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After a $1.8B verdict, the clock is ticking on the 6% realtor commission

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Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#171

Post by jakderrida »

2-718-281-828 wrote: post #170
jakderrida wrote: post #169

Earlier quoted context omitted.

While my mom is a mortgage agent that always had access to MLS (which she shares with me), I'd argue some realtors (my realtor I've known since I was 4) are worth the 5% without MLS. She has like 4 assistants managing everything in the background that are so well-trained that I didn't even need to mention updating my converted Single to a Multi-family because they somehow figured it out and just did it. She also seem…

> an army of prospective buyers to show up on the day that's what i hate about realtors. in germany they will gladly invite a hundred interested people for a flat and by that make searching for an appartment a huge waste of time. it's easier for them and probably a nice ego stroke.

My question was always where the hell she finds all these people and always manages to achieve a rather large premium to my somewhat rigorously estimated value based on all the comparables I find on BrightMLS. They're obviously not getting a great deal. All 3 sales were also Philadelphia suburbs, which is not a lucrative market for speculative gentrification. The only major spike in values in the past 25 years was during COVID with like a single massive 80% jump because in a world where pandemics are real, urban market plummeted. But you'd think this army of buyers would see the name and say, "Screw that! I'm not going to Diane's open houses ever again."

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#172

Post by tsycho »

jakderrida wrote: post #169
x86x87 wrote: post #22

Earlier quoted context omitted.

It's mostly due to the fact that in order to list a house or find a house you need to use a system called MLS. In order to use the system you need to be a realtor. It's quite simple actually

While my mom is a mortgage agent that always had access to MLS (which she shares with me), I'd argue some realtors (my realtor I've known since I was 4) are worth the 5% without MLS. She has like 4 assistants managing everything in the background that are so well-trained that I didn't even need to mention updating my converted Single to a Multi-family because they somehow figured it out and just did it. She also seem…

Now imagine a world where realtor fees are 1% instead of 6%. On a 300k house, that's 15k you don't pay to the realtor. In this world, your realtor doesn't bring you an extra 12k from the buyer, but you still come ahead. And the buyer pays less too.

That's a win win world for everyone (except the realtor, who are redundant middlemen in the internet eta).

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#173

Post by jjeaff »

dlandis wrote: post #135
x86x87 wrote: post #22

Earlier quoted context omitted.

It's mostly due to the fact that in order to list a house or find a house you need to use a system called MLS. In order to use the system you need to be a realtor. It's quite simple actually

There are a ton of websites that say it’s possible to create an MLS listing for a small fee, for a for sale by owner house.Are you suggesting there is some catch or that that is not actually possible?

I did that with my house. But I had to publish on the listing that we would pay a buyer commission otherwise, no one would come. Luckily, another unrepresented person bought it so I didn't have to pay the commission.

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#174

Post by jjeaff »

jakderrida wrote: post #169
x86x87 wrote: post #22

Earlier quoted context omitted.

It's mostly due to the fact that in order to list a house or find a house you need to use a system called MLS. In order to use the system you need to be a realtor. It's quite simple actually

While my mom is a mortgage agent that always had access to MLS (which she shares with me), I'd argue some realtors (my realtor I've known since I was 4) are worth the 5% without MLS. She has like 4 assistants managing everything in the background that are so well-trained that I didn't even need to mention updating my converted Single to a Multi-family because they somehow figured it out and just did it. She also seem…

So she got you $12k over asking, but cost you $15k+. That math doesn't support your conclusion.

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#175

Post by dangus »

rrrrrrrrrrrryan wrote: post #155
intrasight wrote: post #31

I see this changing really fast. Real estate firms and individual real estate agents are not gonna want to get sued for hundreds of millions of dollars. They are going to be SUPER careful to avoid that. I foresee the quick dilution of the power of the realtor trademark. I foresee new real estate agents entering the market and not using the realtor trademark. I see those real estate agents using very different busines…

My prediction: In 8-10 years... Seller's agents will get paid a flat rate, then X% commission for just the amount above some certain price. Basically they'll be rewarded if (and only if) they can successfully create a bidding war that sells the place for more than it's probably worth. If they're just doing their normal job of selling the thing for the appropriate amount, they'll get their flat rate. Buyer's agents wi…

Buyer’s agents should logically cease to exist. They’ve been replaced by real estate websites, they’ve just been hanging on through an artificial monopoly.

Everything my last realtor showed me was worse than what I found on Zillow on my own, and the formatting of the information was so user-unfriendly that it was basically worthless.

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#176

Post by jakderrida »

jjeaff wrote: post #174
jakderrida wrote: post #169

Earlier quoted context omitted.

While my mom is a mortgage agent that always had access to MLS (which she shares with me), I'd argue some realtors (my realtor I've known since I was 4) are worth the 5% without MLS. She has like 4 assistants managing everything in the background that are so well-trained that I didn't even need to mention updating my converted Single to a Multi-family because they somehow figured it out and just did it. She also seem…

So she got you $12k over asking, but cost you $15k+. That math doesn't support your conclusion.

Again, $300k+ was a joke I made to her. So, obviously, my estimates were far lower and the price she achieved exceeded your estimated premium. Unless you think my joke was that a $297k property was worth $3k more, in which case I'd ask you to devote more thought to your conclusions.

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#177

Post by jakderrida »

tsycho wrote: post #172
jakderrida wrote: post #169

Earlier quoted context omitted.

While my mom is a mortgage agent that always had access to MLS (which she shares with me), I'd argue some realtors (my realtor I've known since I was 4) are worth the 5% without MLS. She has like 4 assistants managing everything in the background that are so well-trained that I didn't even need to mention updating my converted Single to a Multi-family because they somehow figured it out and just did it. She also seem…

Now imagine a world where realtor fees are 1% instead of 6%. On a 300k house, that's 15k you don't pay to the realtor. In this world, your realtor doesn't bring you an extra 12k from the buyer, but you still come ahead. And the buyer pays less too. That's a win win world for everyone (except the realtor, who are redundant middlemen in the internet eta).

First off, I'm not opposed to such a world in general. However, you, like the other replier, failed to read how my $300k number was intended as a joke about my optimism. Thus, it makes more sense to conclude my estimates (made with both a degree in Finance and access to BrightMLS comparables to rigorously draw my conclusions) was obviously far lower than $300k and your numbers don't really make much sense. Remember, also, that I'm really only defending her ability to achieve those kinds of results and justify the 5% number. In general, you don't get a team of well-trained professionals diligently finding every possible angle to ensure you get a higher value and an army of prospective buyers. In fact, it's rather rare and it's really the only case where 5% is justified. Had I sold it privately, I'd expect far less than the price I'd joke about wanting.

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#178

Post by kangaroozach »

dangus wrote: post #175
rrrrrrrrrrrryan wrote: post #155

Earlier quoted context omitted.

My prediction: In 8-10 years... Seller's agents will get paid a flat rate, then X% commission for just the amount above some certain price. Basically they'll be rewarded if (and only if) they can successfully create a bidding war that sells the place for more than it's probably worth. If they're just doing their normal job of selling the thing for the appropriate amount, they'll get their flat rate. Buyer's agents wi…

Buyer’s agents should logically cease to exist. They’ve been replaced by real estate websites, they’ve just been hanging on through an artificial monopoly. Everything my last realtor showed me was worse than what I found on Zillow on my own, and the formatting of the information was so user-unfriendly that it was basically worthless.

On point! Been saying this for years. I bought my house and had sellers agent represent me. The seller went with our offer because agent made more commission. We were not the highest offer.

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#179

Post by kangaroozach »

pradn wrote: post #100
4death4 wrote: post #27

Earlier quoted context omitted.

> A good realtor can guide you through the market Sure they can , but the entire incentive structure creates a situation where it's in the agent's best interest to get the sale done regardless or the outcome to the buyer/seller.

There's also the Principal Agent problem here. If the seller's agent gets the home sold for an extra $50,000, the agent only makes an extra $1500. If this takes an extra month of work, it may not be worth it. And what guarantee does the agent have that their extra work will actually pay off? Good agents do get referrals, which is a good incentive to do a good job. But are homeowners even able to tell apart a good age…

There is no incentive at the margin. And only the margin matters in real estate transactions. The first 80% is usually a given based on location. Total racket.

There should be waterfall hurdles like in Real Estate investing. Or variable commissions above certain thresholds or rolling sqft averages in that location.

If they can get that last $50k then split it 50/50 with them.

All of their money should be made at the margin.

Also there should be full transparency such that the buyer agent loses money when this happens. So there is an overt battle for the pot between buyer and seller agent incentivizing them to advocate for their client, not just get the deal done.

Re: After a $1.8B verdict, the clock is ticking on the 6% realtor commission

#180

Post by jjeaff »

4death4 wrote: post #150
rpmisms wrote: post #146

Earlier quoted context omitted.

The realtor I used to buy my last house does it as a hobby. She also did one of the most ethical things I have ever seen, and only took her commission at our initial offer, she wouldn't take commission on any of the escalation clause raises.

Why is that ethical? It seems neutral.

It at least makes it so that the buying agent doesn't profit from any additional upward movement in price. I guess it's about as good as you can do with such a screwed up incentive structure.

Hi, can you help me get the lowest price possible on a house? Sure, and the lower I can get your price, the less money I make, how does that sound?

Oh, and add to that, not only will I make more if you make more, but offering a higher amount will close the deal faster so I can move on to the next person.

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