Earlier quoted context omitted.
Yes. They’re fiduciaries.
I thought that was just Real Estate Brokers and not Agents?
AFAIK all licensees are fiduciaries and in any event the broker is responsible for the agent.
A new class-action lawsuit takes aim at real estate agents and their 6% fee
331–340 of 344 posts
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#332Earlier quoted context omitted.
I’ve been quoted $500 an hour and $750 an hour from various attorneys. I think that’s pretty easy to swing on a $100,000 house.
Sure, for a single hour. A real estate contract is dozens of pages long, and a good attorney would review all of those. $500/hour for one hour? Doable for most people. $5000+? That changes the economics of buying, especially if we're talking a $100k house, since that $100k is spread out over 30 years but the lawyer's bill is due in 30 days.
For contract reviews I've only been quoted 1-3 hours. Nowhere near $5,000.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#333Earlier quoted context omitted.
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?
Nothing illegal, but the initial contract was definitely a bad deal for me. The most glaring item was some added in language that translated to if the appraisal comes up short of the contract agreement then the seller will lower the sales price to match the appraisal. In Texas at least an appraiser is chosen somewhat randomly (I'm not sure how, but neither the buyer nor seller get to choose) and they give what is at best a guesstimate.
The other glaring things were everywhere a fee was to be paid, they had checked the seller's box, and that wasn't the kind of market we were in. I had already signed for my next house and I wasn't about to pay all the closing costs when I was the buyer and again as the seller.
In Texas all the real estate agents use the Texas Real Estate Commission's forms for contracts. It has check boxes and fill-in-the-blanks for all the standard things. I found that almost any place this agent had deviated from one of the standard boxes she had tried to put something shady in. Maybe in her experience people representing themselves were less savvy sellers.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#334It 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…
(Disclaimer: I work for a tech company in the real estate industry. Opinions are my own.) > 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. Negotiating a $100,000 purchase or sale is an order of magnitude less lower stakes than negotiating a $2,000,000 purchase or sale. If you're a real estate agent and you're abl…
I have an even more cynical take on things. I purchased a house last summer and played the naive buyer and entered into a dual-agency agreement with the selling agent. Due to the competitive market in the town we were buying in, this was to hopefully give us the tiebreak with competing offers. I have few expectations from a buyers agent beyond opening doors to let us in to view properties and to communicate with the seller's agent.
For selling our prior house, I think our seller's agent actually performed some services. She ran the open house, gave us great advice on pricing in our town (5 square miles, she's been selling for 30 years), and -most importantly- gave a buffer in communication with the buyer. Should any issues arise, there's no direct communication with the buyer AND it also helped us be dispassionate when choosing among our various offers.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#335Earlier quoted context omitted.
There are 1.3 million Realtors(tm) in the U.S. Imagine what a productivity boon it would be if even half of them switched to gainful employment versus rent extraction via their cartel!
Better watch what you ask for. When they switched to no-fault car insurance in my home state, many years ago, the number of non-car-related lawsuits skyrocketed.
IMO no fault anything sounds like a recipe for abuse. That's generally how society functions -- there are consequences to actions.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#336Earlier quoted context omitted.
Better watch what you ask for. When they switched to no-fault car insurance in my home state, many years ago, the number of non-car-related lawsuits skyrocketed.
IMO no fault anything sounds like a recipe for abuse. That's generally how society functions -- there are consequences to actions.
There are still consequences under no-fault auto insurance. First of all, you can still get a ticket for causing a crash. Second, your traffic record increases your insurance premium. Also you could get injured yourself. I don't think crashing cars is something sane people would do in the absence of the insurance system.
Since everybody has mandatory liability insurance, on average the net money transferred between insurance companies is probably close to zero, whether money changes hands in lawsuits or not.
The aim of no-fault in my state was to reduce the number of lawsuits that arose over petty incidents, that were flooding the courts.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#337I'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…
Why would you pay an agent hired by another party anything at all? If the buyer wanted an agent, surely it's something they should cover.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#338I'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…
Why would you pay an agent hired by another party anything at all? If the buyer wanted an agent, surely it's something they should cover.
That's why you get a buyer's agent who has fiduciary responsibility to -you-. They split the typical 6% between themselves and the seller's agent.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#339Earlier quoted context omitted.
> Oh, and it is illegal here for a realtor to charge both the buyer and the seller because there is a clear conflict of interest there, you can only work for one party. Technically, in the US, the buyer's agent is only working for the buyer. They're just paid by the seller (traditionally and stupidly).
> in the US, the buyer's agent is only working for the buyer. They're just paid by the seller (traditionally and stupidly). I just went through this process. While the buyer's agent ostensibly works for the buyer, their main incentive is to get you to close. It doesn't matter if it's a good deal, a bad deal, or whatever. They take 3% so if you overpay or underpay by 10% of the appropriate value of the house that's on…
That's not true in a general sense at all. My agent actively dissuaded me from several houses and pointed out why they were a bad deal. In the end I ended up with a house that I found while driving around a neighborhood I liked. The BA helped me with all the paperwork and made sure I didn't have any issues with the purchase as well.
Re: A new class-action lawsuit takes aim at real estate agents and their 6% fee
#340Earlier quoted context omitted.
It being % based means the incentives of the agent are more aligned with the seller than buyer. If the agent charged a flat fee -- the agent doesn't have incentive to negotiate a higher price.
No real estate agent I've ever worked with or heard of encourages holding out for a better price. They try to talk you into accepting the fastest close. Time is money and the faster they close on your house the faster they can start selling the next one.
haha definitely reverse caveat emptor :)