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

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

#291

Post by justwalt » Wed, Mar 20, 2019, 3:16 AM UTC

gangstead wrote: post #175

berdon wrote: post #142

We bought our house with a realtor who found and walked us through listings. Ultimately, we found the house we ended up buying. Our buying agent was helpful and did a good job but the questions she answered and information she gave was available online. We sold our house without a realtor and had no real issues. Buying agents tended to stray from our listing and most would communicate with us first to make sure we wo…

This was my experience as well. I've bought two homes and both times we found it ourselves. Used the real estate agent friend of a family member (there's always one) to show us a couple houses and relay offers, but I never felt like they did something I couldn't have done myself. I went along to both home inspections and found things the inspector missed. At all 3 closings (buying and years later selling the first ho…

What kinds of tricks did yours try to pull?

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

#292

Post by joshcain » Wed, Mar 20, 2019, 3:18 AM UTC

olyjohn wrote: post #106

Latteland wrote: post #47

Earlier quoted context omitted.

It's not that people don't do something worthwhile. It's more a question that is it worth paying 60,000 when selling your house? It's not. At $100 an hour, do you get 600 hours out of work of them? No. It's not about market prices, because the cartel (real estate industry) prevents lowering percentages - and they fight to the death any upstart who wants to do it. It should not be a percentage, it should be a fixed ra…

Who is paying $60,000 to sell their house? Most houses and agents aren't selling million dollar houses. There are some, but that's not the majority. Also houses that are priced like that don't have as many buyers, they take longer to sell. They have to market them to the right people, and have connections to sell those kinds of places quicker. People gotta remember, the commission is split 4 ways unless one of the ag…

"Why pay you so much, I can just set up a website on Wix for $10."

I mean, that's a valid point in the age of Wix and Squarespace. I'm certainly glad I'm no longer in the business of building brochureware sites for small clients.

I understand your larger point that we shouldn't be quick to assume a realtor's work is not difficult. However, I think the issue is the buyer doesn't really have the option to forego the buyer's agent service and capture (through a reduced price) the commission that would have otherwise been paid. Not everyone needs a full-service realtor in the same way not everyone needs a bespoke CMS.

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

#293

Post by ericmcer » Wed, Mar 20, 2019, 3:18 AM UTC

tathougies wrote: post #91

ericmcer wrote: post #82

Earlier quoted context omitted.

I have never had someone who has not done programming before, watch me typing into a terminal and say it looks easy. I don't think its hard or requires a huge amount of intelligence, but I think it is crazy to compare the barrier of entry for real estate to that of software engineer. The average person would take minimum a year to go from no-skills to an actually useful independent engineer. I could literally take a…

> 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…

Barrier to entry is what makes some jobs pay more than others. I think programming is easier than working in fast food, but you could literally take almost anyone with an elementary school education and turn them into a productive fast food worker in a matter of days.

I might not be good at real estate, but I bet in a weeks time I could do a passable job filling out necessary documents and doing open houses.

There is no reality where someone who has no programming experience is anything other than a huge liability if you give them a week of training and then assign a feature to them and tell them to start coding, testing, and making pull requests for it.

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

#294

Post by fma » Wed, Mar 20, 2019, 3:21 AM UTC

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…

You don't pay anything to the agent, directly. Why do you think for sale buy owner homes are cheaper? The seller can knock off a few percentage points because they don't have the overhead of paying 6%.

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

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Post by DesiLurker » Wed, Mar 20, 2019, 3:27 AM UTC

TallGuyShort wrote: post #278

DesiLurker wrote: post #265

Earlier quoted context omitted.

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 ave…

Very good point with the math. However with super expensive markets, doesn't their commission then match their increased cost of living to be working there?

that can be used to justify almost any level of commission including fixed fee rate. ultimately its modulated by increase number of realtors coming into the market. the core amount of work needed to buy/sell a house is not that much and can be effectively segmented to specialized (low-cost) individuals like Redfin is trying to do. you could also argue that in hot markets like sf-bayarea homes sell themselves so the workload on realtors is not so much, which means they can sell more houses to make up for 'lost' commission like rest of america.

the problem is that even if a realtor wants to reduce his commission, he has no control over the other party and they'll want to have full 3%. this minimizes the incentive to disrupt the process though in super expensive markets it may still make sense.

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

#296

Post by DesiLurker » Wed, Mar 20, 2019, 3:41 AM UTC

ralph84 wrote: post #284

DesiLurker wrote: post #265

Earlier quoted context omitted.

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 ave…

Math isn't correct because most of that 30 years of work is interest on the mortgage, which the realtor doesn't get a cut of.

that is in addition to mortgage interest. one could argue that is justified because ultimately its the bank taking a risk on giving you a loan for the property. so they deserve a premium for that risk, how much premium is another question but the fact remains that they are one of the parties in the transaction.

My issue here is with these middleman who have nothing to do with property once the sale is made & exist to take a cut of the transaction because they have monopoly on the listing service. the calculation I've done only reflects the cut to the realtor simply because they've inserted themselves in the process.

just think about it, increasingly Americans dont have any other retirement saving besides equity in their homes. so its not a hyperbole to say that you've effectively sacrificed 25% of your retirement to these (really resisting the urge to name call) people.

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

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Post by diggernet » Wed, Mar 20, 2019, 3:44 AM UTC

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...

Please note: That is for a "real estate broker". Most buyers and sellers are dealing with a "real estate agent". Agent is a lower level license, for which that duty does not apply.

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

#298

Post by Justin_K » Wed, Mar 20, 2019, 4:08 AM UTC

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...

This is so meaningless I don't even know how to respond. Banks have the same responsibility and look how they've treated customers.

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

#299

Post by fma » Wed, Mar 20, 2019, 4:10 AM UTC

I always wondered who represents home owners who have cheap houses... Like a $50k house. Whether you are selling a 50k house or 500k, there's a similar amount of work. But those houses do get sold.

Also as a rental property owner I hate how realtors charge by the monthly fee. Meaning, if I rent out my house for $2k a month, I need to pay them that amount for a new tenant. A $2k a month property with tenants that have jobs is easier to maintain than $500 property with tenants that barely hold a job.

They also take a 10% cut per month of the rent... $200 for $2000 rent... $50 for $500...just to do the same thing. Real estate fees make no sense!

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

#300

Post by kevindong » Wed, Mar 20, 2019, 4:14 AM UTC

freewilly1040 wrote: post #288

airstrike wrote: post #250

Earlier quoted context omitted.

Moved to NYC and paid a broker $8k+ for an apartment I had found by myself on streeteasy, and rent was around $3.5k... To this day my wife and I refer to her as "the parasite". She provided ZERO value other than showing me around the building, which any of the 20-person staff in the building could have done, and in any case certainly doesn't justify paying her more than TWO months' rent

I'm surprised there is not more progressive backlash against apartment brokers in NYC. Plain as day rent seekers disproportionally affecting people with low incomes. Who are their friends?

There is actually movement to cap the broker's fee at one month's rent, cap the security deposit at one month's rent (and allow for paying the deposit over six months), and mandate the return of security deposits within two months of the lease ending.

https://www.brickunderground.com/rent/pros-cons-capping-brok...