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Almost no one pays a 6% real-estate commission except Americans

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Re: Almost no one pays a 6% real-estate commission except Americans

#21
I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees.

The last time I sold a house was 2011, when the housing market was still down from the 2008/09 crash. I talked with multiple agents and never got a sense of them doing much to push the house other than listing it on MLS and coordinating showings. For the seller agent, they didn't even really want to be at the showings -- they'd just provide a lockbox and give the code to the buyer agent. So where is the value there? On a median home sale, the seller side agent/broker is netting $12,400. A lockbox and MLS listing are in the sub-$500 cost range, so where is the additional $12,000 in value?

I at least understand the incentive on the buyer side. A buyer can just ring up an agent and have them do their home search for them and coordinate everything. The buyer doesn't bear the cost at all, so why not utilize that convenience?

Anyway, after talking with a few agents in 2011, I had one recommended to me. He could get deals done quickly and was great to work with, so I was told. I met with him and he wanted to list the house at 8% below the price I thought the house was worth (no bidding wars back then so this was no good) and flat-out refused to reduce the total commission from 6% to 5%.

I said "good riddance" to the agents and did an MLS self-list for like $400. I set the buyer-side commission at 1.5%. I still got plenty of people looking at the house and sold it for the value I initially established it was worth. So I ended up saving over 10% from what the whiz-kid agent would have cost me in lost value and fees.

So back to my original point -- where is that seller value coming from? There isn't much legal stuff the agents help with. You need a purchase contract (boilerplate in most cases), some standard state/federal disclosure forms, and then the title agency handles everything else.

Re: Almost no one pays a 6% real-estate commission except Americans

#22

If you divide 6% commission by hours spend, how much does an agent earns per hour? Probably more than senior Google AI developer?

Well typically 6% is split between the buyers agent and the sellers agent. And each agent has to kick up a percent to their broker. Most real estate agents I know working in the average market (I.e. not NYC or the Bay Area) are not clearing $100K.

How did you ever get to the situation where two people want to buy and sell one of life’s fundamental commodities, and 3 people get to insert themselves into the middle to the cost of thousands of dollars?

America confuses me sometimes!

Re: Almost no one pays a 6% real-estate commission except Americans

#25

I think something that is partly to blame is the expansive licensure scheme, and how those licenses have become a monopolistic edge to protect and expand. Many professions have required a license, and it is the responsibility of the organization that issue those license to protect an expand their authority, preventing competition, and pushing up prices higher. The license requirement creates a perpetuating lobby, whi…

[flagged]

Re: Almost no one pays a 6% real-estate commission except Americans

#26
For my first home in Canada we (really the seller, but that’s just a shell game) paid 2% and it felt like a lot in terms of actual $, largely given how home prices have inflated.

We walked through three homes I picked out, and then an evening of email counter offers, and then another walk through, and then some paper work. Then I got to pay the lawyers as well as the inspector.

I imagine I subsidize the times in my agent’s job where she does a ton of work and there’s no sale at all. Though maybe a flat fee could still incorporate that reality.

Re: Almost no one pays a 6% real-estate commission except Americans

#27
post #19

Earlier quoted context omitted.

A nortary makes sure the sale ia properly exevuted and titles properly transferred, he is certifying the transaction and takes on some legal riks dor doing so. This provides legal security for seller and buyer, a service woth paying for in transactions most people only do once in their life (we talk about Germany here). For all others, it is just coat of doing business. No idea why it is always everybody else who sho…

Might be a different meaning of the term notary. In the US, you can become a notary public for $35 and an online course in many instances.

You cannot be elected?

In all seriousness, notaries in Germany are all full lawyers and practices are highly sought after, as the numbers of lisvensed notaries is limited.

Re: Almost no one pays a 6% real-estate commission except Americans

#28
post #21

I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The last time I sold a house was 2011, when the housing market was still down from the 2008/09 crash. I talked with multiple agents and never got a sense of them doing much to push the house other than listing it on…

The extra value is not there. Anyone can do this job, it's literally filling out boilerplate documents, you can ask gpt 4 vision to do it for you.

Re: Almost no one pays a 6% real-estate commission except Americans

#29
post #21

I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The last time I sold a house was 2011, when the housing market was still down from the 2008/09 crash. I talked with multiple agents and never got a sense of them doing much to push the house other than listing it on…

> The buyer doesn't bear the cost at all

This is the issue. If both sides had to pay their own agent, significantly fewer agents would be used. Instead the buyer externalizes the cost, and many sellers aren’t confident enough to deal with the buyer’s agent directly so they arm themselves with an agent.

Re: Almost no one pays a 6% real-estate commission except Americans

#30
post #19

Earlier quoted context omitted.

A nortary makes sure the sale ia properly exevuted and titles properly transferred, he is certifying the transaction and takes on some legal riks dor doing so. This provides legal security for seller and buyer, a service woth paying for in transactions most people only do once in their life (we talk about Germany here). For all others, it is just coat of doing business. No idea why it is always everybody else who sho…

Might be a different meaning of the term notary. In the US, you can become a notary public for $35 and an online course in many instances.

In many states, notaries can marry people as the actual legal step of notarizing the marriage license and returning it to the county clerk's office is the actual deed that makes people legally married.
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