New Commission -3%

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
The new deal…whatever it will be….. will reduce the number of realtors substantially. For many it is part time work with little expertise needed so if you sold a few houses a year you could make decent money. What will be interesting is if someone comes up with a new model that really revolutionizes the industry the way internet travel sites disrupted the travel agent business.


Yes, completely agree. I recall a Shark Tank episode several years ago where someone had developed an app that allowed a prospective home buyer to come across a home for sale and, using the app, unlock the lockbox and tour the home without the buyers agent physically there. Barbara (who is a realtor) was dead set against it. I don't think it got a deal. But that's an example of innovation that was stymied because real estate agents wanted to make sure buyers agents weren't being cut out. It's going to be really cool to see how AI and automation change this up.

This is how Tesla sells its cars. You use the app, go to the parking lot, unlock the car, and test drive it (you get an hour) and then return it. Someone texts you to ask how it went and if you have any questions. That's it. Guess what? There is no middleman (dealer) and they actually sell cars this way. You go to a warehouse to pick up your car that you ordered. No papers. Everything is done online. Easy and it works. As someone said, it's hard to change old habits and systems, but it is definitely possible.

But for housing? Maybe for vacant new builds or otherwise vacant existing homes. Otherwise, as a seller, I would want someone physically there....

Yeah, if only you could hire someone as your...agent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can't get over the agents on his acting like they are providing some kind of specialized service like lawyers or architects. YOU UNLOCK DOORS for a living.

Also acting like it's some sort of divine law that commissions are fixed.

Imagine going to a few architects and describing what sort of house you want to build, and every one saying "well, standard price for a home design, per the National Association of Architects, is $100k".

You still don't get it. You, as a buyer's agent, aren't providing anywhere near the kind of service an architect is. You might as well be comparing the McDonald's fry-guy to the architect. "They're both selling a product!" There is absolutely no reason buyer's agents shouldn't be compensated hourly, like every other service profession, other than they don't want to give up their comfortable income for doing little to no meaningful work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can't get over the agents on his acting like they are providing some kind of specialized service like lawyers or architects. YOU UNLOCK DOORS for a living.

Also acting like it's some sort of divine law that commissions are fixed.

Imagine going to a few architects and describing what sort of house you want to build, and every one saying "well, standard price for a home design, per the National Association of Architects, is $100k".

You still don't get it. You, as a buyer's agent, aren't providing anywhere near the kind of service an architect is. You might as well be comparing the McDonald's fry-guy to the architect. "They're both selling a product!" There is absolutely no reason buyer's agents shouldn't be compensated hourly, like every other service profession, other than they don't want to give up their comfortable income for doing little to no meaningful work.

Not an agent, but the real estate market is much more wild west than many people would choose to admit. It's not rational, neat and tidy, operating on fixed deadlines. Individual homes are not easy to commoditize (= the whole failed ibuyer thing). Individual home sellers can be idiosyncratic, freewheeling, and erratic. Buyers who can more effectively navigate this better are more likely to attain their objective, and what's needed to navigate that does NOT need to be the current system of required 2.5% payment to a buyer agent but if you think the only services used = some doors opened and 3.5 billable hours to an agent or RE attorney to draft a contract, I don't agree with that either. I don't see any of this changing unless we go to a system of detailed, mandated seller requirements, and I don't see that happening or want to see it happen (e.g., photos, virtual tours, and listing descriptions to meet a regulated standard, listing must be advertised publicly on MLS for X number of days, set offer deadline with no discretion to review beforehand, mandated rubric against all offers are reviewed to determine the one the seller must accept, no off market sales, etc.).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Flat fee advocates, help me out here. Are you saying that someone selling a 440k condo should pay the same fee as someone selling their multi-million dollar mansion?

Are you saying someone buying a fridge for a condo should pay different from a fridge fo a mansion?
Maybe a fee for how much work the realtor is puts in? Or a bonus commission % for getting extra high price above a baseline?

Mind blowing, I know.

You don't need to be snarky. I was asking a genuine question because I'm not understanding how the flat fee arrangement would work. It seems grossly unfair that Jeff Bezos will pay the same price for selling his home(s) than the blue collar worker in Appalachia.

As to your fridge analogy, I'll bet the fridge that the 400k condo owner buys will be much less expensive than the luxury fridge the 3.5 million home owner buys for their tricked-out kitchen. Mind blowing, I know.

You don't understand how it would work? It would just happen, this how it would "work".

sure- but the rich person could spend the same money at the store for a shirt or could go fancier, they could pay for the fancy nanny or the lower cost daycare.. the same thing will be true with realtors. obviously already happens with lawyers- you can pay for the "best" or go on legal zoom. you can pay OON for a therapist or get some bot on betterhelp. there's price and quality variations in every option but none of those are percentage based.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can't get over the agents on his acting like they are providing some kind of specialized service like lawyers or architects. YOU UNLOCK DOORS for a living.

Also acting like it's some sort of divine law that commissions are fixed.

Imagine going to a few architects and describing what sort of house you want to build, and every one saying "well, standard price for a home design, per the National Association of Architects, is $100k".

You still don't get it. You, as a buyer's agent, aren't providing anywhere near the kind of service an architect is. You might as well be comparing the McDonald's fry-guy to the architect. "They're both selling a product!" There is absolutely no reason buyer's agents shouldn't be compensated hourly, like every other service profession, other than they don't want to give up their comfortable income for doing little to no meaningful work.

Not an agent, but the real estate market is much more wild west than many people would choose to admit. It's not rational, neat and tidy, operating on fixed deadlines. Individual homes are not easy to commoditize (= the whole failed ibuyer thing). Individual home sellers can be idiosyncratic, freewheeling, and erratic. Buyers who can more effectively navigate this better are more likely to attain their objective, and what's needed to navigate that does NOT need to be the current system of required 2.5% payment to a buyer agent but if you think the only services used = some doors opened and 3.5 billable hours to an agent or RE attorney to draft a contract, I don't agree with that either. I don't see any of this changing unless we go to a system of detailed, mandated seller requirements, and I don't see that happening or want to see it happen (e.g., photos, virtual tours, and listing descriptions to meet a regulated standard, listing must be advertised publicly on MLS for X number of days, set offer deadline with no discretion to review beforehand, mandated rubric against all offers are reviewed to determine the one the seller must accept, no off market sales, etc.).

I would LOVE to see what buyer agent billables would look like. "Read text from client asking to see how they found on MLS .1"

[Anonymous]

*house

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can't get over the agents on his acting like they are providing some kind of specialized service like lawyers or architects. YOU UNLOCK DOORS for a living.

Also acting like it's some sort of divine law that commissions are fixed.

Imagine going to a few architects and describing what sort of house you want to build, and every one saying "well, standard price for a home design, per the National Association of Architects, is $100k".

You still don't get it. You, as a buyer's agent, aren't providing anywhere near the kind of service an architect is. You might as well be comparing the McDonald's fry-guy to the architect. "They're both selling a product!" There is absolutely no reason buyer's agents shouldn't be compensated hourly, like every other service profession, other than they don't want to give up their comfortable income for doing little to no meaningful work.

Not an agent, but the real estate market is much more wild west than many people would choose to admit. It's not rational, neat and tidy, operating on fixed deadlines. Individual homes are not easy to commoditize (= the whole failed ibuyer thing). Individual home sellers can be idiosyncratic, freewheeling, and erratic. Buyers who can more effectively navigate this better are more likely to attain their objective, and what's needed to navigate that does NOT need to be the current system of required 2.5% payment to a buyer agent but if you think the only services used = some doors opened and 3.5 billable hours to an agent or RE attorney to draft a contract, I don't agree with that either. I don't see any of this changing unless we go to a system of detailed, mandated seller requirements, and I don't see that happening or want to see it happen (e.g., photos, virtual tours, and listing descriptions to meet a regulated standard, listing must be advertised publicly on MLS for X number of days, set offer deadline with no discretion to review beforehand, mandated rubric against all offers are reviewed to determine the one the seller must accept, no off market sales, etc.).

I would LOVE to see what buyer agent billables would look like. "Read text from client asking to see how they found on MLS .1"

😍😍😍

[Anonymous]

One side benefit of this is that you won't have many fewer buyers' agents who do the following:

-- Blacklist certain listings that they don't like (because they're from redfin or a discount brokerage)
-- Get buyers to act against their interests by waiving contingencies and using idiotic escalation clauses that aren't supported by comps
-- Convince you that it's a good time to buy when every objective measurement says that it's not

[Anonymous]

Anonymous wrote:One side benefit of this is that you won't have many fewer buyers' agents who do the following:

-- Blacklist certain listings that they don't like (because they're from redfin or a discount brokerage)
-- Get buyers to act against their interests by waiving contingencies and using idiotic escalation clauses that aren't supported by comps
-- Convince you that it's a good time to buy when every objective measurement says that it's not

Typo -- you will

[Anonymous]

Anonymous wrote:

Anonymous wrote:One side benefit of this is that you won't have many fewer buyers' agents who do the following:

-- Blacklist certain listings that they don't like (because they're from redfin or a discount brokerage)
-- Get buyers to act against their interests by waiving contingencies and using idiotic escalation clauses that aren't supported by comps
-- Convince you that it's a good time to buy when every objective measurement says that it's not

Typo -- you will

Ah yes, true marks of an honorable profession worthy of an automatic commission.

[Anonymous]

Anonymous wrote:*house

Another lawyer who can't copy a text. A billable hour to call the IT guy and order him to my office.

[Anonymous]

Anonymous wrote:One side benefit of this is that you won't have many fewer buyers' agents who do the following:

-- Blacklist certain listings that they don't like (because they're from redfin or a discount brokerage)
-- Get buyers to act against their interests by waiving contingencies and using idiotic escalation clauses that aren't supported by comps
-- Convince you that it's a good time to buy when every objective measurement says that it's not

Exactly. Buyers will actually come out way ahead by not having pushy overpriced agents who are actually working against them. I represented myself when I bought my house, and got the 2.5% commission as a closing cost credit (in addition to negotiating 5% off the asking price). It was a great decision. I got the form contract from the sellers agent and filled it in myself. Anyone with a high school education should be able to figure it out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Woo hoo, about time!! I look for real estate listings myself and I contact listing agents myself. Why do I still need to pay someone $60,000 (3% of $1 million) for that service? I was going to do FSBO but if the commission goes down to 1% I might consider using an agent.

NAR will also no longer get exclusive access to MLS.

Just the fact that you wrote this explains how ignorant you are about the process. You will still be paying that 60k. Do you really think that sellers are going to cut their price 60 K for you? The only difference is now you will be paying that baked in commission without actually having an agent.

Exactly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Woo hoo, about time!! I look for real estate listings myself and I contact listing agents myself. Why do I still need to pay someone $60,000 (3% of $1 million) for that service? I was going to do FSBO but if the commission goes down to 1% I might consider using an agent.

NAR will also no longer get exclusive access to MLS.

Just the fact that you wrote this explains how ignorant you are about the process. You will still be paying that 60k. Do you really think that sellers are going to cut their price 60 K for you? The only difference is now you will be paying that baked in commission without actually having an agent.

Exactly.

Ha ha we got 2 people who don't remember econ 101, or didn't take it. Just because NAR has been fixing prices doesn't mean others do it.

This is a very well defined area of study. It's called "deadweight loss". The fixed high commissions are essentially a tax, now that tax is being lowered. The price will therefore decrease slightly, because a higher portion will be available to sellers (from the now available fees), and buyers will pay slightly less. How much exactly depends on a few variables. But there is no way prices stay where they are. Of course these changes will happen while there are other forces on the market.

https://en.m.wikipedia.org/wiki/Deadweight_loss

But yes please go ahead and let us all know how the basics of economics are wrong.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Woo hoo, about time!! I look for real estate listings myself and I contact listing agents myself. Why do I still need to pay someone $60,000 (3% of $1 million) for that service? I was going to do FSBO but if the commission goes down to 1% I might consider using an agent.

NAR will also no longer get exclusive access to MLS.

Just the fact that you wrote this explains how ignorant you are about the process. You will still be paying that 60k. Do you really think that sellers are going to cut their price 60 K for you? The only difference is now you will be paying that baked in commission without actually having an agent.

Exactly.

Even if this were true (which is highly debatable), I'd be fine with it. I'd rather have the seller pocket 3% extra than for that 3% to go to an agent.