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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

#291

Post by smileysteve »

jasode wrote: post #148
dkjaudyeqooe wrote: post #135

Earlier quoted context omitted.

No one is arguing against agents, they're arguing against a fixed, non-negotiable 6% fee. The reason people are talking about DIY sales is because that is the only option left to them.

>, they're arguing against a fixed, non-negotiable 6% fee. The 6% exists in a marketplace of various fees (some charging less) based on other arrangements (discount brokers, For-Sale-Buy-Owner). E.g. Redfin charges 1%: https://www.redfin.com/why-redfin-how-you-save Apparently, Redfin has never made a profit .

So far,

Reminder that Amazon and Salesforce took multiple decades to make a profit

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

#292

Post by tgma »

ryandrake wrote: post #264
HWR_14 wrote: post #235

Earlier quoted context omitted.

That could be true in your case, but for many people that might not be the case.

HN is full of self-professed master negotiators. Just look at any salary thread. I am absolutely willing to pay a realtor to negotiate for me (and in general to have knowledge of the market and know how to find the real market price) because I suck at negotiating and have no idea how to do it.

Well, the average real estate agent is also a shit negotiator on your behalf. The incentive structure makes it so irrespective of the skill set. The agent’s primary job is to sell themselves to you when they get the listing not to sell your house at max price. On the buy side they are also incentivized to close the deal rather than make you do a wise bid. That said during a bidding war, if you are a buyer and your agent is a rando or you don’t have one, the seller agent almost certainly will give the last word to their buddies in the industry so you’ll lose the bidding war. That’s about the only value I’ve seen an agent provide.

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

#293

Post by TexanFeller »

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.

Not showing houses that don’t have a selling agent is a great reason for buyers to avoid having a buyer’s agent.

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

#294

Post by salamandersss »

runako wrote: post #233
yesimahuman wrote: post #116

Earlier quoted context omitted.

I just sold a house in the US and the thought of listing it ourselves did cross my mind, but in the end we used an agent and they did _everything_ for us while I was out of the country, and got us a great price. In the end the amount of commission we paid to our agent (3%) didn't feel excessive at all since I barely had to lift a finger (besides moving). Now, 3% for the buyer's agent? _that_ felt excessive.

The thing about proportional pricing is that it doesn't scale up or down. Assuming your sale was near the median US home price, the seller's agent would net around $12k for their work. You believe that was worthwhile, let's assume that was money well spent. Suppose the market was hotter when you sold and your property was worth 2x the median. Is the same work worth $24k? What if you sold in a hot market in a hot neig…

Yeah I bought some extremely cheap property through a realtor and felt I made out like a bandit vs through a lawyer or dealing with that shit myself. Realtors want to charge a percentage? Cool story bros, I'll burn out the green labor doing my work for pennies on the cheap shit then use a flat lawyer for anything real money.

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

#295

Post by cyanydeez »

Amezarak wrote: post #81
jasode wrote: post #75

Earlier quoted context omitted.

>I said "good riddance" to the agents and did an MLS self-list for like $400. [...] So back to my original point -- where is that seller value coming from? It's a puzzle to you because you had the personality & motivation to do the work of marketing+showing+negotiating the house yourself. You have inadvertently projected your DIY savvy onto other homeowners to do the same thing. But, a lot of home sellers don't want…

Everything you're saying is true to some degree, but I don't think most people would be willing to spend 12k just to be more comfortable, if they understood that's really all they're paying for and understood clearly upfront that's how much they're paying. It's sort of analogous to the American tax situation - many, many people I've talked to refuse to do their own taxes (even a very simple 100EZ) - or even use softw…

I pay an accountant for the insurance of someone who knows what documents I have and can do whatever s necessary is the event of an audit. if you do have complicated forms, that annual service compounds in value.

I'm sure if I moved up tax brackets, the accountant would start providing specific feedback on minimizing exposure.

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

#296

Post by kjkjadksj »

PaulDavisThe1st wrote: post #181
Multiplayer wrote: post #172

In coastal California the commission situation becomes ludicrously lucrative to the top agents. This week a home in my community sold for $25,0000,000. One of my friends had the buy side, another had the sell side. The buy side agent will be involved in ~200,000,000 in transactions this year, a down year. In this community there are plenty of transactions north of $20,000,000. He just did another and had both sides o…

AFAIK, there is zero regulatory capture associated with realtor associations. They have no special priviledge under the law, and are not required for real estate transactions. The one thing they do have is control over access to the MLS, plus social inertia.

People should not be surprised we have realtors when we have companies like turbotax raking in millions for 3 pages of boilerplate tax return form fills. You could tell people all day how they can do it themselves yet they will still gladly pay for someone or a service to hand hold them because thats what they really want. Not the ability to do something but to feel fussed over and to minimally think.

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

#297

Post by fishywang »

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…

My understanding is that in a common American setup, the commission seller paid is split by seller's and buyer's agents half/half.

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

#298

Post by fatzeus »

The real issue to me is that normally the seller pays for the buyer agent as well. This creates a few problems: 1-The buyer will get an agent even if they don't think it's very useful, since they don't pay for it 2-The buyer agent has an incentive to show/promote properties that also have a seller agent, especially if it has the full 3% commission

I think having buyers pay for their own agent (if they want one) would result in lower fees for everyone

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

#299

Post by flebron »

pb7 wrote: post #157
ghusto wrote: post #96

Earlier quoted context omitted.

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_

Except it is wrong. It’s not “except Americans”, it’s “except Germans” and "except Japanese" and hundreds of millions of others. It’s not about the exact number because the whole premise is that it’s too high. "Almost No One is Poor in the United States–Except Lazy People"

"Almost nobody except X does Y." and "Z does Y, with Z != X" are consistent. Is your disagreement entirely due to the (possibly nil) distinction between "Almost nobody except X does Y" and "Almost nobody does Y -- Except X", which is how the article is worded? If so, at least one native English speaker will disagree.

The poster you're replying to seems to have more of an emphasis in how the "Wrong." parent was worded. There was no need to be that confrontational, when one is adding a point of information ("Z does Y, with Z != X") that is most likely consistent with the thread title, and with the article content.

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

#300

Post by cyanydeez »

mNovak wrote: post #289

I thought for sure realtors would get the gig-economy treatment during the rise of Uber and AirBnb; just a person to handle showings while the mega-corp drops prices slightly and collects huge profits. Not sure if I'm happy or sad that they persist. But to me the craziest part of it, is that in my experience 90% of people don't comparison shop for a realtor, they just go with that person their friend used. Those soci…

I think they're mostly esoteric social network parasites. the easy part is getting the license but the hard is finding clients and your skills are all intangible unless you can demonstrate those connections (easier I guess with social media).

it's just not a commodity a app can just sweep in and try to corner.

but it has been "disrupted" with companies like Zillow effectively trying to be buyers and sellers of real estate, driving up prices

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