If it were me buying I would want to talk directly with the seller's agent. They are bound by ethics rules to be fair, and your offer has a much better chance of being accepted.

i would also prefer to deal directly with the seller’s agent.

here a lot of residential properties are sold by public auction - which imo for most properties makes sense - it also maximises transparency and, in theory, minimises the work for the selling agent which should put downward pressure on commissions.

Yeh I agree - in a highly competitive market if your goal is just to win the bid, go directly to the Listing Agent as they're incentivized to double end the deal. They'll break the rules to get both sides - not ethically fair but they all do it. Just don't expect them to work for you - their loyalty is with the Seller.

Dual agency is legal in most states. In some states where it's illegal (like Florida), they have transactional brokers, where there is no fiduciary to the buyer or seller - only to the transaction.

A 1031-ish baseball card trading model would certainly fill the disruption role.

At the end of the day, I don't think people really care how much they receive/pay for a home or the commission rate for the transaction but rather what they end up with.

Yes, I think it's because the Seller only cares about net and selling your home is essentially an auction so it's critical to get not just as many eyeballs on it, but the right eyeballs.

True statement but as real estate marketing standardizes and centralizes so much, proprietary marketing efforts are a lot less common since everyone is looking in the same few places these days to find listings.

Example: I own (City)House.com and (City)Condo.com for a few cities. I occasionally lease them to realtors to use as marketing tools.
In the 00's and even 2010s, brokerages would lease them to use as platform marketing tools; they'd list their entire inventory of condos in (city) on (City)Condos.com, then use that URL in their digital and meatspace marketing campaigns. These days, the domains are leased on a month to month basis to be used as individual marketing tools for individual properties at the highest end (stuff deep into the 7 figures). Total shift in tactics; there's no point DIY'ing your own platform marketing, since Zillow and the MLS/Realtor.com have taken over that role, in addition to the realtor's own proprietary brand sites (Remax, whatever)

Zillow absolutely has potential to fill this role, if the broader transaction and closing ecosystem can evolve to match it. Companies like Doma are making a run at instant title processing (I've averaged my own long position down to have a cost basis around $2.2X), they're branching into home inspections.

If Zillow can get boots on the ground to handle showings, and partner with someone like Doma to handle closings and inspections, its possible to obsolete a lot of what realtors do and start charging lower commissions. The hurdle will be regulation ecosystem being rooted in the 1900s and the tons of people, including lawyers and legislators, who benefit from it protecting their turf because something-something "if you don't use us, everything will go wrong, we're here to protect you", etc, etc

ZG seriously mismanaged their homebuying efforts, but it was a peek behind the curtain of the direction they'd like to head; using proprietary data to identify rapidly rising RE markets, then take a position... then sell themselves for a higher price, capturing both commission and upside on the house itself.

How's it working out for you, bro?!!!!!!

After seeing how Zillow managed to lose boatloads of $ in a decent market, I have little faith they can get out of their own way in sideways/down market.

If I were them I would stay out of resale and go straight to ground up development. There are tons of underperforming properties ripe for new residential development all around the major US metros. Zoning trends has finally gone big toward high density, which are huge cash cows if you get the properties on the cheap.

They got the proverbial hammer searching for nails, when there are far better opportunities available.

I imagine that realtors are similar to job recruiters. Both are middle men jobs that shouldn't need to exist, but they do. People would be better off without them from a macro point of view. For the individual it may be necessary to use them since everyone else is.

All it takes to sell a house is a sign in the yard, good pictures, and for it to be posted on the MLS for everyone to see at a reasonable price. MLS is the marketing, not the realtor. There is some paperwork and calling around that the realtor has to do to make sure things are going smoothly, but this is the easy part. Most all of the work is spent trying to get listings, which is kind of sad since this type of work doesn't really add value to the world in any way. Communication isn't always best with realtors as middle men. I remember when a buyer had not accepted the counter-offer quick enough to beat the deadline, but it turned out the realtor had forgotten to send it over even though the buyer had filled it out the day before. Things seem to be overcomplicated sometimes when they could be simpler, but this rings true through various fields of work. If there weren't so many realtors saturating the market I believe commission prices would be lower, at least for residential real estate.

As a former realtor, I always hated those "feel-good self-help" seminars that the brokerage would try to sell you. I never went to them, because I never saw the point in spending $600+ to get a pep talk for a few hours.

We just bought a house remotely. We've been looking at houses on various sites for a year and had a very good idea what we wanted. We missed out on a few because we didn't take action and didn't know how we were going to go about it, given that we were a 5 hour plane ride away.

Finally we saw a place we really liked. We didn't want to miss it. So we called up a realtor in the area, and said hey, we really like this house. Can you go to it and do a video tour for us. They did it. 30-min FaceTime of them walking around and telling us various details. We put in an offer, and got the house.

Our realtor did max 5 hours of work and got 5 figures. I don't care too much, because really it's the seller that pays this, but I'd like to think there'd be a model where we could say to the selling realtor, hey we don't have a realtor so are interested in the house but will offer 5 figures less.

It's such a sham business and they do very little given the availability of information on the internet now.

Congrats on getting the house, housenuts.


There are startups in the USA that have tried to cut out the realtor completely, but it never takes off.

If you knew better you would of gone straight to the listing broker to potentially save money. I think most use Realtors as they're not familiar with the selling process - ie an older couple maybe in their 60s looking to downsize and never sold a home. Realtors are needed though to negotiate and get the deal from contract to close - do you think sports agents are worthless too? They get a couple % of these multi million dollar contracts and all they do is negotiate terms - the fact of the matter is they're needed as well. If Agents didn't exist the amount of real estate transactions would decline dramatically - sellers and buyers are both greedy and would never be able to come to agreement on terms. You need a third party with no emotion to sort things out - attorneys are not good at negotiating either. The fact of the matter is if Agents were of little value their commission would be half or less of what it is currently - there's clearly a need in the marketplace.

You could have easily negotiated a portion (like half) of your realtors commission in this situation. A simple agreement in writing would take them a few minutes. If they have an issue, call someone else. There's always someone hungry to do a deal and this is one on a silver platter

90% of being an agent is sales. Not selling property, but selling yourself and services. Not every fish you hook gets reeled in but if you can hook em consistently you're golden.

Realtors do provide a ton of value in that the size of the transaction is enormous and they know how to correctly navigate the situation. Mistakes are painfully expensive. That said, the whole thing is still terribly inefficient. Like we would be much better off with 1/4th the number of realtors, and of the remaining group you have competent and highly qualified agents. They spend little time trying to sell their services (instead of 90%) and instead use their time acting as an agent. Give them some assistants to grease the wheels. Less agents, higher volume, lower commission, and we all win. Not sure how that happens.

What's amazing is the 3% commission on new houses they get from most of the homebuilders, when people were lined up on the lots for the past 21 months.

3% on a 750k new home that dozens are trying to buy. Talk about zero work.

Now traffic is slowing, of course.

I've talked to a lot of realtors in the last few months, in multiple states, and every single one of them has acted as though the contract they typically use is dictated by law or set in stone. I would propose: if I find a buyer, or a buyer without a realtor walks in off the street, I will only pay you the seller's commission/fee, not the buyer's commission. It would be fine for them to say, "no way, dual agency on those walk-ins is how I make my gravy, I'm not willing to do that!" But not a single one of them said that. Every one of them said something like: it doesn't work that way, that isn't possible, I have to represent them if they don't have a realtor of their own or if you prefer I could just turn them away, your choice; I would love to do that but it just isn't possible, etc.

On the buying side, I have had _multiple_ lenders, AFTER I'm prequalified, tell me that they are very good friends with the selling realtor, and go back a very long way with her, and their word in her ear could put me over the top and get me the deal in this competitive seller's market ... but if I don't use them, they will have to call her and withdraw the pre-qualification and let her know that things didn't work out with me because I want to use some fly-by-night online thing or whatever. (So telling them that I am going to go with someone else who is in business 10+ years, reputable, 5-star reviews online, etc., and will charge me 1.2% less than them, suddenly means I am not pre-qualified? Is that even legal?!)

It was transparently a case of, "it would be a real shame if someone were to come by and break your windows. But if you pay me, I can make sure it doesn't happen." And these were from lenders that my realtor recommended. Hell, my own realtor practically said the same thing - she clearly believed it, even though in the end I told them all to get ****ed and used my own lender and the deal went through fine.

Particularly in a market where houses are going on the market, getting 5 bids within 48 hours, and going under contract in under a week, there is no reason why a $1,000,000 house should pay out to the realtor twice as much as a $500,000 house.

The people I have dealt with in buying and selling houses, realtors, lenders, inspectors, appraisers, have convinced me that they are not outright crooks who know themselves to be criminals, they are just happily playing along with a rigged system where their interests do not align with their client's interests, but they think of themselves as good guys. They are just wrong. And quite frankly, a lot of them are stupid.

I think realtors sometimes get a bad wrap, but overall I think most of them are decent people. Sometimes they can be incompetent, but also the training you receive doesn't cover very much. You have to research things on your own or ask other realtors to get information. The brokerage just wants to get as many people paying for the monthly fees as possible. Quantity over quality. There are a lot of practices that have become normalized that do not leave a good impression. I really hate the FSBO script that is like "Hey I may have a buyer for your property let me come over and take a look" or something like that. Then the agent gets there and tries to list them. I always preferred an upfront approach, but then again I didn't get a lot of deals either.

@mrmr: Your situation with the lenders sounds pretty messed up. That doesn't sound like it is legal, but I don't know enough to be sure.

I'm im the process of putting my place up for sale. Since i will also be buying through my guy, hes charging 1% on the sale and will negotiate 2 1/2 for the buyers agent.

And, by the way. Tech has really changed. Redfin sends notifications for any property change (sold, pending, new listing) in the area I've specified. Pretty cool.

Yeh there's a lot of dishonest/crooked people in this industry but that's what happens when you have a cutthroat commission based business model. On the flip side I've met a lot of low life buyers/sellers that use you for info and drop you without any notice, or just lie about their intentions.

Edit - also in regards to your first paragraph about finding a Buyer. I would personally work out a deal but it's also double the work, double the legal ramifications in a worst case scenario. Most of the pain in the butt work comes after signed contracts - negotiating inspections, appraisals, dealing with attorneys, title companies,insurance,etc. Usually though Sellers who propose doing their own marketing or if they find a Buyer want to cut commission in half are a pain in the ass the rest of the transaction so I'll just avoid those. Also in regards to 500k vs 1m commissions - higher end homes are tougher to sell and the listings are much tougher to get. Generally people with more money are smarter and have higher expectations - also there's less Buyers as you go up in price. 1m may take longer to sell in certain marketplaces, Sellers expect more bells and whistles on advertising, inspections are usually tougher, the Buyers are more specific, etc.

That is a good point. But as far as your clients using you... I mean in any other industry, that would be like complaining, "the guy took a bid from me.. and then took a bid from another company, and went with them!" Or, "the guy looked around the store at all the stereos, asked me for my recommendations, and then walked out of the store without buying one!" This does not actually make them a low life in my view!

For the amount of time they put in, and the amount of education/training required of them, realtors are extremely well paid. Having difficult clients or having to do more work because the other side is unrepresented, etc., just doesn't move me when you are getting paid exorbitantly and in my opinion the title company's work is more important and difficult than the realtor's.

And while there is a time and a place where this is not true, in the markets I have been buying and selling, houses are just flying off the shelf; 500k or 1000k, the buyers are lining up and throwing money.

I've had title companies screw things up and the realtor was the one that caught the error and made sure it was fixed correctly.

On average? I don't think so.

It's the same with business in general: once we factor in the failures, it's not quite as rosy or exploitive as our survivorship bias or those peddling it wants us to believe.

I meant towards clients who use you with no regard for your time - a Buyer who I've shown 20 homes to and decides to write up an offer one day with another Agent, a Seller who I've communicated with for years and spent time with lists with another Agent. Yes there's no contract with these people and they're free to do what they want, but I think there's a reasonable understanding if I'm constantly showing you homes or meeting with you multiple times to sell you would use me. If we meet once and you use someone else no biggie, but there's no care for my time with some people.

I think the answer to this problem is to have the buyers sign an agreement to use you right off the bat and get them preapproved before looking at houses.. You'll lose a lot of potential buyers, but you'll weed out a lot of the people just looking at houses for fun and just waste your time. The money is in listings, the buyers are just a bonus.

A lot of agents tell buyers that they are working for them for free (which technically isn't true). I think this is bad, because people end up valuing your time less. Seems counterintuitive, but I believe it.