WatchI can't understand why a home owner should pay a realtor 6% +/- in commission to list his/her home.. On a home that is value at $500K that's $30,000 out of your pocket (WOW).
Being a developer, I would like to develop a platform to help out the little guys.
So, if anyone here on patrick.net has any great ideas,I would like to hear them.
I would be open to give the person with the best idea 20% of company. Let get rid of NAR and their realtors..
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San Antonio, TX
jvolstad's website
iwog says
A Realtor touch (hold my hands) me? Ugh. I'd have to wash my hands a couple of times just to get the slime off them.
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San Antonio, TX
jvolstad's website
Realtor Burgers? It will also reduce the costs of school lunches. At long last, Realtors are worth something.
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San Antonio, TX
jvolstad's website
Another solution for too many Realtors. Send them to another planet.
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Los Angeles, CA
Its still legal to sell a FSBO.
But if you try it.... only calls you will get are from:
1. realtors to get your listing - they teach you how to do this in re school
2. non realtors who are lowballer investors who want to buy it and then put it in the MLS where they get top dollar as a flip
3. both of the above in the same savvy agent/flipper so he can save on agent commissions when he sells his flips (these will mostly be chinese people for some reason)
There are about five people in the country right now looking to buy a FSBO. The rest get the 'free limosine service' from a buyers agent to looky loo all saturday and hobnob about granite counters with thier wife's bored housewife realtor friend she smoke pot with in high school.
anyway its hopeless you will only see current trends reinforcing 4eva.
Just get a RE license for $300 and shut up about it already.
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jvolstad's website
PockyClipsNow says
I've never had a Realtor drive me anywhere. The last one I worked with told me to drive around myself and if I see a house that I like, to call him and he will open it up for me. And for this he wanted his 3% commission.
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Mountain View, CA
LarryPatrickMaloney's website
Right here on Patrick.net!
Encourage, and inform people on FSBO, "For Sale By Owner"
Very popular during the bust in the 70's and 80's.
Identify, and recommend reliable Real Estate attorneys, to draft documents.
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Mountain View, CA
LarryPatrickMaloney's website
Just start a site, to helps people sell FSBO. :) It will work. Owner pays for package, package includes the professional photos, scheduled tours/open houses, standard contracts, maybe some deal with lenders... you just have to automate the tedium.
Most people only buy and sell a few times, like when they buy a car, so most owners just aren't prepared to deal with it themselves.
I think most sellers, just want someone else to do the dirty work of giving the tours.
Contract that out to vetted people like on RedFin, but I'm not sure how redfin works internally..
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San Jose, CA
Ours site HomeByWeb.com is shelved. Beta version run by 3 years showed very limited interest between sellers, not buyers. In fact my recent finding showed that in New Zealand most homes are actually sold this way, without broker.
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San Jose, CA
jvolstad says
Would you prefer that they take your email address and send you with tons of listings that are not relevant; simply because they are in your "price range?"
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there are three elements to buying and selling a house. notice, appraisal and title. set up a website (of free listings) that is supported by the advertising of appraisers and title companies, contractors, title insurance, etc.
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"picket fence" in vermont does very well in the burlington area where the money is.
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Sunshine. Realtors, like vampires, shun the day and thrive in darkness. If you can find a way to show how much realtors make per year/transaction/hour actually worked, etc., then public outrage will take care of the rest.
This is the same strategy that is working against public unions. Once everyone found out how much the public pension payouts were, the fit hit the shan!
The other thing the realtors prefer, is that buyers never talk to sellers. Maybe, we could have a website the allows sellers and buyers to talk about existing properties. Maybe even have a offer/acceptance function with full disclosure of all bids? Wouldn't that be nice to know all the bids for both the buyer and the seller? We could call it House-bay, like the realestate version of E-bay.
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Corning, NY
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APOCALYPSEFUCK is Shostakovich says
You mean like this?:
http://www.theonion.com/video/prison-economy-spirals-as-price-of-pack-of-cigaret,14327/
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Corning, NY
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jvolstad says
Soylent Green is Realtors!!
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Las Vegas, NV
Best advise came from Porky.....
Take the steps necessary to get your RE license and work a transaction or two.
Not only will this site have a deeper dimension based on knowledge, but you'll have first crack at that house you've been waiting for, for how long?
Oh, you'll even be the one receiving the commission, after you've paid your national dues, state license, city license, board dues, franchise fee, errors and emissions insurance, brokers split, desk fee, federal income tax and state income tax.
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Foothill Ranch, CA
Indeed, 6% does not happen much. I closed escrow a couple of weeks ago. Took 1.5% to make the deal happen. It was a multiple offer situation. The buyer was an out of towner, so extra work to take care of stuff for them. Current escrow is 2.5% on a total headache short sale with a 169K contract price. Making some money, but no big windfall.
I am not complaining. If I did not want the business, I can turn it down. Just saying for the time and effort that goes in, I would not call it easy money. I am a part timer and have a regular job so I try to provide the same level of service and take the deals that fall into my lap--easy or tough. What I have learned is there are very few easy deals. And more where after many hours put in, they blow up.
ptiemann says
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Los Angeles, CA
A few years ago the big banks tried to 'walmartize' the RE agents.
Currenty bofa,wells,etc are not legally allowed to own a RE brokerage directly. They could make a whole lot more selling all their foreclosures themselves, and everyone visits the bank often and that cute teller girl could ALSO help u sell or buy. It would destroy re agency the way it has been.
Guess what happened? The NAR lobby won by pumping millions into DC and getting the 100 million agents to contact thier representatives. You see this is democracy it means the organzied people with $ will always win. The people buying one house every 10 years have no lobby.
Google the campaign they did to 'keep the big banks out of real estate'. They won and so RE is still like it was 500 years ago - you to have contact someones bored trophy wife who is selling her kosher buthers house for him. (Consider RE industry part of the 'buy local' movement - those commissions stay local - if BofA sold them all it would be like going to best buy to buy or sell a house.
Its probably better this way, how else could savy locals game thier clueless neighbors into letting them double dip a pocket listing to an investor who will flip the house using the same agent (its a triple dip and totally common!). But that money goes to Mercedes dealer and the nail salon workers - all local.
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Whose still paying a 6% commission to a realtor anymore in high-priced areas? I just got a flyer the other day with a realtor offering only a 2% commission in his sales pitch.
Real estate agents are in competition for very little business now.. (sales volume is still low). If i were selling, I would never take on an agent wanting more than 2% commission... They would have to get me a higher price than market value for me to consider 3%.
Everyone keeps warning out your automatically underwater when you buy because of 6% commissions during resale... Patrick has it is his calculator that way also... I think it's set to 7% actually.
But in reality, everything is negotiable... Now more than ever!
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Los Angeles, CA
they advertise 2% but also they dont tell you you HAVE TO PAY 2.5% min to buyers agent or no one will chaufuer their buyer to your house.
2+2.5= 4.5%- pretty normal.
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Baltimore, MD
Obligatory:
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San Antonio, TX
jvolstad's website
wthrfrk80 says
Processing Realtors
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Nuke the NAR!
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It is very simple, just DO NOT USE THEM. It isn't brain surgery.
And btw, this phrase "Being a developer, I would like to develop a platform to help out the little guys." gives me the creeps. If you mean computer developer I stand corrected, if you mean real estate developer it stands. You aren't clear.
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I also wanted to mention off topic, this crap about "Insult Another User" Patrick you better review your map of NJ.
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Redford, MI
The answer is a graduated commission rate. On the first amount of X$ sale price is the 6% to cover brokers'actual cost and then it decreases, espiecally if it is a double dip and there is only one broker. A bonus is given, say of $500.00 or even 1% of the sale price if a full price (or percentage of sale price)offer comes in or what ever the seller can negotiate with the broker's agent(s).
Although now a days the realtors roll is even more important the commissions have got to come down.
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Reader says
What's the problem??? I'm from NJ and I'm not insulted by that map. Unfortunately, most of that map is true!!
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PockyClipsNow says
That's it in a nut shell!! The "cost of entry" into the profession is so low, you get all types of "bottom crawlers" who "claim" to be realtors. They jump in for the Big Bucks that they think they can make!!
Many are so unprofessional (including the former convicted felon that listed my last house), that potential home buyers get screwed during the process of making the largest financial decision of their lifetime.
Plus, the "sheep" are programed that they HAVE to use a realtor and pay 6% to sell... until that perception changes, we will be "stuck" with these realtors making believe they are "professionals"!!
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ptiemann says
Absolutely True!! Anyone paying 6% should have a neuro exam and should not be able to sign any financial documents.
I paid 2% and 2.6% total for full service on the last two houses I sold. With a little bit of research, you can save yourself a crap load of money!
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We need a Patnet public service campaign to educate consumers to alternatives to Realtor rape. Let's start with a pithy slogan: I will start. How's this?
COMMISSION FREE IS CRIME FREE!
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Los Altos, CA
Premium
Who agrees to 6% in this day and age? Seriously? 5% max; lower if you're much over $1mm.
The entire reason you can't disrupt this business model with a clever web site is the MLS. If you want to slurp MLS listings and repeat them on your site you have to play by their rules. There's a reason Craigslist doesn't have MLS listings on it.
The business model will continue to evolve. The commission rate is only going to come down because the internet has already dramatically reduced search costs from where they were 15-20 years ago.
Finally, you already don't have to use an agent as a BUYER if you don't want to. Rather than waste your time thinking some slick Ruby Duby is going to get you a better deal, brush up on your negotiating skills, find any half decent lawyer who knows RE transactions (I've found most who do small biz legal work have done a good amount of real estate), and go negotiate yourself. In CA this is easy to do.
There are really only 2 hard parts, both of which will require you be willing to sharpen your sales skill mojo: (1) the listing agent will be difficult to the point where you'll very likely have to figure out how to directly communicate with the seller to force them to put pressure back on their agent. (2) you have to sell-the-seller on a transaction where they lower their selling price to a level that cuts half the 5% (or apparently 6% from reading this thread) out of the agency fee in terms of total dollars, but leaves more gross $ in the pockets of the buyer & seller. Just solve the math backwards and you can get to the sweet spot. Again, you're proposing a deal that's better for the Seller, better for the Buyer, but worst for the agent. And it's only worse for the listing agent because they will be indignant about the fact half the potential commission will go back to buyer & seller ... odd given that normally they wouldn't be getting that anyway unless they worked both sides of the deal. But they will be losing face in the biz, so they won't like it.
I did this twice and ultimately decided I was simply tired of the intensity and drama required. I still use a RE lawyer to double check everything though. Always a good idea. You'd be surprised at what "oopsies" the agents leave in/out.
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McKeesport, PA
My husband wrote and owns a complete listing program and it is for sale. With it you can completely avoid the mls and the realtors.
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APOCALYPSEFUCK is Shostakovich says
The ones who got the short end of the stick were the workers who appraised the homes. Lots of them got the axe if they didn't comply by increasing the price of the homes. Maybe they should work with the banks and skip the middle-man (realtors). Association of Appraisers? How's that. Where's my 20%? teehee
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How about a business that uses appraisers *and* someone to check the home for potential problems to alert future homeowners (bugs, roofs, appliances, walls, electrical wiring, etc.) so people won't buy so called "money pits". The financing can be done after the first two jobs are completed. The mortgage companies should have the same fees so homeowners don't have to shop around for the best interest rates (and avoid rip-offs). The company should also have CLEAR information so the fine-print information is spelled out more clearly. Former realtors can do the yard work. :)
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Randy H
Well said, thanks
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Reseda, CA
You can buy a house with one click from ebay buy it now.
A house sold to a corporation whose only asset is the house can then be purchased as a single share of stock on etrade with a $25 commission.
- in my perfect world
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Los Altos, CA
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jan says
Sight unseen I can tell you this is worth zero dollars. Sorry. MLS is a legal barrier, not a technical one.
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Foothill Ranch, CA
The other part of this the Supra Key system. I hate paying dues to NAR, but plain MLS access with out Supra Key access makes working as an agent very difficult.
If we really want to change the system, lets force the use of an open exchange that RE agents must use for the submission of offers. If it is required that the sellers could login at any time and see all of the offers that have been submitted, it would remove a lot of the "shade" from the current situation of agents "loosing" offers until that nice double ender comes in and they tell the seller it is the best offer on the table.
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The MLS should be a fucking file format and a shared RSS feed.
And it should be open to read and write privileges to anyone who proves their name, address and legal residency to a notary public so that usage can be audited when abused.
Anyone who is not demanding the disbandment of the NAR and its monopolist practices is an unindicted co-conspirator.
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Corning, NY
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Reader says
I'm pretty sure Patrick didn't create that map.
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Foothill Ranch, CA
All this fascination with the MLS makes me wonder if what causes a lot of the scum in the RE industry is understood.
The read side of the MLS is all over this Internet. Surly we know how to go to Redfin and look at listings. The write side can be had for cheap. Check out 4salemls.com.
But until you deal with the dirty issue of places like California allowing dual agency, scumbags will still have it easy. And just outlawing dual agency will not do much. Agents will still "lose" offers until that double ender comes in and just have another agent in the office write it up.
We need an open offer submission system so sellers are guaranteed to be able to see all the offers.
Fannie Mae knows about this problem and has built an offer submission system to try and deal with it. With this system in place, the agent is reduced to marketing the property and pushing the transaction through. No more f&*king with the offers and cherry picking the double ender or the one that offers up the kickback. The seller can now get the best price for the property and the buyer is able to buy in an open marketplace. Slime ball agents can now go and sell used cars at a pay here yard.
realestateinsidernews.com/foreclosure/fannie-mae-homepath-offer-system-update
I am all for getting ride of NAR. They have ruined enough lives with their "always a great time to buy" bulls(*t.
But I am all for keeping the minimal state licensing requirements in place for write access to the MLS or deal in RE for a fee. Take that away and the slime could be even thicker.