Realtors and Commissions (Spring Hill: lawyers, house, buyers)

[Mike1306]

Originally Posted by crazynip

They dont make bad loans, but they push people to houses they cannot afford spreading lies like "real estate is the only investment that never depreciates", "this home will be worth twice this in 5 years"

Sound familiar?

The banks certainly did their share too

The person who would listen to someone that told them that is the one that is at fault. You also make it seem as if every real estate agent says the same thing to every person.

Of course EVERY profession has their share of shady people and real estate is not immune to that but there is no way agents are to blame for the housing collapse.

[TerdFerguson]

Originally Posted by newyorker24

I cannot believe the people on here blaming realtors, and even banks, for the housing situation right now. People need to start taking responsibility for their own actions. It's easy to say the realtor convinced me or the bank gave me the loan, but at the end of the day YOU bought that house and agreed to pay for it. No one forced you to do it. It's common sense. If your household income is $80,000 you probably should not buy a $300,000 house with little or no money down. But then again why would I expect common sense when I see people with $30,000 salaries buying luxury vehicles.

People were so desperate to buy a house during the housing boom (because they had to fit in with everyone else that was doing it), that quite frankly they did not care how much the house cost, how high their APR was or was going to be in future years, or what type of mortgage they were getting. I bought mine from someone that had an ARM that started at 8% and was going up to 15% in 3 years, and they bought the house for a ridiculous amount of money. They never made 1 mortgage payment.

And worst of all these people have an entitlement mentality that they are just victims and someone (the government, the bank, etc) HAS to help them!

Anyone who absolves the banks from any responsibility in this mess is either deluded or simply has no understanding of the housing bubble.

The truth is that everyone shares in the blame. People share in the blame as you pointed out. But the banks also get a massive share of the blame. The banks abandoned common sense and prudent underwriting standards. That's the crux of their business. Identifying risk in lending and they totally blew it. They lowered down payments, they weren't verifying income, in short they weren't doing their job. And if they had been the real estate bubble either would not have happened or would have been a lot less severe. The banks handing out free money and abandoning traditional sane underwriting standards was the fuel for the bubble fire. But it's not just the banks, it's the people, the banks, the FED, congress, wall street....all of these people played an important part in creating the housing bubble.

[Mike1306]

Originally Posted by zclipse

Thanks TamRE. That sums up the crookedness of the Realtor 'profession'.
There is no way I am paying 5% commission, especially on houses that sell for 500K+.
It is in the best interest of the nation to dissolve the National Association of Realtors and breakup the monopoly of the MLS..

Cluelessness is funny.
How is the MLS a monopoly? There are other websites you can use and there happen to be 1000's of different MLS websites.

As I said before, sell it yourself then you don't have to pay anyone.

[MortonR]

Originally Posted by Mike1306

You haven't seen any profession pay $40,000 a year? Where do you live.

Just sell it yourself, that will cost you nothing

Not totally true.

Having sold homes myself, it not only involves a fair amount of expense to properly market, it also takes a lot of your time (if you do it properly and with a realistic expectation of selling, too.)

Time is money, no matter how you look at it. Between my time, the marketing expenses, dealing with potential buyers, showing, open houses and my attorney, I had costs, for sure.

Granted, these were a lot less than what a realtor would have in it, but I have virtually no overhead. A realtor has the cost of doing business on a day to day basis, whether or not they are selling houses, and since most are connected with an agency, they have to contribute to the costs of running said agency.

If you think that the realtor gets 100% of their commission, you're grossly misinformed. I am not a realtor, but I am sure one of the ones in this conference will identify what percentage they end up with after a sale, and to be honest, in some cases it's not a whole lot.

As for expensive properties, they require expensive marketing, not just a sign and a listing in the Sunday paper. Web hosting, photography, virtual tours, etc., all cost money.

I am not defending realtors, per se, just trying to make the point as others have that they are selling a commodity, no differently than another sales person. Their purpose is to provide guidance and advice to a buyer/seller and handle the transaction so everything is done in accordance with proper procedures and to protect the interests of their client.

Look at it this way: If you were being tried for murder, would you try and defend yourself? Would you look for a cut rate attorney?

The situation is different, but considering that buying or selling a home is the largest financial transaction most people make in their lifetimes, it pays to have a professional involved.

RM

[newyorker24]

Originally Posted by TerdFerguson

Anyone who absolves the banks from any responsibility in this mess is either deluded or simply has no understanding of the housing bubble.

The truth is that everyone shares in the blame. People share in the blame as you pointed out. But the banks also get a massive share of the blame. The banks abandoned common sense and prudent underwriting standards. That's the crux of their business. Identifying risk in lending and they totally blew it. They lowered down payments, they weren't verifying income, in short they weren't doing their job. And if they had been the real estate bubble either would not have happened or would have been a lot less severe. The banks handing out free money and abandoning traditional sane underwriting standards was the fuel for the bubble fire. But it's not just the banks, it's the people, the banks, the FED, congress, wall street....all of these people played an important part in creating the housing bubble.

It's not the banks fault- it still comes down to the buyers. The bank wasn't going to you begging you to take out a $300k loan. The buyer was going to the bank begging for that $300k loan. And as I said before, the buyers wanted those houses so bad they did not care what the terms of the mortgage were.

I got approved for a high mortgage with no down payment. Was I stupid enough to buy the most expensive house the bank said I could buy and put down zero down- no. It's all about self-control and discipline. If a bank sends you a credit card with a $30k limit does it mean you have to go on a shopping spree tomorrow and spend it all? No.

[crazynip]

The banks were certainly at some fault for not doing their due diligence to make sure the borrower met the criteria to be able to pay back the loans. There was certainly a lot of fraud in terms of overinflated appraisals and magic LTV calculations made too.

[Mike1306]

Originally Posted by MortonR

Not totally true.

Having sold homes myself, it not only involves a fair amount of expense to properly market, it also takes a lot of your time (if you do it properly and with a realistic expectation of selling, too.)

Time is money, no matter how you look at it. Between my time, the marketing expenses, dealing with potential buyers, showing, open houses and my attorney, I had costs, for sure.

Granted, these were a lot less than what a realtor would have in it, but I have virtually no overhead. A realtor has the cost of doing business on a day to day basis, whether or not they are selling houses, and since most are connected with an agency, they have to contribute to the costs of running said agency.

If you think that the realtor gets 100% of their commission, you're grossly misinformed. I am not a realtor, but I am sure one of the ones in this conference will identify what percentage they end up with after a sale, and to be honest, in some cases it's not a whole lot.

As for expensive properties, they require expensive marketing, not just a sign and a listing in the Sunday paper. Web hosting, photography, virtual tours, etc., all cost money.

I am not defending realtors, per se, just trying to make the point as others have that they are selling a commodity, no differently than another sales person. Their purpose is to provide guidance and advice to a buyer/seller and handle the transaction so everything is done in accordance with proper procedures and to protect the interests of their client.

Look at it this way: If you were being tried for murder, would you try and defend yourself? Would you look for a cut rate attorney?

The situation is different, but considering that buying or selling a home is the largest financial transaction most people make in their lifetimes, it pays to have a professional involved.

RM

I guess you missed my point entirely.
She stated she didn't want to pay an agent what she felt was too much. She could get around that by selling it herself.

She also stated that she has yet to see a profession pay as much as real estate yet the median income for a full time agent is around $40,000 a year.

[newyorker24]

Originally Posted by crazynip

The banks were certainly at some fault for not doing their due diligence to make sure the borrower met the criteria to be able to pay back the loans. There was certainly a lot of fraud in terms of overinflated appraisals and magic LTV calculations made too.

So the banks should have made sure people could pay back their loans instead of the buyers themselves making sure they could pay? What you are saying is that people are too stupid to make important financial decisions on their own so someone else must make them on their behalf.

[Spring Hillian]

If they took the personal responsibility, then they wouldn't have anyone else to blame.

Originally Posted by newyorker24

So the banks should have made sure people could pay back their loans instead of the buyers themselves making sure they could pay? What you are saying is that people are too stupid to make important financial decisions on their own so someone else must make them on their behalf.

[TampaKaren]

The median GROSS income of Realtors in 2009 in Florida was $34,400 (now deduct $5K for business expenses). In 2005 it was $53,300. Nationwide in 2009, the median gross income of all Realtors was $36,700. Did some get rich? Maybe a few. The majority are middle class working stiffs.

Every Realtor/investor/lender did not contribute to the state of the economy. Some of you only want to place blame on others when IMO you should be looking inside yourself for some way to make your life better. I work hard for my clients and to blame me or an entire industry for others' successes, failures, hardships, greed, or illegal actions is just ridiculous. Every person has a choice to be an optimist, a pessimist, or a realist. I just choose to be the latter.

The OP is looking for information on ways to reduce real estate commissions. In today's economy, I don't know anyone wasting money just because they want to. But you can bet there are people and busineses that will gladly take your money if you are naive or ignorant enough to let them.