New Potential Agent Questioning the whole point of Realtors (prices, properties, attorney)
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I was talking to my family in UK and they started laughing when I told them about the seller & buyer both having a realtor. They asked me why do you'll need 2 realtors? For which I did not have an answer. Did not get to talk in detail, but they mentioned that in UK only the sellers have an agent and the buyers approach directly. No buyers agent.
We used to have that here (in Texas). Only the seller had representation, which left the buyers pretty much at the mercy of a person whose fiduciary responsibility was to the seller, NOT the buyer, with predictable results in enough cases that buyer's agents, whose fiduciary responsibility is to the buyer to protect their interests, was created. (We actually had one of the first buyer's agents in Texas back when we bought the ranch.)
What you're talking about is called intermediary in Texas, with one agent "representing" both parties (actually representing neither but representing the transaction, I guess you could say). I wouldn't do it myself, even though that means I'm double-ending and getting all the money (well, my broker is, and then I get some of it). Way too easy for conflict of interest to sneak in.
Some states have agents that are officially transaction agents, and that's fine as long as nobody thinks they are being represented. That might be closer to what you're talking about, but real estate in the UK is VERY different from real estate here, from what I understand.
We used to have that here (in Texas). Only the seller had representation, which left the buyers pretty much at the mercy of a person whose fiduciary responsibility was to the seller, NOT the buyer, with predictable results in enough cases that buyer's agents, whose fiduciary responsibility is to the buyer to protect their interests, was created. (We actually had one of the first buyer's agents in Texas back when we bought the ranch.)
What you're talking about is called intermediary in Texas, with one agent "representing" both parties (actually representing neither but representing the transaction, I guess you could say). I wouldn't do it myself, even though that means I'm double-ending and getting all the money (well, my broker is, and then I get some of it). Way too easy for conflict of interest to sneak in.
Some states have agents that are officially transaction agents, and that's fine as long as nobody thinks they are being represented. That might be closer to what you're talking about, but real estate in the UK is VERY different from real estate here, from what I understand.
The whole U.K. and Europe thing has been beat around before.
Nothing new to see, but for the sake of review:
And, they drive on the wrong side of the road.
And, the fellers wear wigs.
And, they have some sort of "Brexit" kerfuffle that will likely destroy the Commonwealth.
Of course, if one reads the thread, the 6% commission baloney has been dealt with, again.
He even said that the buyer does not pay their agent? No one falls for that.
Not having a clue does not immediately imbue one with wisdom.
Most every real estate sites mention 6% as the standard rate and I bet it is the starting point for most. The average commission rate in 2018 was around 5.2% according to realtrends.com which means many people are still paying too much commission. Granted you cant expect someone to work for free but $25k+ in commissions on an average home sale is highway robbery.
The total commission rate is built into the sellers contract with the agent so the seller is stuck paying for both sides of the deal. In the event your realtor is both the buying and selling agent they will cut you a break on the rate as they should if there were no buying agent at all. Its best to sell it yourself and use the saved realtor fees as negotiating power should you need it. It would be the perfect storm if you had a qualified buyer with no agent as well.
At the end of the day how have prices increased dramatically, information and marketing become a lot easier, but the commission rate has not adjusted ? paying 5.2% wouldn't be a big deal if the median home price was $100k. But this isn't 1980 any more.
Most every real estate sites mention 6% as the standard rate and I bet it is the starting point for most. The average commission rate in 2018 was around 5.2% according to realtrends.com which means many people are still paying too much commission. Granted you cant expect someone to work for free but $25k+ in commissions on an average home sale is highway robbery.
The total commission rate is built into the sellers contract with the agent so the seller is stuck paying for both sides of the deal. In the event your realtor is both the buying and selling agent they will cut you a break on the rate as they should if there were no buying agent at all.
At the end of the day how have prices increased dramatically, information and marketing become a lot easier, but the commission rate has not adjusted ? paying 5.2% wouldn't be a big deal if the median home price was $100k. But this isn't 1980 any more.
The commission is built into the sellers' side for two reasons:
1. It is the only way the buyer can finance their cost under current lending guidelines, unless the buyer gets the fee reimbursed as a closing cost credit.
2. The incompetent CFPB compounded the scam by calling buyers' agent commission a seller cost.
Fix the first, and the second will fix itself.
Plenty of agents list and sell for less than 5.2%. You inflate your figures with your continued clinging to the falsehood of a legendary 6% standard rate.
You cannot honestly cite 6% as a norm without citing 4.0% or 3.9% as a norm.
I would reiterate:
Give me your county and state and I will provide you with a list of agents who don't charge 6%.
i don't want your DNA or street address. Just a county and state.
Last edited by MikeJaquish; 01-03-2019 at 01:46 PM..
The commission is built into the sellers' side for two reasons:
1. It is the only way the buyer can finance their cost under current lending guidelines, unless the buyer gets the fee reimbursed as a closing cost credit.
2. The incompetent CFPB compounded the scam by calling buyers' agent commission a seller cost.
Fix the first, and the second will fix itself.
Plenty of agents list and sell for less than 5.2%. You inflate your figures with your continued clinging to the falsehood of a legendary 6% standard rate.
You cannot honestly cite 6% as a norm without citing 4.0% or 3.9% as a norm.
Because 4% isnt the norm.
I have never heard of anyone coming close to a 4% offering outside a real estate company in my last state that was a " volume style agent" that wanted to list low for quick turn around. they were charging a flat 1% listing rate and then 2.5 or 3% buyers agent commission rate.
what is a guesstimate to the actual cost to list and sell a home?
So I’m glad I started this discussion because it has been stimulating. Once again call me cocky, or true confidence, doesn’t matter but nothing in this business seems that overwhelming, and if it is it’s probably beyond an agents capitcity to do anything about it anyways.
Being a real estate agent is a stressful profession the way it currently works here. How stressful it is for you depends on your ability to handle conflict, your expectations, and your mindset. Most agents can't handle the nasty that gets thrown at them so they leave. There is this magical thinking out there with rookies that 1) real estate is easy; 2) buyers and sellers are just waiting out there for them and 3) that this is a sales job. Real estate is a service industry and the agents that are here for the long term get that service is what matters.
So if you walk into real estate being comfortable dealing with conflict, are a quick problem solver, think proactively, can handle angry and crying people, then you are 3/4 of the way there. The paperwork, marketing, etc is the easy part.
I'm not going to go into the commission issue as I've addressed that a bazillion times on here already.
I have never heard of anyone coming close to a 4% offering outside a real estate company in my last state that was a " volume style agent" that wanted to list low for quick turn around. they were charging a flat 1% listing rate and then 2.5 or 3% buyers agent commission rate.
what is a guesstimate to the actual cost to list and sell a home?
What county and state is it in?
Does "cost" include any recognition of the time involved, and the overhead one has to carry to actually be in the marketplace to list, or just money out of pocket for the specific transaction?
So, if someone charges 4% and it pulls the 6% norm to the a 5% norm, 4% is not a norm, because it does not fit your scripts?
How else do you suppose your 6% norm is averaged to 5% or 5.2%?
Doesn't elementary arithmetic indicate that there MUST be a lower number to lower the average?
Of course, we have to determine if the "averages" cited are mean, median, or mode.
Does "cost" include any recognition of the time involved, and the overhead one has to carry to actually be in the marketplace to list, or just money out of pocket for the specific transaction?
So, if someone charges 4% and it pulls the 6% norm to the a 5% norm, 4% is not a norm, because it does not fit your scripts?
How else do you suppose your 6% norm is averaged to 5% or 5.2%?
Doesn't elementary arithmetic indicate that there MUST be a lower number to lower the average?
Of course, we have to determine if the "averages" cited are mean, median, or mode.
hard costs only. your time isnt accounted for because well.... its your job and you'll get paid for your time when the job is complete. better sell quickly!
hard costs only. your time isnt accounted for because well.... its your job and you'll get paid for your time when the job is complete. better sell quickly!
Overhead exceeds out of pocket to list.
Time far exceeds out of pocket to list, negotiate, sell.
I spend about $400 out of pocket on a listing. No per listing MLS fee.
$200 for photos and matterport tour, 2D and 3D floorplan.
Print flyers.
Email blasts.
Single Property domain and sign rider.
If you are out of town and I have to overnight documents or a check to you, another $35--$40.
So, if I put 75-100 hours into listing and selling, you only see the $400.
And, you don't see the hours put into licensing, education, learning, networking.
You don't see E&O costs.
You don't see dues and fees.
Overhead, and the value of my time dwarf the small cost of a listing.
I just recently got my FL real estate license. Before that I worked in title and escrow for over a year working on some pretty complex transactions. So even though I never sold an official house yet as a realtor I already have over 20+ real estate transactions under my belt from open to closing from an escrow perspective.
I have a natural ability for sales and that's what motivated me to get my license. Conducting transaction after transaction and seeing some of the commissions these realtors were getting got me thinking why I am not collecting those commissions and just making my $20 an hour escrow pay instead, so I quit cuz I hated being in a office everyday anyways and now here I am with my new license.
The thing is I still don't see the value with most realtors so how the hell I am ever going to be successful trying to sell something I don't even see the value in? If there was no such thing as an MLS then it seems the whole realtor profession would collapse. Now I'm not trying to speak out of ignorance here because there is a lot I don't know, but even a team leader at one of the Keller Williams I visited said most realtors are overpaid administrative workers.
Also I wish they would make the state real estate license test much harder... The FL pass/fail rate for first time takers is 50%, which is too high IMO. The state should aim to make it around more a 10% pass rate. This would keep the profession from being over saturated.
I understand no license alone will bring business to a new agent, you have to go out and generate leads and create deals for yourself, so in the aspect I have a lot of respect for agents because sales isn't easy and I use to make thousands of cold calls every year for a different industry and having to go out and hunt is much harder then when warm leads are coming to you (think car sales people where majority of their business is coming to them).
I guess my main point of this whole thread is I wish they would make it considerably more difficult for people to get their real estate license. Also even with having my license and escrow back round I'm having hard time seeing the value of an agent. If you are a savvy business person even without a real estate back round then you can easily sell or buy a home flawlessly with just an attorney on the side and the title escrow company.
Also, IMO the MLS is BS. When the broker at my office was showing me how to do a market analysis, if there was ever a definition of confirmation bias it would be when an agent does a market analysis. Agent who are listing a property will "justify" their asking price and look at comparable properties that support their case and ignore ones that don't. Now maybe in cookie cutter communities there won't be as much grey area when it comes to the numbers but in neighborhoods that have a lot of variety it's amazing how a buyer and seller agent can cherry pick properties on the MLS in the same neighborhood to support their asking price and be so far apart on the same property for what it's worth. It's all fluff and confirmation bias. There is an information overload on the MLS which IMO dilutes the value of the information and makes agents seem smarter then they are when at the end of the day something is only worth what someone is willing to pay for it.
And appraisers, don't get me started. When I think of the last market crash I realize almost everyone in the real estate industry is full of some kind of shi*t and it all just comes down to showmanship.
I guess two quotes come to mind and they are I was giving this world I didn't make it and don't hate the player hate the game. lol
I'm sure lenders do the same, but with the properties on the lower end of the scale.
Just another funny thing like the same financial institution offering you options for an annuity AND life insurance. With one product the actuaries are afraid you'll die early and the other they're afraid you'll live forever.
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