Lawsuits against real-estate agents may reshape how we buy, sell homes

[Anonymous]

Anyone else watching this? What do you think it will mean for home sales in this area if the plaintiffs win?

https://www.businessinsider.com/real-estate-agents-lawsuits-buy-sell-homes-forever-housing-market-2023-6?amp

if the plaintiffs succeed, they could rewrite the rules of how agents get paid. The seller might no longer pay out both agents' commissions after the sale closes. Instead, a buyer would pay their agent directly. Proponents say these changes would increase competition among agents, dramatically lower commissions, and potentially save consumers as much as $20 billion to $30 billion a year. The defendants, led by the NAR, argue that the current setup actually favors consumers by providing broad access to an efficient real-estate market.

[Anonymous]

I do agree with this and it's closer to how real estate is done in other countries.

I have wondered why real estate agent costs are rolled into mortgages. They're like a bubble on top of house cost.

My relatives just closed on a house in this area. They bought without agents and got 4% off the price. Their mortgages and even their taxes are less because of it.

[Anonymous]

Good. The internet should have done to realtors what it did to travel agents. Long overdue.

[Anonymous]

OP here. I've only been on the buying end not the selling end so haven't had to think about any of this until recently as I am considering selling.

[Anonymous]

I agree. I say that as I did two FSBOs and both times people approached me with “buyers agents”

I said I am fine with buyers agents as long as buyer pays commission. They were like no you have to pay my buyers agent commission.

One was just a condo with a million identical comps in building. Turns out the “buyers agent” was buyers mother.



Buyers agents are not truly representing buyer unless buyer pays them

[Anonymous]

The costs of housing relative to cost of living has drastically increased over the last 10 years. Commissions should decrease.

It makes more sense to pay the sellers agent a smaller percentage or a flat fee to sell. Then the agent shows the home to prospective buyers. If buyers want intensive hand holding, then they can work that out with an agent and pay out of pocket.

Home values would likely stay lower because many sellers are looking at the net at closing. The realtor costs would decrease for sellers. If buyers want a nanny-realtor to hold their hand, then they pay an extra fee to a realtor to provide this service. The overall costs for buyers wouldn't increase because sellers were baking that fee into the sales price.

[Anonymous]

Anonymous wrote:The costs of housing relative to cost of living has drastically increased over the last 10 years. Commissions should decrease.

It makes more sense to pay the sellers agent a smaller percentage or a flat fee to sell. Then the agent shows the home to prospective buyers. If buyers want intensive hand holding, then they can work that out with an agent and pay out of pocket.

Home values would likely stay lower because many sellers are looking at the net at closing. The realtor costs would decrease for sellers. If buyers want a nanny-realtor to hold their hand, then they pay an extra fee to a realtor to provide this service. The overall costs for buyers wouldn't increase because sellers were baking that fee into the sales price.

OP here. Yes, if you need to clear a certain amount and have to give 6 percent!!! to the two agents, you are pricing as high as you can.

[Anonymous]

Anonymous wrote:Good. The internet should have done to realtors what it did to travel agents. Long overdue.

Agreed. If someone needs a realtor to guide them through the process, they should pay.

[Anonymous]

Anonymous wrote:Good. The internet should have done to realtors what it did to travel agents. Long overdue.

It's really interesting that it hasn't. I sold a home FSBO in 2004. I think I paid a fee to list it on the MLS, but I don't remember agreeing to pay a buyer's agent. It was not in this area, however. It was in TX. And in TX, the sale prices of homes are not public so you have to have a realtor to pull comps.

In this area, I feel like the value in an agent for buyer or seller is in the offer phase, and maybe for getting to things pre-market. But if inventory wasn't so low there's really no reason you can't make and handle an offer yourself.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The costs of housing relative to cost of living has drastically increased over the last 10 years. Commissions should decrease.

It makes more sense to pay the sellers agent a smaller percentage or a flat fee to sell. Then the agent shows the home to prospective buyers. If buyers want intensive hand holding, then they can work that out with an agent and pay out of pocket.

Home values would likely stay lower because many sellers are looking at the net at closing. The realtor costs would decrease for sellers. If buyers want a nanny-realtor to hold their hand, then they pay an extra fee to a realtor to provide this service. The overall costs for buyers wouldn't increase because sellers were baking that fee into the sales price.

OP here. Yes, if you need to clear a certain amount and have to give 6 percent!!! to the two agents, you are pricing as high as you can.

Exactly. The realtor fees can get in the way of closing. Although I've never paid more than 4.5% total.

[Anonymous]

Poorly written article. I wouldn't put your hopes on any changes coming out of this.

[Anonymous]

Anonymous wrote:I agree. I say that as I did two FSBOs and both times people approached me with “buyers agents”

I said I am fine with buyers agents as long as buyer pays commission. They were like no you have to pay my buyers agent commission.

One was just a condo with a million identical comps in building. Turns out the “buyers agent” was buyers mother.



Buyers agents are not truly representing buyer unless buyer pays them

So this means you meaningfully reduced the competition for your sales. It’s very reasonable to guess this cost you 4% in sales price.

I’m not an agent, but I think people miss that obvious fact in this whole debate. A significant portion of people won’t look at FSBO at all, or won’t agree to pay their own agent, or will demand an even steeper discount if it’s FSBO. It creates enough FSBO market distortions that I don’t think it’s the win the FSBO folks think it is.

Now mind you I don’t think agents provide any 5 figure services to justify their involvement inherently. But as the market currently stands, I don’t think you’re actually coming out ahead.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree. I say that as I did two FSBOs and both times people approached me with “buyers agents”

I said I am fine with buyers agents as long as buyer pays commission. They were like no you have to pay my buyers agent commission.

One was just a condo with a million identical comps in building. Turns out the “buyers agent” was buyers mother.



Buyers agents are not truly representing buyer unless buyer pays them

So this means you meaningfully reduced the competition for your sales. It’s very reasonable to guess this cost you 4% in sales price.

I’m not an agent, but I think people miss that obvious fact in this whole debate. A significant portion of people won’t look at FSBO at all, or won’t agree to pay their own agent, or will demand an even steeper discount if it’s FSBO. It creates enough FSBO market distortions that I don’t think it’s the win the FSBO folks think it is.

Now mind you I don’t think agents provide any 5 figure services to justify their involvement inherently. But as the market currently stands, I don’t think you’re actually coming out ahead.

So what you’re saying is that we’re being taxed at a higher rate just for a realtor commission? 60k on a 1m home is a lot.

I’d argue that we should move to a system where realtor fees aren’t included in home prices at all. Why should we pay taxes on it? And why is it allowed to be included in your mortgage? No one includes title insurance, moving company fees or the homeowners insurance you have to pay as part of a mortgage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I agree. I say that as I did two FSBOs and both times people approached me with “buyers agents”

I said I am fine with buyers agents as long as buyer pays commission. They were like no you have to pay my buyers agent commission.

One was just a condo with a million identical comps in building. Turns out the “buyers agent” was buyers mother.



Buyers agents are not truly representing buyer unless buyer pays them

So this means you meaningfully reduced the competition for your sales. It’s very reasonable to guess this cost you 4% in sales price.

I’m not an agent, but I think people miss that obvious fact in this whole debate. A significant portion of people won’t look at FSBO at all, or won’t agree to pay their own agent, or will demand an even steeper discount if it’s FSBO. It creates enough FSBO market distortions that I don’t think it’s the win the FSBO folks think it is.

Now mind you I don’t think agents provide any 5 figure services to justify their involvement inherently. But as the market currently stands, I don’t think you’re actually coming out ahead.

So what you’re saying is that we’re being taxed at a higher rate just for a realtor commission? 60k on a 1m home is a lot.

I’d argue that we should move to a system where realtor fees aren’t included in home prices at all. Why should we pay taxes on it? And why is it allowed to be included in your mortgage? No one includes title insurance, moving company fees or the homeowners insurance you have to pay as part of a mortgage.

You’re quoting me. Honestly, I thought this was going to happen with Redfin/Zillow. So much more of this is automated and could have reduced transaction costs tremendously. But, that didn’t happen (at least not as much as I thought), so I don’t have much hope for the future of reduced costs.

And I would still use an agent (albeit the cheapest agent I can find) in a sale just to avoid the anti FSBO bias among buyers.

[Anonymous]

We have sold out last 4 hones using flat fee mls, the biggest cost was paying the buying agent a 2.5% fee. There is no reason to have agents involved at all unless you are boomer and don't know how to use a smartphone.