One of the strangest parts about mortgages to me is the "point" system lenders use to sell buyers lower interest rates. They offer a lower interest rate if you "buy points" rather than applying it towards your down payment. It seems like lenders are prioritizing their short term profit over their customers' long term financial stability.
A new class-action lawsuit takes aim at real estate agents and their 6% fee
111–120 of 344 posts
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#112Earlier quoted context omitted.
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 l…
> 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.
This is exactly why I've sold my homes FSBO with an actual real estate lawyer. Real estate agents are rarely lawyers and their training sometimes seems to give them the idea they are legal experts - they are not. The point I was making was that the agents both made mistakes and neither were held accountable. The reason the agencies stepped in was to fix the mistakes (legal mistakes) that were made. There are other ways to sell a house that do not require an agent that do protect you as a seller (or a buyer). I don't use agents anymore because of this and I've had nothing but a more positive experience given that the information from the buy side is much more accessible, and cheaper. I know what I'm looking for and I'm well capable of setting up searches to find that. Realty agencies know this and are trying to protect their vested interest by playing new games like "premarket" opportunities. I don't see how they're progressing the experience, but are only making moves to protect a legacy model. Very similar to how ridesharing has been, overall, positive disruption.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#113Where 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…
If her client isn't providing a return, she should drop them. The fact that she doesn't means that the 3% she is hoping for is enough to cover all of that hassle. And most sales aren't worth the hassle.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#114Earlier quoted context omitted.
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 p…
I still don't see why your experience means the pay should be percentage-based. Why not a flat fee? Why not hourly? Or a base fee plus hourly? The advice the realtor gave you was obviously valuable - but it shouldn't vary if you were purchasing a $100k house or a $2MM house.
I don't know about the person you are replying to but I don't have any problem with a flat fee becoming the norm.
I was just commenting on that even buying a home I would want a realtor, which many people here believe they don't need.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#115The 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…
Not sure how it is in different countries but in Sweden I haven't heard of anyone using an agent on the buying side. Not sure anyone would need one.
I personally think the whole real estate agent thing is a huge scam that will be solved with tech pretty soon. There are already options here for selling your house yourself through a DIY agency that just provides the boiler plate legal papers needed for 1/10th the cost. The only thing a conventional real estate agent does extra on that is pretty much host the showings.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#116Earlier quoted context omitted.
"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?
It's been a really long time since I saw that movie, but to my memory only one of them (the successful one) was a scammer.
One scene that stuck in my memory -- SPOILER ALERT -- was when one of the agents, who desperately needed to sell because he hadn't been able to sell in a long time and his job depended on it, finally thought he sold a home to a couple he had spent all this time and effort on, only to find out they have no money and just like talking to agents.
That actually happens. People will just waste a ton of real estate agents' time, with absolutely no intention to buy.
Real estate agents just get constantly jerked around, lied to, and cheated. That's just a fact of life for a real estate agent. I would never in a million years want to be one because of how constantly you get screwed -- and don't even get paid for your effort.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#117I 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.
Not necessarily. I bought my first house without an agent from a seller who was selling by owner.
It's quick and simple. We sat down at a table and negotiated a price in about 15 minutes, then had an inspection and paid a title company to do the rest.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#118Earlier quoted context omitted.
I still don't see why your experience means the pay should be percentage-based. Why not a flat fee? Why not hourly? Or a base fee plus hourly? The advice the realtor gave you was obviously valuable - but it shouldn't vary if you were purchasing a $100k house or a $2MM house.
I don't know about the person you are replying to but I don't have any problem with a flat fee becoming the norm. I was just commenting on that even buying a home I would want a realtor, which many people here believe they don't need.
I was replying to ApolloFortyNine. I definitely agree an agent who knows what they're doing can make a difference in the sale and have happily paid realtors in my life as well. I don't agree that that advice is somehow variable relative to the price of the sale.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#119It 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 pri…
(Disclaimer: I work for a tech company in the real estate industry. Opinions are my own.)
> 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.
Negotiating a $100,000 purchase or sale is an order of magnitude less lower stakes than negotiating a $2,000,000 purchase or sale. If you're a real estate agent and you're able to negotiate 5% up or down on the final sale price on a $2,000,000 house, that's equivalent to the entire value of the $100,000 house. It's not the same job. You could make the exact same argument about salesmen who are paid commission (which is almost exactly the same job as a seller's agent).
> but for both the seller and buyer agents, the number of deals done far outweighs slight incremental selling prices
There's definitely a bias for getting a deal done from the agent's perspective--moreso than for other sales or procurement agents because closing deals unblocks deal flow. I think this gets balanced out by the principals (buyers and sellers themselves) having final say on whether to extend or accept an offer.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#120I'm about to graduate college and move to NYC for a job. The unfortunate norm there is to pay a 15% fee (of the annual rent) to brokers to get a rental apartment. The cheapest the broker's fee gets is one month's rent, so about 8.33% of the annual rent. High end apartments sometimes pay the broker's fee on the renter's behalf [2]. Large apartment complexes sometimes have their own leasing offices, so there's no fee t…
I don't understand how this racket is allowed to operate. From my experience (three NYC apartments through realtors), the landlord's realtor provides pre-screening of "desirable" tenants for the landlord, showings, collecting paperwork from the prospect, and handing over the keys. None of this adds value from the (prospective) tenant's perspective, but the tenant must pay the fees (in all three cases, one month's rent).