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

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

#131

Post by atwebb »

Mindless2112 wrote: post #126
jdpedrie wrote: post #104

Earlier quoted context omitted.

> But was it worth $12k for less than 40 hours of total work? I don't think so. First, I agree that the fees charged are exorbitant. However, for many smaller realtors, they may not have much inventory at any given time. So, just like a freelance programmer, the buyer is paying for their work and for their downtime between jobs.

Sure, but a real estate agent who has a "seller" client has a pretty easy time finding "buyer" clients -- run an open house on a property you're selling and prospective buyers (specifically the ones that decide they don't want to buy the property being shown) come to you without even knowing that you exist.

Really, really depends on the specific house.

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

#132

Post by pmoriarty »

nrclark wrote: post #127
pmoriarty wrote: post #116

Earlier quoted context omitted.

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 the…

Isn't it kind of a self-inflicted problem though? As an organization, Realtors guard listings jealously, control access to house viewings, and bind themselves to clients with exclusivity contracts. It shouldn't be surprising their time gets wasted by people who are just window-shopping, because they're essentially standing in front of all the windows.

Maybe it is their fault. In my opinion the entire business model is fucked up. If it was up to me, I'd charge for every single hour of my time, charge for advertising and any other money I spend towards selling the home (or build it in to my hourly fee), and charge a commission on top of that. But from what I understand an agent can't do that because it's against the law.

As for exclusivity contracts: agents don't just impose those on clients. The client can sell the home themselves if they want, it's called "for sale by owner". But if they want an agent to represent them, then yeah, the agent will act as their representative. Why shouldn't an agent get paid for their time when they act as the seller's representative -- even if the house doesn't sell?

It just boggles my mind how much free work agents do.

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

#133

Post by pmoriarty »

kthejoker2 wrote: post #130
pmoriarty wrote: post #116

Earlier quoted context omitted.

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 the…

> It's been a really long time since I saw that movie, but to my memory only one of them was a scammer. You really need to watch the movie again. Their entire operation is based on high-pressure sales. True hackers.

I'll watch it again, and I'll be the first to admit that there are unscrupulous salespeople of all stripes -- maybe they're even the rule rather than the exception. But there are also honest salespeople who truly want nothing but the best for their clients, who refuse to cheat or lie, and who often get screwed by people who do.

I personally know very well one of these latter types, and just feel really bad for them because of how much shit they have to put up with, how much work they have to do for free, and because it's a really tough business to succeed in if you're honest.

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

#134

Post by olyjohn »

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…

That doesn't make sense. If you go to the seller's agent directly, they get the entire commission instead of splitting it with a buyer's agent. It's in their best interests financially to not have a buyer's agent come along. But that's also terrible for you because it's a conflict of interest for the agent to represent the buyer and seller.

More likely, they didn't see you as a serious buyer if you don't have an agent. There are a lot of tire kickers out there.

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

#136

Post by nrclark »

pmoriarty wrote: post #132
nrclark wrote: post #127

Earlier quoted context omitted.

Isn't it kind of a self-inflicted problem though? As an organization, Realtors guard listings jealously, control access to house viewings, and bind themselves to clients with exclusivity contracts. It shouldn't be surprising their time gets wasted by people who are just window-shopping, because they're essentially standing in front of all the windows.

Maybe it is their fault. In my opinion the entire business model is fucked up. If it was up to me, I'd charge for every single hour of my time, charge for advertising and any other money I spend towards selling the home (or build it in to my hourly fee), and charge a commission on top of that. But from what I understand an agent can't do that because it's against the law. As for exclusivity contracts: agents don't ju…

Exclusivity contracts are also the norm for buyers.

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

#137

Post by eutropia »

Recently bought my first home without an agent on either side.

If you were able to take away the complexities of applying for a mortgage, then the transaction would be as follows: buyer and seller sign a purchase contract(which defines what is being sold, for how much, and under what circumstances), establish escrow, have the property officially assessed for value (for tax purposes), have a title agent validate that the deed to the property is legally the seller's to sell, and finally file the deed with the local recorder's office.

You can pay a lawyer to draft the purchase agreement for you or write one yourself.

To me, its the closing costs and lending instruments that need an overhaul -- but yeah, get rid of the realtors too.

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

#138

Post by planteen »

olyjohn wrote: post #134
planteen wrote: post #58

Earlier quoted context omitted.

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…

That doesn't make sense. If you go to the seller's agent directly, they get the entire commission instead of splitting it with a buyer's agent. It's in their best interests financially to not have a buyer's agent come along. But that's also terrible for you because it's a conflict of interest for the agent to represent the buyer and seller. More likely, they didn't see you as a serious buyer if you don't have an agen…

> More likely, they didn't see you as a serious buyer if you don't have an agent. There are a lot of tire kickers out there.

That's definitely it. I literally never got my foot in the door. My plan (which I never executed) was to use a real estate attorney and lower the offer by 3% since no buyer's agent commission would be needed. I had read about people doing this, but it didn't seem viable in a hot market unless you are flush with cash. I wasn't an all cash buyer.

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

#139

Post by planteen »

blacksqr wrote: post #98
planteen wrote: post #58

Earlier quoted context omitted.

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.

I never made an offer. I was simply trying to see the house without an agent of my own. The house in question was near where I was renting and had been on the market over a week without an open house. It went to pending a week or two later. The seller's agent never got back to me at all.

It's funny you say that about legality though - some of my relatives recently put in a low-ball offer on a place in AZ. The seller's agent called them back, said it was insulting, and would not be even showing it to the owners. The house had been on the market for months. I wonder if that was legal.

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

#140

Post by tacomonstrous »

olyjohn wrote: post #122
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…

Anybody can look up listings. And anybody can go directly to the selling agent to buy the house. It's not about negotiating a price, it's about making sure that everything is legit with the transaction. Are you going to make sure that everything is properly filed? Are you going to keep on top of all the other people involved to make sure they're doing their jobs? Are you going to go through 4000 pages of legal paperw…

>Are you going to make sure that everything is properly filed?

Yes, also that's what the attorney keeps track of.

>Are you going to keep on top of all the other people involved to make sure they're doing their jobs?

Yes, that's what I had to do anyway, even with an agent around.

>Are you going to go through 4000 pages of legal paperwork?

No, and neither does anyone else.

>Are you going to ride the sellers' asses to make sure the sale closes, so you aren't stuck homeless after moving out of your old place?

Sure, if I have to.

>There's nothing stopping you from hiring a real estate lawyer instead of an agent. I'm sure he'll be happy to charge you by the hour.

Depending on the state, you're required to hire an attorney in any case.

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