Almost no one pays a 6% real-estate commission except Americans • Hacker News Board

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

#221

Post by pb7 » Fri, Nov 17, 2023, 4:33 PM UTC

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 When she's a seller agent, if it's small jobs like painting a room, covering up spots, changing a massively outdated light fixture, she does it her self.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…

Everyone thinks they bust their ass. Maybe your wife does, maybe she’s just like everyone else. Fact of the matter is the average real estate agent provides little to no value. Thats why anyone with a pulse can become licensed to be one.

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

#222

Post by schnable » Fri, Nov 17, 2023, 4:37 PM UTC

showerst wrote: post #108

I thought because I literally haven't seen a single "what do real estate agents even do" post on here, I'd post my positive experience -- We bought a house this year in a competitive, expensive market (DC). Our agent found the listing through word of mouth before it went on MLS, and got us lined up for an early tour so we had the chance to look at it before the open house. We liked it enough to get a pre-inspection o…

We bought three houses and sold two through the same agent. The first few transactions were pretty straightforward so he really just acted as a coach. Probably not worth the 6%.

In our latest sell/buy, the house were selling had a significant unaddressed issue and the house we were buying had easement issues and a hard to work with seller/agent. His experience was crucial in getting it all over the finish line, we would never have been able to do it successfully ourselves and I would say he earned his money.

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

#223

Post by hn_throwaway_99 » Fri, Nov 17, 2023, 4:38 PM UTC

DOSUser67 wrote: post #185

foogazi wrote: post #137

Earlier quoted context omitted.

> The buyer doesn't bear the cost at all The buyer is the only one bringing money into the deal so they pay for both agents

That's not true, the agent fees come from the seller's money. It's only true if you consider your employer to be paying for everything you have in your house, because they gave you the money you used to pay for your stuff.

Whether it's "true" or not obviously depends on the point of view of "when in the transaction that the transfer of money ownership takes place", but I definitely agree with the parent comment.

The problem with your house analogy is that (a) there can be long time spans between when your employer pays you and when you buy stuff in your house, and (b) you presumably have complete control over everything you decide to purchase in your house. That's not really true in the real estate example, where everything is part of a single transaction to which only one party is bringing any actual money.

A better analogy would be social security taxes in the US. In the US, the fiction is that the employer pays for half of an employee's social security taxes, and the employee pays for the other half out of their paycheck deductions. But basically every economist considers this a work of fiction, and since the true cost of an employee is everything the employer needs to pay, they basically consider all the social security taxes as costs to the employer.

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

#224

Post by komadori » Fri, Nov 17, 2023, 4:39 PM UTC

ineptech wrote: post #217

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…

For the buyer, the value is clear: someone to go out with you to house after house, let you in, walk around with you, talk about whether you could fit a king-sized bed in that room, etc. It's a lot of work and the buyer gets a lot of value from it. But for the seller, who pays the tab, the only value is that some buyers' agents will steer their clients away from you unless you offer a large commission. The individual…

That system seems very convoluted to me. In the UK, only the seller pays a commission on the sale price (typically ~1.5%) and the seller's estate agent is responsible for showing buyers around the property. The buyer doesn't need their own estate agent unless they're also selling a previous property at the same time.

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

#225

Post by closeparen » Fri, Nov 17, 2023, 4:42 PM UTC

ineptech wrote: post #217

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…

For the buyer, the value is clear: someone to go out with you to house after house, let you in, walk around with you, talk about whether you could fit a king-sized bed in that room, etc. It's a lot of work and the buyer gets a lot of value from it. But for the seller, who pays the tab, the only value is that some buyers' agents will steer their clients away from you unless you offer a large commission. The individual…

My realtor was incredibly helpful with my purchase, even knowing some insider details like this HOA is in litigation or that warehouse is becoming a high rise. I would have gladly paid him the $200-300/hour I pay for other professional services. Given the size of the transaction though, his effective hourly rate was well over $1500.

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

#226

Post by Keyframe » Fri, Nov 17, 2023, 4:43 PM UTC

aabajian wrote: post #77

japanuspus wrote: post #64

Earlier quoted context omitted.

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…

The MLSes in the US are all under the Realtor group. The selling agent has to agree to pay the buyer agent's fee in order to list. This is one of the main points of the trial. Sellers cannot list a house in the most popular (only?) listing system without committing to the buyer's-agent fee.

At least there are seller and buyer agents. In Croatia it's one agent that is between buyer and the seller. What could go wrong, right? It's a scam.

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

#227

Post by kelnos » Fri, Nov 17, 2023, 4:43 PM UTC

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…

Hell, realtors have not provided anywhere near that much value to me on that buying side, either. Certainly things were easier than without them, but not $20k easier.

For my most recent home purchase, my realtor easily made $1k/hour, even after taking into account whatever percentage her firm takes.

I'm strongly considering a DIY approach the next time I buy a house. I may eventually give up and get a realtor, but I'm curious to see if I really need one.

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

#228

Post by gpderetta » Fri, Nov 17, 2023, 4:44 PM UTC

ta1243 wrote: post #146

mytailorisrich wrote: post #109

Earlier quoted context omitted.

Well, it is simple and cheap. "Chains" are not 'the system' they are a fact of life. Many people sell one property to buy their next one and need the money from the sale to finance the purchase (and also don't want to end up on the street) so they want contracts on both sides to be entered into at the same time. It adds a level of complication but no additional costs. This is an issue that exists everywhere though so…

Any new home for the last decade, including "freehold" ones, comes with financial obligations to pay for public areas. Older homes have that as council tax, but new homes have a privatised council tax in addition. It's known as "fleecehold" due to its similarity to leasehold.

The difference is that there are actually some modicum of protection and rights for leaseholder, not so much for "fleeceholders".

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

#229

Post by UncleMeat » Fri, Nov 17, 2023, 4:45 PM UTC

dkjaudyeqooe wrote: post #141

UncleMeat wrote: post #93

Earlier quoted context omitted.

Agents provide value. They do things that many homeowners can't or don't want to do. My electrician also does that. Do agents provide tens of thousands of dollars of value?

They can do. If they market your house well you can maybe get another $100,000 (5-10%). At around 1-2% they're generally profitable to the seller.

The data does not support the claim that fsbo homes sell for six figures less than homes sold by agents, and that's with buyer's agents illegally trash talking fsbo.

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

#230

Post by dixie_land » Fri, Nov 17, 2023, 4:46 PM UTC

jperras wrote: post #210

stephencanon wrote: post #59

Earlier quoted context omitted.

We’ve bought two houses, sold one, bought a lot to built a house for my parents. We’ve never hired a real estate agent. The seller had an agent for the first transaction, none of the other counterparties had an agent. Paying a lawyer by the hour to handle things is simpler, cheaper, and a random lawyer is dramatically more competent than a random agent (the most complex transaction ended up costing us maybe $4k in la…

Canadian here. Sadly, it's common practice around these parts for buyer agents to completely ignore listings that don't have a selling agent attached; it's their form of industry protectionism. As a result you end up losing out on a large surface area of buyers who rely on their buying agent to find properties, which puts you at a disadvantage.

A "selling" agent IS the buyer's agent, a "seller's" agent (listing agent) works for the seller.

That tells you how the agents view their job responsibilities, the buyers agent ultimately sells a house (to the buyer), the sellers agent advertises (lists) it.