Anonymous
03/16/2024 01:49
Subject: New Commission -3%
Anonymous wrote:Anonymous wrote:FWIW, DH and I have been buying and selling residential real estate for 20 years now. Even back then the commission is negotiable. We alway pay 4.5%. 3% goes to the buyer’s agent/agency and 1.5% to my agent to split w his agency. He worked as an independent under a listing agency. He essentially takes b/t 0.5-0.75% per transaction. He doesn’t advertise and has a pretty extensive inventor client list that buys/sells both residential and commercial properties. He makes a great living and we have done well with him through the various up-and-down markets.
I’m curious why you pay double to the buying agent?
We are considering entering an agreement with a realtor for 4.5%- 2 to buyer and 2.5 to seller. This seems fair as the buyers are literally lining up and the selling agent incurs listing fees and staging. What am I missing here? Why does the buyer agent deserve so much more?
We pay 4.5% as the seller same as you are lookin to do. How the 4.5% is split b/t buyer agent vs seller agent is up to them. Some deals are 3/1.5, some are 2/2.5.
Buyer agents are really on the side of the seller when it comes to price negotiation. They are there to persuade their clients to buy the house at the price that the seller is willing to settle on. Both sides are trying to simply make a deal at a price that their clients can swallow. Buyer agents are on the side of their clients when it comes to researching and finding the right house(s) to present.
Anonymous
03/16/2024 00:39
Subject: New Commission -3%
Anonymous wrote:Cartel system is broken.
System will find it's floor like many other developed countries where it cost 1-2% total.
Stock brokers used to cahrge useless fees and cartel was broken eventually. About time, americans stop wasting 5% of biggest purchase of their life. Agent can be useful but not as much as 5%.
30-40 bucks an hour is more than enough.
10 hours - 400 bucks
100 hours - 4000 bucks
200 hours - 8000 bucks
Hourly contract just like any other work will do fine.
There is no way that I would represent anybody and do 10 hours of work to collect $400. However, I am now thinking about getting a brokers license and starting an hourly brokerage that represents Buyers. I’ll hire a bunch of novice real estate agents and take a cut of their business.
Anonymous
03/16/2024 00:36
Subject: New Commission -3%
My buyer-client is now desperately trying to purchase before July, because I’m giving her a large rebate. I also feel pretty bad for Redfin, who actually tried to have a consumer minded model. This will gut that business model.
Anonymous
03/16/2024 00:34
Subject: New Commission -3%
American home sellers are the population that will benefit from this the most. And the reality is that they needed the least. Home prices continue to be at record highs. It is a great time in America to be selling a home.
From a consumer perspective, the group that is the most currently screwed over is people who are buying homes. Interest rates are high, and prices are at highs. The market is incredibly tight. And now, Buyers will either have to go into this incredibly competitive market with new representation, or they will have even more costs, and what is basically already an untenable market for homebuyers.
Buyers who use companies like Redfin, or populations such as veterans who use the USAA referral plan will no longer get rebates.
Also, many agents give rebates to their buyers, especially if they are working the sale side of the transaction as well. Those rebates help offset the ever-increasing closing costs.
As an agent I do fully recognize that is some markets, the commissions are ridiculous, but I just don’t see how this benefits any homebuyer in America right now.
From a consumer perspective, the group that is the most currently screwed over is people who are buying homes. Interest rates are high, and prices are at highs. The market is incredibly tight. And now, Buyers will either have to go into this incredibly competitive market with new representation, or they will have even more costs, and what is basically already an untenable market for homebuyers.
Buyers who use companies like Redfin, or populations such as veterans who use the USAA referral plan will no longer get rebates.
Also, many agents give rebates to their buyers, especially if they are working the sale side of the transaction as well. Those rebates help offset the ever-increasing closing costs.
As an agent I do fully recognize that is some markets, the commissions are ridiculous, but I just don’t see how this benefits any homebuyer in America right now.
Anonymous
03/16/2024 00:31
Subject: New Commission -3%
Buyers agents are going to in overdrive to get closing done before July now to collect easy money.
Number of buyers will dry after July. Anyone waiting to list , should list quickly.
Number of buyers will dry after July. Anyone waiting to list , should list quickly.
Anonymous
03/16/2024 00:30
Subject: New Commission -3%
Cartel system is broken.
System will find it's floor like many other developed countries where it cost 1-2% total.
Stock brokers used to cahrge useless fees and cartel was broken eventually. About time, americans stop wasting 5% of biggest purchase of their life. Agent can be useful but not as much as 5%.
30-40 bucks an hour is more than enough.
10 hours - 400 bucks
100 hours - 4000 bucks
200 hours - 8000 bucks
Hourly contract just like any other work will do fine.
System will find it's floor like many other developed countries where it cost 1-2% total.
Stock brokers used to cahrge useless fees and cartel was broken eventually. About time, americans stop wasting 5% of biggest purchase of their life. Agent can be useful but not as much as 5%.
30-40 bucks an hour is more than enough.
10 hours - 400 bucks
100 hours - 4000 bucks
200 hours - 8000 bucks
Hourly contract just like any other work will do fine.
Anonymous
03/16/2024 00:26
Subject: New Commission -3%
Anonymous wrote:As someone who is saving up for a condo, I’m not really happy with this decision. Now not only will I have to have money for a downpayment and closing costs, but also agent costs. Sellers probably won’t want to pay buyers agents, and I don’t want to a first time home buyer without one. It seems to shift more burden onto buyers. But it seems like many are happy with this decision.
You were paying for agent costs before. The price was just baked into the sales price. Now it's going to be separated and you can negotiate how much you want to spend. The market will settle and there will be standard price points based on service level- just like everything else you pay for. Yes the transition period may take a couple of years to shake out. But that's no reason to extend a horribly inefficient system..
And I am truly sorry for the realtors losing their jobs. Nothing personal, but many of you were just free riding on the cartel overly inflating the prices for your services. The good news is that those who actually can consistently provide value will be able to continue to do so.
Anonymous
03/16/2024 00:23
Subject: New Commission -3%
Anonymous wrote:As someone who is saving up for a condo, I’m not really happy with this decision. Now not only will I have to have money for a downpayment and closing costs, but also agent costs. Sellers probably won’t want to pay buyers agents, and I don’t want to a first time home buyer without one. It seems to shift more burden onto buyers. But it seems like many are happy with this decision.
Yes, you will have to save up more money (or purchase a cheaper condo) to pay for the agent to represent you. You may also have to pay per hour unless you want to compensate the agent with a higher commission percentage. As you may not find a home in the end, a buyer agent working on commission will likely want similar to the 2-3pct today.
This whole change is penny wise and pound foolish.
Anonymous
03/15/2024 23:58
Subject: New Commission -3%
As someone who is saving up for a condo, I’m not really happy with this decision. Now not only will I have to have money for a downpayment and closing costs, but also agent costs. Sellers probably won’t want to pay buyers agents, and I don’t want to a first time home buyer without one. It seems to shift more burden onto buyers. But it seems like many are happy with this decision.
Anonymous
03/15/2024 23:55
Subject: New Commission -3%
If this settlement goes through it is a big deal and will upend the whole real estate industry. Winner in the end will be Zillow, CoStar/homes.com and other listing portals.
Buyers will be alone and at the mercy of listing agents working for sellers again. We will have lawsuits and more regulation, making it more expensive for everyone to transact real estate. For example, there will likely be the need for “transfer insurance” purchased by the seller to protect themselves against lawsuits from unrepresented buyers (as is the case in many countries abroad.)
Regardless, short term the pain will be felt by Realtors and brokerages. The high interest rates, low volume of transactions and a loss of 50pct of the commission pot, will make more than half the real estate agents leave the industry and let their licenses expire. Buyer agency is dead - nobody but some of the well off will want to pay enough to make it worth it for the agent. The ones that need the buyer agent the most will be the ones least able to afford one.
Agents on this board are understandably frustrated - their current careers are likely over. Hopefully the economy doesn’t go into full recession as well.
Buyers will be alone and at the mercy of listing agents working for sellers again. We will have lawsuits and more regulation, making it more expensive for everyone to transact real estate. For example, there will likely be the need for “transfer insurance” purchased by the seller to protect themselves against lawsuits from unrepresented buyers (as is the case in many countries abroad.)
Regardless, short term the pain will be felt by Realtors and brokerages. The high interest rates, low volume of transactions and a loss of 50pct of the commission pot, will make more than half the real estate agents leave the industry and let their licenses expire. Buyer agency is dead - nobody but some of the well off will want to pay enough to make it worth it for the agent. The ones that need the buyer agent the most will be the ones least able to afford one.
Agents on this board are understandably frustrated - their current careers are likely over. Hopefully the economy doesn’t go into full recession as well.
Anonymous
03/15/2024 23:02
Subject: New Commission -3%
Anonymous wrote:Anonymous wrote:This is good on the selling side. But I'm totally confused about how this would work on the buyer side.
I didn't ask my agent to show me a bunch of houses but she totally kicked it into high gear when we saw that a house that met my criteria was coming on market. Basically, she was totally on point with every step from initial showing to getting my offer to the seller quickly. It was definitely a value-add over what I could have done myself. Her motivation? She knew she stood to make bank if we got my (strong) offer to the seller first. Was what she did worth almost a quarter grand to the seller? - No, the seller was going to accept the first solid offer that came in, and there would have been others if not mine. So it makes sense that I as the buyer pay, but how much was that really worth? Not almost a quarter grand, I don't think so especially if I'm paying, but at the same time I do think that there probably needs to be some potential upside for the agent beyond the sum total of the hours spent.
You are paying agent fees as a buyer, don’t you see that?
Yes, I get that it is that way under the current system, and I agree that change is needed. Although I think it is naive to believe that the a la carte system paid by buyers won't end up advantaging wealthy buyers further in competitive markets. In more balanced markets or in a buyer's market, the a la carte system has more clear benefits for buyers and sellers.
Anonymous
03/15/2024 22:55
Subject: New Commission -3%
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:If I am reading correctly, this new system will become effective July. Would some people intending to put their house on the market choose to wait until July to do it? If so, inventory could fall even further, and prices climb more in the next few months.
If anyone lists their home in the next few months, I’d expect it to say “no buyer agent commission will be paid” in big letters in the listing.
Exactly what will happen and there will be no co-op commission shown in the MLS.
So sellers get all the benefit of having representation and buyers get none? Cue the lawsuits in a few years from buyers who are like lambs to the slaughter having to use the sellers agent because they can't afford to pay for representation. T The sellers agent LEGALLY REPRESENTS the SELLER so the buyer claims their interests weren't protected - which they weren't, because - the sellers agent represents the SELLER! Duh. Buyers will have to settle for greedy listing agents who will work both sides of the deal (this shouldn't even be legal - it's not in Maryland). THERE IS A REASON BUYER AGENT COMPENSATION WAS INTRODUCED IN THE 90's pushed for by consumer advocacy groups that recognize buyers were at an unfair position. So the upshot of this will be that wealthy buyers will be okay, the average person and lower income buyers are going to be screwed.
We shall see what all the unintended fall out for this is. Some prices will come down rather than go up. Who do you think is bringing all these buyers to homes?? And yes, some crappy agents will start opening doors for a per door fee, but you get what you pay for. Many buyers will not be able to pay for a seasoned agent who understands the contract and can protect the buyers interest AND afford a higher price for a home. So the frenzy that drives the price so high because there are 20 offers on a home will subside because there will not be as many offers. And what about VA buyers who are expressly not allowed to pay for representation??? Again, thrown to the wolves of having to use the SELLERS agent. Yes, we are in a hot sellers market now, but all these sellers who think they don't need buyers agents to show their homes and guide buyers through making offers will be crying when the market shifts some day.
This is a stupid decision that will hurt everyone in the end.
If you put things in all CAPS it show you mean business.
This just means people have the ability to negotiate fees they deem appropriate. Nobody is preventing you from getting a buyers agent and paying them whatever you both agree to. And yes, in the long run, you do get what you pay for. Some people need more, and are perfectly willing to pay for it, which is great! They can pay 5 or 6% if that is what they agree to. But now if you don't want or need as much, you don't have to pay for it, because the cartel pricing is finally broken.
Anonymous
03/15/2024 22:42
Subject: New Commission -3%
Anonymous wrote:This is good on the selling side. But I'm totally confused about how this would work on the buyer side.
I didn't ask my agent to show me a bunch of houses but she totally kicked it into high gear when we saw that a house that met my criteria was coming on market. Basically, she was totally on point with every step from initial showing to getting my offer to the seller quickly. It was definitely a value-add over what I could have done myself. Her motivation? She knew she stood to make bank if we got my (strong) offer to the seller first. Was what she did worth almost a quarter grand to the seller? - No, the seller was going to accept the first solid offer that came in, and there would have been others if not mine. So it makes sense that I as the buyer pay, but how much was that really worth? Not almost a quarter grand, I don't think so especially if I'm paying, but at the same time I do think that there probably needs to be some potential upside for the agent beyond the sum total of the hours spent.
You are paying agent fees as a buyer, don’t you see that?
Anonymous
03/15/2024 22:32
Subject: New Commission -3%
What kind of representation seller’s agent gives? Nothing. They are not lawyers and the contract clearly says that.
Why can’t we negotiate all this at an independent platform and you can let a lawyer look at everything. Much cheaper and safer
Why can’t we negotiate all this at an independent platform and you can let a lawyer look at everything. Much cheaper and safer
Anonymous
03/15/2024 22:23
Subject: New Commission -3%
Anonymous wrote:Anonymous wrote:well, everywhere else in the world or developed countries, the commission is not more than 2% so not sure why we pay so high. Another reason housing is so crazy high
This is DUMB. First of all, everywhere else where the commission is lower (Europe for example) agents also have a base salary and HEALTH CARE.
Housing being "so crazy high" has NOTHING to do with agent commissions and you are an idiot if you believe this.
Ok agent. lol