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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

#251

Post by dragonwriter »

scarface74 wrote: post #246
jedberg wrote: post #210

Earlier quoted context omitted.

I didn’t say base it on profit for a house. I said base it on a price the seller wants. Like consignment.

It’s still a horrible idea. If I know the market value of my house which is easy to find out based on comparables, how much over could the real estate agent sell it for? The buyer can’t get a loan for more than the house is appraised for. In most house buying situations, the seller,buyer, and mortgage company all know what the house is worth with only a little wiggle room.

> The buyer can’t get a loan for more than the house is appraised for.

The buyer in most cases (there are exceptions) probably can't get a loan with a LTV ratio higher than some number less than or equal to 1 times the appraisal value (.8 typically for a conventional, first mortgage alone), but can generally put as much of their own money into a purchase as they want.

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

#252

Post by TomMckenny »

kbutler wrote: post #204
scarface74 wrote: post #164

Earlier quoted context omitted.

Why wouldn’t they unless you agreed to pay the buyer’s agent commission? It’s how they make their living. Edit: oops meant buyers agent - corrected.

Realtors have a fiduciary responsibility to act in the interest of their principal, even when it is against the interest of the agent. "This duty obligates a real estate broker to act at all times solely in the best interests of his principal to the exclusion of all other interests, including the broker’s own self-interest." https://www.nar.realtor/sites/default/files/handouts-and-bro...

In principle.

But do you have an example of that fiduciary responsibility being enforced to any real degree?

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

#253

Post by BrentOzar »

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…

> plus I paid her a 2% commission instead of 3%, and of course not 6% as if she represented me as well.

I tried selling my home twice: first with the “normal” approach, using a real estate agent and paying everybody full commission. My agent just didn’t do enough to move the process along. After my contract with her expired, I bid her goodbye.

On attempt #2, I listed it myself (for sale by owner) but put in the listing notes, “FSBO, but the buyer’s agent will get 4% commission.” Agents kicked my door down bringing buyers in, and we sold it for full asking price in under a week.

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

#254

Post by coredog64 »

windexh8er wrote: post #112
tathougies wrote: post #94

Earlier quoted context omitted.

> 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 somet…

Some states actually require a lawyer in the process as well. So not only is the RE agent holding out their hand for their 3%, there’s a lawyer that wants a couple grand for what is usually filling out boilerplate. Not only that, but you can also find states where the agents aren’t legally allowed to tell you what is a “good” neighborhood or school district.

I would rather pay an RE agent by the hour to show me houses than this percentage nonsense. Zillow/Google street view helps to drop most of the false positives, and the agent can help me focus on real candidates.

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

#255

Post by dd36 »

tomp wrote: post #227
dgudkov wrote: post #166

Earlier quoted context omitted.

>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.

> That's $300/hr. Similar to what lawyers ask. Do agents carry the same (legal) responsibility as lawyers / doctors though?

Yes. They’re fiduciaries.

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

#256

Post by dd36 »

nrclark wrote: post #48
pseudometa wrote: post #25

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 pri…

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…

It’s also hit or miss as offers fall through at every stage. A good agent is worth it just like a good lawyer or doctor.

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

#258

Post by marpstar »

BrentOzar wrote: post #253
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…

> plus I paid her a 2% commission instead of 3%, and of course not 6% as if she represented me as well. I tried selling my home twice: first with the “normal” approach, using a real estate agent and paying everybody full commission. My agent just didn’t do enough to move the process along. After my contract with her expired, I bid her goodbye. On attempt #2, I listed it myself (for sale by owner) but put in the listi…

Thanks for sharing this. My first (and only) home purchase was a FSBO and I also did not have an agent. I didn't see what the point of it was from the buyer side. I'm hoping to sell soon and your 4% buyer agent commission technique is very intriguing.

I made contact with an agent last year in my search for a new home and she's since practically forgotten about me. Never sends me any homes that match my criteria. Looks like I'll be going alone, again.

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

#259

Post by Gibbon1 »

gibybo wrote: post #244
chrisco255 wrote: post #242

Earlier quoted context omitted.

They brought you a buyer. The buyer pays for everything in both cases. If you sell your house for $100K - 3% it's the same as selling your house FSBO for $97K.

He sold his as FSBO. It's highly unlikely the real estate agent brought the buyer since they hate FSBOs. It's much more likely the buyer found the house himself/herself.

My experience with a buyers agent was no offense but they were pretty much worthless when selecting which houses to make offers on.

On the pro side the sellers agent was also worthless.

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

#260

Post by JMTQp8lwXL »

intrasight wrote: post #194

We tried selling our first house ourselves. Ran ads in paper. Put up fliers. Etc. This was before the internet mind you. Tried this for 3 months and literally had no serious interest. We gave the listing to an agent and a week later had two full price offers. Sure, the internet has changed things a bit, but since then I always use a realtor. 6% is fair for the good ones. More challenging in some markets near me is wh…

I think the internet changed things a bit more than a little since then.
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