How many years until realtors are replaced by Redfin/Uber/Zillow/etc?

[Anonymous]

Yeah count me in the camp who think realtors are overpaid, not all of them though.

Listing agents, yes.

Buyer's agents, maybe, but not necessarily. When I bought my place in DC, we probably toured dozens of houses, put in 3 offers, 2 of which fell through. The final transaction was a ginormous pain in the ass as the seller was a greedy flipper. I felt that my buyer's agent earned her commission.

If I were to sell my place though, I don't think a listing agent should be pocketing $15K for merely listing the property and attaching a lock box to the place. Maybe $2-3K for listing, pictures and lock box seem more appropriate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think there's a bit of a myth about how commissions (and transaction costs) are lower overseas.

Total round-trip transaction costs in Italy range from 8.88% to 22.70%of the property value. Registration tax is 3% for main homes and 7% for second homes. Nonresident buyers pay a fixed registration tax of 7%. The real estate agent’s commission is between 3% and 8% plus 22% VAT; typically split between buyer and seller.

France it's 1.5-5%, plus 20% VAT.

Germany is 3-6%, plus 19% VAT.

The Netherlands is 2%-4% plus 21% VAT.

Russia is 5% for properties under $2 million (it's 2% for higher value properties).

Switzerland is 3% to 5% plus 7.6% VAT.

So U.S. realtors should extract a larger commission because the U.S. charges less in sales tax than other countries? How does that follow?

That isn't what I said. Someone said overseas commissions are 1%. Clearly they are not.

France, Germany, Russia, Switzerland all in the 5-6% range too.

US ranges from 0-7%. Average is about 5.5.

[Anonymous]

Anonymous wrote:Yeah count me in the camp who think realtors are overpaid, not all of them though.

Listing agents, yes.

Buyer's agents, maybe, but not necessarily. When I bought my place in DC, we probably toured dozens of houses, put in 3 offers, 2 of which fell through. The final transaction was a ginormous pain in the ass as the seller was a greedy flipper. I felt that my buyer's agent earned her commission.

If I were to sell my place though, I don't think a listing agent should be pocketing $15K for merely listing the property and attaching a lock box to the place. Maybe $2-3K for listing, pictures and lock box seem more appropriate.

Listing agents do a lot more than "merely listingg the property and attaching a lock box to the place." That's like saying doctors merely take your vital signs, or journalists merely write a story, or tax accountants merely file tax returns.

[Anonymous]

Anonymous wrote:I think there's a bit of a myth about how commissions (and transaction costs) are lower overseas.

Total round-trip transaction costs in Italy range from 8.88% to 22.70%of the property value. Registration tax is 3% for main homes and 7% for second homes. Nonresident buyers pay a fixed registration tax of 7%. The real estate agent’s commission is between 3% and 8% plus 22% VAT; typically split between buyer and seller.

France it's 1.5-5%, plus 20% VAT.

Germany is 3-6%, plus 19% VAT.

The Netherlands is 2%-4% plus 21% VAT.

Russia is 5% for properties under $2 million (it's 2% for higher value properties).

Switzerland is 3% to 5% plus 7.6% VAT.

Nope you're wrong about Italy.
VAT is applicable only in the case of new buildings, and it is only applied to the cost of the building itself not the land the building is sitting on. People who pay VAT do not have to pay the registration costs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yeah count me in the camp who think realtors are overpaid, not all of them though.

Listing agents, yes.

Buyer's agents, maybe, but not necessarily. When I bought my place in DC, we probably toured dozens of houses, put in 3 offers, 2 of which fell through. The final transaction was a ginormous pain in the ass as the seller was a greedy flipper. I felt that my buyer's agent earned her commission.

If I were to sell my place though, I don't think a listing agent should be pocketing $15K for merely listing the property and attaching a lock box to the place. Maybe $2-3K for listing, pictures and lock box seem more appropriate.

Listing agents do a lot more than "merely listingg the property and attaching a lock box to the place." That's like saying doctors merely take your vital signs, or journalists merely write a story, or tax accountants merely file tax returns.

Hello realtor,

In the best case scenario, you are paying listing agents for their expertise on pricing and also their negotiation skills. But 1. there's this thing called the interne,t so you can figure out what the appropriate list price yourself and 2. agents are incentivized to get you to list/sell your house at a low a price as possible so most of them are worthless on negotiations.

[Anonymous]

Anonymous wrote:Overseas realtors only make about 1% on transactions. Sounds like a much more fair number.

I am a real estate agent, and I met an agent in London this summer. She works in an office of 10 agents in central London and does about 30 transactions a year. She is the lowest performing agent in the office but said she had been in the business only two years. Most of the agents do 50 to 60 transactions a year. Back of envelope calculaton is that her office of 10 agents does about 50 transactions per year per agent.

My office of nearly 100 agents did 731 transactions so far this year (I just checked number with my manager).

The London agent is paid a salary a bonus as she does more transactions. Last year she said she made over 200 pounds -- roughly $350,000. The bulk of the business in my office is done by me and about five other agents. The non-performing agents in my office make about $40,000 a year -- average.

This shows what is wrong with our system in the States. If we had 10 agents -- rather than 100 agents --- the office would do about the same amount of business, but the productivity would be immensely higher.

I have said from my first day of entering this business, pay people and then they will have to work. The current independent contractor system allows people to waste their time and my company's resources by pretending they are working.

[Anonymous]

I don't know much about Redfin's business model, but I am seeing a lot more Redfin signs on houses for sale. They used to focus on buyers, but now are getting into selling.

FWIW, we bought our house using Redfin and had a great experience. Super realtor, very efficient and knowledgeable, the process is all online and very streamlined. I've bought and sold five houses, and that was by far the easiest transaction and the best realtor.

But when we went to sell our house, Redfin did not have a broker in our area who handled sales, so we went with a traditional broker who was horrible!!!! God, I hate realtors.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is a pretty good (if slightly dated) article on why the real estate brokerage industry hasn't been disrupted.
http://www.economist.com/node/21554204
Key takeaways are agents have more value when homes don't sell themselves in a hot market (duh) and the independent nature of the business.

My reading of the article is FAR different from yours. The article says economists find the realtor market ridiculous and are baffled as to how it survives. The article offers several theories for why the realtor market has survived:
1. When everyone's getting fat with huge housing prices, no one cares about paying a few % for a realtor.
2. "Clients are suckers" getting tricked by realtors who tell buyers that the seller is paying, while promising sellers that they'll just jack the price to pay for the commission.
3. It's a mini-monopoly with only a few big realtors in each area getting most of the sales, so the monopolistic chief real estate agency can enforce the price for everyone and prevent discounters.
4. The industry has captured the regulators and uses the regulators to keep the prices up and prevent competition.

The article guesses though that the biggest reason this ridiculous business model survives is because the realtors are using collusion and policing to block price discounters. Buyer agents steer customers to those homes that pay a full 3% commission, and away from homes that pay the agents less. Buyer agents blackball sellers that use discounts. Because this is all stealth, it's very difficult to prove.

This is why Redfin is having trouble disrupting the market. Also, the Real Estate Lobby spends more money than any other to influence politicians, who support their crazy, crooked business.

OP: The answer is: Not Soon Enough! Realtors are dinosaurs. No need for them whatsoever.

[Anonymous]

Also, the Real Estate Lobby spends more money than any other to influence politicians, who support their crazy, crooked business.

We're going to have to see some proof of that, thanks!
Love,
The Pharmaceutical Industry
Insurance Companies
The NRA
Defense Contractors

[Anonymous]

Most of the "real estate lobby" money is spent to preserve the mortgage interest deduction not to "support their crazy crooked business."

Many other smaller industries spend more on lobbying than NAR.

[Anonymous]

Anonymous wrote:

Listing agents do a lot more than "merely listingg the property and attaching a lock box to the place." That's like saying doctors merely take your vital signs, or journalists merely write a story, or tax accountants merely file tax returns.

Stop comparing yourselves to doctors and lawyers. They study hard to get where they are. You took a week long class.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yeah count me in the camp who think realtors are overpaid, not all of them though.

Listing agents, yes.

Buyer's agents, maybe, but not necessarily. When I bought my place in DC, we probably toured dozens of houses, put in 3 offers, 2 of which fell through. The final transaction was a ginormous pain in the ass as the seller was a greedy flipper. I felt that my buyer's agent earned her commission.

If I were to sell my place though, I don't think a listing agent should be pocketing $15K for merely listing the property and attaching a lock box to the place. Maybe $2-3K for listing, pictures and lock box seem more appropriate.

Listing agents do a lot more than "merely listingg the property and attaching a lock box to the place." That's like saying doctors merely take your vital signs, or journalists merely write a story, or tax accountants merely file tax returns.

Hello realtor,

In the best case scenario, you are paying listing agents for their expertise on pricing and also their negotiation skills. But 1. there's this thing called the interne,t so you can figure out what the appropriate list price yourself and 2. agents are incentivized to get you to list/sell your house at a low a price as possible so most of them are worthless on negotiations.

Again, I'm not a Realtor. And your reflexive accusation of everyone who disagrees iwith you is a Realtor is really tiresome. I don't need a hidden agenda to expose you as an idiot.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Listing agents do a lot more than "merely listingg the property and attaching a lock box to the place." That's like saying doctors merely take your vital signs, or journalists merely write a story, or tax accountants merely file tax returns.

Stop comparing yourselves to doctors and lawyers. They study hard to get where they are. You took a week long class.

I'm not a Realtor, but I would love to see you pass the exam after just a week of classes.

[Anonymous]

Anonymous wrote:I don't know much about Redfin's business model, but I am seeing a lot more Redfin signs on houses for sale. They used to focus on buyers, but now are getting into selling.

FWIW, we bought our house using Redfin and had a great experience. Super realtor, very efficient and knowledgeable, the process is all online and very streamlined. I've bought and sold five houses, and that was by far the easiest transaction and the best realtor.

But when we went to sell our house, Redfin did not have a broker in our area who handled sales, so we went with a traditional broker who was horrible!!!! God, I hate realtors.

I haven't seen a Redfin For Sale sign in months -- maybe not since last June?

I live in Arlington...

The times I did see Redfin signs they seemed to be on less desirable properties -- busy roads, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yeah count me in the camp who think realtors are overpaid, not all of them though.

Listing agents, yes.

Buyer's agents, maybe, but not necessarily. When I bought my place in DC, we probably toured dozens of houses, put in 3 offers, 2 of which fell through. The final transaction was a ginormous pain in the ass as the seller was a greedy flipper. I felt that my buyer's agent earned her commission.

If I were to sell my place though, I don't think a listing agent should be pocketing $15K for merely listing the property and attaching a lock box to the place. Maybe $2-3K for listing, pictures and lock box seem more appropriate.

Listing agents do a lot more than "merely listingg the property and attaching a lock box to the place." That's like saying doctors merely take your vital signs, or journalists merely write a story, or tax accountants merely file tax returns.

Hello realtor,

In the best case scenario, you are paying listing agents for their expertise on pricing and also their negotiation skills. But 1. there's this thing called the interne,t so you can figure out what the appropriate list price yourself and 2. agents are incentivized to get you to list/sell your house at a low a price as possible so most of them are worthless on negotiations.

I'm pretty sure you think you understood Freakonomics. But you didn't.