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Why America’s real-estate brokers are such a rip-off
Selling a house in the United States is extremely expensive
"...believes the problem lies in the anti-competitive practices of the Multiple Listing Service (mls), through which nearly every broker in America lists and searches for homes, and the National Association of Realtors (nar), a trade association with 1.3m broker members in America, which regulates it."
Why America’s real-estate brokers are such a rip-off
Selling a house in the United States is extremely expensive
"...believes the problem lies in the anti-competitive practices of the Multiple Listing Service (mls), through which nearly every broker in America lists and searches for homes, and the National Association of Realtors (nar), a trade association with 1.3m broker members in America, which regulates it."
You can negotiate rates down. Before I received my broker’s license, I usually paid 5% to list. One a house I recently bought, I saw the LA was getting 4%. Even though it is against the law to collude to hold listing percentages high, it happens. In today’s market, there are more RE brokers than you can shake a stick at because RE has an incredibly low barrier to entry - anyone with a pulse can be a broker. It would seem to reason that negotiating LA commission down in a crowded field should be pretty easy.
Or don't use one. If you feel it is such a simple thing to sell one house. Do it yourself. As a 30 year real estate broker-manager, I found it to be a J-O-B. A lot of the time 7 days a week for weeks on end. And I paid every dime of expenses....
Comparing the home buying process and cost across different countries is not easy; because the process, services, and product are not apples to apples. This link provides a little more context to the selectively edited graphic in the first article.
well, it's only a ripoff if the system of exchanging property works the same in those other places - that is, both parties are represented by individual brokers. We already know that the UK uses 1 agent for both sides. And what the other costs of the transaction are!
Hong Kong agents may only get 0.5-1%, but they're selling leaseholds and sounds like for just 50 years.
And excise taxes vary by state and payee here (in NC, the Seller pays the excise tax of 0.2%) but in Hong Kong, it appears the cost can easily be 3+ times.
If an agent can't show, based on their honest track record and marketing plan, how they will net a Seller after expenses more than the Seller can make on their own, then the Seller should forgo using an agent.
He IS smart, has insights, but he sure likes give the pot a good stir routinely.
The pot NEEDS a good stir and routinely.
I've never bought or sold outside the US so have no direct experience...
but I wonder what tasks related to the sale often/commonly done by US agents...
are done by others in other places who then charge separately?
Thing to keep in mind ... 6% may be the starting point but isn’t always the final commission. In other words, not only do I negotiate the commission rates as low as possible at time of listing, I usually throw minor givebacks to the buyer back to the agent to work out. Inspection repairs are a case in point. A buyer can inspect all they want but they aren’t going to get me to repair anything that was visible to an untrained eye prior to the offer. Broken window seals, broken face plates, etc are not something I agree to repair. If the agent wants the deal, they can resolve it between themselves, the buyer agent and the buyer with part of their commission. I may consider hidden repair items depending on the overall price point on the deal but I always make all my property listings “AS IS WHERE IS”. Inspect all you want but don’t try to use an inspection as a place to renegotiate the price.
I don't know where y'all work getting 6% commission but I work off three and my broker gets part of that.
Usually the recommended commission starts at 6% with the brokers splitting the commission unless the buyers broker and listing broker are the same person.
The last house I bought cost the seller $60,000 in commissions plus closing costs to sell. It was on the market for two whole days. I'd love to hear a justification for how that is reasonable.
If you add the cost to sell my previous home, a 4.5% commission, selling and buying a new home cost me just about $85,000 in commission ($60,000 + $25000) costs alone.
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