an inherit conflict of interest
> An agent can’t represent a seller and a buyer
I think you're missing his point, which is that the agent works in the agent's interest, not the buyer's nor seller's.
Yeah because the seller would pay. So really the seller didn’t have a chance to negotiate the buyers commission cuz if they didn’t advertise the 3% then buyers agents wouldn’t show the houses to their clients.
I tried selling FSBO with no buyers agent commission and it was a huge pain and only unrepresented buyers came by. Literally no agent brought a clients, just vultures trying to convince me to use them as a listing agents. Was so damn annoying, I hope this law makes it easier to FSBO.
You do realize no one is forced to hire a Realtor, right? Despite impressions, we don't own the houses and don't get to decide how or when they get sold, nor for how much. People choose to hire Realtors because it's a large financial purchase with many legal documents and soft skills involved. You're more than welcome to debate the value proposition, but it's nonsense to suggest getting rid of Realtors when they aren't a requirement to begin with. If you don't like Realtors, don't hire one. Problem solved.
Exactly this. True real estate professionals will thrive. Part time or those who are just not cut out for it won’t.
Agents may have to work a little more but they’ll have more demand for their services once agents start dropping like flies.
Any agent that can conquer economies of scale will be able to be efficient and effective to make more money.
Absolutely, too many people hang around the profession just so they can collect one off big paydays when their bestie or cousins stepbrother needs a buyer's agent.
Take away that big payday and require volume to earn the same paycheck and they will all drop out and leave their aunt's boyfriend to be represented by an actual professional.
this is exactly what travel agents were probably telling each other when the internet, Expedia and direct booking became a thing. I'm thinking the flat fee will be more like $999 unlimited showings and negotiation.
I'm wondering what you mean by this in layman's terms?
I just begin preparations to begin training to become a real estate agent. I find the timing of this... Interesting, to say the least.
But in all things, there's usually a balance, and with that comes opportunity. And I'm not going in with any preconceived notions/expectations.
I don't even fully understand the changes being made or how they're going to affect the average deal. Just hoping to find an understanding of how to approach things as I learn.
Nothing is going to change dude. All realtors, list and buy side, will continue to operate completely as they have been. The NAR took the bullet for everyone for “requiring” this. Now all the realtors are just going to do it on their own to maintain the monopoly.
Nothing changes.
This whole thread is thinking about this thing the wrong way. The online giants are going to set up their own title companies and contract local inspection services to streamline the entire process and make the agent mostly irrelevant.
In other words the rich get richer, and more middle class service jobs are being destroyed. yet for some reason reddit seems to love everything about it. the only people these new rules will help is the corporate landlords and house flippers. The average joe buyer will see much shittier service, and at the end of the day probably won't save any money.
Oh please. Realtors have been colluding to keep commissions artificially high for years. It’s obscene and far above the value of the actual service provided.
The seller benefits. Lots of people own homes and don’t want to pay 6% of Their money just to sell their house. I’m going to offer 1% to the selling agent and that’s it. And that’s overpaying them compared to how much work they do.
Its a sales problem. Quantify in terms of homes seen across all your buying clients. You probably need to take buyers to 30 homes to complete a sale. This is because you'll do 5 homes with 1 buyer and they decide to pull out. You do 5 homes with another and they can't quality. You do 10 homes and they can't find what they like. In aggregate every 30 homes, you'll sell one. Maybe some agents will have a better rate.
So the commission on that 1 home is actually the effort across all clients. Is that fair to the person actually buying the house, of course not. So then buyers will need to pay an agent a per-home visit fee? Want to remove the buyers agent but then who will responsibly accompany strangers into your home? What happens if something is stolen or damaged?
Like, I get that agent fees are extreme, but whats the solution?
Don’t you need to be a realtor to have full MLS access? Zillow could really cut out the middle man here.
Our realtor gave us MLS access and the interface was awful compared to Zillow.
Yeah but even then, what are they going to charge? The median home price is 416k in 2023. 416k * .06 is 25k. Is Zillow going to charge $25k to use the site? Half of homes sold would have yielded more than that. Actually criminal.
It’ll be free to use the site for most people. They could make their money in the ways I outlined above.
The sale price of the home won’t affect Zillows cost, because the work is the same, regardless of and sale price of the house.
Preach. My girlfriend and I were looking in a specific area of the city. Roughly 2 sq blocks. I went on Facebook and Nextdoor. Said I was buying on that area and found a transactional broker who would do it for 2k flat I pay all. Easiest 850k I’ve ever spent. I had an inspection in a competitive area. Got a house after about 6 months of waiting and reposting. Off market. Seller got more money. I saved money. Real Estate Agents are not worth any more than about 2k.
Eh, the site will still be there and free. They might get into the flat fee agent business model, but they have many other revenue streams (mortgages, rentals, etc)
Have you bought a house? Zillow doesn’t update instantly. I bought my home the day it went up on the market and had an offer accepted the next day. Zillow still showed it for sale for about a week and a half after including showing an open house four days after my offer accepted .
My guess is the majority of buyers will stop using agents. It’s going to cost too much. This guy wants $1400 to show a house. Some people look at tons of houses before making an offer.
Yesterday that money ended up as part of a mortgage loan. Tomorrow it’s not going to be part of the loan. So it’s more out of pocket cash buyers need if they opt to use a realtor.
some shady landlords are about to unload their shithole properties as soon as they understand the new buying habits. List the place in a way they get first time buyers, that don’t have realtors advising.
That's funny, are you only 2 years old? Because the rest of us were alive during covid and saw the buying agents letting their clients walk into these money pits AND telling them the only way to get the winning bid is to waive inspections, something other countries make illegal.
Nah this guys expectations are gonna come way, way down and they’ll be more in the $50-100 range, if that. Or a la carte services, doing comp analysis for a fixed fee.
Or they’ll finally just make an app that lets buyers open the door themselves, shouldn’t be that hard.
showami.com - is like early days of Uber app but concept is there. You can pickup a showing and all the agents are contracted to do is open the door. Level of service ranges from opening the door to walking through. Some people really enjoying learning about a new home.
Right now have to be a broker to be able to use the app though.
If the mls’es (owned locallly by agents) decide to stop sharing with Zillow, you’ll have to walk into these agents’ offices to get re data. Ask me how I know. 😳
IF a company ruins their company, another company will take its place. If you think people want to drag their butt cheeks into an office, you are mistaken. Zillow will just allow people to start listing for sale by owner and take a cut of that, they aren't going to gate keep for real estate agents if agents cut them out.
I’m not cheering for this, I’m just pointing out that all those national apps rely on local agents, via their mls’es, cooperating and agreeing to share their data. It’s voluntary and there are ways to share some, not all, of the listing data as I comment above. It’s not a daydream - it’s the way a market near me works and has always worked. It’s done on purpose to strengthen the role of local agents.
Maybe there would be an outcry and some legislation passed if this caught on at scale as it does open up to claims of redlining and discrimination, frankly. But I could see it as a temporary defensive fallback by agents. I’m only commenting because we spent 2 years searching in that market recently and omg it was painful. We ended up buying in a nearby market that shares data fully, but that was just down to finding the right property.
Well, the way it works in my area is the mls shares some, not all, data with Zillow. So, you see the listing and price and any price changes. But you cannot see the listing status (active, u/c, etc) and you rarely see the closing details (that it closed (vs delisted), price, date). So the seller gets exposure for the listing, but the buyers must have an agent in that particular mls to see history or status or details. And they really prefer you to stop by the office physically. There, you can get a print out of recent sales. lol. A print out.
It keeps the agents central to the transaction. You can’t get comps without the sales histories even if you decide to try to contact the listing agent and go it alone. Oh, and the county records are behind a paywall. And I can’t get that old clumsy system to work on my iPhone. The whole thing seems designed to keep tech out and agents in. And it works.
And this is done at all price points in that market. 🤷🏻♀️
Yes, this person is wrong. What they are describing will not work large scale. It may work for High end properties, it will not work for the vast majority.
When I worked as a licensed RE agent my best buyer deal concerning a big paycheck played out like this. I was on leads that afternoon so all the phone calls/emails came straight to me. A call came in. Women said she and her husband wanted to check out a house for sale they saw online. Their budget about $800K… pretty good lead. Immediately nervous I’m gonna screw it up. I set up the showing and researched the property and ran comps = 1.5 hours. Round trip to showing = 1.0 hour. Showing plus discussion after showing = 2.5 hours. They said home wasn’t for them. No biggie. We connected. They were nice. I said I’d keep an eye out on things for them. Two weeks later she calls again. Wants to see another house. Set up showing, researched home and ran comps = 1.5 hours. Round trip to showing = .5 hours. Yay, closer to my house. Showing plus discussion after showing = 2.0 hours. This is the one! Write offer. Gets accepted. Open escrow. Run escrow without a hitch. Buyers = professional. Sellers = professional. Close escrow. It’s only an estimate but during escrow I probably logged around 14 hours and that includes being present for inspections and what not because I took my duties serious! So, approximately 23 hours on this deal. $765,000 sale price at 2.5% was a $19,125.00 commission. My cut from the brokerage was 65% of the $19,125.00 which came out to $12,431.00 or we could say $504.48 an hour. Like I said, it was the most profitable escrow I ever ran. Not all are like this at all but to say the commission situation is out of whack is pretty accurate.
Great breakdown! I get that driving to showings is real time that realtors spend towards securing a transaction for a client, but nearly everyone who doesn't work from home has at least a 0.5-1 hour round trip commute daily. And when the commute is that "reasonable" they generally don't bother to factor it into their hourly earnings.
I also don't understand how running comps for a single house can take 1.5 hours. It's just a search with filters. I had to instruct one of the agents I worked with on how to configure the queries I needed over email because she wasn't sending me what I wanted to see/know. And it took at most 5-10 mins to rewrite her queries for her.
Edit: I expect that realtors are also able to gain tax advantage for vehicles/mileage they use for work, but I'm not sure about that.
That's fair, but generally if I was seeing multiple houses in a day they were all pretty close to each other. I'm also curious what kind of tax breaks realtors are entitled to for their vehicles. I imagine it's not insignificant. Regular wage earners don't get tax advantages for the daily wear and tear they put on their vehicles to get to work, or for the fact that the majority of time they spend in their car is spent on work-related commuting.
As far as drive time I agree with you. Just about everyone who has a job has to commute. I just included it to add to the hours on that particular deal.
Comps… I worked in an area where there were no two homes alike… period. It’s not just a search with filters lol. If I did that I’d been a shitty agent. I know I spent more time than average for sure but creating good comps where I worked was challenging. Also, I wanted to know everything about each house that sold (or didn’t sell). I wanted to know the neighborhood. Any developments that could affect the future value the home. Any plans the city or county had. I was thorough. So, if you only spend 10 minutes creating comps I feel bad for your clients and that’s why I will continue to say that real estate agents are way overvalued.
I appreciate that regarding the comps and other research. That makes a lot more sense. And it sounds like you bring a significant amount of value compared to the average buyer's agent. The issue is that even the garbage agent I was referring to has been charging/"entitled to" the same exact commission as you. She legitimately just sent me the last 3 months of sales within 0.5 miles, sqft range of 100% - 175% of the one I was offering on and said those few houses are why I should offer $X.
You could argue people need to choose better agents, but it's really difficult to tell how good they are until you're making an offer. And by that time they have you signed to an exclusivity agreement. Good realtors exist, but the industry is poisoned by incredibly low barrier to entry, low standards, and ethically shady practices.
The way realtors don't pay tax is by starting a llc and sending all their money to that llc, they then pay themselves as marketing consultants from that llc. Charge everything to the llc. I worked for a realtor who made 700k and barely paid anything compared to your average 1099 independent contracting taxed earner. It's hard to be a good realtor. He had to spend around 100k on ads and services to make that money. With that said, it's a total racket they are running, though.
100% a racket. The internet has made the most important service they used to offer obsolete. And instead of adapting, they chose regulatory capture, gatekeeping prospective buyers/sellers, and unethical practices to continue growing their bottom line.
In my state, real estate sales data is not publicly available. The only way to get data on comps is to sign a contract with someone who has access to MLS or figure out how to buy access yourself. And then you'd still have to figure out how to tour a home you're interested in because sellers agents can't be bothered with showing the house they want to sell except for a 2 hour open house.
Additionally, agents I worked with either outright refused to tour any FSBO homes or steered me extremely hard away from them. While steering me very hard towards dual agent scenarios or homes listed by the same brokerage.
Edit: re-read your comment. So it's way beyond getting mileage-based tax deduction. Every single expense they incur can be written off. The entirety of car payments, gas, vehicle maintenance. And also season tickets and county club memberships to "network" with their realtor buddies.
In a buyer's market, inspectors offer a great bargaining chip. Finding tons of things wrong that the buyer can then use to negotiate down the price. In a seller's market, agents are going to want The deal to go through as quickly and smoothly as possible. That means no big surprises or for that matter piddly issues on the inspection report That might scare away the buyer.
Most people don't use a travel agent and use a website like Expedia. Many people do their taxes on TurboTax. This isn't the 80's. Why are we still using a realtor in 2024?
Is most countries, people don't do their taxes at all. You get a bill/refund at the end of the year. You are free to argue over the bill, but you can just accept it.
They claim it’s to do paperwork and make sure everyone’s in sync. So their job is to let you in a house you want to see, created a saved search on a website you could create the same search for yourself on, and negotiate / make sure the contract doesn’t screw you. Except they farm out the contract side OR don’t know what they are doing there because they aren’t lawyers to begin with. Tech can handle most items on the list, a lawyer can handle the contract side
Why were they using them in 2014? The tools and other options have existed for a long time if they wanted them.
I would say the Tax one is a good analogy but for travel there really isn't risk like you get from Taxes or Real Estate.
> Why were they using them in 2014?
Because the real estate lobbyists purposely make it hard to navigate buying/selling a home, to make it seem like you need them.
Same with Turbotax. They lobby governments to keep the code needlessly convolute, so that people pay to use their software each year. Filing taxes shouldn't take more than a few button clicks on a free website.
Because you need a realtor to access a property that’s the only gate they keep and it’s the one and only one reason they have to be used. You could do everything else they do for yourself or by paying someone like a lawyer for services
Why are you still using TurboTax in 2024?
FreeTaxUSA
And it's only $15 for state filings. TurboTax is a complete rip-off that upsells you at every point. Additionally, there software is obnoxious if you actually know how to file taxes. Just a bunch of annoying graphics with some bar going up/down to give you the impression that some deep-computational-intensive-work is going on in the background to maximize your return. Why they do this? Because they don't want you to \*\*actually\*\* know how taxes work. And that means mistakes can happen (But wait.... if you sign up for their audit-protection...you can be protected and get someone who 1) isn't a CPA and 2) isn't an enrolled agent).
Because from a buyers perspective it’s always been free.
Buyers don’t pay any of the commissions, sellers do.
It is possible that will change now? Sure, but until now from a buyers perspective it didn’t matter.
F-ing finally. These leeches no longer have a legal blood reservoir to suck. Let them actually work for a living.
So sick of seeing public servant realtors rake in money for doing nothing other than knowing people and opening locks.
Bye bye!
This post needs to be up higher and tattooed as a tramp stamp on OP's lower back.
DO NOT... ABSOLUTELY DO NOT.... USE A HOME INSPECTOR YOUR REALTOR RECOMMENDED.
PLEASE PLEASE PLEASE, ask around to find the best home inspector you can. Talk to everyone you know who has purchased a home. This will likely be your largest purchase in your lifetime so a quality home inspection is your first line of defense.
Knock about $6k off that price and increase 5 homes to "however the fuck many homes I need to see before I find one that works for me" and we might have a deal.
Let’s imagine that he researches all 5 houses for 1 hour each before the showing, 30 mins to travel there and back, and an hour showing (so 2.5 hours total showing each of the 5 houses). This accounts for 12.5 hours. Now let’s imagine he puts in 20 hours of negotiating and closing for a total of 32.5 hours. Now let’s double all of that and assume somehow he puts in a total of 65 hours. This still comes to an hourly rate of $107.69 which is absolutely wild.
As a hourly rate for *irregular* work, that's not completely unreasonable. If it were the same job, at guaranteed 40 hours a week, with full benefits, *that* would be different.
It's only irregular work because there are millions of realtors (more realtors than homes for sale). If compensation goes to something like $50/hr most realtors will find another line of work and things will adjust until the number of realtors is no more and no less than the amount that the local housing market can support. And then full time realtors will all actually have to work for a living the same way almost every other profession has to work for a living.
Now imagine he pays half his hourly rate to his brokerage and 16% off the top for payroll taxes because he's a 1099 employee. You're down to $45/hour, not accounting for business expenses, health insurance, etc. No one has to use a buyers agent or think they're useful, but there's a reality to the costs they incur that drastically reduce that hourly rate.
Realtors are useless and annoying. So idiotic that we are forced to used them. They get 3% commission to open a door and then bitch about how often I want to see the house that I’m BUYING.
This as is perfect. Perfectly shows how overpaid realtors are.
If realtors were paid hourly, as they should be, this guy would be making 1400 an hour. That's outrageous.
That’s more expensive than the cost of a Real Estate attorney. If you really want to pit one against the other, I’d always pay a good lawyer more than a consultant.
Or... Hire me and I'll kick 2/3 of the 3% commission back to you at closing.
I'm not paying for your inspection though. I'll print an inspection checksheet and bring a Harbor Freight flashlight and screwdriver for you to use.
As a buyer, it’s not a “flat rate” that I care so much about. It’s about aligning my interests to my agents. If they got a commission based on how much money they saved me, great. As it is, both the sellers, and the buyers agent want to keep the home price high in order to make more commission off the sale price.
It’s a similar challenge with lawyers. They’re making hundreds of dollars an hour, so in many ways, both sides are incentivized to drag out arguments and fights.
While there are a lot of bad agents that give the industry a horrible rep and some change is needed, I don’t see much changing for now.
Sellers are not going to lower the price of their house just because they don’t have to pay a buyers agent.. a house worth 450k will still be worth 450k..
If anything, it’s just going to drive down some of the demand by pricing out more FTHB, which isn’t good for either side.
On top of that, with more people negotiating for themselves and not necessarily having the insight or expertise when it comes what to look for, I do think more buyers could be taken advantage of.
If anything, this helps companies like Black Rock and Vanguard, who buy entire neighborhoods. If more FTHB are priced out, they win.
Lastly, we’re not all bad. Some of us actually want to do right by our clients and go above and beyond.
That being said, I do hope it weeds out a lot of the agents that are giving the industry a bad rep.
Its such a strange situation where RE Agents do a valuable and necessary service, but the prices they charge are NOT commensurate to that service.
Im glad the price fixing cabal has been shut down
That suuucks lol. Oh crap did I just prove that this whole thing was good for home buyers? I would rather pay zero for all that until I close. I looked at over 50 homes in 3 years. I saved a lot of money in retrospect
Real Estate agents are a low skill, high compensation job. And since the Feds neutered their ability to even say things like “ yes, this is a safe neighborhood with good schools”, which is so absurd that it isn’t funny, I am not sure what value agents can bring anymore.
I know most people suck but our lady was worth the money. She helped us see soooo many places and put up with a lot to get our home sold and a new one bought.
Well, it looks like she sold and bought for you. So she’s actually doing work. But if she was just helping you buy that she really doesn’t need to be paid by the sellers commission.
Thank god, now every single/divorced mom trying to prove a point to make it in Realestate, has to work more harder than just opening doors and printing papers
Good luck getting customers, about to get a wake up call called supply and demand.
What changed? There were always people who did it cheaper?
Buyers didn't used to come out of pocket for it. Now that a buyers agent might effectively double closing costs (as we're seeing here) there will definitely be more unrepresented buyers, and more agents moving out of the industry as that happens.
There’s a large difference between, “let’s get you in a new house, you pay nothing” vs “pay me 7k and then I’ll find you a new house”.
'you pay nothing' -- this was always sleight of hand that riles me up...but to your point, big marketing difference in these statements.
> Pay me 7k to unlock 1-5 houses you find yourself on Zillow, and in return I'll pay my buddy to 'inspect' one and make a half-dozen phone calls on your behalf.
You’ll see more dual agency. Listing agents will end up repping both the buyer and seller and receiving the full commission
Will listing agents refuse showings to buyers that won't accept them as dual agents?
Cannot. Or at least it’s not ethical. They have fiduciary duty to the seller. Easy lawsuit if they refuse.
Do listing agents now need a buyer agency agreement signed if they show a prospective buyer the house? Cause this settlement seems to say realtors now need a buyers agency agreement signed that says what they will be paid by the buyer before showing any houses.
I probably wouldn't hire a listing agent who did that.
I've gone this route for a long time. Buyer's agents have been 95% dead weight since online listings came out. If you use the seller's agent they really want to make a deal with you as they get double commission.
Problem is dual agency is in inherit conflict of interest. If a problem arises, who interest is the agent supposed to prioritize?
In some states they end up changing into a transaction broker and that will change what level of duty he owes to each participant so they get to sort of ignore that in a way.
The agent’s interest obviously just as it is now
Dual agency has always existed as a conflict of interest. Thats why all parties involved have to agree to it. An agent can’t represent a seller and a buyer in the same transaction without informing the buyer that he also represents the seller and vice versa. Some people don’t want their listing agent representing the buyer because, again, it’s an inherit conflict of interest
> An agent can’t represent a seller and a buyer I think you're missing his point, which is that the agent works in the agent's interest, not the buyer's nor seller's.
Buyers who go this route will wish that they hadn't. It's a massive conflict of interest that, IMO, should be illegal.
Dual agency shouldn’t be a thing. Someone cannot effectively work in the best interest of both parties, it’s a paradox
Some states don’t allow dual agency!
“Full commission” will hopefully be lower.
conflict of interest no?
This is already illegal I'm alot of states agents cannot duel represent
Not on the buyer side, there was no reasonable way for a buyer to negotiate commission.
Yeah because the seller would pay. So really the seller didn’t have a chance to negotiate the buyers commission cuz if they didn’t advertise the 3% then buyers agents wouldn’t show the houses to their clients. I tried selling FSBO with no buyers agent commission and it was a huge pain and only unrepresented buyers came by. Literally no agent brought a clients, just vultures trying to convince me to use them as a listing agents. Was so damn annoying, I hope this law makes it easier to FSBO.
A bunch of people who never had a real job and only had a gatekeeper fee just got lawyered out of a living. It's going to get bad.
Wait am I gaining respect for lawyers?? Is it ok guys?
When someone is charging 6x what a lawyer would charge you know things are bad
If you pass the BAR you're allowed to sell RE and CRE as part of the deal.
Very much dependant on the jurisdiction.
Every jurisdiction should do its part to make real estate agents not a thing anymore.
and car salesmen
Yes, direct sales would be nice. Get rid of 3-tier alcohol distro too.
You do realize no one is forced to hire a Realtor, right? Despite impressions, we don't own the houses and don't get to decide how or when they get sold, nor for how much. People choose to hire Realtors because it's a large financial purchase with many legal documents and soft skills involved. You're more than welcome to debate the value proposition, but it's nonsense to suggest getting rid of Realtors when they aren't a requirement to begin with. If you don't like Realtors, don't hire one. Problem solved.
No longer true
It's true in a lot of states.
True in California
It's true in NY
This chicanery? They ve done worse
This is great for those of us who take this profession seriously. I’d love to go from 18,000 agents in my market to 7,000.
Exactly this. True real estate professionals will thrive. Part time or those who are just not cut out for it won’t. Agents may have to work a little more but they’ll have more demand for their services once agents start dropping like flies. Any agent that can conquer economies of scale will be able to be efficient and effective to make more money.
Absolutely, too many people hang around the profession just so they can collect one off big paydays when their bestie or cousins stepbrother needs a buyer's agent. Take away that big payday and require volume to earn the same paycheck and they will all drop out and leave their aunt's boyfriend to be represented by an actual professional.
this is exactly what travel agents were probably telling each other when the internet, Expedia and direct booking became a thing. I'm thinking the flat fee will be more like $999 unlimited showings and negotiation.
I'm wondering what you mean by this in layman's terms? I just begin preparations to begin training to become a real estate agent. I find the timing of this... Interesting, to say the least. But in all things, there's usually a balance, and with that comes opportunity. And I'm not going in with any preconceived notions/expectations. I don't even fully understand the changes being made or how they're going to affect the average deal. Just hoping to find an understanding of how to approach things as I learn.
Too many still.
Can we do the insurance industry next? Health first then move on to the rest.
Believe it or not, health insurance is already legally limited to only keeping 20% of premiums to cover overhead and profit.
I apologize but I am OOTL on this. If you are willing and have the time, would you please explain what happened and what lawyers had to do with it?
There's a settlement that is changing how realtors are getting paid I believe
Nothing is going to change dude. All realtors, list and buy side, will continue to operate completely as they have been. The NAR took the bullet for everyone for “requiring” this. Now all the realtors are just going to do it on their own to maintain the monopoly. Nothing changes.
It does feel like desperation…. And it is only getting started
This whole thread is thinking about this thing the wrong way. The online giants are going to set up their own title companies and contract local inspection services to streamline the entire process and make the agent mostly irrelevant.
Worked for one of those giants - they already have it in place.
Those giants are going to take over. They're driving up home prices as well as rental prices. They will need to be regulated by local governments.
Yup, in buying Redfin stock. It's a steal at $6/share.
How much of Redfin’s income is based on the buyer side commission?
In other words the rich get richer, and more middle class service jobs are being destroyed. yet for some reason reddit seems to love everything about it. the only people these new rules will help is the corporate landlords and house flippers. The average joe buyer will see much shittier service, and at the end of the day probably won't save any money.
Oh please. Realtors have been colluding to keep commissions artificially high for years. It’s obscene and far above the value of the actual service provided.
The seller benefits. Lots of people own homes and don’t want to pay 6% of Their money just to sell their house. I’m going to offer 1% to the selling agent and that’s it. And that’s overpaying them compared to how much work they do.
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Its a sales problem. Quantify in terms of homes seen across all your buying clients. You probably need to take buyers to 30 homes to complete a sale. This is because you'll do 5 homes with 1 buyer and they decide to pull out. You do 5 homes with another and they can't quality. You do 10 homes and they can't find what they like. In aggregate every 30 homes, you'll sell one. Maybe some agents will have a better rate. So the commission on that 1 home is actually the effort across all clients. Is that fair to the person actually buying the house, of course not. So then buyers will need to pay an agent a per-home visit fee? Want to remove the buyers agent but then who will responsibly accompany strangers into your home? What happens if something is stolen or damaged? Like, I get that agent fees are extreme, but whats the solution?
I got Zillow I don’t need you to see a home asshole.
Majority of Zillows business model was shared commissions with agents. They ain’t gonna keep this site up for free dawg.
Get ready for ads, promoted properties, and a paid tier where you can see homes before the free users can.
You just described the MLS. A paid tier, where one group of people sees it first. That's exactly what the MLS is.
Don’t you need to be a realtor to have full MLS access? Zillow could really cut out the middle man here. Our realtor gave us MLS access and the interface was awful compared to Zillow.
Zillow isn’t an mls though. They scrape their data from all the mls’s so if you get rid of them Zillow suffers too.
Yeah but even then, what are they going to charge? The median home price is 416k in 2023. 416k * .06 is 25k. Is Zillow going to charge $25k to use the site? Half of homes sold would have yielded more than that. Actually criminal.
It’ll be free to use the site for most people. They could make their money in the ways I outlined above. The sale price of the home won’t affect Zillows cost, because the work is the same, regardless of and sale price of the house.
How much is a paid membership fee? Is it going to cost me more than 10 thousand dollars to see some houses?
Real estate agents have always done this...
Anyone who has bought and sold a home in the last ten years can tell you plainly that now with the internet, realtors are useless.
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Love a good NoFx reference in the morning.
He's got his I've got mine
Preach. My girlfriend and I were looking in a specific area of the city. Roughly 2 sq blocks. I went on Facebook and Nextdoor. Said I was buying on that area and found a transactional broker who would do it for 2k flat I pay all. Easiest 850k I’ve ever spent. I had an inspection in a competitive area. Got a house after about 6 months of waiting and reposting. Off market. Seller got more money. I saved money. Real Estate Agents are not worth any more than about 2k.
Eh, the site will still be there and free. They might get into the flat fee agent business model, but they have many other revenue streams (mortgages, rentals, etc)
Have you bought a house? Zillow doesn’t update instantly. I bought my home the day it went up on the market and had an offer accepted the next day. Zillow still showed it for sale for about a week and a half after including showing an open house four days after my offer accepted .
You cannot count t on Zillow for accuracy .
My guess is the majority of buyers will stop using agents. It’s going to cost too much. This guy wants $1400 to show a house. Some people look at tons of houses before making an offer. Yesterday that money ended up as part of a mortgage loan. Tomorrow it’s not going to be part of the loan. So it’s more out of pocket cash buyers need if they opt to use a realtor. some shady landlords are about to unload their shithole properties as soon as they understand the new buying habits. List the place in a way they get first time buyers, that don’t have realtors advising.
That's funny, are you only 2 years old? Because the rest of us were alive during covid and saw the buying agents letting their clients walk into these money pits AND telling them the only way to get the winning bid is to waive inspections, something other countries make illegal.
This happened to me. Shit sucked.
Some 18 year old who just passed their exam will open doors for $50 a pop.
Nah this guys expectations are gonna come way, way down and they’ll be more in the $50-100 range, if that. Or a la carte services, doing comp analysis for a fixed fee. Or they’ll finally just make an app that lets buyers open the door themselves, shouldn’t be that hard.
showami.com - is like early days of Uber app but concept is there. You can pickup a showing and all the agents are contracted to do is open the door. Level of service ranges from opening the door to walking through. Some people really enjoying learning about a new home. Right now have to be a broker to be able to use the app though.
If the mls’es (owned locallly by agents) decide to stop sharing with Zillow, you’ll have to walk into these agents’ offices to get re data. Ask me how I know. 😳
IF a company ruins their company, another company will take its place. If you think people want to drag their butt cheeks into an office, you are mistaken. Zillow will just allow people to start listing for sale by owner and take a cut of that, they aren't going to gate keep for real estate agents if agents cut them out.
I’m not cheering for this, I’m just pointing out that all those national apps rely on local agents, via their mls’es, cooperating and agreeing to share their data. It’s voluntary and there are ways to share some, not all, of the listing data as I comment above. It’s not a daydream - it’s the way a market near me works and has always worked. It’s done on purpose to strengthen the role of local agents. Maybe there would be an outcry and some legislation passed if this caught on at scale as it does open up to claims of redlining and discrimination, frankly. But I could see it as a temporary defensive fallback by agents. I’m only commenting because we spent 2 years searching in that market recently and omg it was painful. We ended up buying in a nearby market that shares data fully, but that was just down to finding the right property.
Why would they do that? I would think as a seller you want more people seeing the home is for sale.
Well, the way it works in my area is the mls shares some, not all, data with Zillow. So, you see the listing and price and any price changes. But you cannot see the listing status (active, u/c, etc) and you rarely see the closing details (that it closed (vs delisted), price, date). So the seller gets exposure for the listing, but the buyers must have an agent in that particular mls to see history or status or details. And they really prefer you to stop by the office physically. There, you can get a print out of recent sales. lol. A print out. It keeps the agents central to the transaction. You can’t get comps without the sales histories even if you decide to try to contact the listing agent and go it alone. Oh, and the county records are behind a paywall. And I can’t get that old clumsy system to work on my iPhone. The whole thing seems designed to keep tech out and agents in. And it works. And this is done at all price points in that market. 🤷🏻♀️
Sounds like a racket that needs more regulation. Bunch of lazy scammers that should be automated out of jobs soon.
Yes, this person is wrong. What they are describing will not work large scale. It may work for High end properties, it will not work for the vast majority.
No seller is agreeing to an agent who won’t advertise their property
How do you know?
I'm a agent in my area. I'll sell the Zillow my full access for cheap. Rinse and repeat for every area. Zillow will always have the data.
When I worked as a licensed RE agent my best buyer deal concerning a big paycheck played out like this. I was on leads that afternoon so all the phone calls/emails came straight to me. A call came in. Women said she and her husband wanted to check out a house for sale they saw online. Their budget about $800K… pretty good lead. Immediately nervous I’m gonna screw it up. I set up the showing and researched the property and ran comps = 1.5 hours. Round trip to showing = 1.0 hour. Showing plus discussion after showing = 2.5 hours. They said home wasn’t for them. No biggie. We connected. They were nice. I said I’d keep an eye out on things for them. Two weeks later she calls again. Wants to see another house. Set up showing, researched home and ran comps = 1.5 hours. Round trip to showing = .5 hours. Yay, closer to my house. Showing plus discussion after showing = 2.0 hours. This is the one! Write offer. Gets accepted. Open escrow. Run escrow without a hitch. Buyers = professional. Sellers = professional. Close escrow. It’s only an estimate but during escrow I probably logged around 14 hours and that includes being present for inspections and what not because I took my duties serious! So, approximately 23 hours on this deal. $765,000 sale price at 2.5% was a $19,125.00 commission. My cut from the brokerage was 65% of the $19,125.00 which came out to $12,431.00 or we could say $504.48 an hour. Like I said, it was the most profitable escrow I ever ran. Not all are like this at all but to say the commission situation is out of whack is pretty accurate.
Great breakdown! I get that driving to showings is real time that realtors spend towards securing a transaction for a client, but nearly everyone who doesn't work from home has at least a 0.5-1 hour round trip commute daily. And when the commute is that "reasonable" they generally don't bother to factor it into their hourly earnings. I also don't understand how running comps for a single house can take 1.5 hours. It's just a search with filters. I had to instruct one of the agents I worked with on how to configure the queries I needed over email because she wasn't sending me what I wanted to see/know. And it took at most 5-10 mins to rewrite her queries for her. Edit: I expect that realtors are also able to gain tax advantage for vehicles/mileage they use for work, but I'm not sure about that.
That’s if they only show one house that day, but I agree with your sentiment
That's fair, but generally if I was seeing multiple houses in a day they were all pretty close to each other. I'm also curious what kind of tax breaks realtors are entitled to for their vehicles. I imagine it's not insignificant. Regular wage earners don't get tax advantages for the daily wear and tear they put on their vehicles to get to work, or for the fact that the majority of time they spend in their car is spent on work-related commuting.
Standard Schedule C business mile write off or actual expenses for business use. https://www.irs.gov/taxtopics/tc510
As far as drive time I agree with you. Just about everyone who has a job has to commute. I just included it to add to the hours on that particular deal. Comps… I worked in an area where there were no two homes alike… period. It’s not just a search with filters lol. If I did that I’d been a shitty agent. I know I spent more time than average for sure but creating good comps where I worked was challenging. Also, I wanted to know everything about each house that sold (or didn’t sell). I wanted to know the neighborhood. Any developments that could affect the future value the home. Any plans the city or county had. I was thorough. So, if you only spend 10 minutes creating comps I feel bad for your clients and that’s why I will continue to say that real estate agents are way overvalued.
I appreciate that regarding the comps and other research. That makes a lot more sense. And it sounds like you bring a significant amount of value compared to the average buyer's agent. The issue is that even the garbage agent I was referring to has been charging/"entitled to" the same exact commission as you. She legitimately just sent me the last 3 months of sales within 0.5 miles, sqft range of 100% - 175% of the one I was offering on and said those few houses are why I should offer $X. You could argue people need to choose better agents, but it's really difficult to tell how good they are until you're making an offer. And by that time they have you signed to an exclusivity agreement. Good realtors exist, but the industry is poisoned by incredibly low barrier to entry, low standards, and ethically shady practices.
The way realtors don't pay tax is by starting a llc and sending all their money to that llc, they then pay themselves as marketing consultants from that llc. Charge everything to the llc. I worked for a realtor who made 700k and barely paid anything compared to your average 1099 independent contracting taxed earner. It's hard to be a good realtor. He had to spend around 100k on ads and services to make that money. With that said, it's a total racket they are running, though.
100% a racket. The internet has made the most important service they used to offer obsolete. And instead of adapting, they chose regulatory capture, gatekeeping prospective buyers/sellers, and unethical practices to continue growing their bottom line. In my state, real estate sales data is not publicly available. The only way to get data on comps is to sign a contract with someone who has access to MLS or figure out how to buy access yourself. And then you'd still have to figure out how to tour a home you're interested in because sellers agents can't be bothered with showing the house they want to sell except for a 2 hour open house. Additionally, agents I worked with either outright refused to tour any FSBO homes or steered me extremely hard away from them. While steering me very hard towards dual agent scenarios or homes listed by the same brokerage. Edit: re-read your comment. So it's way beyond getting mileage-based tax deduction. Every single expense they incur can be written off. The entirety of car payments, gas, vehicle maintenance. And also season tickets and county club memberships to "network" with their realtor buddies.
There is a typo in there , K seems misplaced, it should be $7
lol. Lil bro doesn’t realize that’s around $400 worth of work, AT BEST. At least he said he’d pay $125 for an inspection tho, right?
And HIS inspector. Who will find nothing wrong with the property.
Trust but verify with your own inspector, always.
In a buyer's market, inspectors offer a great bargaining chip. Finding tons of things wrong that the buyer can then use to negotiate down the price. In a seller's market, agents are going to want The deal to go through as quickly and smoothly as possible. That means no big surprises or for that matter piddly issues on the inspection report That might scare away the buyer.
And HIS appraisal which will match the list price
The mortgage lender hires the appraisers, not real estate agents.
That's not how appraisals work at all
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"It's got great bones"
"Literally there's chicken bones holding the furnace up."
At least where I am, inspections are way more expensive than that
I paid $450 I think, New England.
$400-600 here in the PNW.
$900 in NJ
Same in Austin.
I paid $400 in the southeast US... 10 years ago.
Where in podunk do you live where a proper — though still shitty and mostly useless — inspection is $125?
He doesn’t do the inspection and the negotiation is just him forwarding emails I can visit the open houses without him and save 7K
$7K and only up to 5 showings? I hope he goes bankrupt.
I'll will fill out my own 10 page fill in the blank PDF then. Dude thought he ate but he starved.
Imagine driving around unlocking a few doors and filling out a PDF for $7k. A dream job.
Most people don't use a travel agent and use a website like Expedia. Many people do their taxes on TurboTax. This isn't the 80's. Why are we still using a realtor in 2024?
Is most countries, people don't do their taxes at all. You get a bill/refund at the end of the year. You are free to argue over the bill, but you can just accept it.
They claim it’s to do paperwork and make sure everyone’s in sync. So their job is to let you in a house you want to see, created a saved search on a website you could create the same search for yourself on, and negotiate / make sure the contract doesn’t screw you. Except they farm out the contract side OR don’t know what they are doing there because they aren’t lawyers to begin with. Tech can handle most items on the list, a lawyer can handle the contract side
Why were they using them in 2014? The tools and other options have existed for a long time if they wanted them. I would say the Tax one is a good analogy but for travel there really isn't risk like you get from Taxes or Real Estate.
> Why were they using them in 2014? Because the real estate lobbyists purposely make it hard to navigate buying/selling a home, to make it seem like you need them. Same with Turbotax. They lobby governments to keep the code needlessly convolute, so that people pay to use their software each year. Filing taxes shouldn't take more than a few button clicks on a free website.
Because you need a realtor to access a property that’s the only gate they keep and it’s the one and only one reason they have to be used. You could do everything else they do for yourself or by paying someone like a lawyer for services
MLS
Why are you still using TurboTax in 2024? FreeTaxUSA And it's only $15 for state filings. TurboTax is a complete rip-off that upsells you at every point. Additionally, there software is obnoxious if you actually know how to file taxes. Just a bunch of annoying graphics with some bar going up/down to give you the impression that some deep-computational-intensive-work is going on in the background to maximize your return. Why they do this? Because they don't want you to \*\*actually\*\* know how taxes work. And that means mistakes can happen (But wait.... if you sign up for their audit-protection...you can be protected and get someone who 1) isn't a CPA and 2) isn't an enrolled agent).
Because from a buyers perspective it’s always been free. Buyers don’t pay any of the commissions, sellers do. It is possible that will change now? Sure, but until now from a buyers perspective it didn’t matter.
F-ing finally. These leeches no longer have a legal blood reservoir to suck. Let them actually work for a living. So sick of seeing public servant realtors rake in money for doing nothing other than knowing people and opening locks. Bye bye!
YIKES
I would never do a home inspection paid for by the one person who stands to profit only if the house transaction goes through.
This post needs to be up higher and tattooed as a tramp stamp on OP's lower back. DO NOT... ABSOLUTELY DO NOT.... USE A HOME INSPECTOR YOUR REALTOR RECOMMENDED.
PLEASE PLEASE PLEASE, ask around to find the best home inspector you can. Talk to everyone you know who has purchased a home. This will likely be your largest purchase in your lifetime so a quality home inspection is your first line of defense.
Get ready to learn about supply and demand. You’ll do all that for $7k? Well, I’ll do twice that for $3.5k!
And I will do thrice that for a third! Letting the bidding wars ensue! Race to the bottom!)
Sorry, but $1k+ for ~15 mins of work? I think we only spent over 30 mins in 2 houses. granted we looked at way more than 5 homes.
But look look you could be charging $7k like a pro!!
You mean $700?
Knock about $6k off that price and increase 5 homes to "however the fuck many homes I need to see before I find one that works for me" and we might have a deal.
Todd is drunk
Let’s imagine that he researches all 5 houses for 1 hour each before the showing, 30 mins to travel there and back, and an hour showing (so 2.5 hours total showing each of the 5 houses). This accounts for 12.5 hours. Now let’s imagine he puts in 20 hours of negotiating and closing for a total of 32.5 hours. Now let’s double all of that and assume somehow he puts in a total of 65 hours. This still comes to an hourly rate of $107.69 which is absolutely wild.
As a hourly rate for *irregular* work, that's not completely unreasonable. If it were the same job, at guaranteed 40 hours a week, with full benefits, *that* would be different.
It's only irregular work because there are millions of realtors (more realtors than homes for sale). If compensation goes to something like $50/hr most realtors will find another line of work and things will adjust until the number of realtors is no more and no less than the amount that the local housing market can support. And then full time realtors will all actually have to work for a living the same way almost every other profession has to work for a living.
Now imagine he pays half his hourly rate to his brokerage and 16% off the top for payroll taxes because he's a 1099 employee. You're down to $45/hour, not accounting for business expenses, health insurance, etc. No one has to use a buyers agent or think they're useful, but there's a reality to the costs they incur that drastically reduce that hourly rate.
So then don’t give them the benefit of the doubt and double the hours.
What a bargan./s
Dear McDonalds, I will be accepting $500 to run the french fry machine, maximum of 15 orders of fries + mopping floor.
Lol that clown wants $7,000 for at most 20 hours of work. That rate is equivalent to a salary of over $700K/year.
Which is why there were literally realtors on every street corner for the past 20 years. It was a good gig.
It was a good *grift*. FTFY
Dude still asking for like $500+/hr for unskilled, no education required tasks. Nice.
Houses are selling themselves now anyways. Realtors are irrelevant.
Imagine thinking you earned $30k because you put your name on a paper and made a Few calls
Realtors are useless and annoying. So idiotic that we are forced to used them. They get 3% commission to open a door and then bitch about how often I want to see the house that I’m BUYING.
Dude, you only really need a real estate attorney for the closing. No more of this real estate agent nonsense.
This as is perfect. Perfectly shows how overpaid realtors are. If realtors were paid hourly, as they should be, this guy would be making 1400 an hour. That's outrageous.
lol good luck
Sure. I’ll charge 15k to mow your lawn. Let’s see how many calls I get
What if I don’t by one of the five ?
I did ALLLLLL of this myself as a buyer of a FSBO it’s not hard at allll. Please make these leeches go away.
That’s more expensive than the cost of a Real Estate attorney. If you really want to pit one against the other, I’d always pay a good lawyer more than a consultant.
"negotiate" ... more like colluding with the seller and seller agent to maximize profit
Not too soon. Realtors are actually going to have to work for that money now.
Why can't I do this myself again?
What’s going to happen is people will get the name of the listing broker online and call them for a viewing. Buyer’s brokers will go extinct.
Imagine if buying cars were like buying houses. You need a car agent to find, show and negotiate. It’s outdated folks.
Or... Hire me and I'll kick 2/3 of the 3% commission back to you at closing. I'm not paying for your inspection though. I'll print an inspection checksheet and bring a Harbor Freight flashlight and screwdriver for you to use.
Integrate Zillow with lockboxes and a schedule. I’ll show myself all the homes I like and pay them .05% That’s when the party ends.
Good luck with that
If you don’t close, then did you just pay $7k for nothing?
As a buyer, it’s not a “flat rate” that I care so much about. It’s about aligning my interests to my agents. If they got a commission based on how much money they saved me, great. As it is, both the sellers, and the buyers agent want to keep the home price high in order to make more commission off the sale price. It’s a similar challenge with lawyers. They’re making hundreds of dollars an hour, so in many ways, both sides are incentivized to drag out arguments and fights.
Can’t wait till technology comes along for a few hundred bucks and replaces these people….
While there are a lot of bad agents that give the industry a horrible rep and some change is needed, I don’t see much changing for now. Sellers are not going to lower the price of their house just because they don’t have to pay a buyers agent.. a house worth 450k will still be worth 450k.. If anything, it’s just going to drive down some of the demand by pricing out more FTHB, which isn’t good for either side. On top of that, with more people negotiating for themselves and not necessarily having the insight or expertise when it comes what to look for, I do think more buyers could be taken advantage of. If anything, this helps companies like Black Rock and Vanguard, who buy entire neighborhoods. If more FTHB are priced out, they win. Lastly, we’re not all bad. Some of us actually want to do right by our clients and go above and beyond. That being said, I do hope it weeds out a lot of the agents that are giving the industry a bad rep.
What happens when demand is driven down?
Its such a strange situation where RE Agents do a valuable and necessary service, but the prices they charge are NOT commensurate to that service. Im glad the price fixing cabal has been shut down
This sub is a joke, full of people that have no idea how real estate transactions and commissions actually work
Still too expensive for the amount of work actually done.
5 homes is ridiculous lol. I toured over 40 before buying my first home.
Holy shit, i overpaid. That 3% rate came with a steep agent commission 😂
That suuucks lol. Oh crap did I just prove that this whole thing was good for home buyers? I would rather pay zero for all that until I close. I looked at over 50 homes in 3 years. I saved a lot of money in retrospect
Real Estate agents are a low skill, high compensation job. And since the Feds neutered their ability to even say things like “ yes, this is a safe neighborhood with good schools”, which is so absurd that it isn’t funny, I am not sure what value agents can bring anymore.
In the words of the late Amy Winehouse: “what kind of fuckery is this?”
Since when do agents pay for inspections? Not in CA at least
I know most people suck but our lady was worth the money. She helped us see soooo many places and put up with a lot to get our home sold and a new one bought.
Well, it looks like she sold and bought for you. So she’s actually doing work. But if she was just helping you buy that she really doesn’t need to be paid by the sellers commission.
Thank god, now every single/divorced mom trying to prove a point to make it in Realestate, has to work more harder than just opening doors and printing papers
He’d charge just to see the place?! Or for five separate inspections? I dont understand
Charge buyers? Since when do buyers pay agents… it’s the sellers that pay them their commission