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understood, but the original post placed the entire $40K on what you could save on the listing side. therein lies the issue.
Right now, almost uniformly across the country, we're in a huge seller's market where people see homes "selling themselves in a matter of days". Of course, when that's the sentiment and the apparent situation, paying someone a large amount of money for "what a poolboy can do" (as has been posited in the last 30 days) doesn't make sense on paper.
No matter the market, one side or the other is working very hard - and it's whichever side has the weaker position. In a seller's market, the listing agent compensation looks excessive. In a buyer's market, when you can basically offer 90% of market value on whichever of the 10 options you like the most and get it, the buyers' agents seem overpaid.
when the chances for success are extremely high, then there will always be business models that accept that risk of compensation. Redfin can offer 1% listing now, collected at a successful closing, because homes are selling so quickly. The risk that they won't get paid is pretty darn low.
But Redfin's model, on paper, should be no more appealing than any highly-qualified, experienced, and proven-successful agent that charges 3 or even 6%, just on the list side. What should appeal most would be the $500 MLS listing model, plus you provide the professional photos. When "all" houses "sell themselves" and you can expect to get multiple offers whereby negotiation isn't needed ... go for the absolute lowest-cost model.
I've said numerous times that I'd be happy to work on a pure hourly basis, with an upfront retainer. That side of the argument refuses to acknowledge that the vast majority of people do NOT WANT TO WRITE A BIG CHECK UPFRONT.
I've been a vocal proponent for a fee for service model (fixed fee by service or per hour) for buyer's agents so I'm assuming you are including me in this statement. I have repeatedly acknowledged that buyers will not accept a fee for service model as long as they are led to believe that buyer's agent services are free to them. Regulator action is required, similar to what happened in financial services where commissions for advisory services were hidden in product costs. Government said "no" buyer must pay for 'advice' rather than it being hidden. And 'advice' is fraught with conflict of interest when it's funded by commissions earned for selling something. Consumer was not very keen to pay for their time with an advisor so things had to evolve. Transparency. I also raised this point many times so I don't know what you are talking about that nobody acknowledges it. It's just incorrect to say this.
There is no real consumer choice when you hide commission/fees or lead consumers to believe that something is "free". Cell phones used to be "free". Regulator now require unlocking to promote competition. Locking was the fortress that enabled lack of transparency in the pricing bundle.
Nobody wants to write a big check upfront for anything when the alternative is 'free'. Your argument that consumers don't want fee for service is dishonest because it ignores the point that consumers are led to believe that buyer's agent services are free. You've never addressed this.
The reality is that when there is regulatory action to break up the buyer's agent model (or, less likely, some kind of serious market disruption), there will be no $150/hour to measure ceiling joists or drive people around feeding them bottled water. There will be no 'BIG' checks up front. Consumers wont' pay this.
So you have a problem with your argument. Consumers will pay for things where they get value for money. We both agree that consumers will not pay buyer's agent fees - e.g. $10k for help to buy a modest house. No way. So strip away all of the complexity and nonsense of buyers agents getting paid by commission splits, etc and boil it down to the core. Buyer's agents provide services to the buyer (well even that's debatable as they are there to sell the house in cooperation with the sellers agent) but anyway, let's just say provide services representing the buyer as that's what agents themselves say. The uncomfortable truth is that buyers are not willing to pay for the services that buyers agents provide to buyers. I think we both agree on this.
Give this to a consumer and ask them if they'd pay approx $10k for it. No way. https://www.realtor.com/advice/buy/w...ant-reasons/So dress it up with all kinds of complexities around commission splits, etc. All of this is propping it up unnaturally. Consumers will be much better off when the services offered and the prices for these services match what consumers/buyers want and what they are willing to pay for it. Almost all industries play by these rules, why can't buyer's agents? Regulation will eventually fix this.
Exactly(what you say in bold). That's the stranglehold that regulation needs to break. In the UK where purplebricks originates, commission is circa 1% total now (total because buyer's agents don't exist in a split commission model). So there is only so much you can squeeze from the listing side if the buyer's side (where value for money is so poorly lacking) is proving to be a fortress.
While real estate agents will never go away completely and it may take a while the 6% commission imo is going to be drastically reduced. Sellers eventually will offer less and less commission percentage.
Generally I am very skeptical of these services that do not/cannot address the buyer's agent side of the equation. At least they open up the potential for new thinking among consumers but their value is capped as long as the buyer's agent commission split is so impenetrable.
I think that the arguments for traditional agents in this article were particularly poor. I think the value proposition needs a lot of work and the articulation of that proposition needs to be keener. Examples in the article:
-vague notion that alternatives are 'cut-rate' or like flying economy. Or Walmart or Motel 6. Come on, you can think of better arguments than that. Ethically, I think those kind of claims might be questionable as well.
What they think doesnt mattter. They are bound by the sale laws regulations as a typical agent
-The emotional appeal of the home being where your kids took their first steps, etc. come on. That's not how people think anymore.
I had a seller who was very emotional about selling. Emotional = psycho crazy. Just the out to lunch demands. 120 day escrow and 120 day free ren5 back after closing. Yeah I’ll get right on it.
Like the old insurance salesman's line "how do you put a price on protecting your family". Or diamond rings "Isn't two months' salary a small price to pay for something that lasts forever?". This is linking money spent to values (love, security, etc) rather than actually value for money. Yeah good marketing decades ago but I can see millennials gagging over such claims that it's worth spending 10s of thousands on commission because your baby will take her first steps in that home!
Some people can still be swindled in that. When we bought I bought based on my needs wants. My wife bought on emotion. There were plenty of houses I walked away from. A few actually after i had paid for a inspection. Everyone thought oh we’re in inspection it’s sold. Not so fast. I dint care about spending $4-600 bucks if the deal isn’t working for me. I walked. I walked in a house over 5k difference. We just couldn’t get past that. I wasn’t willing to go higher they weren’t willing to go lower. Thank you good luck we go our separate ways.
-"I'm involved in your life". yuck. young people do not want this. i can't believe that this is a quote from a spokesperson. That's why the family insurance agency is dying. old way of looking at the world.
You are involved in my life. For the duration of this deal. We’re not going to become life long friends.
For those who have poor comprehension, I'll clarify that my point here is not that traditional agents are or are not good or bad, etc, the point here is that the articulation of the value proposition for traditional agents in this article was outdated and just plain awful. The industry has to do far better than this if it wishes to survive.
The thing is that there are simply too many and it’s too easy to get in real estate agent position. Out of all the agents I dealt with i found two that I would use again. Pretty much all the others I would not hire again
I've been a vocal proponent for a fee for service model (fixed fee by service or per hour) for buyer's agents so I'm assuming you are including me in this statement. I have repeatedly acknowledged that buyers will not accept a fee for service model as long as they are led to believe that buyer's agent services are free to them. ...
Nobody wants to write a big check upfront for anything when the alternative is 'free'. Your argument that consumers don't want fee for service is dishonest because it ignores the point that consumers are led to believe that buyer's agent services are free. You've never addressed this.
...
I didn't make that statement with you in mind. I said the "vast majority". that means there's a quantity that will, and you may very well be in that group.
I don't appreciate you claiming I'm dishonest. I believe that you'd need to show I routinely tell my Buyer clients that I work for free.
I didn't make that statement with you in mind. I said the "vast majority". that means there's a quantity that will, and you may very well be in that group.
I don't appreciate you claiming I'm dishonest. I believe that you'd need to show I routinely tell my Buyer clients that I work for free.
I did not say you were dishonest. I don't say things like that. Ever. I said that your argument is dishonest because it ignored an important point. Big difference. I have no idea whether you are honest or not and I have no reason to believe you are not. I do not take personal stabs here, i only respond to the words people write.
Please read more carefully so we don't waste time and create unnecessary discord through misunderstanding of very simple English.
not honest; disposed to lie, cheat, or steal; not worthy of trust or belief:
a dishonest person.
2.
proceeding from or exhibiting lack of honesty; fraudulent:
a dishonest advertisement.
"incomplete", perhaps would have been a better word for you to use, but I welcome your clarification, explanation, or better word choice.
here's your paragraph...
Quote:
Nobody wants to write a big check upfront for anything when the alternative is 'free'. Your argument that consumers don't want fee for service is dishonest because it ignores the point that consumers are led to believe that buyer's agent services are free. You've never addressed this.
Lest I get concerned about something I shouldn't, or answer the wrong point, I guess I'll need you to explain what "this" at the end is referring to. Or simply, the claim that I've "never adressed this" thus requires you to show that I've never addressed "is Buyer Agency free", yes?
For it to be dishonest, I suppose buyers would have to be led to believe that the only 2 options are "fee-for-service" or "free".
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