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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

#211

Post by dustindiamond »

matthewowen wrote: post #157
tathougies wrote: post #91

Earlier quoted context omitted.

> 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 regulat…

It's two weeks of classes and a test. 85% of realtors drop out of the industry within 18 months. My impression is that this is because "becoming a realtor" is very easy. A counterpoint might be that it's because being a _good_ realtor is hard, and I believe that that is true to some extent. But that means you aren't _really_ paying someone "for having passed a test saying that he/she is capable of representing you in…

You still need a broker to work under, you then need to pay desk fees, real estate board membership fee, MLS fee, and then actually advertise.

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

#212

Post by dustindiamond »

jrs235 wrote: post #148
ak217 wrote: post #86

Earlier quoted context omitted.

They are undercutting. Online brokerages like Redfin and Opendoor are challenging the 6% fee. Their success has led to the "standard" fee now being 5% in many markets, but if you use these platforms on both the seller and buyer side, you may now be able to get down to 2.5%. I expect the fees will continue to drop. As the article points out, the realtor cartel works to de-platform individual realtors who undercut the…

I keep seeing people incorrectly using the word 'Realtor'. A Realtor is a member of the National Association of Realtors. Not all real estate agents are Realtors. And not all Realtors are real estate agents (some are appraisers, home inspectors, etc.) The "realtor cartel" will not de-platform individual Realtors as much as they will deplatform non-realtor real estate agents. To get access to MLS you must be a Realtor…

I am able to get MLS access as a licensed real estate agent as long as I am a member of the local board and pay for that membership and MLS access. I am not a realtor.

Also, it may be different where you are, but 25% is the standard for referrals (from the buyer or seller side).

To me, it seems easier to generate quality leads, and then refer them to a buyer agent.

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

#213

Post by legohead »

When I was in OK the 6% seemed like a lot, but it was workable.

Now in CA, after selling my first home, this 6% is simply absurd. After selling and buying a new house, even with considerable equity, if I were to sell my house again I would actually be losing money.

We had several major life events at once recently (job loss, family death, and a couple others), and almost had to sell the house. Doing so would have been like starting over after building up equity for 30 years.

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

#214

Post by opportune »

manny_hasyrs wrote: post #206
jliptzin wrote: post #181

Earlier quoted context omitted.

Still, even if a home appraises for 25% less than it otherwise should, that's still a vastly better compensation scheme than our current system.

This will make buying a home very unattractive as an investment.

homes shouldn't be investments anyway

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

#215

Post by jseliger »

chrisco255 wrote: post #200
om3n wrote: post #146

I'm a software engineer, and I started my career at a well known mortgage company in Detroit. Views are my own, BTW. I bought a house a couple years after I started working there, and I wanted the full home-purchaser experience. I used my company's services for everything, and as an employee they hooked me up with a real estate agent (among other things). I was honestly appalled at what little my real estate agent di…

Former real estate agent, now software engineer. Doing a FSBO (for sale by owner) is as old as time. There's nothing wrong with this approach, but you are limiting your market (and you might therefore be selling at a lower price anyways) and it's highly dependent on your: patience, financial situation, free time, marketing skills, general sales skills, local housing market, tricky property situations, ability to assi…

Buyer's agents deserve their 3% perhaps even more than listing agents and it's unfortunate you screwed this agent out of that. It's sort of like stiffing a server on a tip

A tip might be $20, not $10,000. The two are nothing alike.

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

#216

Post by Youden »

chrisco255 wrote: post #200
om3n wrote: post #146

I'm a software engineer, and I started my career at a well known mortgage company in Detroit. Views are my own, BTW. I bought a house a couple years after I started working there, and I wanted the full home-purchaser experience. I used my company's services for everything, and as an employee they hooked me up with a real estate agent (among other things). I was honestly appalled at what little my real estate agent di…

Former real estate agent, now software engineer. Doing a FSBO (for sale by owner) is as old as time. There's nothing wrong with this approach, but you are limiting your market (and you might therefore be selling at a lower price anyways) and it's highly dependent on your: patience, financial situation, free time, marketing skills, general sales skills, local housing market, tricky property situations, ability to assi…

> and it's unfortunate you screwed this agent out of that.

This makes absolutely no sense to me. Why on earth would I be obligated to pay the buyer's agent? What has the agent done for me? When did I establish a relationship with this person and agree to pay them anything?

I would feel absolutely fine paying this person zero. If they want to get paid, they should take it up with the buyer because the buyer is the one who engaged their services.

Note: I am not American.

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

#218

Post by tootie »

michaelper22 wrote: post #120
kevindong wrote: post #74

I'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 ren…

I recently worked on a financial website that does a full credit, background and fraud check online and in real time for issuing small loans. There's some amount of manual auditing that can happen in the background for anyone that raises a yellow flag, but otherwise you can get a loan approved and disbursed with no fees and it happens in a few days and is fully automated.

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

#219

Post by matthewowen »

dustindiamond wrote: post #211
matthewowen wrote: post #157

Earlier quoted context omitted.

It's two weeks of classes and a test. 85% of realtors drop out of the industry within 18 months. My impression is that this is because "becoming a realtor" is very easy. A counterpoint might be that it's because being a _good_ realtor is hard, and I believe that that is true to some extent. But that means you aren't _really_ paying someone "for having passed a test saying that he/she is capable of representing you in…

You still need a broker to work under, you then need to pay desk fees, real estate board membership fee, MLS fee, and then actually advertise.

But the barriers to entry for these things are also small. It's money for the fees, and given that these people are 100% commission finding a broker is not a big challenge.

Do you honestly disagree that the barrier to entry to being a practicing real estate agent is low? Doesn't mean it isn't hard to be a _successful_ one, but the basic barrier to entry just doesn't seem that high.

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

#220

Post by [deleted] »

dgudkov wrote: post #166
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…

>But was it worth $12k for less than 40 hours of total work? That's $300/hr. Similar to what lawyers ask. Although, I suspect that a lot more education is required to become a lawyer than a real estate agent.

[deleted]
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