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

wsj.com

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

#271

Post by avn2109 »

dg08 wrote: post #211
foobarian wrote: post #98

Earlier quoted context omitted.

> 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 question that this raises is even more puzzling: why hasn't there arisen agents that undercut the status quo? Are there guild or cartel effects at play?

They do exist. When I sold in NYC a few years ago, I paid 2.5% all in. When I bought, I used the same broker and got a 2/3 buyer's commission rebated to me at closing. It was a decent chunk of money and helped me pay the closing costs. I recommended it to all my friends and several got the rebates as well. There are a bunch of these brokers now.

What do I type into google to find this?

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

#272

Post by llm_nerd »

MarkusWandel wrote: post #237
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 too. I only ever bought one house, in 2005, and I'm still living in it. But I seem to recall that the agent - a good one, referred by friends, and referred onward - had a boilerplate contract in which I was responsible for his commission even if I independently bought a FSBO (pronounced "fizzbo" in realtor lingo, i.e. completely off-system For Sale By Owner house) during the contract period. I had that…

>For realtors it's very simple. Why spend time on something they won't get paid for?

Isn't that almost everyone doing work? I don't do work for free.

>the dream customer of every selling agent is a clueless first-time buyer

I've purchased multiple homes without a 'buyer's agent'. I'm certainly not clueless. It's actually a great negotiating tactic and often yields real savings.

Agents are grossly overpaid, but buyer agents in particular are just an enormous waste of time. It was actually our first home purchase where we did use a buyer agent and it was...eye opening. People under illusions that buyer agents are actually informed or acting in the buyer's interests are the most clueless of all.

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

#274

Post by cyanydeez »

aftbit wrote: post #239
komadori wrote: post #224

Earlier quoted context omitted.

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.

That seems backwards. Only the buyer should need an agent, as they are the one who is searching. The seller is just sitting around waiting for offers.

if it were just an object, it makes more sense that the seller does the leg work. they know the object, the market, etc. they're the expert.

why does a buyer need a expert on all the objects out there?

I know there's technical examinations like a home inspection that the buyer would have done, but if you're just talking about navigating the property and legal docs, seems like the buyer isn't going to need an agent to do that other than once to accept the price.

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

#275

Post by kube-system »

lostlogin wrote: post #269
kube-system wrote: post #263

Earlier quoted context omitted.

In the US, this will severely limit your options. Most houses are posted to MLS first, and don't make it to public sites until later. If you want to get the best deals, you gotta have an agent send you MLS listings daily, swoop in and make an offer on the first day before anyone else sees it. When I bought my last house, my agent was able to send me dozens of listings from MLS for homes that weren't listed on public…

Then this is why agents exist. That’s gate keeping to protect their patch.

Definitely. But if you want to get a deal, for now, you have to play the game.

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

#276

Post by mcoliver »

psunavy03 wrote: post #257

This is worth reforming, but almost no one except Americans also gets to get a 30-year fixed-rate mortgage. And this is a major boon for stability and predictability in American homeowners' finances.

Wait till that becomes a 40yr fixed rate. I see two viable ways to unlock the current supply/demand stalemate in the US (please chime in if you can think of other alternatives).

People can't afford the 30yr payment (interest rates), can't drop interest rates (inflation), supply dried up because who is giving up that low rate for a higher one.

So push the payments out over a longer period of time and drop the monthly hit.

That or allow people to carry their mortgage under the current rate to a new property.

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

#277

Post by justrealist »

ghusto wrote: post #96
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…

I don't normally nitpick in this way, but the single line "Wrong." rubbed me up the wrong way. The claim was: > Almost No One Pays a 6% Real-Estate Commission–Except Americans (wsj.com) and you've cited an example which fits neatly into the word "almost", _right there as the first worth in the sentence_

When I see "almost" I would think of the exception being like, "Estonia", or "Albania", not.... Germany. It's a big place.

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

#278

Post by deathanatos »

ianhawes wrote: post #16
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?

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.

Google thinks 2-10 homes sold per year. Assuming the same on the buy side, at 6%, using the median home price of $416,100, that's $50k (2) to $250k (to 10) per agent per year.

(That accounts for the split. That doesn't account for whomever the agent works for taking whatever cut.)

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

#279

Post by no_wizard »

lotsofpulp wrote: post #251
jperras wrote: post #210

Earlier quoted context omitted.

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.

Websites have obviated the utility of a buyer’s agent “finding” houses for 90% of buyers. Setup alerts for the type of house you want, draw the geographic boundaries on Zillow, and spend 2 minutes looking at the listing and maps to find out everything an agent would have been able to tell you.

I have routinely found more homes by looking around the neighborhoods I wanted to buy in than what I found on Zillow. They don't seem to capture all data sources well (or something else may be afoot, I'm not sure)

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

#280

Post by maerF0x0 »

cpncrunch wrote: post #166
RationPhantoms wrote: post #132

Earlier quoted context omitted.

This is the first time I've seen WSJ articles not be given full access from archive.

Its been happening to all their articles for the past day.

in fairness that's a pretty tight window for parent commenter to notice. +1 it's never not worked for me
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