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How does my post play into fears?
That certainly is not my intent.
Agents here have been quite helpful, all in all.
And, view the success stories below from a trolling and heavily trolled thread, with some agent support for folks who want to sell their own houses themselves. People who want alternatives, find alternatives.
Others whine...
This line:
consumers choose commission-based compensation to avoid paying for failure
When I have listed homes for sale by owner you get the agents trolling for customers and that is real estate 101 scare FSBO people into signing with an agent. Basically legal extortion.
I am not whining. People can do whatever they want. Millions of people every year use realtors to buy and sell their homes. Of course there are lots of success stories. But people can succeed selling FSBO also. I know that first hand.
consumers choose commission-based compensation to avoid paying for failure
When I have listed homes for sale by owner you get the agents trolling for customers and that is real estate 101 scare FSBO people into signing with an agent. Basically legal extortion.
I am not whining. People can do whatever they want. Millions of people every year use realtors to buy and sell their homes. Of course there are lots of success stories. But people can succeed selling FSBO also. I know that first hand.
Yes, you aren't whining.
I agree with you on that point.
Overall, it's a whine/troll thread at heart, however.
"Real estate 101" does NOT support lying to consumers or intimidating consumers.
You've just had the misfortune of exposure to trashy people.
They are an embarrassment to decent agents.
I've been thinking that for a decade now. They are dinosaurs clinging onto the last vestiges of a dying industry.
One of the biggest problems with the industry is that there are essentially no barriers to entry. Got a pulse? You can become a realtor and have access to people's homes where you can use shady sales tactics (hard-selling, guilt-tripping, emotional appeals, etc.) to convince people to hurry up and buy so you can make a fat commish without much work or effort.
Oh, you open doors for people and let them walk around!? Yes, here's many thousands of dollars!!!
Crazy, isn't it?
Honestly, a house that's priced correctly will sell instantly in all but the most rural areas where you are limited by the small population of potential buyers who are interested. In any metro area any house will sell at the correct price. If it sits for a month it's overpriced.
You know what else is a fat racket? Those title service companies. I see no reason that real estate exchanges can't be done at the county courthouse where the deed is transferred over right then and there. All that "someone might have a vague claim to the property" nonsense is incredibly antiquated.
LOL, I also hope the industry dies, and it can't be soon enough. Sadly, as long as there are young, inexperienced consumers they will get away with their game. It is time to change the system and pay them for filling out their forms at minimum wage.
It is far better to hire a real lawyer to oversee sales people instead of being led down the golden path that the sales people are here to save the consumer when we know who is the wolf. A real estate lawyer is highly educated and qualified to handle the process as they can do more than fill out a form and don't have an interest in the outcome. The salespeople are well trained to counter all arguments any consumer has so don't waste too much time on the argument, just demand change by educating consumers.
Don't argue with a fool, he will drag you don't to his level and beat you with experience.
LOL, I also hope the industry dies, and it can't be soon enough. Sadly, as long as there are young, inexperienced consumers they will get away with their game. It is time to change the system and pay them for filling out their forms at minimum wage.
It is far better to hire a real lawyer to oversee sales people instead of being led down the golden path that the sales people are here to save the consumer when we know who is the wolf. A real estate lawyer is highly educated and qualified to handle the process as they can do more than fill out a form and don't have an interest in the outcome. The salespeople are well trained to counter all arguments any consumer has so don't waste too much time on the argument, just demand change by educating consumers.
Don't argue with a fool, he will drag you don't to his level and beat you with experience.
Post is pretty much nonsense in most of the west. We don't use lawyers and the ones that are actually competent to assist are specialists in the $250 an hour range. Other than one of those a well experienced agent is a better bet than the neighborhood lawyers. Has 50 times as much experience dealing with the Residential Purchase Contract. And these agents actually do practice law in a limited way. Likely go to jail back east for what we do here.
You can of course find a dud agent here too. But you can find dud lawyers too.
LOL, I also hope the industry dies, and it can't be soon enough. Sadly, as long as there are young, inexperienced consumers they will get away with their game. It is time to change the system and pay them for filling out their forms at minimum wage.
It is far better to hire a real lawyer to oversee sales people instead of being led down the golden path that the sales people are here to save the consumer when we know who is the wolf. A real estate lawyer is highly educated and qualified to handle the process as they can do more than fill out a form and don't have an interest in the outcome. The salespeople are well trained to counter all arguments any consumer has so don't waste too much time on the argument, just demand change by educating consumers.
Don't argue with a fool, he will drag you don't to his level and beat you with experience.
So maybe the lawyer would have saved me the couple thousand I wasted but I'd have to pay them a similar amount if not more. We bought a pretty inexpensive home ($100,000) because we aren't rich, and lawyers are big bucks. IMO if you need a lawyer, it's automatically not consumer friendly. I'd rather see things simplified. As long as the solution is hire a lawyer, it is just more evidence that the entire process is meant to take as much money from the consumer as possible. Also I had no clue how crazy a process it was.
. It wasn't the real estate agent that cost me all the extra money, it was mostly the mortgage company, especially the first underwriter ( I think that's her title) who seemed incompetent to me and who I complained about from the get go, but they didn't assign me someone new until the 3rd extension. But some was simply due to the bloated and ridiculous rules, which again to me seemed stacked to protect the folks on their side of the sale and not the consumer. I
I felt like I was just along for the ride, no one explained what was going on. I was putting down 20% originally, but the final closing amount did not include it. When I asked the mortgage people, they said, "oh, we switched you to an FHA loan, you don't need anything down now". I I said, but what about the mortgage insurance? And he replied oh you'll be able to get rid of that in six months but he never explained how. After three extensions and thousands of dollars already spent we were too far in to start again so again I just went along with it because I just wanted it over by then. There had been so many emergencies and panicked conference calls between the agent and mortgage company and me I can't count them. I called the realtor a LOT because the underwriter lady never returned calls. The realtor answered his phone even at 7:30 am.
I'm lucky I didn't get fired during this whole thing, because my days the last couple of months were spent hiding around corners on the phone with them, or docusigning things I already docusigned twice before, and checking email to discover another list of documents they needed ASAP. It was like working a second job while at the first!
This thread is of great interest to me. We've bought and sold many houses, as my husband has been transferred for work every couple of years. The company always paid for all the moving expenses, so the 6% realtor commission was of no consequence to us.
However, our next move will likely to be to our retirement place, at our own expense. Unfortunately we are currently in an area where homes cost much more than other places we've lived, so this is the most expensive home we've ever owned. Houses are close to twice as much as where we came from previously (but I assure you, hub's salary did not double) We are facing realtor commission of over $50K when we sell this place, which to me is insane. So basically, in an area where houses cost twice as much, realtors earn twice as much (but other professionals don't).
I don't understand the 6% thing. It seems to me the commission should be capped at some point. I mean, at some point, enough is enough. I don't know all of the expenses line by line, but surely $20K, or $30K, is more than commission for the sale of ANY house. And I say that because the average home price in the US is just under $200K, hence average commission is just under $12K.
At straight 6%, a million dollar home, commission would be $60K. For a two million dollar home, $120K!
Is it actually twice as much work to sell a house that costs twice as much? Can those commissions in my examples be justified?
The great realtor rip-off | The Economist basically argues that the reason realtors get paid thousands of dollars per hour is because the whole thing is a cartel (duh!).
Opinions?
It was the most important single financial decision of our lives and our realtors were worth every penny. They were like our real estate financial counselors. They explained everything. They gave us interest, they gave us Excel spreadsheets on what mortgage insurance would cost vs. interest vs. opportunity cost, etc. They also had a great mortgage broker who saved us thousands in interest by having an assistant check the interest rates repeatedly until we could lock in the lowest rate.
That was a big win for us because the sellers didn't want any trouble at all. Knowing we had knowledgeable agents and there would not be hiccups was a big deal for them.
So, yes, it is a cartel, but our legal system and financial systems also work in the favor of having professionals do it all. Don't get divorced without a lawyer, and don't buy a house without an agent.
consumers choose commission-based compensation to avoid paying for failure
When I have listed homes for sale by owner you get the agents trolling for customers and that is real estate 101 scare FSBO people into signing with an agent. Basically legal extortion.
I am not whining. People can do whatever they want. Millions of people every year use realtors to buy and sell their homes. Of course there are lots of success stories. But people can succeed selling FSBO also. I know that first hand.
I read the first bolded statement to mean they choose to pay on the back end, when the sale closes (success) vs upfront (flat fee, etc) when you pay without regards to actually selling the home or not (failure).
In this thread or another ongoing one, someone mentioned the owner of FSBO.com *having* to list his house because he was basically extorted. I went to the website, and noticed they had a "sale guarantee". You could get your fee back. Only problem was, you agreed upfront to let them refer you to an agent (and get a referral fee) should your FSBO not succeed. And your initial fee would be credited back to you, against the referral fee they earned.
So maybe the lawyer would have saved me the couple thousand I wasted but I'd have to pay them a similar amount if not more. We bought a pretty inexpensive home ($100,000) because we aren't rich, and lawyers are big bucks. IMO if you need a lawyer, it's automatically not consumer friendly. I'd rather see things simplified. As long as the solution is hire a lawyer, it is just more evidence that the entire process is meant to take as much money from the consumer as possible. Also I had no clue how crazy a process it was.
. It wasn't the real estate agent that cost me all the extra money, it was mostly the mortgage company, especially the first underwriter ( I think that's her title) who seemed incompetent to me and who I complained about from the get go, but they didn't assign me someone new until the 3rd extension. But some was simply due to the bloated and ridiculous rules, which again to me seemed stacked to protect the folks on their side of the sale and not the consumer. I
I felt like I was just along for the ride, no one explained what was going on. I was putting down 20% originally, but the final closing amount did not include it. When I asked the mortgage people, they said, "oh, we switched you to an FHA loan, you don't need anything down now". I I said, but what about the mortgage insurance? And he replied oh you'll be able to get rid of that in six months but he never explained how. After three extensions and thousands of dollars already spent we were too far in to start again so again I just went along with it because I just wanted it over by then. There had been so many emergencies and panicked conference calls between the agent and mortgage company and me I can't count them. I called the realtor a LOT because the underwriter lady never returned calls. The realtor answered his phone even at 7:30 am.
I'm lucky I didn't get fired during this whole thing, because my days the last couple of months were spent hiding around corners on the phone with them, or docusigning things I already docusigned twice before, and checking email to discover another list of documents they needed ASAP. It was like working a second job while at the first!
'
you can thank Dodd-Frank and the Consumer Financial protection Bureau (CFPB) for those rules.
Choice.
People CHOOSE to pay agents the rates they seek.
There is fee competition in nearly every US market, including capable agents.
Sort of goofy article with minimal insight.
1. Average commission is 5% or 5.4%, but 6% is "standard?"
Goofy.
That's the mean vs. the median. The average can be lower than the median if there are a significant minority of sales with 0-1% commission reported.
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We are facing realtor commission of over $50K when we sell this place, which to me is insane. So basically, in an area where houses cost twice as much, realtors earn twice as much (but other professionals don't).
