I suppose you believe in Free Shipping also.

For Buyers trying to get the best deal - in this market you're basically screwed but expect some correction either in the Fall or 2023. Rates have shot up drastically, inflation will catch up when the free government money runs out, so wait for that to happen in the next year or so. When negotiating always check the days on market - if something is sitting for say 30 days you know there are no offers so you can come in lower and try to haggle. In our state offers are made subject to inspection - you can always ask for a discount during inspection period and I would recommend it, even on as is offers. Shop around mortgage rates - ask one Lender what their rate is, call another to see if they'll beat it, etc. A home inspection is worth every penny - don't cheap out on that. Happy hunting.

6 months ago condos in my complex were going well above asking price with cash offers. I just looked today and i saw three that have been reduced since they were listed. Its already started here.

I still remember way back as a kid my dad was a realtor and he would get a big large book with all the listings. Folks would call him up and he would look through the book and drive them around . No internet either

Today customers go online look at 40 pictures and decide if they want to view.

As a Builder I still use a realtor but negotiate a flat fee.

I saw on Netflix that in Australia you choose between being a listing broker or buyers broker. Not Both

not sure i read every single reply in this thread,

but surprised i haven't seen any mention of realtors having a monopoly over the MLS......

that is probably the largest reason commissions are so high.........

not sure why there isn't more price competition amongst realtors who have access to MLS.... i wonder if the realtor community "keeps them in line" by boycotting their listings

https://www.google.com/search?q=real...hrome&ie=UTF-8

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How can you have a monopoly over commissions when every contract is a negotiated sum? There is price competition amongst Realtors - read the first post. If you offer a low commission Agents will do their best to avoid showing it, but plenty of them close on my MLS.

The reason 6% hasn't gone away is because the NAR used anticompetitive, collusive practices to prevent lower commission rates, including punishing members with the temerity to offer lower commission rates. That has changed somewhat recently but only after several FTC investigations, some of which are still ongoing.

Tittle insurance is even worse - it has the lowest payout of claims via premiums in the entire insurance industry. And I wouldn't overlook the hundreds of kickback schemes investigated every year, where mortgage brokers and title agents kick money back to real estate agents for referrals, even though the practice is illegal.

This appears to highlight how you continue to not understand. Shipping isn't "free" in that it costs someone. That said, you can find many products at brick in mortar retail for say $50 and online for $50. The online offers are "Free" shipping. They can do this because warehousing products is cheaper than running a retail outlet. Picking the product up at the warehouse isn't an option. So if you want to buy the $50 product your options are to go to the store and buy it or order it online with "free" shipping. Either way it's $50.

Yes you can tell yourself the buyer is paying for shipping but the reality is they just want the product. They will pay $50 for it. Who takes what cut and how is irrelevant to them. This also applies to real estate. Buyers will pay x for a property. How much is taken from x and divided among realtors etc is irrelevant to them. The seller is left with the remainder of the pie. The Seller pays their agent and the sellers agent pays the buyers agent. The buyer pays the same if the agents collect 1% or 10%. The seller is affected by the rates

Some markets even keep their own data to box out other realtors from other markets. For example Whistler which is one of the top resort destinations in the world

A few years ago I talked to a pilot who said you could train someone to safely complete a flight in an afternoon with all the modern tech. Of course they wouldn't be prepared if there were any curveballs. Of course the cost of a curveball is too high to take any risk. Similar principles apply to real estate. That said, with market data available, you could teach someone with aptitude to appraise property in an afternoon. Once you understand market value, you're 90% there in buying or selling a home with the magic of the internet at your fingertips

If there were no real estate commissions, prices would eventually go down. (This is of course hard to measure as real estate prices are not static over time.) When determining the price to ask for a house, the seller is not concerned with the gross, they care about the net. Imagine this scenario - There are only two choices for an agent to sell your house. Both will find an acceptable all-cash buyer for the price you set within two weeks. The first will price the house at $100k and charge 10% commission. The second will price the house at $95k and charge 1%. Which agent would you go with?

In addition to the effect on price, the elimination of oversized ad valorem commissions would significantly increase the mobility of homeowners and the velocity of sales. A 6% nut off the top is a significant deterrent to households contemplating discretionary sales, for example households wanting to trade up, those considering a career change involving relocations, people unhappy with a recent purchase, etc...

In my area basically nobody pays 6%. Agents splitting 4% are doing good. I'd put median rate around 3.5%. I'm talking residential.

Agents do a lot of leg work buyers and sellers are reluctant to do. Working with escrow, setting up open houses, pre qualifying buyers, explaining offers to the seller, dealing with lenders, standardized forms, contingencies, etc. Sure, in a perfect world where real estate is like a bag of potatoes, commissions should trend to zero. But there is a role for an agent, as most people are too busy to be bothered with the process. There are very few "cookie cutter" transactions and experience helps.

Similar to lawyers or CPAs, where they have experience with the process that the ordinary Joe does not, and has zero interest in learning.

lol nar doesn't punish anyone who offers lower commission rates. You're way off base on that one.

Read Chapter IV, A1, "Minimum-Service Requirements" (page 53) of the following FTC document:

https://www.ftc.gov/sites/default/fi...ce/v050015.pdf

The NAR spent millions in political donations to get specious minimum-service laws passed in states as an end-run around brokers trying to offer discounted commissions. Any broker who doesn't adhere to those "laws" can't broker their services and/or gain access to the MLS. I'm not sure what else to call it than punishing them.

NAR I'm sure advocates against discounted fee Brokers, but at least in my state (CT) they haven't had any impact. You can list on the MLS for 500 dollars, or use one of the many discounters - they're certainly not banned from the MLS. I don't mind discounters as it should be an open market to charge whatever you want, but the public prefers to pay more for a full service Broker based on market share.

lol 15-year-old report.


But what we can say is historically realtors have tried to protect their monopoly - just like many other groups and businesses such as unions and florists in Louisiana. Some more successful than others.


For real estate, where there once was a monopoly of information technology has changed that. I seem to remember that NAR tried to stop Redfin from advertising listing it pulled from MLS. It lost that fight since Redfin was a member of the local MLSs.



There are now plenty of options if you want to use a discount broker. In a hot market, you might be ok. In a less than hot market, you get what you pay for.

Is the current day recent enough for you?

"Several civil lawsuits challenging industry rules and practices around commissions have survived initial procedural challenges and drawn support from the Justice Department, putting added pressure on traditional broker fees.

The politically powerful real-estate industry has survived past challenges to its commission structure, but consumer advocates say rising home prices have exacerbated concerns about excessive fees.

“The litigation and the government attention that the industry is getting now is unprecedented,” said Stephen Brobeck, a senior fellow at the Consumer Federation of America and a longtime critic of the industry."

WSJ: Real-Estate Agents Gear Up for Fight to Save Their Commissions - Justice Department probe, civil lawsuits pose challenge to real-estate industry practices

The bottom line is commission is negotiable - I can ask for whatever I want and the owner can say no, there's nothing forcing them to pay 5-6%+. Lawsuits happen all the time - doubt this one will go anywhere.

Your takes are somehow getting worse. I'd attempt to unpack this but I suspect nobody is interested. It's like you had a notion and coming up with a defense of it is top priority vs entertaining the large flaws. If offering explanations results in more absurd rebuttals I think that's a good indication this isn't going anywhere.

Well, it's not only me that knows commissions are ultimately paid by the buyer.

LINKS:
Precisely who pays a real estate agent's commission is where things get a little tricky. Standard practice is that the seller pays the fee. However, the seller usually wraps the fee into the price of the home. So, the buyer ultimately ends up paying the fee, albeit indirectly.

“while sellers pay the fees, they usually wrap them into the price of the home.” In that sense, you could say the buyer pays the fees.

we should point out that the commission is often wrapped into the house price. In other words, sellers factor in the cost of commissions when they price homes, and the listing agent and the buyer's agent split the commission from the transaction, so technically the buyer is offering the payday to both agents.

It can be argued that the buyer always pays the commission. Why? Because it's typically part of the sales price.

The reason why seller pays commission is simple... the selling agent is incentivized to have the house sell for a higher price. If the buyer paid commission directly it would be a conflict of interest because the agent gets paid more for the customer paying more. So they do it in a roundabout way that ends up the same. If anyone truly believes commission isn't a cost for both sellers and buyers albeit indirectly they're delusional. If you think the buyer doesn't pay a price then you're basically saying even if commissions went up to absurd amounts like 50% the seller wouldn't pass that on to the buyer through a higher price of the property which is obviously untrue.

i don't understand why it works the way it does in the us - and specifically why the buyer needs an agent.

in australia it works like this:

1. seller appoints agent and enters into sales agreement which stipulates commission, commissions vary <2.5%.

2. seller's agent lists property online with photos and an estimated selling range (example https://www.realestate.com.au/proper...arra-138727351), costs of advertising are borne by seller.

3. buyers search the database and make a shortlist of homes to view. inspection times are listed on the website or for premium properties you can contact agent to arrange private inspection.

4. seller's agent shows buyers through the house and then there is typically a public auction or offers are made through the agent. <1% of people might use a buyers agent.

maybe this works because property prices are typically higher here, and everyone loves reisdential property - but just seems to me the us sytems is terribly convoluted for what is a pretty easy job - particulalry in hot markets.

the australian equivalent of zillow (https://www.google.com/finance/quote...MQ3ecFegQIGBAi) has a market cap of $17b and its traidng at 45P:E. high end properties are listed on it, and the agents do the same job.

seems to me zillow has failed but the opportunity is still there to drive down commissions.

what did u guys use before zillow/its equivalent? MLS has always been incredibly dumb. It's not incredibly open to the public and it is directed entirely towards agents so it's not practical for buyers to find listed homes that fit their criteria timely without an agent so up until recently it was not practical to act without a buying agent. Also selling agents are lazy and make buying agents show homes. If you don't have a buying agent they won't give you the code to the key usually.

not sure - we've always had good databases of homes for both sale and rent.

the market is hot, so the selling agent's job is basically to pitch the client, negotiate commission, arrange for photos, upload to website, open the house on the weekend and hold an auction / wait for offers.

https://www.realestate.com.au/. this is the home page on the website, you basically put in your areas and filters and budget and it spits out properties that match your criteria - including on a map if you want it, you can contact the agent directly through the app to ask questions or arrange an inspection.

it is incredibly easy to use and a good system - particularly in cities like melbourne and sydney with large populations and high property prices.

here is an article from an aus based value fund (the analyst was us-based):

https://foragerfunds.com/news/can-zi...ea-of-america/

it is 7 years old but seems to still be accurate.