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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

#261

Post by blacksqr »

planteen wrote: post #139
blacksqr wrote: post #98

Earlier quoted context omitted.

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'…

If a market is hot then bidding is necessarily going to be more competitive and sellers are going to be less accommodating. It's not unusual for buyers to make an offer site unseen in a hot market. So if you have the cash and you really want the house, I suggest you check out the rules in your state and next time try making an offer by any necessary means.

Or get an agent.

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

#262

Post by asciident »

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…

I and almost everyone I know have had the exact same experience. Buyer agents seems to basically set you up on some auto-email service for a search filter (which you can do yourself on many real estate websites), and occasionally take you to see some homes. They use all sorts of fear tactics to keep themselves from getting cut, and everyone is starting to realize it.

I ended up buying a house via private sale (FSBO) and I had no agent, and everyone won BIG TIME. The closing costs, including the lawyer, title search, and court documents were $650. With an agent, the costs besides the home purchase would have been about $25,000. It's a prisoner's dilemma, where either of you has an agent, then both buyer and seller are worse off.

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

#263

Post by asciident »

WkndTriathlete wrote: post #186
olyjohn wrote: post #122

Earlier quoted context omitted.

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…

Back in the day I did a FSBO with a real-estate lawyer who charged a grand total of $250 for a sale of $100,000. I'll take 0.25% overhead any day over 6%.

Same, my real estate lawyer charged $350 flat fee. He used standard documents, private sale. He probably spent about 1 hour on it in total, and that was about it.

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

#264

Post by asciident »

mbesto wrote: post #77
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…

> Also in England, real estate commission fees are about 1% vs. 6% in US. Also in England...stamp duty.[0] Yaaaaa....no thanks. https://www.gov.uk/stamp-duty-land-tax/residential-property-...

You know that most states have a stamp tax as well? It's just hidden in closing documents, and sometimes named something else. Basically a percentage of your sale price goes to the state.

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

#265

Post by DesiLurker »

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…

I see many (likely realtors) defending the fees & the larger model. Here is some back of envelop math I once did to put it in perspective:

according to Bob Shiller (of case/shiller fame) it has historically taken about 30 years of work to own a house in steady markets. now on an average people move houses once every 7 years due to labor mobility/family/etc reasons. so roughly 4 housing buy/sell transactions in an average persons life. assuming 7% commisions (~9% if you include both buyer and seller plus origination as you are often both when you move). so essentially you end up with .93^4 or ~75%. which means you've worked 25% of your life for your realtor(s).

Now do you think the commissions are worth it? IM[NSH]O its total BS, at best their work is fixed commission especially in the booming & super expensive markets like sf bayarea.

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

#266

Post by scarface74 »

dragonwriter wrote: post #251
scarface74 wrote: post #246

Earlier quoted context omitted.

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.

Outside of a very few areas of the country. There is more than enough housing inventory for people not to pay over the appraised value of the house. Most people are smart enough not to be upside down on their home the day they move in.

If you have good credit you can still get 100% LTV loans. Heck you only have to have a 600 credit score and not have had a foreclosure in 3 years to get a government back FHA loan with 3.5% down.

There are plenty of people who did “strategic defaults” on multiple properties after 2008, rented for three years and got an FHA loan for a new mortgage (ask me how I know).

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

#267

Post by Simon_says »

Nelson69 wrote: post #235
gamblor956 wrote: post #195

Earlier quoted context omitted.

Everything from mandatory trainings, registration to insurance requirements. People pay hundreds of thousands of dollars on their homes. It's the single largest transaction of most people's lives. I certainly hope the individuals hired to negotiate and manage these transactions are trained and insured...

When I last bought a house, I had an agent to show me houses. Then when it came offer time, I actually had my lawyer do the final review and he essentially did the bulk of the negotiation, the agent was simply a mouth piece with access to the databases and someone the other agents would talk to. It was during the 2008 time and I placed a bid on a short sell, my lawyer gave me distinctly different advice than the agen…

What were the demands the seller wanted in the contract? And what was the bad advice that your agent gave? Just curious.

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

#268

Post by iends »

dustindiamond wrote: post #225
matthewowen wrote: post #219

Earlier quoted context omitted.

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.

I thing the barrier to entry is not that low, otherwise we would have a ton of HN folks getting their license to make leadgen sites and collect 25% referral fees (from the 3%) for having to really not deal with the customer.

Nobody outs their niches. If something is super easy nobody is going to confirm that for you.

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

#269

Post by ryanmarsh »

Your local real estate listing service (also useful for competitive price analysis) is only accessible by real estate agents. This is anti-competitive. Real estate agents are one of the last bastions of rent-seeking bastards that will fall, and not a day too soon.

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

#270

Post by ninkendo »

linsomniac wrote: post #190
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.

Note they said "less than 40 hours", so that's "at least $300/hour". I feel like my buyers agent, who I really liked, worked more like 10-20 hours for $9K, for $450-$900/hour. Don't get me wrong, I really liked her and she did a great job, but I'm not sure she did $9K great...

I feel you. I just bout a $715k house largely because I found it online, and went through an agent to show me the house and, I guess, do some paperwork for me? Her company made $21k off of the seller, and I'm sure she took at least half of it.

Probably 10-20 hours of work in total.

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