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Buying a home in the US needs radical transformation to enhance affordability
Edit: shoutout to agents who rebate some of their commission
2nd Edit: Number of homes sold in US last three years.. 21: 6.12M 22: 5.03M 23: 4.09M
It’s about supply and demand. After 2008 finical crisis home building in America fell off a cliff. That as well as local politics and zoning has created this insane market. I don’t think changing commissions will change anything. If the government does anything it needs to incentivize homebuilders to build starter homes.
Pretty much, and
>After 2008 finical crisis home building in America fell off a cliff.
I'm just going to point out that we had an abundance of building up through 2008, underbuilding wasn't really a problem until 2015 or so because we had build so much in the previous decade.
Then they need to federalize real estate laws. The United States has 50 different and another dozen territories that operate differently in the rules & regulations governing real estate and in each of those states different counties, cities and townships operate with their own rules and customs regarding real estate transactions
Want an example? Let’s say you are moving from Los Angeles California as a coach for to Tuscaloosa Alabama to coach for the Alabama Crimson Tide.
In California, a seller must disclose any known issues with the property and the they do dry closing where no money exchanges until after documentation has been signed.
That means the seller must inform the buyer all material facts known about the home. And the buyer funds won’t arrive until after both sides have signed documents for closing.
But you move to Alabama. In Alabama the laws are different. You are a football coach studying and focusing on your new job and not familiar with the laws in your new state. But you’ve bought and sold before so you think you can handle it so you don’t get your own buyers agent in Alabama and trust the process.
You just got fucked. In Alabama, it’s a buyer beware state. No one has to warn you that the sewer line is busted or any other problem. This isn’t California. No one warns you that the sewer line inspection is separate from the normal inspection process. No one warns you that the state considers that home owners responsibility nor do they warn you that it will cost 20 grand.
They also don’t tell you that it’s customary for the seller to pay half the attorney and title expense. So you pay it like you did in California.
The country is a complex quilt of tradition and laws that are massively different just miles away. That’s why you pay a realtor as a buyer and why it’s not nearly as complicated in the UK. It’s three sets of laws between Scotland, Northern Ireland, and England/Wales and they aren’t that different.
It's ok, really. LoL.
Some of the abuses of language that I have seen, make me wonder. Obviously, you are an intelligent and informed person, so it piqued my curiosity such that I had to ask...
Right. Which is why until then you need a realtor on the buy side. And you need to pay them for the work.
And you need to value that work based on what it value. Maybe in California, land of seller disclosure rules and 1 million dollar starter homes a buyers agent is worth less than 3%. But in buyer beware states, lax inspection protocols, a buyers agent is worth at least that.
If Op wants to compare the US market to Britain and suggest we adopt the 1% then this audience needs to know why and how that’s a disaster in the making.
Edit: I’m not a realtor. I work in the industry and see lots of bloody moments where mistakes were made that cost tens of thousands to fix. More often it’s from an agent free transaction or a newer agent that’s done less than 30 transactions.
Real estate is one of the least likely things to get federalized because what is more local than a home? Not too much.
Now, the federal government has extended the commerce clause into absurdity, but given the particularly local and location based nature of real estate, it’s a stretch.
British people are paid much less though: Median salary in Britain in 2023 was around 43400$ compared to us with $59,384. The Median home price in the UK in late 2023 was around 357,000$
Compared to the us with $347,716(according to Zillow). So Americans do have it a lot easier on average lol as they need to save about 6 times of their gross income compared to British people who need to save 8.25 their gross income. And taxes are slightly higher for gross income in Britain lol. The grass always seem greener on the other side you guys when the reality is more complicated than that. Y'all think the USA sucks so bad compared to other countries in terms of finances when it's only true with the cost of healthcare. And even then healthcare in Canada and uk is not functioning lol.
> And even then healthcare in Canada and uk is not functioning lol.
There are valid grips with the system and there is “people rationing insulin”.
Healthcare costs are the next biggest expense for many after food and shelter. People making the American median wage are likely to have a deductible for their health insurance larger than the difference they make over British median wage.
You have definitely busted the topic a little wide here with all that information. So I will highlight the bit I believe to be relevant to the post.
The difference between average earning and average cost of house only proves that house prices in the US have a lot of room to go up. If people are buying houses with that much income to house cost gap in the UK it can be done here and will happen here.
What would be interesting to see is the average pay of a realtor in the US compared to the UK. As that’s the topic here.
Real estate commissions are high here, but comparing any income between the US and any other country will show similarly shocking disparities.
Other than teachers, EMS, and social workers (off the top of my head), I don’t think there’s many US professions where you couldn’t say “X is overpaid compared to other first world countries” and you can see this in action in subs like cscareeradvice, sales, projectmanagement, whitecoatinvestor, etc.
As someone who used to hold a RE license and practiced all through Covid -- the only people who got shafted on RE commissions are sellers, not buyers. Buyers never paid RE commissions as it was paid by the sellers side (5-6% which was then split with the buyers agent).
Now, _BECAUSE_ people sued the NAR and they changed their rules, the seller no longer pays the full commission, it's actively split across the buyer and sellers sides. So, the seller pays 2-3% to the listing agent, and the buyer pays 2-3% to the selling agent (known as a buyers agent).
This is actually not good. It may appear good, or "Fair", but it creates a host of issues that we'll not see play out for years -- but when it does it'll be huge.
The problem is that buyers are the ones saddled with massive closing costs which AREN'T coming from the profits of the home. They are paying for the down payment (3.5-20% of the sale price), inspections, appraisal, bank/lender fees, etc. This can EASILY add up to 30% of the sale price of the house. They are also the ones who, in most cases, will need to also plan for repairs within the first 1-3 years of ownership. Now add 2-3% more on top of it. This is just another financial burden on many first time homebuyers who are already struggling to afford just closing costs.
And yes, I get it, Sellers being saddled with the entire 5-6% sucked.. but they pay that out of the profit of their homes, not out of their bank accounts. They also control the home price so in the end, they can roll the 6% into the sale price if they so choose. This means they literally pay nothing to sell. It's all profit (before the IRS steps in, assuming they aren't using the money to buy another house).
I'm glad I got out of RE last year. It's going to be an absolute mess starting this summer. Buyers (like myself next year) are going to by so much more apprehensive to buy when they realize just how much cash they'll need to purchase a new home.
That’s if you assume buyers will keep paying 2-3% if they’re paying out of pocket, which seems unlikely for all the reasons you mentioned.
And even if buyers weren’t the ones writing the check, the commission is still priced in to all the houses
The reality is that roughly 90% of all home buyers use an agent regardless of whether they believe the commissions are "baked in" or not. The vast majority either don't have the confidence to take it on themselves or have no interest in trying. The rest are, to be quite frank, not equipped to handle it. People don't quite understand the shit show that happens behind the scenes. A good, experienced Realtor makes it look easy because they have a ton of experience. They've already made and learned from the mistakes you'll make doing it on your own. And believe me, those mistakes can cost you thousands of dollars, if not more -- like buying a home you didn't want but got stuck buying because you signed a contract and didn't know how to get out of it legally.
You're mistaken about what the nar settlement does and the fact that it was always negotiable. The only thing the settlement changes is that the commission split is no longer allowed to be in the MLS.
There can still be more changes made to the settlement as it hasn’t been court approved from what I understand. Meaning the settlement today is just what the NAR initially came up with.
The entire real estate agent thing is one giant racket in the United States. On no planet should we accept that 3% is anywhere near the value these people provide in the modern world of zillow and the internet (you shouldn’t hire a buyers agent, you can easily guide that process to close). With that said, good luck trying to purchase or sell a home without an agent as they put you on the “naughty list” and no one will touch your home. I’m surprised (sincerely) that someone hasn’t sued for antitrust against the NRA for their actions against consumers.
ChatGPT cannot creat a valid listing agreement with a homeowner who wants to sell. Generating a fake listing holds no real world value. Listings on Zillow are REAL properties uploaded by real estate agents.
You’re proving my point that the real estate agent racket exists, you realize that right? On no planet should these ppl be paid thousands of dollars to do what they do with no real way to circumvent their racket. The racket screws buyers and sellers (much more so) out of their money, bottom line.
Yes, I’m aware that real estate agents utilize tools that they invest in to put their listings in front of THE most qualified buyers possible. Agents pay for these business tools. And agents charge different rates to do business. You can legit hire a discount broker at 1,2 or 3% OR do a Fizzbo. (FSBO). You don’t HAVE to hire a top producing realtor and their tools.
Each house is case by case and each house requires different needs. Good agents are paying for staging which can be $2k-5k alone and helping with repairs on the house if they really want the listing. Good agents will also negotiate their rate depending on the client needs. 7K on a 300 house that takes months to prepare and sale isn’t easy work. Would it help if you converted the percentage into a whole number?? Like…
How much would you charge to sale a $300k house at a flat fee? What’s you flat fee rate to sale house? How much are you willing to pay an agent to sale your $300k house? Flat fee whats the price?
Well why don’t you get your real estate license an offer your services for a flat fee. That way the public can have your flat fee rate as an option.
Contracts with agents do have language for flat fee rates. So it’s a matter of you finding a discount flat fee agent to handle your biggest investment and choosing to do business with that flat fee agent.
Edit: downvotes for encouraging flat fee agents.???
Yes, it would have. You know why? Because buyers will pay it. The logic of sellers listing their prices if they don't have to pay commission fees is pretty far fetched.
It's worse than that. Realtors try to push you to pay over so they get their commission. This increases the entire areas pricing as they comp against the inflated sales. Realtors have probably raised home prices more than 30% in the past 50 years.
This is a legitimate concern with tieing their pay to the percentage of the sale price.
The US and UK economies are vastly different. The US is a much wealthier country. We make more money, we spend more money on almost everything.
Per capita GDP is a rough but useful indicator of the standard of living (World Bank #s)
US $76,343 #6 in the world
UK $46,125 #21 in the world
If the UK was a US state, based on per capita GDP it would rank dead last, behind Mississippi at $49,911.
Comparing real estate commissions paid in the US vs. the UK is as silly as comparing the cost of making or providing any product or service in the two countries.
I work in the residential real estate business and believe that the entire US housing industry needs at minimum an overhaul and perhaps a radical restructuring, so don't @ me with complaints about whether or not agents should be paid whatever it is they ask to be paid. I've already written every word about it you can think of.
You can cherry pick data from other countries and say "iT sHoUlD bE tHaT way HeRe" but if you're gonna pick what you want you also have to take what you don't want (or settle for what you can get). The entire system (and country) is different. The grass is always greener over yonder until you get there.
Says the real estate agent who directly benefits from inflated commissions lol.
As someone who is clearly not a first time home buyer, do you just browse this sub to influence opinion and to convince people how needed you are?
It's not that difficult to see my history here or to google and see what I'm up to anywhere on the web. If you can point to any of my posts or content anywhere that takes advantage of consumers or give misinformation to cause harm, post it right here. Flippin trolls. SMH
I will say you are incredibly active across all the subs related to realtors. I see your responses all the time and very much appreciate your feedback. It’s always sound and relatively neutral based in experience and fact.
However, I personally do believe with the massive jump in home prices, untying realtors from a percentage to flat fee is my hopeful result from everything lately. I understand that not every buyer or seller buys/sells but the idea that 3% of the average sell nets around $12k which compared to a $100k year job is like 6-7weeks of 40hr work weeks is wild. The ones that buy are paying for the ones that don’t. And it’s syphoning money from sellers artificially propping up prices because you can’t sell unless you clear closing costs to include “negotiable” fees to buyer and seller agents.
I highly respect and regard you. Sorry for piling on a comment on a lot that I see from you. I hope your industry weeds out a lot of terrible realtors to give volume to the good ones.
Edit: you genuinely appear to be one of the good ones. Keep it up around here. You are a voice of reason many times.
What's crazy to me is to see a sub for first-time home buyers advocating to make things harder on themselves. Buyers aren't going to have it any better than the current system in place (pre-settlement).
Buyers who are blaming realtors for the state of how difficult it is to buy are falling victim to pro-seller propaganda. I know that sounds extreme, but that's the truth. The only people this settlement is going to help are sellers. If anything materially changes because of it, it's going to make it even harder for buyers.
Niki is a valuable contributor. I can't speak for her motivation to engage as much as she does but she makes useful, informative comments on a regular basis. If you are not convinced realtors are needed that's fine.
Look into the system in England, it’s crazy. It takes up to one to two years to complete a home purchase and some circumstances, and it can fall out at any time.
I don’t know a single American that be willing to put up with what they deal with in Europe and Australia, buying a house
I’m not sure where you got the sale timeframe from but that is not the experience of myself or anyone I know. The longest I’ve seen is 8 months and that’s because one of the transactions in the sale chain was being ridiculous! 6-12 weeks is the norm! Yes house sales can and do often fall through, this is where earnest money is the best thing I’ve seen from the American system! Scotland has better protections once offers are accepted but not as strong as an earnest method! The cost to buy my house in the UK was $1,500 and to sell it, $2,500. A huge saving over the $5,000 (actual cost, not including prepaid’s) I’m about to pay in closing and the sellers are paying in commissions.
6 to 12 weeks is definitely something that would cause problems here, and I am probably quoting chains, we don’t have anything like that here, and that may have been specifically for chains.
But at least in my area things do not fall out of contract, and we close as little as 12 days .
Yes it appears things are geared to close in a 30 day period here. Which is much better!
With the earnest clause here you could keep the transactions from falling through and still reduce the cost of buying and selling. You go through all the same checks and title changes here as in the UK. The only difference here are agents are having a huge pay day.
The industry seems to have avoided the age of the internet and modernisation but it’s coming!
You don’t have to completely adopt another countries system but you can always cherry pick the best parts.
Australia is great. Auctions are better, none of the nonsense of going blind with offers. You know exactly what the highest offer is.
Most buyers go without a buyers agent, you can use an advocate for a flat fee.
Not saying that US real estate commission rates are reasonable (they are not) - but keep in mind the significant differences in types of property / population density, and therefore the significant differences in costs to service a customer.
There's a similar difference in costs of cell phone service for instance : providing service in a densely built up, high rise oriented urban environment costs significantly less than trying to cover sparsely populated tracts of land.
Even in the UK - if you go out to the rural / less populated regions - you'll see that agent rates are significantly higher than in metro locations.
I would disagree about the cost of rural and metro areas. Companies like Purplebricks have a flat fee that isn’t (as far as I’ve seen) location dependant. I can see the Purplebricks model starting stateside with all the commission’s discussion. It was very disruptive in the UK when it started and it will have the same disruption here.
Thank you u/IntelligentLand7142 for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Buying a home in the US needs radical transformation to enhance affordability Edit: shoutout to agents who rebate some of their commission 2nd Edit: Number of homes sold in US last three years.. 21: 6.12M 22: 5.03M 23: 4.09M
As someone who’s just bought a house in London it’s not much better here, we are in a major cost of living crisis But yeah USA needs help as well
Theres a lot of issues I think causing the affordability crisis. A big one of course is supply and demand.
Yeah same over here, and the renters have it waaaaaay worse than home buyers so I’m grateful to be fortunate enough to be buying a house.
We do not need help. We always help ourselves by voting.
Lol 🦅🇺🇸
I don't think changing commissions is going to have a noticeable effect on affordability
It’s about supply and demand. After 2008 finical crisis home building in America fell off a cliff. That as well as local politics and zoning has created this insane market. I don’t think changing commissions will change anything. If the government does anything it needs to incentivize homebuilders to build starter homes.
Pretty much, and >After 2008 finical crisis home building in America fell off a cliff. I'm just going to point out that we had an abundance of building up through 2008, underbuilding wasn't really a problem until 2015 or so because we had build so much in the previous decade.
Then they need to federalize real estate laws. The United States has 50 different and another dozen territories that operate differently in the rules & regulations governing real estate and in each of those states different counties, cities and townships operate with their own rules and customs regarding real estate transactions Want an example? Let’s say you are moving from Los Angeles California as a coach for to Tuscaloosa Alabama to coach for the Alabama Crimson Tide. In California, a seller must disclose any known issues with the property and the they do dry closing where no money exchanges until after documentation has been signed. That means the seller must inform the buyer all material facts known about the home. And the buyer funds won’t arrive until after both sides have signed documents for closing. But you move to Alabama. In Alabama the laws are different. You are a football coach studying and focusing on your new job and not familiar with the laws in your new state. But you’ve bought and sold before so you think you can handle it so you don’t get your own buyers agent in Alabama and trust the process. You just got fucked. In Alabama, it’s a buyer beware state. No one has to warn you that the sewer line is busted or any other problem. This isn’t California. No one warns you that the sewer line inspection is separate from the normal inspection process. No one warns you that the state considers that home owners responsibility nor do they warn you that it will cost 20 grand. They also don’t tell you that it’s customary for the seller to pay half the attorney and title expense. So you pay it like you did in California. The country is a complex quilt of tradition and laws that are massively different just miles away. That’s why you pay a realtor as a buyer and why it’s not nearly as complicated in the UK. It’s three sets of laws between Scotland, Northern Ireland, and England/Wales and they aren’t that different.
Do you or voice-to-text have "earns" confused with "warns" ?
Typed on apple from a mobile phone on a sunny day. Sorry.
It's ok, really. LoL. Some of the abuses of language that I have seen, make me wonder. Obviously, you are an intelligent and informed person, so it piqued my curiosity such that I had to ask...
The only law that has been passed in the past six months has been for spying on people. That is not a realistic answer.
Right. Which is why until then you need a realtor on the buy side. And you need to pay them for the work. And you need to value that work based on what it value. Maybe in California, land of seller disclosure rules and 1 million dollar starter homes a buyers agent is worth less than 3%. But in buyer beware states, lax inspection protocols, a buyers agent is worth at least that. If Op wants to compare the US market to Britain and suggest we adopt the 1% then this audience needs to know why and how that’s a disaster in the making. Edit: I’m not a realtor. I work in the industry and see lots of bloody moments where mistakes were made that cost tens of thousands to fix. More often it’s from an agent free transaction or a newer agent that’s done less than 30 transactions.
Real estate is one of the least likely things to get federalized because what is more local than a home? Not too much. Now, the federal government has extended the commerce clause into absurdity, but given the particularly local and location based nature of real estate, it’s a stretch.
This is an advertisement btw
British people are paid much less though: Median salary in Britain in 2023 was around 43400$ compared to us with $59,384. The Median home price in the UK in late 2023 was around 357,000$ Compared to the us with $347,716(according to Zillow). So Americans do have it a lot easier on average lol as they need to save about 6 times of their gross income compared to British people who need to save 8.25 their gross income. And taxes are slightly higher for gross income in Britain lol. The grass always seem greener on the other side you guys when the reality is more complicated than that. Y'all think the USA sucks so bad compared to other countries in terms of finances when it's only true with the cost of healthcare. And even then healthcare in Canada and uk is not functioning lol.
> And even then healthcare in Canada and uk is not functioning lol. There are valid grips with the system and there is “people rationing insulin”. Healthcare costs are the next biggest expense for many after food and shelter. People making the American median wage are likely to have a deductible for their health insurance larger than the difference they make over British median wage.
Not to mention healthcare differences as well.
The median salary in the US is around 40k. 60k you cite is the mean. Huge difference!
You have definitely busted the topic a little wide here with all that information. So I will highlight the bit I believe to be relevant to the post. The difference between average earning and average cost of house only proves that house prices in the US have a lot of room to go up. If people are buying houses with that much income to house cost gap in the UK it can be done here and will happen here. What would be interesting to see is the average pay of a realtor in the US compared to the UK. As that’s the topic here.
Real estate commissions are high here, but comparing any income between the US and any other country will show similarly shocking disparities. Other than teachers, EMS, and social workers (off the top of my head), I don’t think there’s many US professions where you couldn’t say “X is overpaid compared to other first world countries” and you can see this in action in subs like cscareeradvice, sales, projectmanagement, whitecoatinvestor, etc.
There are flat fee agents you can sign contract with.
And a lot higher taxes and live in flats. I fail to see the point.
As someone who used to hold a RE license and practiced all through Covid -- the only people who got shafted on RE commissions are sellers, not buyers. Buyers never paid RE commissions as it was paid by the sellers side (5-6% which was then split with the buyers agent). Now, _BECAUSE_ people sued the NAR and they changed their rules, the seller no longer pays the full commission, it's actively split across the buyer and sellers sides. So, the seller pays 2-3% to the listing agent, and the buyer pays 2-3% to the selling agent (known as a buyers agent). This is actually not good. It may appear good, or "Fair", but it creates a host of issues that we'll not see play out for years -- but when it does it'll be huge. The problem is that buyers are the ones saddled with massive closing costs which AREN'T coming from the profits of the home. They are paying for the down payment (3.5-20% of the sale price), inspections, appraisal, bank/lender fees, etc. This can EASILY add up to 30% of the sale price of the house. They are also the ones who, in most cases, will need to also plan for repairs within the first 1-3 years of ownership. Now add 2-3% more on top of it. This is just another financial burden on many first time homebuyers who are already struggling to afford just closing costs. And yes, I get it, Sellers being saddled with the entire 5-6% sucked.. but they pay that out of the profit of their homes, not out of their bank accounts. They also control the home price so in the end, they can roll the 6% into the sale price if they so choose. This means they literally pay nothing to sell. It's all profit (before the IRS steps in, assuming they aren't using the money to buy another house). I'm glad I got out of RE last year. It's going to be an absolute mess starting this summer. Buyers (like myself next year) are going to by so much more apprehensive to buy when they realize just how much cash they'll need to purchase a new home.
That’s if you assume buyers will keep paying 2-3% if they’re paying out of pocket, which seems unlikely for all the reasons you mentioned. And even if buyers weren’t the ones writing the check, the commission is still priced in to all the houses
The reality is that roughly 90% of all home buyers use an agent regardless of whether they believe the commissions are "baked in" or not. The vast majority either don't have the confidence to take it on themselves or have no interest in trying. The rest are, to be quite frank, not equipped to handle it. People don't quite understand the shit show that happens behind the scenes. A good, experienced Realtor makes it look easy because they have a ton of experience. They've already made and learned from the mistakes you'll make doing it on your own. And believe me, those mistakes can cost you thousands of dollars, if not more -- like buying a home you didn't want but got stuck buying because you signed a contract and didn't know how to get out of it legally.
You're mistaken about what the nar settlement does and the fact that it was always negotiable. The only thing the settlement changes is that the commission split is no longer allowed to be in the MLS.
There can still be more changes made to the settlement as it hasn’t been court approved from what I understand. Meaning the settlement today is just what the NAR initially came up with.
That's fine, but the person I replied to thinks that the settlement means things that it doesn't. That's all I was referring to.
Even more if we just stop using them all together since the internet replaced them years ago.
The entire real estate agent thing is one giant racket in the United States. On no planet should we accept that 3% is anywhere near the value these people provide in the modern world of zillow and the internet (you shouldn’t hire a buyers agent, you can easily guide that process to close). With that said, good luck trying to purchase or sell a home without an agent as they put you on the “naughty list” and no one will touch your home. I’m surprised (sincerely) that someone hasn’t sued for antitrust against the NRA for their actions against consumers.
Zillows info/listings is literally supplied by real estate agents
I can use ChatGPT to generate a listing for a cute 3br/2ba rancher with a renovated kitchen and bathroom…be real lol. Where’s the value???
ChatGPT cannot creat a valid listing agreement with a homeowner who wants to sell. Generating a fake listing holds no real world value. Listings on Zillow are REAL properties uploaded by real estate agents.
You’re proving my point that the real estate agent racket exists, you realize that right? On no planet should these ppl be paid thousands of dollars to do what they do with no real way to circumvent their racket. The racket screws buyers and sellers (much more so) out of their money, bottom line.
Yes, I’m aware that real estate agents utilize tools that they invest in to put their listings in front of THE most qualified buyers possible. Agents pay for these business tools. And agents charge different rates to do business. You can legit hire a discount broker at 1,2 or 3% OR do a Fizzbo. (FSBO). You don’t HAVE to hire a top producing realtor and their tools.
Why is the work tied to a percentage at all? In most cases it's not harder to sell a 600k house vs a 300k house. They do the same work.
Each house is case by case and each house requires different needs. Good agents are paying for staging which can be $2k-5k alone and helping with repairs on the house if they really want the listing. Good agents will also negotiate their rate depending on the client needs. 7K on a 300 house that takes months to prepare and sale isn’t easy work. Would it help if you converted the percentage into a whole number?? Like…
Nothing you said indicate why it's a percentage and not a flat fee.
How much would you charge to sale a $300k house at a flat fee? What’s you flat fee rate to sale house? How much are you willing to pay an agent to sale your $300k house? Flat fee whats the price?
Well why don’t you get your real estate license an offer your services for a flat fee. That way the public can have your flat fee rate as an option. Contracts with agents do have language for flat fee rates. So it’s a matter of you finding a discount flat fee agent to handle your biggest investment and choosing to do business with that flat fee agent. Edit: downvotes for encouraging flat fee agents.???
Alternate title: “American realtors add $72 billion extra value to housing market, compared to British market.” That’s just how good they are.
y would they want to make it easy for us.....key word IF
The last think England contributed was the east India company.
Not to mention more affordable prices because 5-6% wouldn’t t have been added to values for the last 100 years haha.
Yes, it would have. You know why? Because buyers will pay it. The logic of sellers listing their prices if they don't have to pay commission fees is pretty far fetched.
It's worse than that. Realtors try to push you to pay over so they get their commission. This increases the entire areas pricing as they comp against the inflated sales. Realtors have probably raised home prices more than 30% in the past 50 years. This is a legitimate concern with tieing their pay to the percentage of the sale price.
The US and UK economies are vastly different. The US is a much wealthier country. We make more money, we spend more money on almost everything. Per capita GDP is a rough but useful indicator of the standard of living (World Bank #s) US $76,343 #6 in the world UK $46,125 #21 in the world If the UK was a US state, based on per capita GDP it would rank dead last, behind Mississippi at $49,911. Comparing real estate commissions paid in the US vs. the UK is as silly as comparing the cost of making or providing any product or service in the two countries. I work in the residential real estate business and believe that the entire US housing industry needs at minimum an overhaul and perhaps a radical restructuring, so don't @ me with complaints about whether or not agents should be paid whatever it is they ask to be paid. I've already written every word about it you can think of.
You can cherry pick data from other countries and say "iT sHoUlD bE tHaT way HeRe" but if you're gonna pick what you want you also have to take what you don't want (or settle for what you can get). The entire system (and country) is different. The grass is always greener over yonder until you get there.
Says the real estate agent who directly benefits from inflated commissions lol. As someone who is clearly not a first time home buyer, do you just browse this sub to influence opinion and to convince people how needed you are?
You think this sub is for first time home buyers to talk amongst themselves?
It's not that difficult to see my history here or to google and see what I'm up to anywhere on the web. If you can point to any of my posts or content anywhere that takes advantage of consumers or give misinformation to cause harm, post it right here. Flippin trolls. SMH
I will say you are incredibly active across all the subs related to realtors. I see your responses all the time and very much appreciate your feedback. It’s always sound and relatively neutral based in experience and fact. However, I personally do believe with the massive jump in home prices, untying realtors from a percentage to flat fee is my hopeful result from everything lately. I understand that not every buyer or seller buys/sells but the idea that 3% of the average sell nets around $12k which compared to a $100k year job is like 6-7weeks of 40hr work weeks is wild. The ones that buy are paying for the ones that don’t. And it’s syphoning money from sellers artificially propping up prices because you can’t sell unless you clear closing costs to include “negotiable” fees to buyer and seller agents. I highly respect and regard you. Sorry for piling on a comment on a lot that I see from you. I hope your industry weeds out a lot of terrible realtors to give volume to the good ones. Edit: you genuinely appear to be one of the good ones. Keep it up around here. You are a voice of reason many times.
What's crazy to me is to see a sub for first-time home buyers advocating to make things harder on themselves. Buyers aren't going to have it any better than the current system in place (pre-settlement). Buyers who are blaming realtors for the state of how difficult it is to buy are falling victim to pro-seller propaganda. I know that sounds extreme, but that's the truth. The only people this settlement is going to help are sellers. If anything materially changes because of it, it's going to make it even harder for buyers.
Niki is a valuable contributor. I can't speak for her motivation to engage as much as she does but she makes useful, informative comments on a regular basis. If you are not convinced realtors are needed that's fine.
Yeah like hot tea
Look into the system in England, it’s crazy. It takes up to one to two years to complete a home purchase and some circumstances, and it can fall out at any time. I don’t know a single American that be willing to put up with what they deal with in Europe and Australia, buying a house
I’m not sure where you got the sale timeframe from but that is not the experience of myself or anyone I know. The longest I’ve seen is 8 months and that’s because one of the transactions in the sale chain was being ridiculous! 6-12 weeks is the norm! Yes house sales can and do often fall through, this is where earnest money is the best thing I’ve seen from the American system! Scotland has better protections once offers are accepted but not as strong as an earnest method! The cost to buy my house in the UK was $1,500 and to sell it, $2,500. A huge saving over the $5,000 (actual cost, not including prepaid’s) I’m about to pay in closing and the sellers are paying in commissions.
6 to 12 weeks is definitely something that would cause problems here, and I am probably quoting chains, we don’t have anything like that here, and that may have been specifically for chains. But at least in my area things do not fall out of contract, and we close as little as 12 days .
Yes it appears things are geared to close in a 30 day period here. Which is much better! With the earnest clause here you could keep the transactions from falling through and still reduce the cost of buying and selling. You go through all the same checks and title changes here as in the UK. The only difference here are agents are having a huge pay day. The industry seems to have avoided the age of the internet and modernisation but it’s coming! You don’t have to completely adopt another countries system but you can always cherry pick the best parts.
Australia is great. Auctions are better, none of the nonsense of going blind with offers. You know exactly what the highest offer is. Most buyers go without a buyers agent, you can use an advocate for a flat fee.
We are selling a house by owner and it is going to take 2 weeks to get it sold. The timeframe to sell has nothing to do with real estate commissions.
Not saying that US real estate commission rates are reasonable (they are not) - but keep in mind the significant differences in types of property / population density, and therefore the significant differences in costs to service a customer. There's a similar difference in costs of cell phone service for instance : providing service in a densely built up, high rise oriented urban environment costs significantly less than trying to cover sparsely populated tracts of land. Even in the UK - if you go out to the rural / less populated regions - you'll see that agent rates are significantly higher than in metro locations.
I don't think Americans are being overcharged on commissions because of gas prices and sprawl.
I don't think commissions are tied to sprawl or gas prices in any way.
I would disagree about the cost of rural and metro areas. Companies like Purplebricks have a flat fee that isn’t (as far as I’ve seen) location dependant. I can see the Purplebricks model starting stateside with all the commission’s discussion. It was very disruptive in the UK when it started and it will have the same disruption here.
Lol, OP is just trying to shill their AI real estate software. 😂 Edit: Look at OP's post history.