End of high commission real estate agents.
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End of high commission real estate agents.

By Strategist following x   2018 Jan 10, 8:20am 1,279 views   37 comments   watch   sfw   quote     share    


http://www.sandiegouniontribune.com/business/real-estate/sd-fi-purplebricks-launch-20180108-story.html#nt=oft03a-1la1 Purplebricks, flat fee real estate listers, launch in San Diego
1   Strategist   ignore (1)   2018 Jan 10, 8:22am   ↑ like (3)   ↓ dislike (0)   quote        

Internet finally begins to destroy excessive real estate commissions. Good riddance to rip offs.
2   APOCALYPSEFUCKisShostikovitch   ignore (27)   2018 Jan 10, 9:11am   ↑ like (2)   ↓ dislike (0)   quote        

If you're not shooting Realtors in the face, you're part of the problem.
3   APOCALYPSEFUCKisShostikovitch   ignore (27)   2018 Jan 10, 9:13am   ↑ like (2)   ↓ dislike (0)   quote        

$3200 is way too much.

Listings should be free and Realtors can make their money waiting for the sellers on the sidewalk and offering to blow them for tips when they close the sale.
4   WookieMan   ignore (0)   2018 Jan 10, 9:16am   ↑ like (1)   ↓ dislike (0)   quote        

These types have been around for a while. It's a volume business at the rates they're charging and it's really tough to crack any substantial market share to truly make it worth it. Plus, you still have to pay the buyers broker. Until you can crack that nut (seller not paying buyer broker commission) these flat fee services will come in and eventually get washed out by the normal model.

Got to get the seller out of paying a buyers broker. Cause the seller is still pissing away 2-3% paying that other broker in most cases.
5   Malcolm   ignore (1)   2018 Jan 10, 9:35am   ↑ like (0)   ↓ dislike (0)   quote        

We saw this back in 2007 as a symptom of the pending bubble burst. First, competition between brokers, even in a normal market, will encourage discounting in high priced markets like San Francisco and Southern California. Example, a couple of years ago, I sold some houses in Jackson, MS. The 6% commission on $15,000 houses is a fair commission for the work. The work is roughly the same on a half million dollar house in San Diego, so if supply is short, listing agents will bid against each other for a listing. Fast forward to a couple of months ago, I sold my house in San Diego for a total of 3%. The agents were satisfied and I saved over $12,000. Despite prices being unaffordable again,there is a seller's dilemma of "Cool, I have $100,000 of equity, but if I sell where do I live, and do I want to pay sky high property taxes on a new place?" Despite strong numbers, there are actually very few buyers who can qualify for $750K loans, especially in the pricier areas. The feedback I got was that in San Diego, those markets are flat and starting to drop. In another post, I made the observation of houses in foreclosure for just a little more than I priced my house for.

Agents are never happy, understandably, they either have a situation where there are many buyers and not much inventory, or they have a glut of inventory and no buyers. In San Diego, they have the worst of both worlds, and then on top of that, because Southern California can be lucrative for agents there are zillions of agents desperate to get a listing. So sit back and watch, the next stage will be pictures of dozens of lock boxes and intersections cluttered with for sale signs.
6   Ceffer   ignore (1)   2018 Jan 10, 9:52am   ↑ like (1)   ↓ dislike (0)   quote        

You know that when Realtors barter for yams instead of taking commissions, things are about to get bad.
7   HEYYOU   ignore (8)   2018 Jan 10, 10:33am   ↑ like (0)   ↓ dislike (0)   quote        

Commissions aren't the problem.
It's assholes paying more than 10% of listing.
Overpaying makes sellers & real estate shysters wealthy.
Buyers close the deal & then have to pay out the ass interest.
How long before they are paying more against principle than interest?
Not a problem. They can sell to some other dumbass who will overpay.
How much has the house price inflated since it was finished?
How many improvements have been made since it was finished?
How many are just superficial?

Paint covers a multitude of sins.
8   HEYYOU   ignore (8)   2018 Jan 10, 10:37am   ↑ like (0)   ↓ dislike (0)   quote        

How much more is the interest than the commission & then buyers have to pay interest on the commission?
The commission is in the price.It's paid by the money that the buyer brings to the table.
The seller doesn't pay the commission in advance.
9   Tenpoundbass   ignore (8)   2018 Jan 10, 11:04am   ↑ like (1)   ↓ dislike (0)   quote        

I have a friend that got out of a tech business that serviced Car lots. He got his RE license worked with a firm for a year. Now he says he just does one or two deals a year and he's comfortably set for the whole year. His wife even did the same thing. This is Boca so the average house they sell is 3 million to 15 million dollar homes and Condos.
10   Strategist   ignore (1)   2018 Jan 10, 11:53am   ↑ like (1)   ↓ dislike (0)   quote        

Malcolm says
Despite strong numbers, there are actually very few buyers who can qualify for $750K loans, especially in the pricier areas. The feedback I got was that in San Diego, those markets are flat and starting to drop. In another post, I made the observation of houses in foreclosure for just a little more than I priced my house for.


Please provide links. The median San Diego County home price is about $540,000, 9% higher than 12 months ago.
11   Satoshi_Nakamoto   ignore (0)   2018 Jan 10, 11:56am   ↑ like (1)   ↓ dislike (0)   quote        

And this is different from Redfin how?
12   zzyzzx   ignore (1)   2018 Jan 10, 12:08pm   ↑ like (0)   ↓ dislike (0)   quote        

Satoshi_Nakamoto says
And this is different from Redfin how?


As far as I can tell, it's not.
13   joshuatrio   ignore (0)   2018 Jan 10, 12:11pm   ↑ like (2)   ↓ dislike (0)   quote        

Flat fee agents have been around as long as I remember. I sold my house in 2006 for $400 seller side and 3% buyer side.

Def the way to go if you're listing a home.
14   WookieMan   ignore (0)   2018 Jan 10, 1:07pm   ↑ like (3)   ↓ dislike (0)   quote        

joshuatrio says
3% buyer side

This though.

This is the problem. Why the fuck should you pay someone that is technically trying to screw you and get their client a cheap place? Whether you're using a flat fee broker or Bob from Remax down the street. This has always made zero sense to me and I'm kind of in the industry. Buyer brokers have zero skill at anything in almost 95% of the cases. They fucking schedule it and open the door. That's it.

Until consumers revolt and understand what the issue is, it will never change. Buyer agents should be like massage therapists. They are licensed, but it's on a fee basis for the people that USE the service, not the seller. Pay them $10 a door/showing. They'll easily make $40/hr which isn't bad money. 2.5-3% on the purchase price, fuck off.

Listing agents to some extent have some value. Buyer agents, no. You either like the house or not. If the inspector gives it a thumbs up you buy it, if not, don't. The agent repping the buyer is just skimming off the sale because they made a call to schedule something (most dentist secretaries maybe get paid $50k/yr) and open the door (walmart greeters don't even do this and they're probably $24k/yr).

Sellers have got to stop agreeing to pay the buyers broker. It makes ZERO sense. Have the fucking buyer pay it if they think they're getting good service.
15   joshuatrio   ignore (0)   2018 Jan 10, 1:10pm   ↑ like (0)   ↓ dislike (0)   quote        

WookieMan says
This is the problem. Why the fuck should you pay someone that is technically trying to screw you and get their client a cheap place? Whether you're using a flat fee broker or Bob from Remax down the street. This has always made zero sense to me and I'm kind of in the industry. Buyer brokers have zero skill at anything in almost 95% of the cases. They fucking schedule it and open the door. That's it.


I couldn't agree more.
16   Sniper   ignore (11)   2018 Jan 10, 1:16pm   ↑ like (4)   ↓ dislike (0)   quote        

joshuatrio says
Flat fee agents have been around as long as I remember. I sold my house in 2006 for $400 seller side and 3% buyer side.

Def the way to go if you're listing a home.


I did the same thing on my last house. $350 flat fee and 2.5% to the buyer's agent.

Listing realtors are a total waste, the house just needs to get on MLS, and if it's priced right, it will get action.
17   Sniper   ignore (11)   2018 Jan 10, 1:20pm   ↑ like (1)   ↓ dislike (0)   quote        

WookieMan says
Buyer brokers have zero skill at anything in almost 95% of the cases. They fucking schedule it and open the door. That's it.


Not actually true.

The buyer's agent has to do a lot of crap like pre-qualifying mortgages, presenting offers, scheduling inspections, pass around contracts and some other stuff. Granted they're still not worth 2.5 - 3% for that service, but they sure as hell do more work than a listing agent that takes a few photos and fills out MLS online listing.
18   Sniper   ignore (11)   2018 Jan 10, 1:21pm   ↑ like (0)   ↓ dislike (0)   quote        

WookieMan says
Listing agents to some extent have some value.


How so, what do they do to earn their commission?
19   WookieMan   ignore (0)   2018 Jan 10, 1:37pm   ↑ like (1)   ↓ dislike (0)   quote        

Sniper says
pre-qualifying mortgages

This is a lenders job, not a broker. It's a quick phone call or email to the buyer's lender to make sure they are pre-qualified so they're not wasting their time. Both buyer and listing broker (when receiving offers) should be doing this. This is 2 min. tops of time.

Sniper says
presenting offers,


Offers need to be presented on both sides. In a multiple offer situation the listing agent has substantially more work. The buyer agent just wrote one offer up. There are literally about 6-7 fields that actually matter on a real estate contract. Filling out an offer takes 5 min. If the buyer is an idiot then maybe 15 minutes to explain as a broker. Most the time the buyer broker is an idiot so it takes 30-45 minutes to complete an offer, stupid I know.

Sniper says
pass around contracts and some other stuff


Email, text, fax, etc. These all take less then 5 min. The listing broker has to pass it around to his client, attorney, etc. No difference.

Not mentioned, but the time to drive around a buyer and open doors for them. I don't care. They can write off gas and the $700/mo lease on their Mercedes as a business expense. So they get a nice car and can call opening doors a business expense.

The main point was that why should the seller be paying someone that is technically trying to screw them? If you look at any HUD closing statement, who pays the buyer's broker? I don't care if the buyer came with the money and that's what funded the deal. The seller signed a listing agreement that included another person getting paid that is technically supposed to screw them on price. The listing broker should be immediately sued for breach of fiduciary duty. Yet this will never happen.

Buyer's should be paying their broker out of their own pocket. That's all I'm getting at. If you think it's worth it, pay them for opening a door for you.

I'm not siding with listing brokers either. Two evils here and one is obviously worse if you ask me. Both are skimming money off while adding very little value to the transaction.
20   Booger   ignore (0)   2018 Jan 10, 1:45pm   ↑ like (2)   ↓ dislike (0)   quote        

WookieMan says
Both are skimming money off while adding very little value to the transaction.


Fixed:
Both are skimming money off while adding NO value to the transaction.
21   anonymous   ignore (null)   2018 Jan 10, 1:49pm   ↑ like (0)   ↓ dislike (0)   quote        

Chewy said: This is the problem. Why the fuck should you pay someone that is technically trying to screw you and get their client a cheap place?
In the words of FAB, pay'em 4% and they'll trip over each other bringing in buyers. They don't get paid unless the deal closes; they'll literally drag in their buyer with check book in hand screamin' "no contingencies in this market". The buyer's agent work for you (the seller).
22   APOCALYPSEFUCKisShostikovitch   ignore (27)   2018 Jan 10, 3:14pm   ↑ like (1)   ↓ dislike (0)   quote        

If you're not giving Realtors a haircut with a six-pound sledge, you're part of the problem.
23   WookieMan   ignore (0)   2018 Jan 10, 3:54pm   ↑ like (1)   ↓ dislike (0)   quote        

Booger says
Both are skimming money off while adding NO value to the transaction.

Generally agree with this. Most service businesses are this way though. They just try and get your business/money and that's it. The actual service is at the bottom of the list for them, so it's not real estate exclusive. Brokers just get a massive percentage (as a dollar amount) of one of the biggest purchases/sales you'll ever complete in your lifetime.

Out of the two evils, a listing agent has more value for any money you may pay them if you ask me. That's all I'm getting at. Not saying it's a necessary evil. Knowing what I now know, I'd never enlist the services of a buyer agent. I'll call the listing agent directly on my own and get into the property. Buyer agents are not needed and seller's should stop paying them today.

anon_3e01a says
The buyer's agent work for you (the seller).


Depends on the market. This is true in many. Whether they're in the same office or not, many brokers work together (without either client's interest in mind) to get a deal done. Like you said, no agent is getting paid if they cannot get the deal closed. BUT, if a buyer agent is truly doing their legal duty, their job is to have the seller net the least amount of money as possible. Which the seller is paying them to do essentially.

A listing broker should never sign a listing agreement that involves cooperating with another broker. It's the opposite of what they're legally required to do. Yet this is the industry. Pretty much every single listing broker, if you really interpret the law as written (at least in my state) and take away the lobby shield, is breaking their fiduciary duty every time they sign a listing agreement that cooperates with a buyers broker. It's like volunteering to pay the fees of both attorneys in a court case. Makes no sense.
24   APOCALYPSEFUCKisShostikovitch   ignore (27)   2018 Jan 10, 4:08pm   ↑ like (1)   ↓ dislike (0)   quote        

The listing agent's job is to 1) find a fugitive PRC Army officer with too much money to launder who will buy any overpriced piece of shit like your house for multiples over its real or even alleged worth or 2) arrange for some sleaze ball originator to write a note for a penniless speculator to buy your house for multiples over its real or even alleged worth. Otherwise, you can put an ad in the paper for a few bucks.
25   WookieMan   ignore (0)   2018 Jan 10, 4:11pm   ↑ like (1)   ↓ dislike (0)   quote        

APOCALYPSEFUCK_is_ADORABLE says
Otherwise, you can put an ad in the paper for a few bucks.

If you've got a listing agent putting ads in a newspaper, fire them now ;) I suppose options 1 or 2 are worth about 2%, right?
26   APOCALYPSEFUCKisShostikovitch   ignore (27)   2018 Jan 10, 4:44pm   ↑ like (2)   ↓ dislike (0)   quote        

WookieMan says
I suppose options 1 or 2 are worth about 2%, right?


They can get the buyer to pay it, sure.
27   Strategist   ignore (1)   2018 Jan 10, 6:36pm   ↑ like (0)   ↓ dislike (0)   quote        

WookieMan says
Booger says
Both are skimming money off while adding NO value to the transaction.

Generally agree with this. Most service businesses are this way though. They just try and get your business/money and that's it. The actual service is at the bottom of the list for them, so it's not real estate exclusive. Brokers just get a massive percentage (as a dollar amount) of one of the biggest purchases/sales you'll ever complete in your lifetime.

Out of the two evils, a listing agent has more value for any money you may pay them if you ask me. That's all I'm getting at. Not saying it's a necessary evil. Knowing what I now know, I'd never enlist the services of a buyer agent. I'll call the listing agent directly on my own and get into the property. Buyer agents are not needed and seller's should stop paying them today.


In a sellers market, it's best to go through the listing agent. They want to earn a double commission, and will do everything possible to make sure offers from a buyers agent don't go through, even if it means doing something illegal. All a buyer has to do is go on Zillow, Trulia, or Redfin to find out what's there. Drive by the properties that meet your parameters, and if you like something, call the listing agent.
I would like to see a system where both the seller and buyer deal with a flat rate sellers agent only. All the listings are on the internet for a buyer to see. The sellers agent would do all the paperwork, thereby earning his keep. If a buyer wants an agent to represent him, let him hire and pay the agent. The industry would go from agents spending all their time marketing, while doing very few transaction, to spending no time at marketing and doing lots of transactions. The agents expertise would change from bullshitting to knowing what is relevant in a real estate transaction.
28   Strategist   ignore (1)   2018 Jan 10, 6:41pm   ↑ like (0)   ↓ dislike (0)   quote        

Sniper says
WookieMan says
Listing agents to some extent have some value.


How so, what do they do to earn their commission?


All they do is put it on the MLS and wait for the phone to ring. Here are a couple of quotes I have heard over the years:
"When you put it on the MLS, it sells itself"
"I will never allow another agent to sell my listing"
29   WookieMan   ignore (0)   2018 Jan 10, 7:05pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says
Sniper says
WookieMan says
Listing agents to some extent have some value.


How so, what do they do to earn their commission?


All they do is put it on the MLS and wait for the phone to ring. Here are a couple of quotes I have heard over the years:
"When you put it on the MLS, it sells itself"
"I will never allow another agent to sell my listing"

No doubt these quotes are spot on.

As far as earning a commission? In essence, none of them actually "earn" a commission. So that's a bit of a loaded question.

I don't think I need to pull examples, but certain agents pull out their iphone and walk around taking blurry pictures and post that. Other listing agents hire a photographer to do a good job. If you were paying 2.5-3%, what type of photo would you prefer? The one hiring a photographer is at least attempting to earn their money.

Then there are listing agents that have the seller handle the showings and then the agent that takes care of everything and shows up to meet the other broker and buyer. What would you prefer?

I hate brokers. Think it's one of the worst models that's allowed to exist. But, if you have to live with it, the agent listing your home is a lot more valuable to you compared to when you are out buying a house and using a buyers agent. A buyers agent really does nothing except act as a chauffeur.
30   Strategist   ignore (1)   2018 Jan 10, 7:21pm   ↑ like (0)   ↓ dislike (0)   quote        

WookieMan says
A buyers agent really does nothing except act as a chauffeur.


ROFL
Well, they do tell you which room is the kitchen, and which room is the bathroom. How else would you know? That alone is worth $5,000.
Travel agents got destroyed by the internet.
Retailers are getting destroyed by the internet.
Land lines got destroyed by the internet.
In each of the cases the consumer was left better off. Real Estate with it's ridiculous commissions has been surprisingly resilient to change, though it's just a matter of time before they join the cemetery of the travel agents.
31   WookieMan   ignore (0)   2018 Jan 10, 7:28pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says
In each of the cases the consumer was left better off. Real Estate with it's ridiculous commissions has been surprisingly resilient to change, though it's just a matter of time before they join the cemetery of the travel agents.

When though?

I want it to happen sooner then later. I'm just not seeing it right now. The achilles heal of the real estate brokerage industry is the buyer agent. You eliminate that and it starts to crumble and quickly. Until that happens, brokers will be your best friend ;)
32   FortWayne   ignore (0)   2018 Jan 10, 7:30pm   ↑ like (0)   ↓ dislike (0)   quote        

Way overdue in my opinion. About time
33   Strategist   ignore (1)   2018 Jan 10, 7:44pm   ↑ like (1)   ↓ dislike (0)   quote        

WookieMan says
Strategist says
In each of the cases the consumer was left better off. Real Estate with it's ridiculous commissions has been surprisingly resilient to change, though it's just a matter of time before they join the cemetery of the travel agents.

When though?

I want it to happen sooner then later. I'm just not seeing it right now. The achilles heal of the real estate brokerage industry is the buyer agent. You eliminate that and it starts to crumble and quickly. Until that happens, brokers will be your best friend ;)


I think there are 2 other Achilles heels:
1. Control of the listings.
2. Agents shunning discount brokers.

Control of the listings by agents is over, as all the listings are available on the internet.
Agents shunning anyone who is not a full commissioned broker is still a major problem to overcome.

It's just a matter of time before the regular agents are obsolete. When it happens, it will happen suddenly.
Buying the shares of companies that can put them out of business must be a great investment.
34   WatermelonUniversity   ignore (1)   2018 Jan 10, 9:32pm   ↑ like (1)   ↓ dislike (0)   quote        

EASY. Give buyer 1.5% discount if they drop their agent.
35   Strategist   ignore (1)   2018 Jan 10, 9:37pm   ↑ like (0)   ↓ dislike (0)   quote        

BorderPatrol says
EASY. Give buyer 1.5% discount if they drop their agent.


I really like that idea. That would be one helluva disruption to our lousy system as it exists now.
36   junkmail   ignore (0)   2018 Jan 10, 10:25pm   ↑ like (0)   ↓ dislike (0)   quote        

Used these guys in the UK. They are ...ok, actually they are fine, as long as you are experienced. No complaints. Owner showed me the property, arranged by PB. Didn’t make the purchase because the owner was too honest. When have you heard that before?
37   Strategist   ignore (1)   2018 Jan 11, 9:06am   ↑ like (0)   ↓ dislike (0)   quote        

Ha ha ha Realtors fear Zillow and Redfin. They know what will kill their legal extortion racket.

https://www.ocregister.com/2018/01/10/realtors-plot-statewide-database-to-combat-zillow-redfin-and-other-apps/ Is the Realtor-run property listing service in California obsolete?

Several brokers, agents and “multiple listing service” operators expressed concern during a panel discussion Wednesday that commercial websites like Zillow, Redfin and Realtor.com have overtaken the patchwork of industry databases agents use to find homes for clients.




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