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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

#61

Post by cj »

thiago_fm wrote: post #44

Wrong. In Germany the Maklerprovision (comission for the Real State agent) is 7%. Typically, the seller pays half of it, but there are cases where the buyer pays it all. You also need to pay a notary, government taxes, making the cost of buying a property over 12%+. Furthermore, you shouldn't sell that property for around 10 years, otherwise, you'll need to pay Capital gains taxes. The good part is that you don't pay…

That sounds like some great tax policies in favor of long term home owners.

I was surprised that taxes ended up being over 50% of the total cost of home ownership, at least in New York (not NYC).

Bought my first house in 2021. My mortgage payment is less than my annual school + property taxes. It’s quite insane.

A big problem is my town’s property assessments arent done fairly. Anyone who hasn’t bought or sold their house in the last 10 years are enjoying extremely low assessments (e.g. a house down the street sold for $800k while the assessment was $270k). The tax assessor seems to wait until a specific house is sold before adjusting the assessed value.

Meaning grandma’s $2 million dollar house is still paying taxes based on the value of the house 30 years ago.

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

#62

Post by walthamstow »

CPLX wrote: post #37
Tangurena2 wrote: post #25

Earlier quoted context omitted.

[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 te…

Fix teeth, yes, cut hair, absolutely not. How can you conflate those two things? It is utterly bizarre for the state to license barbers and hairdressers, especially in the so-called land o' the free.

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

#63

Post by tecleandor »

hef19898 wrote: post #27
debacle wrote: post #19

Earlier quoted context omitted.

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.

In Spain, Notaries and Property Registrars are a weird thing.

You have to pass an exam, same as a public servant, and the number of positions is limited. But you don't have a regular salary like any other public servant: you set up a private office and get the money directly from your clients.

The price for the actions is regulated but it's high, and the number of licenses is limited, so generally they have hefty salaries, specially compared to the rest of the public servants and the mean of the population.

Their salary can be very variable based on location (as you get the money directly from your clients), but it's said to typically be from 100K to 200K€

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

#64

Post by japanuspus »

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…

Where I live (Denmark), the real estate guild has captured the market by building the de-facto listing portal and only making it available to registered brokers. Sounds great if the US portal (MLS?) is available to all listings.

For selling a small plot of land I got so angry about the fees for nothing that I paid an obviously rogue broker to proxy-list the thing. This guy was charging half of what the other brokers were (still way too much), and did not do anything except upload documents from me.

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

#66

Post by camgunz »

CPLX wrote: post #37
Tangurena2 wrote: post #25

Earlier quoted context omitted.

[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 te…

Literally the first ddg result for occupational licensing racism: https://www.minneapolisfed.org/article/2022/how-occupational...

EDIT: oh I guess I read too hastily and this is about the original motivation. For that you'd probably want to read Competition and Coercion by Robert Higgs. A lot of statutes and ordinances were adopted in the wake of the South's loss in the Civil War to maintain the status quo of white dominance in business

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

#68

Post by cj »

snowzach wrote: post #52

I think this very much depends on the agent. My wife is an agent and busts her ass. When she's a seller agent, if it's small jobs like painting a room, covering up spots, changing a massively outdated light fixture, she does it her self. She's spent days a time landscaping. Also when it comes to pricing, it helps to know the market. She will list a house for 8% under market value because she knows it will draw intere…

> One offer may look good but you know the agent and know they will give you an artifically high offer and then ask for 10's of thousands in remedies.

True, but it also greats a negative incentive. The realtor is obligated to present to high offer to the seller, but not obligated to tell them “this agent usually tries to bump the price down $30k during inspection”. A less than ethical agent can use this to their advantage to get the seller to accept the offer, then convince the seller to accept the lower offer later after they’ve stopped showing the house.

Good realtors like your wife can definitely add value, but there’s no good way to know which realtors are good and which are terrible other than (maybe) references.

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

#69

Post by hef19898 »

esrauch wrote: post #36
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…

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 fre…

In Germany you cannot sell real estate thatbisn't yours, ownership is registered. The notary, as part of his job, makes sure this title transfer is done properly. If the seller isn't the owner, the sale is void, as far as I know sales price is to be paid once the title transfer was requested and approved, upon proof of payment the notary finalizes it. So basically no title insurance needed.

By the way, excerpts of the registry for the real estate in question are part of the sales contract (just remembered).

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

#70

Post by jstanley »

poulsbohemian wrote: post #53
codedokode wrote: post #12

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

And yet the stats tell us the average U.S. agent is only making on the order of $60k / year, so… how’s that work?

The commission attracts entrants until it is no longer worth new people taking the job? That's what you'd expect to happen!

What's surprising is that this competition doesn't reduce the fee rate, that's the part I don't understand.

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