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That's not the consumer's problem. Your "unless..." has to happen. Breaking up the buyer's agent system and making buyers pay directly for any "buying services" that they need or want would immediately cut sales commission costs in half (more than half in some cases). Competition and new models would force seller's agent commission down much closer to 1%. Reduce your costs. We had an agent here describing how he measures ceiling joists! Highly paid agents should not be measuring ceiling joists, pushing paper or doing other menial tasks. Oversee the operation, embrace technology, and build economies of scale for back office work. Those are just possible examples, it's not my problem to solve. People used to like when there were elevator attendants but it's just not sustainable as it's too high cost and many consumers, particularly young ones are going to rebel just like they don't want to use insurance agents to buy insurance. It's backward, too expensive, and its days are numbered.
Buyer's agent is the problem as it's far too expensive and there is insufficient choice for buyers and sellers in the matter. Sellers are "forced" to pay buyer's agent commissions for buyers and buyers are led to believe their buyer's agent is free so they sign up fast. Break down that racket and you can come a long way to revamping the system.
Actually it is the consumers problem. If agents can't make a decent living the talented ones will go other careers. If consumers don't want to pay a commission they can go it alone.
That's not the consumer's problem. Your "unless..." has to happen. Breaking up the buyer's agent system and making buyers pay directly for any "buying services" that they need or want would immediately cut sales commission costs in half (more than half in some cases). Competition and new models would force seller's agent commission down much closer to 1%. Reduce your costs. We had an agent here describing how he measures ceiling joists! Highly paid agents should not be measuring ceiling joists, pushing paper or doing other menial tasks. Oversee the operation, embrace technology, and build economies of scale for back office work. Those are just possible examples, it's not my problem to solve. People used to like when there were elevator attendants but it's just not sustainable as it's too high cost and many consumers, particularly young ones are going to rebel just like they don't want to use insurance agents to buy insurance. It's backward, too expensive, and its days are numbered.
Buyer's agent is the problem as it's far too expensive and there is insufficient choice for buyers and sellers in the matter. Sellers are "forced" to pay buyer's agent commissions for buyers and buyers are led to believe their buyer's agent is free so they sign up fast. Break down that racket and you can come a long way to revamping the system.
How would this happen though? Make it illegal for listing agents to share part of the commission with the buyer's agent? Because as it is now sellers need to agree to pay the full commission, not just the listing agent's so currently a buyer with no agent doesn't really save the sellers any money.
This does actually relate back to the OP though since I didn't see where the article specified if they pay buyer's agents or if the buyer needs to pay any sort of "convenience fee."
Actually it is the consumers problem. If agents can't make a decent living the talented ones will go other careers. If consumers don't want to pay a commission they can go it alone.
We live in a free market economy. It's not a perfect system but it's the best we have and that won't change. Being 'good' at a dinosaur trade is not 'good enough' when change rolls around as it will in this industry. One must have to adapt to change. Plenty of 'good' travel agents went on to other things. A few had the talent and foresight to lead the industry into the new world.
It's not my problem to solve but, for example, very, very few buyers will shell out several thousand dollars for a vaguely defined service that's offered today. So once the artificial model is broken up, buyer's agents will need to figure out how to service the buyer and provide what he needs at the price he's willing to pay.
The easy ride enabled by leading the buyer to believe his agent is 'free' (so low expectations and low accountability) and making the seller pay to access buyers under buyer's agent ownership will not last forever.
How would this happen though? Make it illegal for listing agents to share part of the commission with the buyer's agent? Because as it is now sellers need to agree to pay the full commission, not just the listing agent's so currently a buyer with no agent doesn't really save the sellers any money.
This does actually relate back to the OP though since I didn't see where the article specified if they pay buyer's agents or if the buyer needs to pay any sort of "convenience fee."
I don't know when or how it will happen but yes, it has to happen through direct or indirect regulatory action or other systemic action like changes in mortgages, etc.
Once the buyer's agent racket is broken, the buyer will pay for the services he needs and all kinds of new providers of those services will emerge - low cost, focused/specialised services, etc. It certainly won't be the same old agents doing the same old thing but just converted to a fee for service model! Many agents here fail to get this and just cling to the line that consumers don't want fee for service because they can get it today but most opt for the traditional model.
For example (just off the top of my head but anything can happen):
-Go after buyer's agent split percentages for price fixing. Big variations in buyer's agent rates will be difficult to manage in the industry because homes will overtly be favored based on the percentage on offer. The system could topple.
-Banks refusing to include commissions bundled into pricing. For example, valuing homes without commission included would severely change the rules and make consumers much more cost conscious.
-Make it illegal for buyer's agents to be compensated with sales commission. Similar to changes in the financial services space.
-Some further and stronger federal anti-competitive actions against MLSs.
I think the buyer's agent racket is so strongly protected, it will be difficult for any disruptor to break it. Very happy to be proven wrong but most disruptive plays don't (because they can't) address the buyer's agent side. Where new companies like Redfin play in buyer's agent space, they do it in a traditional, non-disruptive way.
JB, IMHO, the buyer's agent is the most important consumer protection in Real Estate right now. We exist to help the buyer, who hires us of their own free will, to represent them through a complex transaction that they may have no time, experience or interest in doing alone. Why you think we are the problem and must be eliminated, I will never understand... or agree with.
JB, IMHO, the buyer's agent is the most important consumer protection in Real Estate right now. We exist to help the buyer, who hires us of their own free will, to represent them through a complex transaction that they may have no time, experience or interest in doing alone. Why you think we are the problem and must be eliminated, I will never understand... or agree with.
I'm not saying that some or even many buyers don't need help. Let buyers choose the services that they value and pay for them. Those services will evolve to better meet the needs of the buyer if the buyer is paying for them and demanding value from their expense (just like how just about everything else in the world works). Create a straightforward system where the party meant to benefit from the services pay for those services. Rather than a system where the "other side" funds those services (or so the buyer is led to believe) in a confused cauldron of conflicting interests - sales commissions funding advice, the seller funding the buyer's "representation", etc, etc.
Nobody is saying help is not needed. It's the model.
The way it is now is pretty straight forward, your way actually sounds MORE complicated, and I think my buyers actually appreciate that they don't get nickled and dimed and billed by the hour or mile during their whole search and transaction. As do the sellers we've worked for.
I wish we could keep straight whether the complaint now is that buyers or sellers are paying the commission, because I'm pretty sure it's being argued both ways right now on this forum.
The way it is now is pretty straight forward, your way actually sounds MORE complicated, and I think my buyers actually appreciate that they don't get nickled and dimed and billed by the hour or mile during their whole search and transaction. As do the sellers we've worked for.
I wish we could keep straight whether the complaint now is that buyers or sellers are paying the commission, because I'm pretty sure it's being argued both ways right now on this forum.
There should be no sales commission for services related to helping a buyer. Period.
Maybe part of the problem is that nobody can even agree on who pays for something. That's hardly what I would call 'straight forward'.
You can get "nickled and dimed" for the services you want or you can get "18 thousand dollared" for a bundle of services, most of which many buyers do not want or need. If most buyers knew how much being driven around and given bottled water costs them, they'd just drive themselves....or they could hire a chauffeur driven Roller for cheaper and replace the bottled water with champagne.
At least in my market, they are much more flexible on the negotiation of fees than big brokerages. Those huge buildings that house large brokerages have large overhead which has to be made up somehow. I know some brokerages don't allow their agents to accept less than a certain commission which is what it sounds like you ran into.
Good question. What I would depend on my schedule and benefits. If I'm an employee I want more fixed hours which would include limited nights and weekends.
150% Overtime pay past 5:00PM or Saturday?
Doubletime on Sunday?
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