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A new class-action lawsuit takes aim at real estate agents and their 6% fee

marketwatch.com

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Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#21

Post by tehlike »

bkohlmann wrote: post #19

Where you stand really depends on where you sit. My wife recently became an agent, and prior to that I was all about disrupting the industry. But I’ve come to see the 3% on each side as an almost market clearing price. It’s really hard work, with low barriers to entry, and significant upfront costs. In a tight market, being a buyers agent can be a blessing or a curse. She’s been working with one client for nearly a y…

Similar story. We ended up beingvery undecisive buyers, and our agent ended up working really hard. I felt sorry. She is doing honest work, and there are too many agents in the market who is in it for the quick buck.

I would consider getting a license myself for my own investments, nothing more.

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#22

Post by newhotelowner »

rhacker wrote: post #17

This may lead to banks and realtors colluding. Instead or the current model we'll get realtor/banks buying properties that go up for sale. Then the realtor/banks will upgrade the cost to a 50% markup. That will of course be after flippers fix the house and other things. But in general, we're see the rich buying out the poor. And that model will be 100% legal.

> Then the realtor/banks will upgrade the cost to a 50% markup.

What stopping them right now?

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#23

Post by T_D_K »

tacomonstrous wrote: post #6

The model's pretty broken now, when anyone can look up listings on realtor.com or Redfin, and get customized alerts based on preferences. I mean what special skills do agents even bring on the buy side? I can mediate things with the seller myself, thank you very much. On the sell side, an experienced agent can be much more of a help. Even there, we used Redfin the last time we sold, and the difference in commission w…

Having a real estate agent as a buyer can be extremely useful. Time savings: they'll actively search out properties that fit your needs, handle negotiations, schedule inspections and work with the city or county, etc. They're also experienced with all of the legal aspects, and work with mortgage and insurance companies.

"Tech Bros" have a stereotype of thinking they can do everything themselves. Sometimes they should maybe step back and acknowledge that someone's profession is a bit more than what they can pick up in the course of reading blogs for a few weeks.

Now, it's understandable that there's plenty of bad real estate agents -- finding a good one can be difficult. And I'm not saying that the industry is perfect, there's certainly room for improvement. I just think that it's unfair to say they don't have value.

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#24

Post by tracer4201 »

sl1ck731 wrote: post #15
tacomonstrous wrote: post #6

The model's pretty broken now, when anyone can look up listings on realtor.com or Redfin, and get customized alerts based on preferences. I mean what special skills do agents even bring on the buy side? I can mediate things with the seller myself, thank you very much. On the sell side, an experienced agent can be much more of a help. Even there, we used Redfin the last time we sold, and the difference in commission w…

I purchased my first home in 2017. I absolutely would not have known half of what to do without my agent. In retrospect there are some things that he swept under the rug that I'm paying for now, but all of the paperwork and having someone who knew what to ask for was invaluable. If I was left to my own devices I would have made some probably very stupid offers and lost the chance at my property. This might just be be…

What were the things swept under the rug? A home purchase is arguably the largest purchase most people will make in the US. This is an area where I would actually want some laws requiring the agent to work on behalf of/ in the interest of their customer instead of only their own wallet.

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#25

Post by pseudometa »

It blows my mind that the fees are percentage based. The amount of work required for an agent on a 100K house is very similar to that of a 2 Mill house. Presumably the seller agent wishes to get compensation for increasing the value of the house, but for both the seller and buyer agents, the number of deals done far outweighs slight incremental selling prices. In which case, both would prefer to settle on a lower price and move to the next deal. So frustrating. I wish the lawyers all the best!

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#26

Post by elteto »

newhotelowner wrote: post #20

I couldn't buy a house without a realtor even though its a house that found myself and was paying 100% cash. 3%-3% is a lot of money if I don't use any service from a realtor.

What prevented you from buying it yourself?

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#27

Post by bluedevil2k »

squozzer wrote: post #16

As someone who has bought a couple of houses, a buyer's agent mostly provides convenience because they can access the property just as easily as the listing agent. While agent fees usually run in the thousands of USD, probably the larger source of tacked-on fees is on the mortgage side, especially when the buyer does not have the 20% down. So not sure if transferring more of the fee load to buyers will help move real…

Convenience shouldn’t cost 3% though. When I was looking for a house I was able to find houses I liked on search engines and then call the aeller’s realtor directly to set up a viewing. When time came for an offer, paying a real estate lawyer an hourly fee ends up saving $10k+.

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#28

Post by pseudometa »

bkohlmann wrote: post #19

Where you stand really depends on where you sit. My wife recently became an agent, and prior to that I was all about disrupting the industry. But I’ve come to see the 3% on each side as an almost market clearing price. It’s really hard work, with low barriers to entry, and significant upfront costs. In a tight market, being a buyers agent can be a blessing or a curse. She’s been working with one client for nearly a y…

Wouldn't it make more sense to charge by the hour? Or perhaps you live in a location with low housing prices. In either case, it seems to highlight the fact that the system is broken.

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#29

Post by freewilly1040 »

bkohlmann wrote: post #19

Where you stand really depends on where you sit. My wife recently became an agent, and prior to that I was all about disrupting the industry. But I’ve come to see the 3% on each side as an almost market clearing price. It’s really hard work, with low barriers to entry, and significant upfront costs. In a tight market, being a buyers agent can be a blessing or a curse. She’s been working with one client for nearly a y…

It'd be less work if the tools and information were more open and transparent. It might be hard work, but a lot of it doesn't need to exist and only does because of the information asymmetry that realtors maintain

Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee

#30

Post by bkohlmann »

bkohlmann wrote: post #19

Where you stand really depends on where you sit. My wife recently became an agent, and prior to that I was all about disrupting the industry. But I’ve come to see the 3% on each side as an almost market clearing price. It’s really hard work, with low barriers to entry, and significant upfront costs. In a tight market, being a buyers agent can be a blessing or a curse. She’s been working with one client for nearly a y…

I’ll also add value I’ve seen she adds from a buyers perspective:

-she has access to a lot of off market listings via her networks. Sellers will somethings keep things off market so that when they sell, the tax base stays relatively the same - the appraisers don’t see a sale in the official pipeline -my wife also is really good at sending bespoke letters to target homes of folks not yet willing to sell. She’ll ID a group of homes in the buyers range, send them letters, and usually gets a 5%+ response rate. These are from folks who wouldn’t have sold otherwise

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