hahahahahahahaha
https://www.wsj.com/lifestyle/careers/realtor-career-real-estate-industry-3b1dcf41?mod=mhp
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So what happens now? Buyers have to pay their agents directly therefore prices will go down substantially (probably flat rate)?
Good realtors are worth it but there are a shit ton of hacks and hobbyists.
Why would prices go down? It’s not like realtor fees caused the supply-side issues and low-rate fixed mortgages that led to this runaway housing market.
Median income for a Realtor is $56k and that’s with them paying a bunch of their own expenses. Most of them would be better off if they were paid by the hour. Their pay is structured as a form of gambling/insurance that most home buyers and sellers want.
People pay less for houses without potpourri.
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Assuming this really does destroy the current 6% commission structure I think it will benefit sellers more than buyers, although even a first time buyer will one day be selling, and probably repeat the cycle multiple times. So it should benefit consumers generally at the expense of agents.
Agents knew what they were doing putting the full bill on the seller and pseudo-colluding to make sure you can’t fully access the market without paying them their cut. Sellers will be less price sensitive since it’s coming out of their gains on paper, and even if they’re savvy enough to understand just how much is coming out of their pockets, they don’t have any other options.
I don’t think home prices will drop. Appraisals are based on comparable sales, and the market is driven by supply, demand, and what buyers can afford. The realtor commissions were always just a predatory cut on the seller’s equity.
I don’t know how agents will respond. Being a buyer’s agent sucks, it’s a lot of work and driving around. It should be the side that’s compensated better, but charging buyers is going to make it tougher. And if they don’t find another way to collude on the buy side there’s no shortage of entry level realtors who would work for Uber/Doordash wages. They’re already doing this working as assistants to more successful realtors who don’t want to be bothered showing houses.
Sellers agents would also get wrecked if they have to compete on price. They take some pictures, post it on MLS, and do some paperwork when the offers come in. If they’re highly motivated maybe they’ll do an open house and solicit feedback. In no cases are they providing 3% value.
I think it all comes down to how effective the realtor cartels will be in developing a new price fixing scheme. Considering everyone else in the home buying process is working for fixed, reasonable wages (lawyers, loan officers, inspectors), I’m hopeful realtors now get dropped to the same level.
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Yeah on the face of this it makes things more competitive which is good for the consumer. But I fear that like so many other “disruptions”, it’s going to open to the door to finance bros and tech bros to figure out a way to hoard the value for themselves.
I mean, it can’t get worse than 6% for taking pictures and unlocking doors, right? Paging Natalie
Any efficiency will come from Realtors telling tire-kickers, people who won’t sell at a reasonable price, and people who won’t move out and get the house ready to fuck off. Changing the industry will be great for most Realtors and terrible for the few who make most of the money. Hopefully it changes enough that buyers and sellers pay for everything that doesn’t necessarily end up with a commission getting paid.
The tech bro angle, and I should keep this to myself…nah, of course someone is already doing it…[redacted - maybe I’ll run that by my evil friends]
This topic always reminds me of this classic clip:
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i mean the fees of the agents, not the price of the homes.
Perhaps… let the seller agents unlock doors for potential buyers and then let the potential buyers pay a real estate lawyer when they are ready to sign the contract?
Here’s my question. Wtf do you need an agent as a buyer? In Norway only seller has an agent and its 2.5% Before you say to keep buyers interests in mind. The buyers agent has the same exact goal as the sellers agent. To sell the property. Such a weird system and 6% always seemed insane to me.
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No. Have the sellers agent and banks draw up all the paperwork.
Supposedly the buying agent helps you negotiate a better price (as well as show you houses that fit what you’re looking for). In practice though, it seems their main incentive is just to get you to buy, since that is the only way they get paid. Also, with all the tools now, it’s not hard to find for yourself houses that meet your criteria.
my experience with buyer agents is that whatever you said negative about the house you were viewing they countered with something positive.
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We’ve bought 2 house in the states and both times my wife actually the found the houses we bought. The agents in both cases never gave her a cut. Also on the house we sold our agent came back with an offer from the buyers. I said to counter with an extra 5k and he did his best to talk me out of it. I finally said OK but half of the 5k comes out of your commission, miraculously they went with the extra 5k.
Realtors are, in my experience, shit
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