51–60 of 329 posts
People love to complain about realtors. Companies like Redfin have been trying to disrupt this market for years. People on HN and other places like to complain that realtors are pointless and that the only reason they exist is they are entrenched. I posit a different theory, which may well be controversial here, and that is that realtors continue to exist--and charge large commissions doing so--because they provide a…
Over the last two years I've bought a couple of properties and I see the value of realtors as professional negotiators and experts on real estate laws and contracts. That being said, the National Association of Realtors (NAR) and their local branches are the definition of a cartel. My parents owned a real estate agency when I was growing up in the 80s and 90s. Back then, the cost of selling and marketing real estate…
That's a bold statement. Still, the NAR has data that suggests realtors are more likely to be involved in transactions than 18 years ago: 87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001. Source: National Association of Realtors ( https://www.nar.realtor/research-and-statistics/quick-real-e... ) ... But I'm curious if the definition o…
Both redfin and Opendoor go through licensed brokers in each state so is agree with what you posit.
That's a bold statement. Still, the NAR has data that suggests realtors are more likely to be involved in transactions than 18 years ago: 87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001. Source: National Association of Realtors ( https://www.nar.realtor/research-and-statistics/quick-real-e... ) ... But I'm curious if the definition o…
No way. Find me the mythical millennial who wants to deal with a first-party negotiation.
In some fantasy land where you ride your unicorn to work and shop for pre-fabricated houses on Amazon.com, sure. The reality is that your bank demands due diligence, houses are always in some state of disrepair, and nobody wants to deal with that.
I've used buyers agents (1 traditional, 1 Redfin) when I've bought homes since they are being paid from the Seller's Fees and in most states I believe they are legally bound to act in your best interest. I've had a new construction seller try to convince me to not get an agent and would give a discount instead but felt that the risk wasn't worth it especially since most buyers agents I've engaged with have been open…
The other thing you should absolutely never do, as a buyer, is use a home inspector recommended by either the seller's agent, the seller themselves, or even your own buyers agent. Choose one yourself. Anything else and they have too much of an incentive to produce an inspection report that will result in a quickly closed sale.
It's a bit extreme outright dismiss an inspector just because they are recommended by your own agent (there is no reason whatsoever to even ask the selling agent for such advice). After all, you've hired them for their expertise and advice, and they see and know a lot more home inspectors than you. Of course, look at the recommended inspectors and do your own homework, like anything else. But if you can't trust your agent to recommend an inspection I question why you are working with them in the first place.
That's a bold statement. Still, the NAR has data that suggests realtors are more likely to be involved in transactions than 18 years ago: 87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001. Source: National Association of Realtors ( https://www.nar.realtor/research-and-statistics/quick-real-e... ) ... But I'm curious if the definition o…
It’s a essentially a giant network effect. Practically, the #1 reason to use a realtor is that if there is an issue with the home that should have been known ahead of time, there is a chain of insured entities that provides legal recourse. The shop and decide part is secondary to their value, but that is how they are so entrenched. The local MLS in any given area has the ability to cut off access to anyone. Some are…
Presumably sellers also want to maximize the money they get when selling. Why wouldn't they be willing to experiment on increasing that number?
There's also the agent's access to their rolodex, which new agents will not necessarily have, they'll depend on leads from zillow, trulia, knocking on doors, etc.
It's also "free" to buy with an agent.
For most higher end listings, it is expected that you do participate in the monthly mailer real estate magazines, that's just the cost of doing business. Brokerages do buy these in bulk, and can offer the discounts to an agent to participate in this sort of marketing.
All of this is pretty tough to do, you can't just wrap the MLS in a skin, make some signs and be in business. Real estate isn't just a tech problem, though there are some things you can do with tech to make the buying, researching and selling process easier.
You have to have distinctions for your specific market, some of these don't make sense nationwide, but are very important locally. For example, a "deep water canal for sailboat" is a term that comes up pretty often in Florida, an Ohana Suite is something that is often requested in Hawaii. Local knowledge matters unless you're in suburbia where literally every house fits into a formula consisting of: ++school - commute time + square footage - age of house +++in monthly payment. The formula would be different for every buyer.
Disclaimer: these opinions are my own, not of the company i work for.
I've used buyers agents (1 traditional, 1 Redfin) when I've bought homes since they are being paid from the Seller's Fees and in most states I believe they are legally bound to act in your best interest. I've had a new construction seller try to convince me to not get an agent and would give a discount instead but felt that the risk wasn't worth it especially since most buyers agents I've engaged with have been open…
since they are being paid from the Seller's Fees This is a myth perpetuated by buyer's agents. Just because you aren't writing a check doesn't mean it doesn't come out of your pocket. It's like sales tax. It's collected and paid to the government by stores, but it makes everything you buy more expensive.
I found our house entirely myself, but brought in an agent on "my" side with whom I'd negotiated a 75bpp refund if I bought a specific property. I did and they cut me a check (out of my own money) at closing. In retrospect, I perhaps should have held out for a full point. (1 for the agent, 1 for the agent's brokerage, 1 for me)
Earlier quoted context omitted.
It’s a essentially a giant network effect. Practically, the #1 reason to use a realtor is that if there is an issue with the home that should have been known ahead of time, there is a chain of insured entities that provides legal recourse. The shop and decide part is secondary to their value, but that is how they are so entrenched. The local MLS in any given area has the ability to cut off access to anyone. Some are…
Not having a realtor as a buyer really helps, because you can add that 3% to the purchase price of the house saving you 3% which can be a huge amount in expensive markets like the bay area.
Rational agents want to get as much money as they can for their homes, and begrudgingly pay any fees that they are forced to. If the seller gave you a 3% discount here for no reason, it would be the same as if they'd hired an agent- except, they wouldn't be getting anything for it? So why would they discount you the 3%? It's a zero sum transaction where your gain of 3% (very significant money in the Bay Area, as you note!) is the seller's loss.
IRL, real sellers will charge as much as they can. They are not giving out 4 or 5 figure discounts randomly or because they're nice. Do you randomly give strangers 4 figures of money for no reason?
Earlier quoted context omitted.
Not having a realtor as a buyer really helps, because you can add that 3% to the purchase price of the house saving you 3% which can be a huge amount in expensive markets like the bay area.
Frankly, if you're worried about 3% on the purchase price of the house, you can't afford that house, regardless of the amount of money. Particularly in expensive markets in the Bay Area, the real estate agent is there to tell you when you're being stupid - unrealistic with your demands (under or _over_ paying) and keeping you from stomping away in a huff during the stressful negotiations. This is buying and selling t…
Some people will be very comfortable with dealing with negotiations, pricing their house (the quasi-ethical can even talk to a few realtors before hand to get their opinion), and doing the paper legwork.
Just because someone chooses to use their time and effort rather than forking out what could amount to several months salary doesn't mean they're stupid.
With that said, we've tried to sell a home by owner, with a good realtor, and a bad realtor (same home, different time periods with renting in between). The bad realtor was worse than doing it by myself (got 2 more offers doing it ourselves...we just felt it was worth more to us renting it than selling it at that time). The good realtor was fantastic and easily earned their commission by pitting buyers against each other and creating a bidding frenzy (it was a good market, but we got way more than we expected).
I would wholeheartedly recommend a good realtor, and say absolutely avoid bad ones. But how do you know?