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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

#31

Post by plagiarist »

ssharp wrote: 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…

You encountered a great example of how not only is the fee ridiculous, but also the agents are not incentivized to work for you. They are incentivized to move houses as fast as they can.

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

#32

Post by [deleted] »

debacle wrote: post #19
hef19898 wrote: post #15

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.

[deleted]

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

#33

Post by statusgraph »

debacle wrote: post #19
hef19898 wrote: post #15

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.

Seems like it, the parent poster is almost implying there's an element of underwriting the transaction/house for which 2% is not unreasonable (Title insurance is in the 1% (or a bit less) range in the US I believe)

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

#34

Post by tempsy »

criley2 wrote: post #18
geff82 wrote: post #7

Earlier quoted context omitted.

Germany has high fees when buying a house, but compared to the US it is dirt cheap to actually own the house. „Ground tax“, similar ro „property taxes“ in the US is usually just a few hundred Euro a year. Which, compared to the US, is change money. A German house, when the mortgage is paid, feels like real property.

The tax man gets his one way or another. Imagine the shock of an American living without sales tax when they go to Germany and everything has a 20% government markup... In Germany, the net average tax rate on a worker is 37.4%, in America it is 24.8%. That's a dramatic difference in taxation!

Anyone living in California or NYC and making mid six figures and up is easily paying more than German tax rates then. You’re paying almost 50% around high six figure range.

I’ve never quite understood why people think the US is a low tax country.

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

#35

Post by voisin »

mcntsh wrote: post #3

Closing costs in Germany are quite high... about 12%. - 3.57% RE commission - 2.00% notary - 6% for the land transfer tax And the seller also pays 3.57% of the RE commission. So over 6% at the end of the day :)

There are land transfer taxes in Canada too, and I presume our equivalent to notary are lawyers which are about $1,000-$1,500.

The actual in-and-out costs are significantly higher than just the agents, though the agents are the most expensive and of questionable value.

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

#36

Post by esrauch »

hef19898 wrote: post #15
onlyrealcuzzo wrote: post #11

Earlier quoted context omitted.

Why is the notary making 2%?! Is that including all legal fees? Even still that seems like a much bigger rip off than a buyer's agent in the US.

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…

Does the notary provide the title insurance (as in: if it turns out later that the seller didn't actually own the house, the real owner shows up and proves it, the bank and new buyers have their money covered)?

That would make more sense for the 2% but it's not related to the notary in the US; notary literally just does "I checked the id of the person signing and it matches" which is a service that can be had for free at your bank or at most $50 if you have to pay someone, 2% of a house for that service obviously wouldn't make sense.

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

#37

Post by CPLX »

Tangurena2 wrote: post #25
underseacables wrote: post #6

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]

> Occupational licensing was originally developed to prevent black people from being employed.

You’ll need to cite some evidence for this. Occupational guilds and membership associations stretch back a lot further into the Middle Ages in Europe versus the timeline you’re suggesting here.

There are also some very common sense public policy issues at play like making sure people who say they can cut hair or fix your teeth actually know how to do it.

Granted they’ve been misused as well for various less honorable reasons but the narrative you’re presenting here doesn’t totally hold together.

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

#38

Post by _benedict »

rwmj wrote: post #20
benjaminwootton wrote: post #5

Earlier quoted context omitted.

In the UK, the market rate 1.5% paid by the seller on completion. Nothing to the buyer and rarely any fees for a failed transaction. Then approximately £1000 in legal fees when buying or selling. Then the big one which is stamp duty (a government tax) which is between 0 and 12% of the purchase price. Typically the lower end of that scale though. ( https://www.gov.uk/stamp-duty-land-tax/residential-property-... )

It's important to note that (in general) sellers pay the estate agents fee and buyers pay stamp duty. If you are both buying and selling then you'd pay both, but on different properties. However if you're moving to/from rentals, dead or moving abroad then you'd pay only one. Also it's possible to cut out the estate agent if you really want to save money. There are a bunch of websites that for a minimal flat fee will…

Those websites usually include (or at least offer) professional photography, and some also offer various levels of agent assistance for viewings, negotiations etc. an a la carte offering of sorts. A for sale sign is often included as it’s free advertising for them.

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

#39

Post by nemo44x »

I guess the argument is that the agent brings more than 6% value to the table so everyone wins. But I’ve always found it odd it’s a fixed percentage on total sale and not a fixed rate + percentage over a threshold.

Saying that, where I live many hones are well over $1,000,000 - that’s more or less the entry level. The agencies do a good job staging them (moving all existing furnishings out and replacing with pieces that flatter the space), taking great photographs, and hosting events at the property - that all costs money.

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

#40

Post by Tangurena2 »

benjaminwootton wrote: post #17
geff82 wrote: post #7

Earlier quoted context omitted.

Germany has high fees when buying a house, but compared to the US it is dirt cheap to actually own the house. „Ground tax“, similar ro „property taxes“ in the US is usually just a few hundred Euro a year. Which, compared to the US, is change money. A German house, when the mortgage is paid, feels like real property.

I would hate the high US property taxes. It’s like you never really own the property if you are being taxed on it continually. It must play havoc with retirement planning?

In most states, property taxes are what pays for schools, roads, libraries and things like that. When I was modernizing our state's motor vehicle registration system, I had to account for those fees in every vehicle (cars, boats, mobile homes, etc) registration cost. The state constitution states that things can only taxed based on value.

Taxed based on value: https://apps.legislature.ky.gov/Law/Constitution/Constitutio...

Value based on fair market value: https://apps.legislature.ky.gov/Law/Constitution/Constitutio...

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