New Commission -3%

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

What ethical consideration are you talking about? The agent has an ethical obligation to present all offers. The listing agent does not have an obligation to to write an offer for an unrepresented buyer though. Depending upon the state, in some cases the agent cannot represent a buyer and can only do ministerial acts.

Do you really not understand how dual agency creates ethical issues? How one agent can't really represent both sides in a transaction?

https://www.rockethomes.com/blog/home-buying/dual-agency

No shit. The initial post I made asked why a listing agent would not present an unrepreseted buyer's offer to the sellers. It had nothing to do with dual agency.

Realtor to realtor: "Scratch my back and I'll scratch yours."
Would likely prefer to sell to a buyer with an agent in order to (1) lessen the work for the sellers' agent in hand-holding the buyer and (2) keep money flowing to the buy-side agent ecosystem. Every agent who sells is also an agent who is buying for another client. To the extent you can promote the norm of buy-side agent fees, the better it is for all parties.

It's similar to agents who steer clients away from Redfin properties or Redfin buyers. You don't promote someone who wants to disrupt the model through lower fees.

LOL. You are totally clueless. The listing agent has to present all offers to the sellers and your hypotheses are nothing more than uneducated speculation. Agents steer clients away from Redfin properties? False. Listing agents having to hand hold unrepresented buyers, false. Every listing agent is also a buyer's agent, false. Promoting the norm of buy-side agent fees, wrong. Nice try dude but you have no idea what you are talking about as is true of 90% of people on this site. Kind of like the post where no one could figure out what a cash buyer is. SMDH.

Oh, just like agents don't have a long and sordid history promote redlining, in spite of the law? True.
Oh, just like agents are not supposed to steer clients to homes with higher buyer agent fees? True.

Agents are "supposed to" do a lot of things. What we do know with certainty is that agents do what is best for their own pockets, in spite of whatever laws or NAR ethics code is in place. Dual agency happens all the time, in spite of the well-known ethical issues.

We don't know how things are going to shake out, post-NAR settlement. But I can guarantee that agents will do what is best for their pocket book and their industry. Agents are not giving up half their commissions - buyers' agent fees - without a (likely underhanded) fight.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

OK, so play that out ...

2% is 1% each.

For an agent, that might be equal to 0.44% after a 50/50 split and the 6% haircut the brokers take off the top (agents typically only get 94% of their split).

So you sell your house for $1 million. The agent now pockets $4,400 from that. Out of which they have to pay for any marketing, staging (unless you pay separately for that), and pay taxes and their own license fees etc. So maybe their net is $2,500.

But that's a million dollar house. Now do it on a $500,000 house. Now it's $1,250.

I'll let you tell me if that's a fair amount or not. I guess it depends on how many hours they spend on the sale.

The market comprising the consumers of your services decides what your services are worth. If you provide services worth 5K, they are worth 5K. If you provide services worth $1,250, they are worth $1,250. You decide if the compensation is "fair". If not, find a new job.

The point is -- absent NAR cartel-ing the industry -- the real estate industry will function like every other comparable industry driven by macroeconomic forces.

And my point is that it will be a while before we see what new compensation model takes the old one's place. But I do think this probably won't play out the way you think -- either transactions may get more rocky or agents will find some different way to get their money. Hourly rates, maybe, but pay-as-you go. Or maybe fee-for-service -- want an open house? That'll be $500... Every trip to the house to let in an inspector? $200/hour. Every e-mail replied to? $200/hour, billed in 8 minute increments like a lawyer... Who knows. Remains to be seen.

Every house I’ve sold has sold itself in no time. I would have saved a fortune paying by the hour.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

OK, so play that out ...

2% is 1% each.

For an agent, that might be equal to 0.44% after a 50/50 split and the 6% haircut the brokers take off the top (agents typically only get 94% of their split).

So you sell your house for $1 million. The agent now pockets $4,400 from that. Out of which they have to pay for any marketing, staging (unless you pay separately for that), and pay taxes and their own license fees etc. So maybe their net is $2,500.

But that's a million dollar house. Now do it on a $500,000 house. Now it's $1,250.

I'll let you tell me if that's a fair amount or not. I guess it depends on how many hours they spend on the sale.

I know that brokers take in a portion of commissions, as you note. What service are they providing in exchange for this revenue? Could this be another place in this process that is ripe for disruption? Maybe it isn't, I don't know -- I'm just curious.

A broker offering to take less might attract the top agents on the sell side. Wasn't Compass offering incentives to try to lure good agents a few years back?

[Anonymous]

Anonymous wrote:
LOL. You are totally clueless. The listing agent has to present all offers to the sellers and your hypotheses are nothing more than uneducated speculation. Agents steer clients away from Redfin properties? False. Listing agents having to hand hold unrepresented buyers, false. Every listing agent is also a buyer's agent, false. Promoting the norm of buy-side agent fees, wrong. Nice try dude but you have no idea what you are talking about as is true of 90% of people on this site. Kind of like the post where no one could figure out what a cash buyer is. SMDH.

You are factually and empirically wrong.

https://www.antitrustinstitute.org/wp-content/uploads/2021/02/BBLJ-ONLINE-Nadel-.pdf
https://www.cato.org/regulation/summer-2021/anticompetition-buying-selling-homes
https://www.aeaweb.org/articles?id=10.1257/app.20160214
https://dl.icdst.org/pdfs/files3/a434d892077e6f98695d2855e1e3fc91.pdf

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

What ethical consideration are you talking about? The agent has an ethical obligation to present all offers. The listing agent does not have an obligation to to write an offer for an unrepresented buyer though. Depending upon the state, in some cases the agent cannot represent a buyer and can only do ministerial acts.

Do you really not understand how dual agency creates ethical issues? How one agent can't really represent both sides in a transaction?

https://www.rockethomes.com/blog/home-buying/dual-agency

No shit. The initial post I made asked why a listing agent would not present an unrepreseted buyer's offer to the sellers. It had nothing to do with dual agency.

Realtor to realtor: "Scratch my back and I'll scratch yours."
Would likely prefer to sell to a buyer with an agent in order to (1) lessen the work for the sellers' agent in hand-holding the buyer and (2) keep money flowing to the buy-side agent ecosystem. Every agent who sells is also an agent who is buying for another client. To the extent you can promote the norm of buy-side agent fees, the better it is for all parties.

It's similar to agents who steer clients away from Redfin properties or Redfin buyers. You don't promote someone who wants to disrupt the model through lower fees.

LOL. You are totally clueless. The listing agent has to present all offers to the sellers and your hypotheses are nothing more than uneducated speculation. Agents steer clients away from Redfin properties? False. Listing agents having to hand hold unrepresented buyers, false. Every listing agent is also a buyer's agent, false. Promoting the norm of buy-side agent fees, wrong. Nice try dude but you have no idea what you are talking about as is true of 90% of people on this site. Kind of like the post where no one could figure out what a cash buyer is. SMDH.

Oh, just like agents don't have a long and sordid history promote redlining, in spite of the law? True.
Oh, just like agents are not supposed to steer clients to homes with higher buyer agent fees? True.

Agents are "supposed to" do a lot of things. What we do know with certainty is that agents do what is best for their own pockets, in spite of whatever laws or NAR ethics code is in place. Dual agency happens all the time, in spite of the well-known ethical issues.

We don't know how things are going to shake out, post-NAR settlement. But I can guarantee that agents will do what is best for their pocket book and their industry. Agents are not giving up half their commissions - buyers' agent fees - without a (likely underhanded) fight.

It's shocking how these agents / agent-apologists either don't know or don't care how badly their industry abuses their clients.

[Anonymous]

I going to spend the $418 and take the online real estate class to eliminate the fees for our transactions.

Screw the realTOR

except Phil Dumphy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

What ethical consideration are you talking about? The agent has an ethical obligation to present all offers. The listing agent does not have an obligation to to write an offer for an unrepresented buyer though. Depending upon the state, in some cases the agent cannot represent a buyer and can only do ministerial acts.

Do you really not understand how dual agency creates ethical issues? How one agent can't really represent both sides in a transaction?

https://www.rockethomes.com/blog/home-buying/dual-agency

No shit. The initial post I made asked why a listing agent would not present an unrepreseted buyer's offer to the sellers. It had nothing to do with dual agency.

Realtor to realtor: "Scratch my back and I'll scratch yours."
Would likely prefer to sell to a buyer with an agent in order to (1) lessen the work for the sellers' agent in hand-holding the buyer and (2) keep money flowing to the buy-side agent ecosystem. Every agent who sells is also an agent who is buying for another client. To the extent you can promote the norm of buy-side agent fees, the better it is for all parties.

It's similar to agents who steer clients away from Redfin properties or Redfin buyers. You don't promote someone who wants to disrupt the model through lower fees.

LOL. You are totally clueless. The listing agent has to present all offers to the sellers and your hypotheses are nothing more than uneducated speculation. Agents steer clients away from Redfin properties? False. Listing agents having to hand hold unrepresented buyers, false. Every listing agent is also a buyer's agent, false. Promoting the norm of buy-side agent fees, wrong. Nice try dude but you have no idea what you are talking about as is true of 90% of people on this site. Kind of like the post where no one could figure out what a cash buyer is. SMDH.

Oh, just like agents don't have a long and sordid history promote redlining, in spite of the law? True.
Oh, just like agents are not supposed to steer clients to homes with higher buyer agent fees? True.

Agents are "supposed to" do a lot of things. What we do know with certainty is that agents do what is best for their own pockets, in spite of whatever laws or NAR ethics code is in place. Dual agency happens all the time, in spite of the well-known ethical issues.

We don't know how things are going to shake out, post-NAR settlement. But I can guarantee that agents will do what is best for their pocket book and their industry. Agents are not giving up half their commissions - buyers' agent fees - without a (likely underhanded) fight.

It's shocking how these agents / agent-apologists either don't know or don't care how badly their industry abuses their clients.

So long as they get their cut! Real Estate agents are no different than car salesmen these days. Both positions only exist artificially to create friction in the system and then demand a reward for untangling it (and at $200/hr!). Let the buyer go straight to the source.

[Anonymous]

I have always wondered why there is not a sliding scale commission structure.

If the agent says your house will sell quickly for $1MM...maybe the total commission is 2-3%...at $1.1MM+ the commission increases by 1% for every extra $100k and then caps at 6% total.

If it sells for less, the commission also drops...maybe 0.5%.

Is this not legal? Don't you want to align the commission structure to ensure a higher sales price vs. the current structure that dramatically just rewards a sale at any price (i.e., if the commission is 6%...if you get a quick offer at $900k for a total of $54k, you push the seller to take it vs. waiting longer just to get full asking and a $60k commission).

[Anonymous]

Anonymous wrote:I have always wondered why there is not a sliding scale commission structure.

If the agent says your house will sell quickly for $1MM...maybe the total commission is 2-3%...at $1.1MM+ the commission increases by 1% for every extra $100k and then caps at 6% total.

If it sells for less, the commission also drops...maybe 0.5%.

Is this not legal? Don't you want to align the commission structure to ensure a higher sales price vs. the current structure that dramatically just rewards a sale at any price (i.e., if the commission is 6%...if you get a quick offer at $900k for a total of $54k, you push the seller to take it vs. waiting longer just to get full asking and a $60k commission).

Because NAR. NAR spends Millions in lobbying to prevent competitive pricing structures and to protect its anti-competitive policies that harm consumers.

That's why they lose antitrust and class-action lawsuits.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

What ethical consideration are you talking about? The agent has an ethical obligation to present all offers. The listing agent does not have an obligation to to write an offer for an unrepresented buyer though. Depending upon the state, in some cases the agent cannot represent a buyer and can only do ministerial acts.

Do you really not understand how dual agency creates ethical issues? How one agent can't really represent both sides in a transaction?

https://www.rockethomes.com/blog/home-buying/dual-agency

No shit. The initial post I made asked why a listing agent would not present an unrepreseted buyer's offer to the sellers. It had nothing to do with dual agency.

Realtor to realtor: "Scratch my back and I'll scratch yours."
Would likely prefer to sell to a buyer with an agent in order to (1) lessen the work for the sellers' agent in hand-holding the buyer and (2) keep money flowing to the buy-side agent ecosystem. Every agent who sells is also an agent who is buying for another client. To the extent you can promote the norm of buy-side agent fees, the better it is for all parties.

It's similar to agents who steer clients away from Redfin properties or Redfin buyers. You don't promote someone who wants to disrupt the model through lower fees.

LOL. You are totally clueless. The listing agent has to present all offers to the sellers and your hypotheses are nothing more than uneducated speculation. Agents steer clients away from Redfin properties? False. Listing agents having to hand hold unrepresented buyers, false. Every listing agent is also a buyer's agent, false. Promoting the norm of buy-side agent fees, wrong. Nice try dude but you have no idea what you are talking about as is true of 90% of people on this site. Kind of like the post where no one could figure out what a cash buyer is. SMDH.

Oh, just like agents don't have a long and sordid history promote redlining, in spite of the law? True.
Oh, just like agents are not supposed to steer clients to homes with higher buyer agent fees? True.

Agents are "supposed to" do a lot of things. What we do know with certainty is that agents do what is best for their own pockets, in spite of whatever laws or NAR ethics code is in place. Dual agency happens all the time, in spite of the well-known ethical issues.

We don't know how things are going to shake out, post-NAR settlement. But I can guarantee that agents will do what is best for their pocket book and their industry. Agents are not giving up half their commissions - buyers' agent fees - without a (likely underhanded) fight.

Agree, but fortunately they will be in a white hot spotlight for some time to come, and everyone has a recording device in their pockets to capture the underhanded tactics. DOJ is still not done with them yet either. It really is over for the high commissions and for buyers agents.

[Anonymous]

Anonymous wrote:I have always wondered why there is not a sliding scale commission structure.

If the agent says your house will sell quickly for $1MM...maybe the total commission is 2-3%...at $1.1MM+ the commission increases by 1% for every extra $100k and then caps at 6% total.

If it sells for less, the commission also drops...maybe 0.5%.

Is this not legal? Don't you want to align the commission structure to ensure a higher sales price vs. the current structure that dramatically just rewards a sale at any price (i.e., if the commission is 6%...if you get a quick offer at $900k for a total of $54k, you push the seller to take it vs. waiting longer just to get full asking and a $60k commission).

In reality, commission percentage goes down the higher the house price. It's an explicit acknowledgment that a house selling for $10M does not take more effort than selling a house for $1m once you do the initial paperwork, listing prep/photos, and open houses. It's just harder to find a buyer at the higher prices since it's a smaller pool of people.

[Anonymous]

Anonymous wrote:
Agree, but fortunately they will be in a white hot spotlight for some time to come, and everyone has a recording device in their pockets to capture the underhanded tactics. DOJ is still not done with them yet either. It really is over for the high commissions and for buyers agents.

Maybe if agents stopped paying dues, NAR would not have the resources to carry out the repeated schemes to screw people.

While not all agents are directly the problem, shouldn't agents be taken to task as an indirect matter - for funding an organization that extorts money for home buyers and sellers?

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Agree, but fortunately they will be in a white hot spotlight for some time to come, and everyone has a recording device in their pockets to capture the underhanded tactics. DOJ is still not done with them yet either. It really is over for the high commissions and for buyers agents.

Maybe if agents stopped paying dues, NAR would not have the resources to carry out the repeated schemes to screw people.

While not all agents are directly the problem, shouldn't agents be taken to task as an indirect matter - for funding an organization that extorts money for home buyers and sellers?

That's like acting Congress to vote on their own term-limits. Never going to happen.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Agree, but fortunately they will be in a white hot spotlight for some time to come, and everyone has a recording device in their pockets to capture the underhanded tactics. DOJ is still not done with them yet either. It really is over for the high commissions and for buyers agents.

Maybe if agents stopped paying dues, NAR would not have the resources to carry out the repeated schemes to screw people.

While not all agents are directly the problem, shouldn't agents be taken to task as an indirect matter - for funding an organization that extorts money for home buyers and sellers?

That's like acting Congress to vote on their own term-limits. Never going to happen.

Allow me to restate and clarify:

Shouldn't consumers - home buyers and sellers take agents to task; meaning, any an all agents who fund an organization (NAR) that extorts money for home buyers and sellers?

[Anonymous]

It's so great seeing the destruction of the illegal real estate commission scheme. Agents in the dmv have made hundreds of millions from sellers from the 5-6% scheme. You wonder when someone will file a class action against the top 200-300 realtors themselves in the dmv and their brokers, eg, Sotheby's, WFP, Long & Foster.