Yes-many folks shouldn't be homeowners and the push for all to be was a mistake. Those responsible type folks just starting out have a harder time grabbing that 'first rung of the ladder' these days. I'm older and have never used a realtor-just a real estate lawyer at closings.
Real Estate Rates
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Its always funny how people always focus on how high the commission is for what appears to be easy work. But realtor get paid for one thing and that's to close.
It's actually a pretty efficient system because the alternative is worse. You basically get the service for free until you close. So if you change your mind or don't get financing, you pay nothing. Who else is willing to take that risk?
It's actually a pretty efficient system because the alternative is worse. You basically get the service for free until you close. So if you change your mind or don't get financing, you pay nothing. Who else is willing to take that risk?
Exactly true. I guess you could say the rate is performance based.
Sit on your rump and you won't get paid. I have no issue with professionals getting paid for their work. I just want to make sure I hire the right people. But as you said, even if you don't, it still isn't that bad unless your running up debt holding onto something you can't afford.
Originally Posted By: Wolf359
Its always funny how people always focus on how high the commission is for what appears to be easy work. But realtor get paid for one thing and that's to close.
It's actually a pretty efficient system because the alternative is worse. You basically get the service for free until you close. So if you change your mind or don't get financing, you pay nothing. Who else is willing to take that risk?
Sit on your rump and you won't get paid. I have no issue with professionals getting paid for their work. I just want to make sure I hire the right people. But as you said, even if you don't, it still isn't that bad unless your running up debt holding onto something you can't afford.
Originally Posted By: Wolf359
Its always funny how people always focus on how high the commission is for what appears to be easy work. But realtor get paid for one thing and that's to close.
It's actually a pretty efficient system because the alternative is worse. You basically get the service for free until you close. So if you change your mind or don't get financing, you pay nothing. Who else is willing to take that risk?
Originally Posted By: hatt
Originally Posted By: Nate1979
Realtors are basically overpaid car salesman. I hate jobs like this where they think they are worth a percentage instead of a fixed fee. Same with tipping at restaurants.
REALTORs are more than happy to negotiate a fixed fee instead of a %. It's nice to lock in your commission!
Talking about that: I recently bought a home with a discount buyer agent that charges either $7k or 35% of what the seller agent would split with him (and refund 65% of his revenue to me, before tax). That knocked down my share by about 10k and he put most of it into my loan's escrow account for tax and insurance. He doesn't do anything other than writing offers and absolute minimum paperwork, and no showing homes.
I'm sure he made more money being a discount agent than full service agent by working like this.
Originally Posted By: Nate1979
Realtors are basically overpaid car salesman. I hate jobs like this where they think they are worth a percentage instead of a fixed fee. Same with tipping at restaurants.
REALTORs are more than happy to negotiate a fixed fee instead of a %. It's nice to lock in your commission!
Talking about that: I recently bought a home with a discount buyer agent that charges either $7k or 35% of what the seller agent would split with him (and refund 65% of his revenue to me, before tax). That knocked down my share by about 10k and he put most of it into my loan's escrow account for tax and insurance. He doesn't do anything other than writing offers and absolute minimum paperwork, and no showing homes.
I'm sure he made more money being a discount agent than full service agent by working like this.
Originally Posted By: PandaBear
Talking about that: I recently bought a home with a discount buyer agent that charges either $7k or 35% of what the seller agent would split with him (and refund 65% of his revenue to me, before tax). That knocked down my share by about 10k and he put most of it into my loan's escrow account for tax and insurance. He doesn't do anything other than writing offers and absolute minimum paperwork, and no showing homes.
I'm sure he made more money being a discount agent than full service agent by working like this.
I doubt he makes more money. He would need to do everything a conventional agent needs to do to get leads and then convert 3x more. Never mind that people bargain shopping for buyer's agents are likely going to be harder to deal with come negotiating time. I'll pass. Buyers are not where it's at with full commission, never mind giving them 65% back.
Talking about that: I recently bought a home with a discount buyer agent that charges either $7k or 35% of what the seller agent would split with him (and refund 65% of his revenue to me, before tax). That knocked down my share by about 10k and he put most of it into my loan's escrow account for tax and insurance. He doesn't do anything other than writing offers and absolute minimum paperwork, and no showing homes.
I'm sure he made more money being a discount agent than full service agent by working like this.
I doubt he makes more money. He would need to do everything a conventional agent needs to do to get leads and then convert 3x more. Never mind that people bargain shopping for buyer's agents are likely going to be harder to deal with come negotiating time. I'll pass. Buyers are not where it's at with full commission, never mind giving them 65% back.
Real estate agent fees are robbery. There are other places like Redfin that charge way less than a typical realtor. Someday the heritage realtor will be shoved aside, especially for people who can advertise and sell their house by themselves. Just like Uber displaced taxi drivers, the same is starting to happen in real estate.
Absolutely. There is no lack of real estate agents crying that FSBO is a bad idea, that their way is the only way to get a good deal. But the high cost of selling a house, which is primarily the agents fee is a major hinderance to the hkusing economy and the entire economy. One of the most cited reasons people dont buy is the cost of buying/selling (takes years to pay back compared to renting) as well as the lack of mobility for a worker. This inefficiency hurts the economy.
Sites like zillow have already turned the industry upside down. Next up is gettkng rid of the outrageous fees of agents.
Sites like zillow have already turned the industry upside down. Next up is gettkng rid of the outrageous fees of agents.
The thing that everyone misses is that real estate agents are still the most efficient way to sell a home. The reason why they say FSBO is a horrible way to sell a home is because it's true, very few homes are sold through FSBO and many that try end up going with agents. The main problem is being free to show the home and being able to screen your buyers. It basically kills all your free time. In real estate we always say it's show and sell, can't show it, can't sell it. Agents trust other agents and we never have a problem giving out a lock box code to an agent. You can't do that with a random buyer. There are also fees involved for the buyer as well as the seller in addition to the standard real estate broker fees, typically title company/attorney/bank fees and taxes.
The real problem with FSBO is that there's no one telling the seller that their price is too high so it doesn't sell. And when realtors see a good property, they call their clients to come see it. None of that goes on with a FSBO, you're only getting those actively looking. It's supply and demand, realtors can create the demand that FSBO's can't.
The real problem with FSBO is that there's no one telling the seller that their price is too high so it doesn't sell. And when realtors see a good property, they call their clients to come see it. None of that goes on with a FSBO, you're only getting those actively looking. It's supply and demand, realtors can create the demand that FSBO's can't.
Originally Posted By: Wolf359
The thing that everyone misses is that real estate agents are still the most efficient way to sell a home. The reason why they say FSBO is a horrible way to sell a home is because it's true, very few homes are sold through FSBO and many that try end up going with agents. The main problem is being free to show the home and being able to screen your buyers. It basically kills all your free time. In real estate we always say it's show and sell, can't show it, can't sell it. Agents trust other agents and we never have a problem giving out a lock box code to an agent. You can't do that with a random buyer. There are also fees involved for the buyer as well as the seller in addition to the standard real estate broker fees, typically title company/attorney/bank fees and taxes.
The real problem with FSBO is that there's no one telling the seller that their price is too high so it doesn't sell. And when realtors see a good property, they call their clients to come see it. None of that goes on with a FSBO, you're only getting those actively looking. It's supply and demand, realtors can create the demand that FSBO's can't.
Maybe 20 years ago but technology will make all this obsolete. In terms of pricing the house correctly, I would say technology will beat old school in the coming years. This is not rocket science. No more can agents hide behind their listing systems with sites like Zillow who give an open system of houses for sale, house values, etc. An owner can research all on their own without the need of an agent.
As well the loan process is already greatly improving with technology to remove a lot of the shady and hidden details of the past.
I would predict in less than 10 years the real estate market will be turned on its head like the taxi business.
The thing that everyone misses is that real estate agents are still the most efficient way to sell a home. The reason why they say FSBO is a horrible way to sell a home is because it's true, very few homes are sold through FSBO and many that try end up going with agents. The main problem is being free to show the home and being able to screen your buyers. It basically kills all your free time. In real estate we always say it's show and sell, can't show it, can't sell it. Agents trust other agents and we never have a problem giving out a lock box code to an agent. You can't do that with a random buyer. There are also fees involved for the buyer as well as the seller in addition to the standard real estate broker fees, typically title company/attorney/bank fees and taxes.
The real problem with FSBO is that there's no one telling the seller that their price is too high so it doesn't sell. And when realtors see a good property, they call their clients to come see it. None of that goes on with a FSBO, you're only getting those actively looking. It's supply and demand, realtors can create the demand that FSBO's can't.
Maybe 20 years ago but technology will make all this obsolete. In terms of pricing the house correctly, I would say technology will beat old school in the coming years. This is not rocket science. No more can agents hide behind their listing systems with sites like Zillow who give an open system of houses for sale, house values, etc. An owner can research all on their own without the need of an agent.
As well the loan process is already greatly improving with technology to remove a lot of the shady and hidden details of the past.
I would predict in less than 10 years the real estate market will be turned on its head like the taxi business.
It doesn't cost anything to sell a home if you want to go that route.
Realtors will do the selling if you want to pay them as it is not a trivial task. If it was so easy to sell a home, competition would drive the commission downward, it ain't like they are in a labor union that has a monopoly.
Realtors will do the selling if you want to pay them as it is not a trivial task. If it was so easy to sell a home, competition would drive the commission downward, it ain't like they are in a labor union that has a monopoly.
Originally Posted By: Nate1979
Originally Posted By: Wolf359
The thing that everyone misses is that real estate agents are still the most efficient way to sell a home. The reason why they say FSBO is a horrible way to sell a home is because it's true, very few homes are sold through FSBO and many that try end up going with agents. The main problem is being free to show the home and being able to screen your buyers. It basically kills all your free time. In real estate we always say it's show and sell, can't show it, can't sell it. Agents trust other agents and we never have a problem giving out a lock box code to an agent. You can't do that with a random buyer. There are also fees involved for the buyer as well as the seller in addition to the standard real estate broker fees, typically title company/attorney/bank fees and taxes.
The real problem with FSBO is that there's no one telling the seller that their price is too high so it doesn't sell. And when realtors see a good property, they call their clients to come see it. None of that goes on with a FSBO, you're only getting those actively looking. It's supply and demand, realtors can create the demand that FSBO's can't.
Maybe 20 years ago but technology will make all this obsolete. In terms of pricing the house correctly, I would say technology will beat old school in the coming years. This is not rocket science. No more can agents hide behind their listing systems with sites like Zillow who give an open system of houses for sale, house values, etc. An owner can research all on their own without the need of an agent.
As well the loan process is already greatly improving with technology to remove a lot of the shady and hidden details of the past.
I would predict in less than 10 years the real estate market will be turned on its head like the taxi business.
Who are you again? You can make all the predictions you want, AI was supposed to be just 10 years around the corner. It's been like that since the 70's. Home prices have been public for the last 30+ plus years, it's all at the local registry of deeds. There were sites 20 years ago that told you how much the houses were.
Your thinking would lead everyone to think that the quick lube places would all go out of business because Walmart sells oils and filters and you can do it cheaper and quicker yourself than taking it to one of those places. Owners can do lots of things, but will they do it? And who do you trust? It's rather funny that most people don't trust real estate agents in general, but if you ask people who buy homes from real estate agents, the trust factor is pretty high. The ones that are low are the ones who are always complaining. You never really hear from satisfied customers.
Originally Posted By: Wolf359
The thing that everyone misses is that real estate agents are still the most efficient way to sell a home. The reason why they say FSBO is a horrible way to sell a home is because it's true, very few homes are sold through FSBO and many that try end up going with agents. The main problem is being free to show the home and being able to screen your buyers. It basically kills all your free time. In real estate we always say it's show and sell, can't show it, can't sell it. Agents trust other agents and we never have a problem giving out a lock box code to an agent. You can't do that with a random buyer. There are also fees involved for the buyer as well as the seller in addition to the standard real estate broker fees, typically title company/attorney/bank fees and taxes.
The real problem with FSBO is that there's no one telling the seller that their price is too high so it doesn't sell. And when realtors see a good property, they call their clients to come see it. None of that goes on with a FSBO, you're only getting those actively looking. It's supply and demand, realtors can create the demand that FSBO's can't.
Maybe 20 years ago but technology will make all this obsolete. In terms of pricing the house correctly, I would say technology will beat old school in the coming years. This is not rocket science. No more can agents hide behind their listing systems with sites like Zillow who give an open system of houses for sale, house values, etc. An owner can research all on their own without the need of an agent.
As well the loan process is already greatly improving with technology to remove a lot of the shady and hidden details of the past.
I would predict in less than 10 years the real estate market will be turned on its head like the taxi business.
Who are you again? You can make all the predictions you want, AI was supposed to be just 10 years around the corner. It's been like that since the 70's. Home prices have been public for the last 30+ plus years, it's all at the local registry of deeds. There were sites 20 years ago that told you how much the houses were.
Your thinking would lead everyone to think that the quick lube places would all go out of business because Walmart sells oils and filters and you can do it cheaper and quicker yourself than taking it to one of those places. Owners can do lots of things, but will they do it? And who do you trust? It's rather funny that most people don't trust real estate agents in general, but if you ask people who buy homes from real estate agents, the trust factor is pretty high. The ones that are low are the ones who are always complaining. You never really hear from satisfied customers.
Originally Posted By: Wolf359
Who are you again? You can make all the predictions you want, AI was supposed to be just 10 years around the corner. It's been like that since the 70's. Home prices have been public for the last 30+ plus years, it's all at the local registry of deeds. There were sites 20 years ago that told you how much the houses were.
Your thinking would lead everyone to think that the quick lube places would all go out of business because Walmart sells oils and filters and you can do it cheaper and quicker yourself than taking it to one of those places. Owners can do lots of things, but will they do it? And who do you trust? It's rather funny that most people don't trust real estate agents in general, but if you ask people who buy homes from real estate agents, the trust factor is pretty high. The ones that are low are the ones who are always complaining. You never really hear from satisfied customers.
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
Who are you again? You can make all the predictions you want, AI was supposed to be just 10 years around the corner. It's been like that since the 70's. Home prices have been public for the last 30+ plus years, it's all at the local registry of deeds. There were sites 20 years ago that told you how much the houses were.
Your thinking would lead everyone to think that the quick lube places would all go out of business because Walmart sells oils and filters and you can do it cheaper and quicker yourself than taking it to one of those places. Owners can do lots of things, but will they do it? And who do you trust? It's rather funny that most people don't trust real estate agents in general, but if you ask people who buy homes from real estate agents, the trust factor is pretty high. The ones that are low are the ones who are always complaining. You never really hear from satisfied customers.
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
Originally Posted By: Nate1979
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
Last edited:
Originally Posted By: hatt
Originally Posted By: Nate1979
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
I think you are living in a dream world if you think that information can not be solved by tech. The common stated argument by the real estate industry is that the industry is too complicated for an algorithm to solve. But with enough data input someone like Google could certainly solve this - it's by far more simple than other areas they work on.
In today's day of technology agents are far less valuable and yet they still ask for the 6% (oh sure, you can negotiate, but how far down, how about 1% total commission?).
Here is a good article why the real estate agent is becoming obsolete:
http://www.forbes.com/sites/brucekasanoff/2014/04/04/real-estate-brokers-obsolete/#7dc52e3431c9
Originally Posted By: Nate1979
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
I think you are living in a dream world if you think that information can not be solved by tech. The common stated argument by the real estate industry is that the industry is too complicated for an algorithm to solve. But with enough data input someone like Google could certainly solve this - it's by far more simple than other areas they work on.
In today's day of technology agents are far less valuable and yet they still ask for the 6% (oh sure, you can negotiate, but how far down, how about 1% total commission?).
Here is a good article why the real estate agent is becoming obsolete:
http://www.forbes.com/sites/brucekasanoff/2014/04/04/real-estate-brokers-obsolete/#7dc52e3431c9
What about getting preapproved for loan...
Going online and find a home, inspect home...
Place home in your 'shopping cart' and checking out.
Similar to Amazon.
Going online and find a home, inspect home...
Place home in your 'shopping cart' and checking out.
Similar to Amazon.
Originally Posted By: Nate1979
Originally Posted By: hatt
Originally Posted By: Nate1979
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
I think you are living in a dream world if you think that information can not be solved by tech. The common stated argument by the real estate industry is that the industry is too complicated for an algorithm to solve. But with enough data input someone like Google could certainly solve this - it's by far more simple than other areas they work on.
In today's day of technology agents are far less valuable and yet they still ask for the 6% (oh sure, you can negotiate, but how far down, how about 1% total commission?).
Here is a good article why the real estate agent is becoming obsolete:
http://www.forbes.com/sites/brucekasanoff/2014/04/04/real-estate-brokers-obsolete/#7dc52e3431c9
Who's going to input the data and make sure it's correct and current? Who's going to let the buyer and seller know if the property will pass an inspection to get a .gov backed loan?
Dude, people in the RE biz have no worries about becoming obsolete. Just today I had a young couple bring me a list of 10 or so houses they found on Zillow they were interested in. Only two were actually active and something they could get financed through FHA. One was listed on Zillow as active sold in DECEMBER 2015. It took me 10 minutes to figure this all out. It would have been many hours of nonsense for them and the sellers to figure out.
Your solution is simple. Stay clear of agents. It sounds to me like you really like the service that RE pros provide, you're just want it for nothing. Not happening. The housing biz is too complex. Car dealerships will be gone long before RE agents.
Originally Posted By: hatt
Originally Posted By: Nate1979
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
I think you are living in a dream world if you think that information can not be solved by tech. The common stated argument by the real estate industry is that the industry is too complicated for an algorithm to solve. But with enough data input someone like Google could certainly solve this - it's by far more simple than other areas they work on.
In today's day of technology agents are far less valuable and yet they still ask for the 6% (oh sure, you can negotiate, but how far down, how about 1% total commission?).
Here is a good article why the real estate agent is becoming obsolete:
http://www.forbes.com/sites/brucekasanoff/2014/04/04/real-estate-brokers-obsolete/#7dc52e3431c9
Who's going to input the data and make sure it's correct and current? Who's going to let the buyer and seller know if the property will pass an inspection to get a .gov backed loan?
Dude, people in the RE biz have no worries about becoming obsolete. Just today I had a young couple bring me a list of 10 or so houses they found on Zillow they were interested in. Only two were actually active and something they could get financed through FHA. One was listed on Zillow as active sold in DECEMBER 2015. It took me 10 minutes to figure this all out. It would have been many hours of nonsense for them and the sellers to figure out.
Your solution is simple. Stay clear of agents. It sounds to me like you really like the service that RE pros provide, you're just want it for nothing. Not happening. The housing biz is too complex. Car dealerships will be gone long before RE agents.
Yep, they're really living in a dream world. The car dealership model is even simpler, yet used car dealers and new car dealers are still around. I think markups on used cars can range anywhere from 10-20%, more like 20% on the sub 5k cars, dealers easily tack on at least 1 or 2k so maybe as high as 40%. Lots of sites to sell cars directly, lots of places to look up the price of used cars. Yet people still trade in their cars instead of selling direct. Some do sell direct, but it's not the majority of the market. Real estate agents will disappear after car dealerships disappear.
Originally Posted By: Nate1979
Originally Posted By: hatt
Originally Posted By: Nate1979
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
I think you are living in a dream world if you think that information can not be solved by tech. The common stated argument by the real estate industry is that the industry is too complicated for an algorithm to solve. But with enough data input someone like Google could certainly solve this - it's by far more simple than other areas they work on.
In today's day of technology agents are far less valuable and yet they still ask for the 6% (oh sure, you can negotiate, but how far down, how about 1% total commission?).
Here is a good article why the real estate agent is becoming obsolete:
http://www.forbes.com/sites/brucekasanoff/2014/04/04/real-estate-brokers-obsolete/#7dc52e3431c9
It's an interesting article but because they're not part of the industry they miss out on a few key points. You could have 20+ people come to your home on average before you get an offer and that's assuming it's fairly priced. Showings can take an hour or so. But state law here requires that you pay anyone who works for you a minimum of 3 hours. So that's at least $45 per showing not including benefits etc. So now you're already up to $1000. That's without the house sold. If it doesn't sell, you're out $1000 and up. With an agent, there's no up front cost. It's "cheaper", they get paid at the closing. Not every listing an agent takes sells. The broker has an incentive to price it property and to do what's need to get the property sold. I'm sure that $15 guy would be happy to sabotage the showings as he stays busy if it doesn't sell. I was just talking to a guy who said he worked at a fast food place in his younger days and he noticed that if he shut the sign light off at night, fewer customers came in. He was happy to shut it off sometimes.
Originally Posted By: hatt
Originally Posted By: Nate1979
Just the guy telling you that your industry will be replaced by robots (apps, data, online websites, etc).
So you're saying that tech that is over 50% errors, omissions, and outdated information that depends on real estate brokerages for the good information it does have is going to replace real estate brokerages? OK. Don't see it.
I think you are living in a dream world if you think that information can not be solved by tech. The common stated argument by the real estate industry is that the industry is too complicated for an algorithm to solve. But with enough data input someone like Google could certainly solve this - it's by far more simple than other areas they work on.
In today's day of technology agents are far less valuable and yet they still ask for the 6% (oh sure, you can negotiate, but how far down, how about 1% total commission?).
Here is a good article why the real estate agent is becoming obsolete:
http://www.forbes.com/sites/brucekasanoff/2014/04/04/real-estate-brokers-obsolete/#7dc52e3431c9
It's an interesting article but because they're not part of the industry they miss out on a few key points. You could have 20+ people come to your home on average before you get an offer and that's assuming it's fairly priced. Showings can take an hour or so. But state law here requires that you pay anyone who works for you a minimum of 3 hours. So that's at least $45 per showing not including benefits etc. So now you're already up to $1000. That's without the house sold. If it doesn't sell, you're out $1000 and up. With an agent, there's no up front cost. It's "cheaper", they get paid at the closing. Not every listing an agent takes sells. The broker has an incentive to price it property and to do what's need to get the property sold. I'm sure that $15 guy would be happy to sabotage the showings as he stays busy if it doesn't sell. I was just talking to a guy who said he worked at a fast food place in his younger days and he noticed that if he shut the sign light off at night, fewer customers came in. He was happy to shut it off sometimes.
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