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In my area (and I suspect everywhere else) the buyer's agent opens the escrow as they have the earnest money deposit check.
MA is an "attorney" state so we don't use escrow companies. Typically, the seller's agent acts as escrow agent but on rare occasion I've seen the seller's attorney act as escrow agent instead.
Quote:
Originally Posted by DMenscha
I'm still trying to figure out if the OP doesn't have any experience in this, (although he claims he is a broker) or if he doesn't really understand the process. One can write a book based on a premise, but if the premise is faulty, the conclusion has no chance of being supported.
Maybe he was a broker but now he's lost his mind?
Reading these ramblings displays a clear lack of knowledge and a general lack of understanding for the entire process. Then of course, there are always those people who have a license and have never used it except to bilk their friends/relatives out of a few dollars by acting as their agent every so often. Why anyone would ever hire their friend/relative to act as their agent when they know that person is not a practicing agent is beyond me.
Surprised I missed this thread but I can't keep my mouth shut.
I profess to not reading every message in this thread, but once again, realtors fail to see the real reason there is an argument over their commission, whatever it may be.
To me, the issue is not paying someone to do a good job representing my interests. I think most people agree this is necessary and valuable.
What I have a huge problem with is why it needs to be 5-6% of the transaction cost.
Your average realtor is a one person business. The whole agency model doesn't work anymore for most market segments. It prevents your average realtor from leveraging technologies to let them do things better/faster/easier. It also causes them to be error prone.
Maybe it's a bit different in certain markets like SF where technology is part of the culture, but where I live and I'm guessing for most of the country, realtors are some of the most inefficient, error prone professionals I've met and their services have almost no value. People don't see this because they generally don't buy and sell homes very often.
I don't understand why realtors fight tooth and nail to explain why their commission structures are justified instead of looking at ways to drive transaction costs down by focusing on the costs which can be controlled. Realtors spend a fortune on faxing, but very few think about getting eFax numbers. Realtors spend a fortune on paper and sitting in the office signing contracts, reviewing contracts, faxing contracts. Nobody ever thinks about using DocuSign, they just hire assistants.
Surprised I missed this thread but I can't keep my mouth shut.
I profess to not reading every message in this thread, but once again, realtors fail to see the real reason there is an argument over their commission, whatever it may be.
To me, the issue is not paying someone to do a good job representing my interests. I think most people agree this is necessary and valuable.
What I have a huge problem with is why it needs to be 5-6% of the transaction cost.
Your average realtor is a one person business. The whole agency model doesn't work anymore for most market segments. It prevents your average realtor from leveraging technologies to let them do things better/faster/easier. It also causes them to be error prone.
Maybe it's a bit different in certain markets like SF where technology is part of the culture, but where I live and I'm guessing for most of the country, realtors are some of the most inefficient and error prone professionals I've met and I do not feel like I am getting value from their services.
I don't understand why realtors don't grasp why Redfin is right about some things, namely driving the transaction cost down by focusing on the costs which can be controlled. They spend all their time justifying why they are so important when they should be focused on how they can reduce the unnecessary costs, like faxes.
Posting in threads without reading them is ill-advised.
Why not post Aunt Bertha's scalloped potato or baked-bean recipe?
Surprised I missed this thread but I can't keep my mouth shut.
I profess to not reading every message in this thread, but once again, realtors fail to see the real reason there is an argument over their commission, whatever it may be.
To me, the issue is not paying someone to do a good job representing my interests. I think most people agree this is necessary and valuable.
What I have a huge problem with is why it needs to be 5-6% of the transaction cost.
Your average realtor is a one person business. The whole agency model doesn't work anymore for most market segments. It prevents your average realtor from leveraging technologies to let them do things better/faster/easier. It also causes them to be error prone.
Maybe it's a bit different in certain markets like SF where technology is part of the culture, but where I live and I'm guessing for most of the country, realtors are some of the most inefficient and error prone professionals I've met and I do not feel like I am getting value from their services.
I don't understand why realtors don't grasp why Redfin is right about some things, namely driving the transaction cost down by focusing on the costs which can be controlled. They spend all their time justifying why they are so important when they should be focused on how they can reduce the unnecessary costs, like faxes.
As already stated you should have read the thread before responding.
#1. I think Realtors understand why some think there is an argument over commissions. Most agents in this thread have given valid basis for their compensation model which ever it may be.
#2. It does not need to be 5-6% of the transaction costs, there are many different models. Some such as by owner cost nothing, if you don't want to pay anything this is the model you should choose.
#3. The agency model has adapted somewhat to work with new technology available but the full service agency model is obviously still the best option in many areas since it seems to be the most widely used. If it wasn't working it wouldn't be the most widely used.
#4. If you do not want to utilize the services of an agent then you can do it yourself. If it works out for you that is great, if not you can cost yourself quite a bit.
#5. If Redfin was so good they might actually make some money but they don't.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,311,234 times
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I will agree with the fax argument. Sometimes we're forced by clients who do not have the ability to scan something and email it. It costs me nothing to send a fax, and less than a penny a page to receive one.
Banks won't accept electronic signatures on property they have foreclosed on.
The average realtor is not a one person business. I'm totally unsure why anyone thinks we don't utilize the current technologies or how it makes us error prone.
Have any of you non-agents talking about the commission issues ever been on the other side, as in have you ever been an agent? It's better to talk on issues you're actually well versed and knowledgeable on, and while the others have been pretty nice let me be blunt here: You don't know what you're talking about and you aren't well informed. If there were really that much money floating around and the job were so easy there wouldn't be a 90% failure rate. I'm tired of some of you taking shots in ignorance and pushing you're agenda every chance you get when you don't have a clue what it's like.
Surprised I missed this thread but I can't keep my mouth shut.
I profess to not reading every message in this thread, but once again, realtors fail to see the real reason there is an argument over their commission, whatever it may be.
To me, the issue is not paying someone to do a good job representing my interests. I think most people agree this is necessary and valuable.
What I have a huge problem with is why it needs to be 5-6% of the transaction cost.
No agents understand. Consumers need to take responsibility for finding an agent compensation model that works for them. They just have to look for them.
Commissions dominate because consumers want it that way. It's true. I know from personal experience as a fee-for-service agent. When given the choice between a flat rate that is guaranteed or a commission which is all or nothing, consumers overwhelmingly choose all or nothing.
The issue is that consumers, like yourself, fail to see that most consumers are risk averse and so when given the choice between a lower rate at true cost that must be paid like all other bills, or an agent assuming all the risk, they would rather pay more to avoid having to guarantee payment.
Quote:
Originally Posted by trickymost
Your average realtor is a one person business.
No, most agents are associated with a brokerage, large or small, that has real business overhead.
Quote:
Originally Posted by trickymost
The whole agency model doesn't work anymore for most market segments. It prevents your average realtor from leveraging technologies to let them do things better/faster/easier. It also causes them to be error prone.
Some agents are great at tech. If it is important to you find one. The average age of a real estate agent is 55, so keep that in mind when you are slamming their lack of technological prowess. I've had people call me up to interview me as their prospective agent and one of the first questions was "Do you use Docusign?" They weren't going to work with an agent that didn't.
Quote:
Originally Posted by trickymost
Maybe it's a bit different in certain markets like SF where technology is part of the culture, but where I live and I'm guessing for most of the country, realtors are some of the most inefficient, error prone professionals I've met and their services have almost no value. People don't see this because they generally don't buy and sell homes very often.
I agree that most consumers can't tell a good agent from a bad agent because they don't sell homes often, but I don't see a ton of errors from other agents on things that come my way. I just don't think some agents are good advocates. They are paper pushers.
Quote:
Originally Posted by trickymost
I don't understand why realtors fight tooth and nail to explain why their commission structures are justified instead of looking at ways to drive transaction costs down by focusing on the costs which can be controlled. Realtors spend a fortune on faxing, but very few think about getting eFax numbers. Realtors spend a fortune on paper and sitting in the office signing contracts, reviewing contracts, faxing contracts. Nobody ever thinks about using DocuSign, they just hire assistants.
Esignatures freak out some brokerages as they fear lawsuits so they don't allow their agents to use them. The commission structure is justified due to high risk of business loss. It is a risk vs. reward thing. That is why commissions are high.
Remember commissions are all or nothing. It is why so many brokerages folded during the bust. In my area only 42% of listings were selling during the worst part of the recession. Brokerages still did all or nothing. So think about that. 58% of homes aren't going to sell, yet you are still paying out for business costs for those listings. The only way to bring real estate costs down is to have consumers take the financial risk like they do with their plumber, hairdresser, etc where you pay for the service regardless.
Consumers don't want to do that. They don't want to pay for real estate services if their home doesn't sell.
You know I wrote an addendum that the lender requested. UW rejected it and wanted it written differently. Two addenda within 24 hours makes me love Docusign. Even the FSBO seller is in love with the program.
Docusign+Jammies+hot cocoa=Happy agent at 9:00 at night while writing new addenda.
Surprised I missed this thread but I can't keep my mouth shut.
I profess to not reading every message in this thread, but once again, realtors fail to see the real reason there is an argument over their commission, whatever it may be.
To me, the issue is not paying someone to do a good job representing my interests. I think most people agree this is necessary and valuable.
What I have a huge problem with is why it needs to be 5-6% of the transaction cost.
I honestly just don't get it.
Dear Tricky most.
Thanks for your post. It is relevant and don't mind the attacks.
Don't worry about not reading all of the thread. If you look back on this thread, some of the people participating stated the same. People sign listings, accept offers and sign Joint Escrow Instructions with out reading them. That is life man!!
Have you bought or sold a home lately?
In California?
Do you have the documents still?
If you do, I can show you what this is all about, but only if you have those things. If you don't, just stick around, somebody will have them eventually. The "puzzle" as the USDOJ calls it, is on the forms, how they are explained, what the buyer and the seller understood in writing and the end result.
The problem is not going to be that it needs not to be a percentage per se. It does not matter if you pay a flat fee or a percentage, you only pay once the home sells. Any agent can explain that to you, but they don't know, but that feature is in every form.
To do what I do, write a dollar amount, the agents must understand how the forms work, and they do, but not completely for some of the reasons you mentioned in your post. Nobody except agents reads the forms or care what the forms say. Clients think the agent knows and that is why people get agents for. (that is not the fault of the agents)
The problem with the high commissions charged by agents is because of the "cooperating broker" concept, which was developed by the association and found in the forms, is used blatantly wrong. Nobody has caught up with it, except one or two guys I found on the internet.
Where have you seen an industry where the professional ask some sort of permission from the client as to what to do with their fee. What they say is "I charge 6% and you authorize me to give half of that to another agent" That little conversation, while signing the listing is where the puzzle is going to start and like you said, agents are no... well you already said it.
That is where we need to go with this thread, but I need somebody that has the forms and remembers what happened during the initial meeting with the agent.
BB
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The Man has a point
