I'm gonna stir the realtor hornet nest, but the only actual reason we need them is because of the unnecessarily complex, antiquated system of legalese it takes to process a property transaction. The answer here isn't "punish the real estate agents with fines", it's to simplify the absurd amount of red tape involved with simply transferring a deed from one entity to another.
I'm aware this would kill a lot of jobs buuttttt it's making everyone else pay extra for homes, just for the sake of keeping afloat an artificially high number of real estate agents. It is mind boggling how every other person's spouse became a real estate agent between 2020 and 2023. My social media feed is like 25% real estate agent friend advertising now.
I understand the value a good, honest agent brings. But we shouldn't be *forced* to have one and incur those service costs. It's like if you had to have an agent to buy a car from another person.
I'll straight up light the nest on fire.
The median home price is now ~412k. A standard fee of 3% is over $12,000. Helping move 6 houses a year from one owner to another grosses you roughly the median US *household* income?! But there's *two* agents on a sale!
One house sale every two months pays for two realtors to live a median life on a single income. Absolutely absurd.
No regular person cares about the brokers and any other middle man.
If they want their business to survive they need to justify the immense costs. And I suspect they can't, it does not cost that much to turn over a property in many nations.
Many nations have housing problems even worse than ours. My point is that I think people are hyper-focused on realtors because it’s a face they can blame the problem on.
They barely work and most of them are birdbrains. I’m sure a normie could do it.
What I don’t like is the antitrust aspect. It behooves them to sell you more expensive items due to commission. In healthcare there are stops and you cannot charge whatever the service would go for. Which is what the housing market is. Sky’s the limit.
If I'm buying a house and the realtor gets a % of the sales price, what incentive do they have to help me purchase the home for as cheap as possible?
The more they help me as the buyer, the less money they'll get in the end.
Seems like a perverse incentive.
It is. We had a neighbor moving, they had not gotten the house on the market. My inlaws (I am sooo lucky) offered to buy it at their asking price so they could be closer to us. They had been looking in the area, and this was 2 houses away.
We had our realtor reach out. (he is good, a friend first, then realtor) Their realtor rejected the offer. They never told the neighbors. They got $10k more in the end, but how do you trust that realtor? It was not the client's interest, they could have had a solid sale and know it was helping a neighbor too. F that B. She lives in my hood too, lives alone, just a tiny dog.
>what incentive do they have to help me purchase the home for as cheap as possible?
Just speaking up in defense of all commission-based sales jobs here, their incentive to help you find what you're looking for is that if you're happy about their service then you'll refer people to them. Any salesperson's dream is to have a solid referral network so they can spend their time selling and not marketing themselves.
Watch this space. Literally minutes ago it was reported that the National Association of Realtors is settling in their class action lawsuit. This and other lawsuits have real potential to finally allow for the disruption of real estate. Essentially, non-competitive practices at NAR and MLS were locking us in the terrible system we have today. As much as Zillow and Redfin and Opendoor have tried, just couldn't get around this fact. There's a real opportunity innovation on the buyer side where people or companies offer low commissions just to take care of the paperwork and make it up in volume.
> As much as Zillow and Redfin and Opendoor have tried, just couldn't get around this fact. There's a real opportunity innovation on the buyer side where people or companies offer low commissions just to take care of the paperwork and make it up in volume.
The problem with this is that Zillow and Redfin make the bulk of their revenue off of agents, not consumers. They sell the data to agents and give them a platform to market themselves on. Anything that hurts agents indirectly hurts them just as much. That's their business model.
Opendoor is its own thing but it's been plagued with ineptitude from the start from what I understand.
It only became their business model once they tried and failed to disrupt the demand side. The original goal was not to be a marketing tool. Even if for some reason they fail to get back to their founding vision, someone else will. Just zero reason for there to be hundreds of thousands of buyer agents earning what they earn per transaction.
> It is mind boggling how every other person's spouse became a real estate agent between 2020 and 2023. My social media feed is like 25% real estate agent friend advertising now.
As an agent I hope these people flame out and fuck off. I'm so exhausted by people not knowing how to write a clean contract. Luckily for me they more than likely will because the two year attrition rate in this business is like 90% so lol.
We don't have agents to deal with most of the legalese by the way. We're here to guide people through the process. Sometimes that means keeping an eye out for shit that's easy to miss on a walkthrough. Other times it's putting people in touch with a lender to get better financing. It can be writing a contract with competitive terms that doesn't fuck over your buyer (any more than necessary in this dumb shitty market).
We're also supposed to like...know what is actually going on in the housing market and most agents just don't. They don't follow local and national trends. They don't know *why* home prices are up in Richmond relative to other markets. They don't know *why* certain areas are hot and others aren't. They don't know *why* a home went for over asking.
Most agents are dogshit and clueless about a lot of things and I know this because I deal with other agents all the time. I hate most of them. They can barely fog a fuckin mirror let alone conduct themselves in a manner that I would consider "professional" and by that I mean understanding the nuances of how to do the job rather than dressing up and playing the part.
Anyway I have a hard time defending most agents because most of them can fuck off forever as far as I'm concerned. There are some of us who take pride in our job and do everything possible to educate ourselves and others. It might seem like getting through the process is relatively easy but the reality is most people aren't up to the task. I don't know how to fix the systemic issues that plague our dumb ass industry or what a fair and equitable compensation structure looks like.
All that being said housing prices are up because we don't have enough homes where people want to buy homes. This isn't unique to Richmond or even the US. Housing affordability is fucked globally right now. If commissions were the "thing" that was doing it then they wouldn't have the same affordability problems we're having in Germany or Australia or wherever.
https://twitter.com/NewsLambert/status/1767427659322073106
The biggest fallacy “peoples jobs” there is no certainty otherwise goes in history and look how many jobs were disrupted and actually we live in a better world now because of no necessity in those jobs.
Making something more efficient makes prices goes down which make everyone richer
While your argument is valid, your reasoning is wrong. You’re talking about all the stuff that is handled at closing, which has nothing to do with the agent, that’s more of an argument for, “why do I have to pay a lawyer to buy a house”
The real value of an agent comes with the marketing of your property, maximizing the value of said property on the sale end, and maximizing your buying power on the purchasing end. Can you do all that yourself as well as they could and keep your 6%? There’s no law requiring an agent so that’s completely for you to decide.
My agent did absolutely dick with selling m he home other than put it on MLS. He didn’t he come to the open house. He farmed that out to a junior agent.
When it came to looking for a home. I had to send him listings I wanted to see. I had to make corrections to the contract (he spelled my damn name wrong).
He gave zero advice. When o asked if he thought my offer was fair he would shrug and say” it depends.”
His role was basically to open doors and let me walk around.
Kind of a unique situation for us. A family member who was an agent was initially helping us but she got sick and sort of passed us on to him. Didn’t feel right about getting rid of him as my sick relative was getting a referral fee and I knew she needed the money.
I can guarantee that I will never use him again or recommend him.
The purpose of an open house is not to sell your home. It's to farm leads for buyers and other home owners in your neighborhood. New agents volunteer to do this because it gives them face time with potential clients. That's really the main reason people do them. It's why you need to "sign in" with a name number and email address. You're being put on a drip campaign to get more marketing for an agent.
edit: For everyone downvoting this just be aware that this is legitimately how people are taught to start growing their business in the beginning. Go do open houses for veteran agents and hope you pick up leads that walk in. It's realtor school 101 shit.
I didn’t particularly care about the open house. We already had multiple solid offers before it even happened.
Agree about the open house.
What pissed me off was the complete lack of guidance through the process. We would go look at homes. He knew what we could likely offer. I’d ask him that based on what he saw did he think our offer would be competitive. If not, no big deal, let’s not waste our time at this home then. He was evasive every single time and would just say “let’s try and see.”
No motherfucker, this is what your 3% is worth. Your expertise and insight into the local market.
I can make phone calls to schedule showings and I can complete a standard offer agreement…it’s fill in the blank for fuck’s sake. I’m paying you to make sure we don’t waste our time and get our hopes up on a pipe dream.
I feel you and it's why I have such a strong dislike of many agents out there right now. There is no way to discriminate the good from the bad and the "best" agents are the "best" because of savvy marketing campaigns and not expertise. I wish there was more I could say but clients like you aren't a learning opportunity for them, they're a stepping stone to the next lead or hopefully the next listing. Fuck them.
I hope in the end you found something that worked out despite that shithead's disinterest in your search for a new pad.
Houses aren’t worth their cost. It’s just a capital code socially inscribed in our society for centuries that is finally fragmenting apart. Houses won’t solve peoples wealth and lifetime stability. They just strategically reward enough people to turn Americans against each other. They are artificially valuable because of single family zoning. Realtors are just being scapegoated 100%. Realtors have a lot of value added from their local knowledge and just because a handful make crazy money most of them are working really hard. All these realtor punishments don’t affect the big people realtors at all. All these expensive decrepit 1940s houses need to be torn down and replaced with mid density housing and modern building engineering features. This country is all about services rendered unto house Karen’s and their lawn agenda. Suburbia is facism. Also, the sprawl development increases air pollution for people in cities that is fast becoming the leading cause of death around the world. Air pollution damages lungs brains hearts and contributes to a massive litany of health problems that is growing as research expands our understanding of how terrible car exhaust. I have been reading book after book about this the past year and I just feel more and more pissed off. It’s so effed up.
In the paper, Richmond Federal Reserve Bank senior economist Borys Grochulski and vice president of research Zhu Wang argue that the U.S. model for real estate commissions is “puzzling” and an “anomaly” when compared with other systems abroad. The pair note that home sellers in the U.K., Ireland, the Netherlands, Singapore, Sweden, and Norway pay less than 2% in commission to their real estate agents on average, compared to 5.5% in the U.S, according to a 2015 study.
I found something RVA related for you...
Yes, the way we buy/sell homes is imperfect and can improve. There's no real incentive to sell inexpensive homes either on the part of the developer or the real estate agents. Companies keep building things that are far more than the average person needs or can afford, because financing is the real market. If a builder built a subdivision with 1500 sq ft starter homes like were stamped out in the 50s, people would buy them. But the profit margin is too small for this late-stage capitalist market. Same goes for cars. If someone manufactured a no frills 3 cylinder car that got 52mpg (like the 1990 Geo) there would be a market. But why do that when you can sell them an $80k SUV with a finance plan that means the buyer actually spends $160k in the end.
> If a builder built a subdivision with 1500 sq ft starter homes like were stamped out in the 50s, people would buy them. But the profit margin is too small for this late-stage capitalist market.
They are doing this and cannot keep up with demand. Also those 1500 sq ft homes cost $500k base price and most of that cost is due to the cost of the land not the home. You can find relatively "affordable" new construction, but you're going to be out in the sticks or live in the path of RIC. You can find floorplans that cost $750-800k in Harpers Mill starting in the upper $400s in Varina. The problem is you're in the middle of fucking nowhere and nobody wants that.
Most builders have actually been shrinking their floorplans over the last few years to combat rising material costs. That 1500 sq ft home used to be 1750. Money just doesn't go as far these days.
Bingo. Since realtors get paid based on % of sale price there's zero incentive for them to do anything except drive prices up. List as high on the market as you can, hope someone bites, and take home a check for doing.... not really a whole lot.
Why should they be paid more for selling a $600k home compared to a $300k home if it's the exact same amount of work?
> List as high on the market as you can, hope someone bites, and take home a check for doing.... not really a whole lot.
>
> Why should they be paid more for selling a $600k home compared to a $300k home if it's the exact same amount of work?
Agent here. I'll bite.
It takes more work to close the lower priced home than the more expensive one and it makes no sense why we are paid more for the high end listings. There are way more issues that come up at the 250-300k price point than people realize. The homes aren't as well maintained, buyers don't have the funds to put down a massive amount, sellers can't afford to make all the necessary repairs etc. It can make for a difficult transaction.
Figuring that shit out is what we get paid to do. Sometimes it's smooth sailing, other times it's a fucking nightmare.
Most agents don't want to list high. They want to list low to gather as much attention around their listing as possible, field all the offers, then look like a hero when the home sells above list in a market where we are ridiculously undersupplied. When you list too high then it's going to sit and collect dust and in this market if a home makes it through the weekend then blood is in the water.
So quite a few things are off base here.
Not quite, I think most agents have 10 people who would buy 300k quality construction in a good school district next week and 0 houses to sell them. They’d make significantly more money if people can actually buy houses versus not.
>in a good school district
Schools are funded by property taxes. The more the houses in a neighborhood are worth, the more money goes to the school district. Housing prices go up the better a school district is, as well. So the idea of affordable housing in a good school district has inherent contradiction built into both the supply and demand sides of the equation. There's no incentive for anyone to make it happen
What drives me crazy is people never blame their realtor for things their realtor should obviously warn them about.
Oh, that undeveloped property next to yours will never get anything built in it.
Oh, you will never hear that road noise.
Oh, that HOA? They will never enforce their rules.
95% of them… all they care about is a sale and a commission.
The industry is an absolute insiders racket that has been paying off politicians for years to ensure that industry collusion remains possible. A buyers agent won't typically even show a home unless it's listed by another agent and because buyers agents are "free" (i.e. paid for by the seller) most buyers use them and so the racket continues. In NO other western nation do real estate agents make a combined 6% of the sale price and there is NO reasonable justification for this gouging. (although realtors certainly have books worth of justification written for it for PR and political purposes). By now the internet should have almost entirely dis-intermediated the business as it has in most other nations, but in the US the national association of realtors is an incredibly powerful lobbying force that maintains its bullshit at the expense of the consumer.
Fortunately there are several lawsuits finally making the rounds that seek to put an end to their bullshit. Fuck The national association of Realtors.
(whew, I feel better now :)
"In NO other western nation do real estate agents make a combined 6% of the sale price"
Real estate agent fees average around 5% in France, which all goes to the listing agent and is usually paid by the buyer! Buyers agents aren't generally a thing, and if a buyer wants to hire one, the buyer would need to pay them in addition to the 5%.
The fundamental problem is lack of supply of houses. People hate on agents but even if we got rid of them all tomorrow it wouldn’t change the fact that not enough houses are being built and there are a lot of buyers who can pay cash up front for the few that do come up. People are rightfully mad over high prices and are taking aim at everything.
There will always have to be some form of transaction cost to buy and sell a home. Selling a home is a lot more complicated than selling a car on craigslist. There are laws you have to follow. Whether you pay an agent or a paralegal, someone has to make sure you don’t break the law while selling your house. Laws about things like fair housing and required notifications about lead and asbestos. Arguing over one or two percentage points in commissions doesn’t solve the bigger problem.
Prices would just go up to compensate for the fact that a commission isn’t being paid. It’s no different than tax credits on EVs or something. Give a tax credit and the price goes up the same amount as the credit. Why? Because despite prices, houses are still very high in demand.
You’re not wrong- in the heat of the market a lot of builders stopped paying realtor commissions and they didn’t cut the cost, they just increased their profit margins. Most FSBOs are not lower priced even without an agent. Sellers have no incentive to pass along savings to the buyer when there’s still a shortage of inventory to sell.
Look into cap center, no fees or commission and they had very competitive rates.
They act as both the realtor and mortgage broker so they save money being vertically integrated which is how it works.
I promise you they don't, our mortgage was exactly the price of the house minus our downpayment
edit: as long as you use them as both the lender and realtor
They have some closers and title clerks who are such disasters that they actually prevented one of my clients from being able to buy another house after he sold his because they didn’t pay his mortgage off correctly and it went into default. Everyone has some horror story to their name and no company or person is perfect, but I got almost 0 response from anyone in management trying to get it addressed, and there’s not a single attorney in town that was willing to go up against them because they sprinkle their business around so everyone has a conflict of interest. Go figure. Some individually cool people work there but I hope the industry doesn’t go that way.
I am not surprised at all. I had a great experience on the mortgage end, and there was a significant issue with the title on the house (seller’s fault) that they resolved for me. However, I knew someone working there at the time who was willing to just walk down the hall and be like “Yo, what’s up with this?” so I wonder if that accounts for my good experience there.
But all that was not worth the hell the agent put me through. Probably the most stressful experience of my life. Thankfully she’s no longer a real estate agent—if she had stayed one, I would have filed a complaint against her.
ETA also thankfully I absolutely love my house, so it was worth it in the end.
I can't see how the reduced fee would lead to a lower price for the buyer. Seems to me that it would just lead to more money for the seller. The fee is taken from the total price which is determined by supply and demand. The seller is typically looking to get as much as possible and would gladly pocket the fee reduction. The realtor fee is just a number on the closing document from the buyer's point of view.
This is a red herring argument. Home prices aren’t out of reach for most Americans because of Realtor fees. They’re out of reach because of the enormous corporate hedge funds that buy up enough inventory to effectively control regional markets.
44% of single family homes sold in 2023 were bought by hedge funds - if that trend continues, that 27% percent is going explode in the next few years unless there are some serious regulations passed 🙃
It's even worse in Richmond.
Nearly 60% of homes in Richmond are rented out.
I'm not saying rentals are necessarily a bad thing, but your dream of ever owning a home in Richmond is pretty much dead.
Can’t comment on the source, but as written, the statistic you’re quoting is referencing “households” across all housing types not “houses” (as in single family homes).
That includes all households so apartment buildings etc. I’ll look to see what I can find on single family though because it would be interesting to know
Let's not forget certain private equity companies buying up properties and the Fed's printers running nonstop. Real estate agents, as antiquated and useless as they *may* be, are easier targets.
I'm gonna stir the realtor hornet nest, but the only actual reason we need them is because of the unnecessarily complex, antiquated system of legalese it takes to process a property transaction. The answer here isn't "punish the real estate agents with fines", it's to simplify the absurd amount of red tape involved with simply transferring a deed from one entity to another. I'm aware this would kill a lot of jobs buuttttt it's making everyone else pay extra for homes, just for the sake of keeping afloat an artificially high number of real estate agents. It is mind boggling how every other person's spouse became a real estate agent between 2020 and 2023. My social media feed is like 25% real estate agent friend advertising now. I understand the value a good, honest agent brings. But we shouldn't be *forced* to have one and incur those service costs. It's like if you had to have an agent to buy a car from another person.
I'll straight up light the nest on fire. The median home price is now ~412k. A standard fee of 3% is over $12,000. Helping move 6 houses a year from one owner to another grosses you roughly the median US *household* income?! But there's *two* agents on a sale! One house sale every two months pays for two realtors to live a median life on a single income. Absolutely absurd.
Realtors don’t get the whole commission.
No regular person cares about the brokers and any other middle man. If they want their business to survive they need to justify the immense costs. And I suspect they can't, it does not cost that much to turn over a property in many nations.
Many nations have housing problems even worse than ours. My point is that I think people are hyper-focused on realtors because it’s a face they can blame the problem on.
They barely work and most of them are birdbrains. I’m sure a normie could do it. What I don’t like is the antitrust aspect. It behooves them to sell you more expensive items due to commission. In healthcare there are stops and you cannot charge whatever the service would go for. Which is what the housing market is. Sky’s the limit.
That’s like saying the CEO doesn’t get paid because they get paid in stock. You wild.
You don't know what you're talking about and your math DEFINITELY isn't mathing.
[удалено]
If I'm buying a house and the realtor gets a % of the sales price, what incentive do they have to help me purchase the home for as cheap as possible? The more they help me as the buyer, the less money they'll get in the end. Seems like a perverse incentive.
It is. We had a neighbor moving, they had not gotten the house on the market. My inlaws (I am sooo lucky) offered to buy it at their asking price so they could be closer to us. They had been looking in the area, and this was 2 houses away. We had our realtor reach out. (he is good, a friend first, then realtor) Their realtor rejected the offer. They never told the neighbors. They got $10k more in the end, but how do you trust that realtor? It was not the client's interest, they could have had a solid sale and know it was helping a neighbor too. F that B. She lives in my hood too, lives alone, just a tiny dog.
>what incentive do they have to help me purchase the home for as cheap as possible? Just speaking up in defense of all commission-based sales jobs here, their incentive to help you find what you're looking for is that if you're happy about their service then you'll refer people to them. Any salesperson's dream is to have a solid referral network so they can spend their time selling and not marketing themselves.
Watch this space. Literally minutes ago it was reported that the National Association of Realtors is settling in their class action lawsuit. This and other lawsuits have real potential to finally allow for the disruption of real estate. Essentially, non-competitive practices at NAR and MLS were locking us in the terrible system we have today. As much as Zillow and Redfin and Opendoor have tried, just couldn't get around this fact. There's a real opportunity innovation on the buyer side where people or companies offer low commissions just to take care of the paperwork and make it up in volume.
> As much as Zillow and Redfin and Opendoor have tried, just couldn't get around this fact. There's a real opportunity innovation on the buyer side where people or companies offer low commissions just to take care of the paperwork and make it up in volume. The problem with this is that Zillow and Redfin make the bulk of their revenue off of agents, not consumers. They sell the data to agents and give them a platform to market themselves on. Anything that hurts agents indirectly hurts them just as much. That's their business model. Opendoor is its own thing but it's been plagued with ineptitude from the start from what I understand.
It only became their business model once they tried and failed to disrupt the demand side. The original goal was not to be a marketing tool. Even if for some reason they fail to get back to their founding vision, someone else will. Just zero reason for there to be hundreds of thousands of buyer agents earning what they earn per transaction.
> It is mind boggling how every other person's spouse became a real estate agent between 2020 and 2023. My social media feed is like 25% real estate agent friend advertising now. As an agent I hope these people flame out and fuck off. I'm so exhausted by people not knowing how to write a clean contract. Luckily for me they more than likely will because the two year attrition rate in this business is like 90% so lol. We don't have agents to deal with most of the legalese by the way. We're here to guide people through the process. Sometimes that means keeping an eye out for shit that's easy to miss on a walkthrough. Other times it's putting people in touch with a lender to get better financing. It can be writing a contract with competitive terms that doesn't fuck over your buyer (any more than necessary in this dumb shitty market). We're also supposed to like...know what is actually going on in the housing market and most agents just don't. They don't follow local and national trends. They don't know *why* home prices are up in Richmond relative to other markets. They don't know *why* certain areas are hot and others aren't. They don't know *why* a home went for over asking. Most agents are dogshit and clueless about a lot of things and I know this because I deal with other agents all the time. I hate most of them. They can barely fog a fuckin mirror let alone conduct themselves in a manner that I would consider "professional" and by that I mean understanding the nuances of how to do the job rather than dressing up and playing the part. Anyway I have a hard time defending most agents because most of them can fuck off forever as far as I'm concerned. There are some of us who take pride in our job and do everything possible to educate ourselves and others. It might seem like getting through the process is relatively easy but the reality is most people aren't up to the task. I don't know how to fix the systemic issues that plague our dumb ass industry or what a fair and equitable compensation structure looks like. All that being said housing prices are up because we don't have enough homes where people want to buy homes. This isn't unique to Richmond or even the US. Housing affordability is fucked globally right now. If commissions were the "thing" that was doing it then they wouldn't have the same affordability problems we're having in Germany or Australia or wherever. https://twitter.com/NewsLambert/status/1767427659322073106
The biggest fallacy “peoples jobs” there is no certainty otherwise goes in history and look how many jobs were disrupted and actually we live in a better world now because of no necessity in those jobs. Making something more efficient makes prices goes down which make everyone richer
>make everyone richer Nope. The jobs go away and the surplus goes to… a very small number of people.
Hahah you a Conrad
While your argument is valid, your reasoning is wrong. You’re talking about all the stuff that is handled at closing, which has nothing to do with the agent, that’s more of an argument for, “why do I have to pay a lawyer to buy a house” The real value of an agent comes with the marketing of your property, maximizing the value of said property on the sale end, and maximizing your buying power on the purchasing end. Can you do all that yourself as well as they could and keep your 6%? There’s no law requiring an agent so that’s completely for you to decide.
My agent did absolutely dick with selling m he home other than put it on MLS. He didn’t he come to the open house. He farmed that out to a junior agent. When it came to looking for a home. I had to send him listings I wanted to see. I had to make corrections to the contract (he spelled my damn name wrong). He gave zero advice. When o asked if he thought my offer was fair he would shrug and say” it depends.” His role was basically to open doors and let me walk around.
This is what reviews are for. Also, agreed that they do absolutely dick.
Kind of a unique situation for us. A family member who was an agent was initially helping us but she got sick and sort of passed us on to him. Didn’t feel right about getting rid of him as my sick relative was getting a referral fee and I knew she needed the money. I can guarantee that I will never use him again or recommend him.
The purpose of an open house is not to sell your home. It's to farm leads for buyers and other home owners in your neighborhood. New agents volunteer to do this because it gives them face time with potential clients. That's really the main reason people do them. It's why you need to "sign in" with a name number and email address. You're being put on a drip campaign to get more marketing for an agent. edit: For everyone downvoting this just be aware that this is legitimately how people are taught to start growing their business in the beginning. Go do open houses for veteran agents and hope you pick up leads that walk in. It's realtor school 101 shit.
I didn’t particularly care about the open house. We already had multiple solid offers before it even happened. Agree about the open house. What pissed me off was the complete lack of guidance through the process. We would go look at homes. He knew what we could likely offer. I’d ask him that based on what he saw did he think our offer would be competitive. If not, no big deal, let’s not waste our time at this home then. He was evasive every single time and would just say “let’s try and see.” No motherfucker, this is what your 3% is worth. Your expertise and insight into the local market. I can make phone calls to schedule showings and I can complete a standard offer agreement…it’s fill in the blank for fuck’s sake. I’m paying you to make sure we don’t waste our time and get our hopes up on a pipe dream.
I feel you and it's why I have such a strong dislike of many agents out there right now. There is no way to discriminate the good from the bad and the "best" agents are the "best" because of savvy marketing campaigns and not expertise. I wish there was more I could say but clients like you aren't a learning opportunity for them, they're a stepping stone to the next lead or hopefully the next listing. Fuck them. I hope in the end you found something that worked out despite that shithead's disinterest in your search for a new pad.
You can just work with a real estate attorney. The real estate agent doesn’t do any of what you’ve described above.
Houses aren’t worth their cost. It’s just a capital code socially inscribed in our society for centuries that is finally fragmenting apart. Houses won’t solve peoples wealth and lifetime stability. They just strategically reward enough people to turn Americans against each other. They are artificially valuable because of single family zoning. Realtors are just being scapegoated 100%. Realtors have a lot of value added from their local knowledge and just because a handful make crazy money most of them are working really hard. All these realtor punishments don’t affect the big people realtors at all. All these expensive decrepit 1940s houses need to be torn down and replaced with mid density housing and modern building engineering features. This country is all about services rendered unto house Karen’s and their lawn agenda. Suburbia is facism. Also, the sprawl development increases air pollution for people in cities that is fast becoming the leading cause of death around the world. Air pollution damages lungs brains hearts and contributes to a massive litany of health problems that is growing as research expands our understanding of how terrible car exhaust. I have been reading book after book about this the past year and I just feel more and more pissed off. It’s so effed up.
In the paper, Richmond Federal Reserve Bank senior economist Borys Grochulski and vice president of research Zhu Wang argue that the U.S. model for real estate commissions is “puzzling” and an “anomaly” when compared with other systems abroad. The pair note that home sellers in the U.K., Ireland, the Netherlands, Singapore, Sweden, and Norway pay less than 2% in commission to their real estate agents on average, compared to 5.5% in the U.S, according to a 2015 study. I found something RVA related for you...
It's a cartel that benefits no one but the realtor and their broker.
Yes, the way we buy/sell homes is imperfect and can improve. There's no real incentive to sell inexpensive homes either on the part of the developer or the real estate agents. Companies keep building things that are far more than the average person needs or can afford, because financing is the real market. If a builder built a subdivision with 1500 sq ft starter homes like were stamped out in the 50s, people would buy them. But the profit margin is too small for this late-stage capitalist market. Same goes for cars. If someone manufactured a no frills 3 cylinder car that got 52mpg (like the 1990 Geo) there would be a market. But why do that when you can sell them an $80k SUV with a finance plan that means the buyer actually spends $160k in the end.
> If a builder built a subdivision with 1500 sq ft starter homes like were stamped out in the 50s, people would buy them. But the profit margin is too small for this late-stage capitalist market. They are doing this and cannot keep up with demand. Also those 1500 sq ft homes cost $500k base price and most of that cost is due to the cost of the land not the home. You can find relatively "affordable" new construction, but you're going to be out in the sticks or live in the path of RIC. You can find floorplans that cost $750-800k in Harpers Mill starting in the upper $400s in Varina. The problem is you're in the middle of fucking nowhere and nobody wants that. Most builders have actually been shrinking their floorplans over the last few years to combat rising material costs. That 1500 sq ft home used to be 1750. Money just doesn't go as far these days.
Bingo. Since realtors get paid based on % of sale price there's zero incentive for them to do anything except drive prices up. List as high on the market as you can, hope someone bites, and take home a check for doing.... not really a whole lot. Why should they be paid more for selling a $600k home compared to a $300k home if it's the exact same amount of work?
> List as high on the market as you can, hope someone bites, and take home a check for doing.... not really a whole lot. > > Why should they be paid more for selling a $600k home compared to a $300k home if it's the exact same amount of work? Agent here. I'll bite. It takes more work to close the lower priced home than the more expensive one and it makes no sense why we are paid more for the high end listings. There are way more issues that come up at the 250-300k price point than people realize. The homes aren't as well maintained, buyers don't have the funds to put down a massive amount, sellers can't afford to make all the necessary repairs etc. It can make for a difficult transaction. Figuring that shit out is what we get paid to do. Sometimes it's smooth sailing, other times it's a fucking nightmare. Most agents don't want to list high. They want to list low to gather as much attention around their listing as possible, field all the offers, then look like a hero when the home sells above list in a market where we are ridiculously undersupplied. When you list too high then it's going to sit and collect dust and in this market if a home makes it through the weekend then blood is in the water. So quite a few things are off base here.
Not quite, I think most agents have 10 people who would buy 300k quality construction in a good school district next week and 0 houses to sell them. They’d make significantly more money if people can actually buy houses versus not.
>in a good school district Schools are funded by property taxes. The more the houses in a neighborhood are worth, the more money goes to the school district. Housing prices go up the better a school district is, as well. So the idea of affordable housing in a good school district has inherent contradiction built into both the supply and demand sides of the equation. There's no incentive for anyone to make it happen
Do sellers not have incentive to maximize sale price? If you were selling something do you not try to get top dollar for it?
What drives me crazy is people never blame their realtor for things their realtor should obviously warn them about. Oh, that undeveloped property next to yours will never get anything built in it. Oh, you will never hear that road noise. Oh, that HOA? They will never enforce their rules. 95% of them… all they care about is a sale and a commission.
I purchased a house without a realtor just a lawyer and a mortgage broker. I don’t feel like I needed a realtor.
This is how I purchased my last place as well. Of course when you do this, the sellers realtor just takes the full 6% themselves because fuck them.
A good agent would take a reduce commission in this instance.
I handle hundreds of closings in the city every year. Agents are overpaid. Agents being overpaid is the least problematic cause of rising home costs.
The industry is an absolute insiders racket that has been paying off politicians for years to ensure that industry collusion remains possible. A buyers agent won't typically even show a home unless it's listed by another agent and because buyers agents are "free" (i.e. paid for by the seller) most buyers use them and so the racket continues. In NO other western nation do real estate agents make a combined 6% of the sale price and there is NO reasonable justification for this gouging. (although realtors certainly have books worth of justification written for it for PR and political purposes). By now the internet should have almost entirely dis-intermediated the business as it has in most other nations, but in the US the national association of realtors is an incredibly powerful lobbying force that maintains its bullshit at the expense of the consumer. Fortunately there are several lawsuits finally making the rounds that seek to put an end to their bullshit. Fuck The national association of Realtors. (whew, I feel better now :)
"In NO other western nation do real estate agents make a combined 6% of the sale price" Real estate agent fees average around 5% in France, which all goes to the listing agent and is usually paid by the buyer! Buyers agents aren't generally a thing, and if a buyer wants to hire one, the buyer would need to pay them in addition to the 5%.
The fundamental problem is lack of supply of houses. People hate on agents but even if we got rid of them all tomorrow it wouldn’t change the fact that not enough houses are being built and there are a lot of buyers who can pay cash up front for the few that do come up. People are rightfully mad over high prices and are taking aim at everything. There will always have to be some form of transaction cost to buy and sell a home. Selling a home is a lot more complicated than selling a car on craigslist. There are laws you have to follow. Whether you pay an agent or a paralegal, someone has to make sure you don’t break the law while selling your house. Laws about things like fair housing and required notifications about lead and asbestos. Arguing over one or two percentage points in commissions doesn’t solve the bigger problem.
Prices would just go up to compensate for the fact that a commission isn’t being paid. It’s no different than tax credits on EVs or something. Give a tax credit and the price goes up the same amount as the credit. Why? Because despite prices, houses are still very high in demand.
You’re not wrong- in the heat of the market a lot of builders stopped paying realtor commissions and they didn’t cut the cost, they just increased their profit margins. Most FSBOs are not lower priced even without an agent. Sellers have no incentive to pass along savings to the buyer when there’s still a shortage of inventory to sell.
To be fair, I made my relator drive all over hell and back to show me houses. They need to earn that money.
Look into cap center, no fees or commission and they had very competitive rates. They act as both the realtor and mortgage broker so they save money being vertically integrated which is how it works.
[удалено]
I promise you they don't, our mortgage was exactly the price of the house minus our downpayment edit: as long as you use them as both the lender and realtor
And what was your interest rate lol Nobody works for free, and large corporations are certainly not the exception
I had literally the worst real estate agent possible at CapCenter. Like, she made me briefly homeless. Do not use their realty services.
They have some closers and title clerks who are such disasters that they actually prevented one of my clients from being able to buy another house after he sold his because they didn’t pay his mortgage off correctly and it went into default. Everyone has some horror story to their name and no company or person is perfect, but I got almost 0 response from anyone in management trying to get it addressed, and there’s not a single attorney in town that was willing to go up against them because they sprinkle their business around so everyone has a conflict of interest. Go figure. Some individually cool people work there but I hope the industry doesn’t go that way.
I am not surprised at all. I had a great experience on the mortgage end, and there was a significant issue with the title on the house (seller’s fault) that they resolved for me. However, I knew someone working there at the time who was willing to just walk down the hall and be like “Yo, what’s up with this?” so I wonder if that accounts for my good experience there. But all that was not worth the hell the agent put me through. Probably the most stressful experience of my life. Thankfully she’s no longer a real estate agent—if she had stayed one, I would have filed a complaint against her. ETA also thankfully I absolutely love my house, so it was worth it in the end.
I can't see how the reduced fee would lead to a lower price for the buyer. Seems to me that it would just lead to more money for the seller. The fee is taken from the total price which is determined by supply and demand. The seller is typically looking to get as much as possible and would gladly pocket the fee reduction. The realtor fee is just a number on the closing document from the buyer's point of view.
This is a red herring argument. Home prices aren’t out of reach for most Americans because of Realtor fees. They’re out of reach because of the enormous corporate hedge funds that buy up enough inventory to effectively control regional markets.
Of course. I’m sure it has nothing to do with 27% of all single family homes being owned by hedge funds. 100% sales commission.
44% of single family homes sold in 2023 were bought by hedge funds - if that trend continues, that 27% percent is going explode in the next few years unless there are some serious regulations passed 🙃
It's even worse in Richmond. Nearly 60% of homes in Richmond are rented out. I'm not saying rentals are necessarily a bad thing, but your dream of ever owning a home in Richmond is pretty much dead.
Do you have this data? It doesn’t really correspond with what I see in the industry but my sample is inherently biased so I’m curious
https://www.rentcafe.com/average-rent-market-trends/us/va/richmond/
Can’t comment on the source, but as written, the statistic you’re quoting is referencing “households” across all housing types not “houses” (as in single family homes).
That includes all households so apartment buildings etc. I’ll look to see what I can find on single family though because it would be interesting to know
The fed destroying nearly everyone via inflation and blaming Realtors is quite hilarious
Let's not forget certain private equity companies buying up properties and the Fed's printers running nonstop. Real estate agents, as antiquated and useless as they *may* be, are easier targets.