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

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

#91

Post by tathougies » Tue, Mar 19, 2019, 5:37 PM UTC

ericmcer wrote: post #82

tathougies wrote: post #64

Earlier quoted context omitted.

I mean, the risk a realtor takes on 2million/100k times the risk in selling a $2mil house versus a 100k house. If the realtor makes false statements on accident, etc, they can be sued up to the total amount in consideration -- which is the price of the house. Moreover, it is likely more work to sell a $2mil home, because there are proportionately fewer buyers, which means more work in sourcing buyers, more work in re…

I have never had someone who has not done programming before, watch me typing into a terminal and say it looks easy. I don't think its hard or requires a huge amount of intelligence, but I think it is crazy to compare the barrier of entry for real estate to that of software engineer. The average person would take minimum a year to go from no-skills to an actually useful independent engineer. I could literally take a…

> I could literally take a crack at selling a house after a week of training and probably do alright.

My father was an agent, so I'm obviously biased. However, thinking that 'selling a home' is all there is to being an agent is incredibly naive. It is a professional certification, where you have to be knowledgeable about the laws of the state you operate in, because they control your business.

Compared to the regulatory environment of real estate, software is a dream. You pay the realtor for having passed a test saying that he/she is capable of representing you in accordance with the law.

Also, you probably would not be able to sell a home. Sales is a skill unto itself. Only non-salespeople think it's easy. Having seen what my dad would have to do, I noped out of sales real quick. Engineering is way easier.

> I have never had someone who has not done programming before, watch me typing into a terminal and say it looks easy

I should introduce you to my mother.

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

#92

Post by ApolloFortyNine » Tue, Mar 19, 2019, 5:38 PM UTC

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…

Mine made an offer way below asking that I thought was insulting, but he told me to go with it, so I did. And they took it, and even on top of that he said I should ask for a few repairs to be made, and they even did that too at 100%.

So I too am in the bucket of people who think's the 3% is well worth it. Not to mention the time spent showing houses and the research he did. I get some peoples issue with it being a percentage of the house, but for the house I bought at least, I see no problem with the amount of money he made. If I was buying a million dollar house, I'd probably think differently.

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

#93

Post by crooked-v » Tue, Mar 19, 2019, 5:39 PM UTC

benj111 wrote: post #10

I'm from the UK where it works differently. If you're a buyer, what does the realtor do? Do they sort the legal stuff? Or are you (/seller) paying 3% to find you a house? How does the legal mechanics of this work, do realtors have an obligation to work in the interests of the person that engaged them, or the person that's paying them? Presumably its who engaged them, as they won't know who's paying them. Why then are…

Note that "realtor" is a trademarked brand name invented by a trade association to distinguish from the generic "real estate agent".

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

#94

Post by tathougies » Tue, Mar 19, 2019, 5:40 PM UTC

windexh8er wrote: post #81

tathougies wrote: post #64

Earlier quoted context omitted.

I mean, the risk a realtor takes on 2million/100k times the risk in selling a $2mil house versus a 100k house. If the realtor makes false statements on accident, etc, they can be sued up to the total amount in consideration -- which is the price of the house. Moreover, it is likely more work to sell a $2mil home, because there are proportionately fewer buyers, which means more work in sourcing buyers, more work in re…

The reality is realtors are well protected in the sale of the home for many reasons that are defined in the legal documentation required and not in the closing process. Given the point I'm curious now of how many individual realtors take the blame in a sale after the fact? It is generally the seller who's on the hook and is directly sued from what I've seen. Maybe this is incorrect but it's rarely the middle man step…

> Maybe this is incorrect but it's rarely the middle man stepping in to take the bullet.

Yes, the seller is the party responsible. However, if he hired an agent and was relying on the agent's advice, the seller can sue the agent. That is the difference between hiring an agent and doing it yourself. You are basically paying the brokerage to insure you against sticking your foot in your mouth, and the brokerage -- to limit their liability in the first place -- gives you an agent who tells you how not to screw yourself.

As you yourself said, once you threatened to sue, the agencies started getting stuff done. That's the point. If you didn't use them, you would have no one to shift the blame to.

> That being said I do believe it's s scam that realtors in a legacy mindset are offended when negotiating their rate comes up - regardless of their work put into the sale of the home

As someone who believes in the free market, I of course do not object to wanting to negotiate rates, but if no agent is willing to do it, well then, they're just charging what the market will bear. You are, of course, free to sell your home and take on the liability yourself.

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

#95

Post by mertd » Tue, Mar 19, 2019, 5:40 PM UTC

lifehacked wrote: post #36

I bought my house, at age 19 without the help of an agent, all the have to do is coordinate: home appraisal, home inspection, title company. If you can make 10 phone calls you can buy a house without an agent.

You still paid the seller's agent.

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

#96

Post by 0x0000000 » Tue, Mar 19, 2019, 5:43 PM UTC

o_nate wrote: post #44

When we sold our house, it was obvious that our realtor's incentive was to get a deal done. They had no incentive to go for a higher price if it lowered the chances of a deal getting done. If you really want an incentive to get the best price, you should have a base fee and an incentive fee, similar to how hedge funds operate. E.g. 2% of total price, plus 20% of difference of price above some baseline (e.g. assessed…

The Freakonomics guys found that "when real estate agents sell their own homes, they tend to keep them on the market longer (about 10 days) and get a higher sale price (by about 3%) than when they sell homes for their clients."

https://www.investopedia.com/financial-edge/0311/how-real-es...

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

#97

Post by NeedMoreTea » Tue, Mar 19, 2019, 5:45 PM UTC

noneeeed wrote: post #57

andrewtbham wrote: post #2

currently, it is illegal to pay anyone a commission for selling your house except a licensed real estate agent. If you got rid of that restriction, imagine the opportunities. you could let your friends sell your house by sharing a link on social media and they could get the commission. Also in England, real estate commission fees are about 1% vs. 6% in US. As the article states, in the US a lot of agents won't show F…

Is there a significant difference between what an "estate agent" (UK) and a "realtor" (US) do? Are they more involved in the actual legal side of things (the sort of thing a conveyancing solicitor would do in the UK), or are they still just there to advertise the property and show people round? If they were doing a lot more of the legal side of things I could understand the difference, but a four or five percentage-p…

Especially as the agency work and cost required, both sides of the Atlantic, is far less than twenty years ago before sites like Right Move and easy production of details via DTP and colour printing.

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

#98

Post by blacksqr » Tue, Mar 19, 2019, 5:46 PM UTC

planteen wrote: post #58

elteto wrote: post #26

Earlier quoted context omitted.

What prevented you from buying it yourself?

In a hot market (e.g., Denver last year), the seller's agent would not return your calls for a showing if you didn't have an agent. I suppose you could visit an open house and then submit an offer. Some houses never do open houses, or will already have offers before the open house. You would probably be competing with 2-3 other offers all over asking for a properly priced house. The odds of them choosing your offer w…

In my home state at least, a sellers' agent is legally and professionally obligated to present all valid offers received to the sellers. Failure to do so can result in legal liability, fines, loss of license etc.

If your state is similar, then if you had made an offer by any means, like via the agent's voicemail and the agent didn't tell the seller about it, then you would have had cause for legal action.

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

#99

Post by koolba » Tue, Mar 19, 2019, 5:49 PM UTC

pmoriarty wrote: post #83

nrclark wrote: post #48

Earlier quoted context omitted.

Agreed 100%. Realtors do legitimate work, and deserve to be compensated for sure. But I think the pay is grossly disproportionate to the amount of value provided, and it's propped up by Realtor-sponsored laws and kickbacks. A lot of Realtors won't even deal with non-Realtor(tm) real-estate agents, which promotes their monopoly stranglehold on the real-estate market. I'm not sure where I fall on what a real-estate age…

"When I bought my house, my Realtor found some good listings, arranged viewings, did the paperwork, and set everything up for me. All useful services, and worth paying for. But was it worth $12k for less than 40 hours of total work? I don't think so." A lot depends on the realtor. One realtor I know not only does everything you mention, but also gives their clients lots of advice (based on many decades of experience…

> Watch the movie Glengarry Glen Ross sometime. The life of a typical real estate agent really is that bad, or worse.

You do realize that all the salesman in that movie were scammers right?

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

#100

Post by teachrdan » Tue, Mar 19, 2019, 5:50 PM UTC

0x0000000 wrote: post #96

o_nate wrote: post #44

When we sold our house, it was obvious that our realtor's incentive was to get a deal done. They had no incentive to go for a higher price if it lowered the chances of a deal getting done. If you really want an incentive to get the best price, you should have a base fee and an incentive fee, similar to how hedge funds operate. E.g. 2% of total price, plus 20% of difference of price above some baseline (e.g. assessed…

The Freakonomics guys found that "when real estate agents sell their own homes, they tend to keep them on the market longer (about 10 days) and get a higher sale price (by about 3%) than when they sell homes for their clients." https://www.investopedia.com/financial-edge/0311/how-real-es...

I know the obvious takeaway is (to exaggerate) that all realtors are crooks who are selling your house for too little because they don't care about you. But are we to expect that every realtor should spend as much time and effort selling every home as they do on their own? They presumably only sell their own home every few years, if that, and sell other people's homes every week.

I'm actually surprised the numbers aren't "worse" for realtor's own homes. Never mind that realtor's are, presumably, the most aware of local market conditions and are then in a position to best prepare their own homes for a higher sale price, i.e.: more likely to do home improvements that reap a higher return, to know how to best show the house, etc.