Do Mustachians hate real estate agents?

[mrs sideways]

"Hate" is a strong word, but I've sure had some bad experiences with agents. We used Redfin when we bought our house, and I think it's a better system.

Our agent was awesome, but we never met him in person. We didn't need to. The Redfin website let us do all the research, we went to open homes on our own, and when it came time to re-visit a home we liked, someone from Redfin came and unlocked it for us. She was an office worker, getting paid by the hour, rather than an agent who might push us to buy it.

We put in an offer, the sellers countered with a higher price, and our agent said "Yeah, no, we'll re-submit the offer as-is. They'll take your price and like it." Since our agent is getting paid a salary (with customer service bonuses) rather than commission, and since he had multiple other clients at the same time, he had no incentive to push us to buy. I can imagine a commission-based salesman, relying on our buy to make his monthly check, going "Of COURSE you should offer more! Let's jack that price up and get back to them!"

Basically, I thought the entire process worked better when the "agent" was a whole office of specialists, rather than a lone wolf who has to do all his own marketing, touring, and selling. I'm also for the idea of some kind of hourly payment, like employing a lawyer, since the commission-only structure gets abused by lookie-loos and bad customers who can suck up weeks of an agent's time without paying them anything.

[ctuser1]

I have mixed feelings towards the whole RE Agent cartel.

On one hand, RE Agents (like any cartels) actively work to decrease the efficiencies in the RE market using their monopolistic behavior. This is a clearly bad for the entire system!!

On the other hand, savvy deal seekers can use this inefficiency and opacity to get better deals at the expense of the general crop of the market participants. I like to think I fall in the savvy deal seeker category and hence it personally benefits me!

How?

Simple! After being frustrated trying to find our home to buy using the conventional means using a "buyer's agent" - we fired her. After spending 2 months running around with her, it was very clear to me she does not give two hoots as to whether the house/deal is suitable for us or not - only that we buy something, fast!

After firing her, we looked for houses on our own in realtor.com and zillow. Every weekend, we'd spend half a day to make a shortlist, and contact the listing agents. As soon as the listing agents hear I am not represented - they were suddenly very interested!! We eventually got a really good deal! The final purchase price was $40k below appraised, $70k below what the sellers paid 5 years ago, and $80k below original listing.

The only thing that went against us was that the mortgage interest rates ran up on us in 2016 when the negotiations were going on. My first pre-qualification letter was 2.38%. I eventually got 3.25% :-(...

The realtor was obviously a strong advocate for us (he will earn double the commission with us vs some other buyer) during the whole process. I believe this was a strong factor in us getting a good deal. It sucked to be the seller in this specific case though.

Don't get me started however, on how slimy the whole industry is!! All the professionals you will engage (inspectors, plumbers, electricians etc) get much more business via the RE Agent than they will ever get from you. So you have to always second guess their motives!! I would typically just do a basic risk assessment. If a lot rides on their opinion then I would sometimes get a second opinion from someone who is not local.

As a novice facing the whole cartel united against your interest like this can be exhausting - however savvy you think yourself to be.

[mm1970]

The difference, here anyway - is selling a house in 2 weeks versus 6 months.  The difference can be $50k or $100k (or even more) in house price.  Is that worth it to you?

How many hours total go into selling a property?  And buying a property.  Yeah, it may be 10 hours total on occasion, but I am expecting it is far more than that typically (nevermind the buyer's side - I've got friends who looked at hundreds of properties with an agent for over a year and never bought).  That, actually, should also be taken into account when you consider their working hours - a fair bit of their hours as a buyer's agent will be "unpaid".

Like I said, that one property has now been on the market for 6 months, and the price has dropped $120,000.  Six percent of the original asking price is $60k.  Would it have been better to work with an agent?  The size and location of the property would put it at about $1.2 million or so - but it needs work.  So the original selling price of just over $1M was probably pretty reasonable.  But it hasn't sold.

I'm pretty sure we paid our lawyers who wrote up our trust $200 an hour.  Maybe more.

This just sounds like you're arguing that we should have to subsidize people who can't follow through. If I only look at 3 houses and have a pre-approval, I probably require just a minimal amount of investment. But I'm apparently subsidizing the people who waste your time by looking at houses they can't afford, can't make a decision on, or can't qualify for.

Once again, an hourly rate seems like it would fix all of these issues.

I dunno, would it? 

I wonder how many house hunters would be willing to pay an agent an hourly rate for helping them look for a house.  Think about the people who spent a year and saw hundreds of open houses.  Eh, $50/hr x 200 houses.  I think probably not that many. 

As someone else put it (prob Malkynn), it's a sales industry. I know that my own CEO (in tech) referred to our sales department as "coin operated", meaning they get a very small base salary and make money when they make sales.

As far as I can see, there are already other options - there are discount realtors that charge a smaller fee here (1.5%), there are flat fee realtors also.  Options exist, but they just haven't "taken off", perhaps because if you are good at it and you get a lot of referrals and sales, what is the advantage to a flat $5000 payment per sale when you could be getting $25,000 at each sale. (Our buyer's agent made about $24k when we bought our house 15 years ago).

[Raenia]

Don't get me started however, on how slimy the whole industry is!! All the professionals you will engage (inspectors, plumbers, electricians etc) get much more business via the RE Agent than they will ever get from you. So you have to always second guess their motives!! I would typically just do a basic risk assessment. If a lot rides on their opinion then I would sometimes get a second opinion from someone who is not local.

This is why we did not use the inspector that our realtor recommended, but did some research and contacted an inspector with a reputation for being very thorough and explaining every finding to the buyer.  Same for plumber, electrician, roofer, HVAC - we did our own research and hired our own choice of professional.  The only place we went with our realtor's contact was for the title work, and only because there is much less room for opinion and prices were similar across the board.

[ctuser1]

Don't get me started however, on how slimy the whole industry is!! All the professionals you will engage (inspectors, plumbers, electricians etc) get much more business via the RE Agent than they will ever get from you. So you have to always second guess their motives!! I would typically just do a basic risk assessment. If a lot rides on their opinion then I would sometimes get a second opinion from someone who is not local.

This is why we did not use the inspector that our realtor recommended, but did some research and contacted an inspector with a reputation for being very thorough and explaining every finding to the buyer.  Same for plumber, electrician, roofer, HVAC - we did our own research and hired our own choice of professional.  The only place we went with our realtor's contact was for the title work, and only because there is much less room for opinion and prices were similar across the board.

I have found that even hiring your own guy is often insufficient!!

Case in point - we submitted offers (with contingencies, of course) on a house with a septic system. The listing agent was one of the largest ones in our area. After the offer was accepted, we started doing more research and found some red flags with the septic system. There were two big trees growing right in the middle of the septic field!! This is a problem as the tree roots will seek out the source of water (buried septic pipes) and clog them - per our amateurish research!!

We researched and contacted a very well known septic guy in our area. I had a pretty long phone conversation with him and he told me all kinds of horror stories with septic systems and trees. His tune suddenly changed after I had texted him the address (which I'm guessing helped him realize who the realtor was).

I purchased my home on the third attempt, i.e. I walked out on two offers using contingencies. During this process, multiple service providers I hired have acted funny suggesting possible collusion with the realtor. My modus operandi was to be present during the entire time the service provider was working and interview him carefully. I believe that my job interview skills (on both sides of the table) saved my rear end multiple times. Even so, there were two obvious issues that the inspector missed on the final house I purchased - I wonder if on purpose!!

Oh well! I got it quite a bit below market price, so that is okay I guess.

[A Fella from Stella]

The very low barrier t entry for RE agents hurts the trade. These people are brokering huge transactions for people, and some are clueless dummies just trying to get some money.

With my current home, I had to be a real nuisance to the people because my agent wasn't petitioning on my behalf. I arranged my own listings because she seemed unsure of what to look for. In the end, I'm not actually sure what I used her for other than to get paperwork signed. I won't use her to list the property.

[Jon Bon]

Cartel: Noun

a group of similar independent companies or countries who join together to control prices and limit competition

Cartels are illegal in this country, but realtors sure try and act like one. Realtors are fine, but I sure hate some of their practices. They are all required to be card carrying members of NAR, control prices, try to control access and information, and regularly do not act in their clients best interests.

I am surprised they have not tried to make Zillow and Redfin illegal (see car dealers and Tesla)

[Adam Zapple]

There seems to be a misconception here that a realtor takes home 3%.  The realtor takes home 1% and the broker takes the rest.  It's the brokers I'd get rid of.  They basically provide lawn signs then take more than half the money.

Also, nobody is forced to list through an agent.  Anyone can list on MLS for a fee.  Though you will likely have to pay the buyer's agent if you want to actually sell.

[Boofinator]

I dunno, would it? 

I wonder how many house hunters would be willing to pay an agent an hourly rate for helping them look for a house.  Think about the people who spent a year and saw hundreds of open houses.  Eh, $50/hr x 200 houses.  I think probably not that many. 

You aren't helping your cause, given that a lot of people are already spending $10k for an agent, and I'd be willing to bet the vast majority of them aren't looking at 200 houses. Or is it that the people who can figure things out fairly quickly should be subsidizing those that need a year and 200 houses to make up their minds?

[Jon Bon]

There seems to be a misconception here that a realtor takes home 3%.  The realtor takes home 1% and the broker takes the rest.  It's the brokers I'd get rid of.  They basically provide lawn signs then take more than half the money.

And I think this is a bit disingenuous. If I sell my house tomorrow at closing I get to pay 6% of the value to realtor(s) for what amounts to writing and reading a craigslist add. How it is split up is irrelevant.

Also, nobody is forced to list through an agent.  Anyone can list on MLS for a fee.  Though you will likely have to pay the buyer's agent if you want to actually sell.

Sources please?

[Adam Zapple]

There seems to be a misconception here that a realtor takes home 3%.  The realtor takes home 1% and the broker takes the rest.  It's the brokers I'd get rid of.  They basically provide lawn signs then take more than half the money.

And I think this is a bit disingenuous. If I sell my house tomorrow at closing I get to pay 6% of the value to realtor(s) for what amounts to writing and reading a craigslist add. How it is split up is irrelevant.

Also, nobody is forced to list through an agent.  Anyone can list on MLS for a fee.  Though you will likely have to pay the buyer's agent if you want to actually sell.

Sources please?

It may be irrelevant to you, but I was speaking to those who were insinuating that being a realtor was easy money.  I know few realtors that earn enough through selling houses alone to support themselves.  The brokers take a gigantic cut.  Nothing disingenuous about it.

As far as listing on MLS, google will be a better source than anything I list here.  My Brother-in-law used isolmyhouse.com with zero issues.

[Jon Bon]

Yeah realtors are a lot like lawyers in their pay scale (so I have read). Sure there are guys that make 500k a year but for everyone of them there are thousands barely scraping by. Nor do they get to keep the entire 3%, they have to split with their brokerage. Who knows what value those companies even add.

I too have posted in the MLS for a fee, but again I had to go through a cartel member. As I suspect your brother-in-law did as well.

To me its all about value, does going through a realtor add 12k to the sale of a 200k house? Could I only have gotten 187,000 if I did FSBO/flat fee etc? If I priced my house 6% lower then FMV I would think I would have people knocking down my door to buy it.  Maybe Ill put that in my next listing, might be a fun experiment. "Won't pay fees to any realtor."  I wonder how many realtors would even be willing to show the property. Or less than that even call about it on behalf of their clients.


Realtors probably do add some value, but there is no way it's 6%. And this is before any principal agent problems IMO.

[Duke03]

Like everyone else I've had great realtors ie: marketed and priced the house correctly that sold in one day and I've had realtors that are inept ie: part time grandmothers who refused to put an offer on some raw land because she felt it was too low of an offer and was less than she paid for her property.  News flash none of that shit matters.  I'm with everyone else when I say I can't wait for that cartel to get disbanded and we go to a flat listing price system totally across the board.

[EngagedToFIRE]

Well yeah, lawyers are shake down artists.  Why would we like them?  It's a horrifically immoral and unethical profession, generally speaking (yes I know there are some decent ones, public defenders, etc.)  Financial advisors, same.  They aren't there to help anyone.  Fee-based maybe.  But that's rare.  They are commissioned salespeople and shady as fuck, who care not one bit about the well being of their clients.

That's a big paintbrush you have there.  Public defenders, divorce lawyers, prosecutors, employment lawyers, patent attorneys, in-house counsel.  My FIL was a hometown lawyer handling wills and such.

Also, I have a couple of friends who are financial advisers, including one of my best friends who is an honest as they come.  He refused to work with a fellow adviser who was recommending unneeded insurance - so I can see where the thought comes from.  But again, it's a big big brush.

It's probably best not to derail the thread with talk of lawyers.  But I'll just say my opinions are based on about a half dozen extremely negative experiences with our joke of a legal system.  Business, real estate, defamation, etc.  I've seen it all (and been victim to it).  This system has almost nothing to do with justice, and has merely become a tool of shake downs and intimidation.  It's a game played by attorneys whether it's divorce, employment, patents, etc.  Pay up or go bankrupt defending yourself.  Wow, what a choice.  This system has become just a tool of extortion and it's horrible.  It's my experience, I've been extorted enough by the system to the point I harbor extremely negative views of it.  I've seen things that are sickening, over and over.  It's a disgusting profession.  That's how I feel.  Sorry if you don't agree.  It's fine.  Just ranting.  And I'll stop.  :)

[Bloop Bloop]

Many professions are cartels. Doctors, lawyers, dentists, whatever. That's just life. Learn to live with it and if you can't beat them, join them. Or at least achieve peace.

[TomTX]

How many hours total go into selling a property?  And buying a property.  Yeah, it may be 10 hours total on occasion, but I am expecting it is far more than that typically (nevermind the buyer's side - I've got friends who looked at hundreds of properties with an agent for over a year and never bought).  That, actually, should also be taken into account when you consider their working hours - a fair bit of their hours as a buyer's agent will be "unpaid".

This thought came to my mind. I actually had friends look at 58 houses before buying. I remember that exact number because they were proud to talk about how many houses they looked at before buying their $130,000 home. 

I remember thinking they should have written their real estate agent a check for at least $5,000.

LOL. If you're doing high volume, dragging along the RE agent should just slow you down. We looked at well over 100 houses before buying this one (driveby, get out and look around if it's promising, write a grade on the MLS printout, move on)  - but the agent only showed us three in the span of one afternoon once we had viciously winnowed things down.

Admittedly we were also trying to get a good feel for various neighborhoods, access to parks + library, etc.

[Missy B]

Do Mustachians hate real estate agents?

This one does. I say that knowing there has to be some good agents who act with integrity, but I think they are overwhelmed by the number who think it isn't really dishonest to lie to a client about whether the rental max has already been reached at that condo building, or the engineering report, or the issues the realtor knows about because they sell in that building all the time, but which haven't (oopsie!) made it into the strata minutes... yes, I'm from Vancouver. I've had realtors flat lie to my face (fun to see what they try on when they don't know you live in the building!).
I had an email this week from a realtor that was so blatantly full of manipulative NLP-style trigger words that I nearly emailed him back to tell him he was pathetic. Sadly, he's not... it's only pathetic if it doesn't work.
The realtor I used 12 years ago to buy my house made 3K for an afternoon of work, much of which she spent driving me to properties that weren't what I wanted, but on which she was agent on both sides of the deal.

And having said that, as far as I'm concerned you're welcome here. I give individuals the benefit of the doubt and I think your perspective could be very valuable to the community here.

[Just Joe]

I just don't see the value in the services of agents for my family. Three houses in a row now we've found our own properties. All the agent has done is unlock the door for us and be the go-between us and the owner.

If we were passive buyers who wanted to be driven around and who didn't know a city's neighborhoods well then perhaps an agent would be worthwhile. There are alot of people out there like that.

We found our first in a newspaper, the second one exploring the neighborhoods, third one online via on the RE websites. As soon as we knew we liked the properties we began visiting the properties morning and night to get a feel for what living there would be like. Is it noisy, is it busy, etc?

We can hire all of our inspection people. The bank did the heavy lifting fielding questions and processing paperwork for us.

[nancyjnelson]

I loved my real estate agent.  When I initially her about about selling my house (due to a divorce), she urged me to wait a year if possible (thus delaying money for herself and risking no money in case I decided to go with someone else) because she saw the market rising rapidly and I'd get more money the next summer.  She also had her husband - a handyman - walk through the house with me and point out what needed to be done to make the house sellable (a window fixed, some light switch plates replaced, etc).  Most of the repairs he did for free.  My real estate agent got me a sale (the next summer - six years ago) that still has not been surpassed for my house type (WWII duplexes) in my neighborhood.

This would not have been possible without her.

[Omy]

What a great experience! As a realtor, I've had many similar discussions with potential clients that have resulted in a delayed purchase or sale - or no purchase or sale because their situation or the market was not ideal. I consider myself a counselor (not a salesperson or just the person with the key). I get countless referrals because my clients know I'm there to help and counsel during a stressful process - and that I don't view them as paychecks.

[CowboyAndIndian]

I have bought 4 homes and sold 2. At the end of each buy or sell, I never said that this was a wonderful realtor and I could not have done it without them. Never!

That does not mean that there are no great realtors. I'm sure there are a few, but I have never met one. They are all chasing their commission and their only loyalty is to their commission.

When I sell my primary home in a couple of years, I will try and do it myself. No realtor is worth 6% in a highly desirable neighborhood.

[HandleBarred]

In the US do you have an estate agent if you are buying, as well as you are selling? Are they the same people?

It is different in my country, where estate agents work for and get paid by the seller.

[Just Joe]

I loved my real estate agent.  When I initially her about about selling my house (due to a divorce), she urged me to wait a year if possible (thus delaying money for herself and risking no money in case I decided to go with someone else) because she saw the market rising rapidly and I'd get more money the next summer.  She also had her husband - a handyman - walk through the house with me and point out what needed to be done to make the house sellable (a window fixed, some light switch plates replaced, etc).  Most of the repairs he did for free.  My real estate agent got me a sale (the next summer - six years ago) that still has not been surpassed for my house type (WWII duplexes) in my neighborhood.

This would not have been possible without her.

Awesome agent!

[ecchastang]

Of the last two properties I have owned, I bought and sold the previous without a realtor, and bought my current home without a realtor. 

[jlcnuke]

I've yet to hear a realtor who can satisfactorily explain to me what they're going to do to earn 50% more when selling a client's $300k house that they wouldn't do when selling a client's $200k house. That's why I'll never use one that doesn't do flat rate pricing, because they clearly aren't earning their money for some jobs if they're charging twice as much for the same service. Writing "3" instead of "2" on paperwork is still just writing a number.

[ecchastang]

Excellent point!  Technology will continue to diminish the need for realtors.

[CowboyAndIndian]

I plan to use Darbin Orvar's method for selling the house. She makes a lot of sense. No more 6%.

Someone posted this on some other thread on the forum.

https://youtu.be/J0LQrLslQUk

[norajean]

We have bought and sold many properties over the years and worked with a wide range of agents, from completely pathetic to superstars. A good agent is worth their weight in gold.  They will more than cover their commission when assisting with a sale by getting you the best buyer at highest price.  On the buying side, they are free so get the best one you can and make them work their rear off to find you the best property, negotiate the best price, and manage the inspection process.  We have found "pocket listings" we never would have found without a realtor and it has really worked out well. 

People may feel because listings are online that they are automatically real estate professionals. Nonsense. Buy and sell 100 properties, get involved in some legal battles, then you are an expert.  Until then, you are just some person clicking a mouse on pictures which catch your eye.

[Boofinator]

On the buying side, they are free....

No, they are not free. I'll bet you nine times out of ten that a seller would choose a buyer without an agent over one with an agent, all other things being equal.

On top of that, any time you buy a house you will eventually have to sell it, and thus pay the buyer's agent. The cost is simply deferred by a few years.

[Arbitrage]

Don't hate them, but I did cultivate a healthy dislike of the National Association of Realtors during the (previous?) housing bubble, as I was on the rental side of the equation back then, and reading increasingly ridiculous statements by their "chief economist"/shill David Lereah drove me bonkers.  I also ground my teeth while reading on car forums about various just-out-of-school agents bragging about their latest purchases financed by their super-easy 6-figure incomes (by their own reckoning). 

I think their fees can be out-of-whack in HCOLAs.  Does it really take 5-10 times the work to sell a house in San Francisco as in the midwest? 

We used Redfin for our house purchase, and were very pleased; I could see that our agent was working very hard for us, and was always available for our questions without ever pushing us.  I'm not sure what a traditional agent would've done more of to earn an extra 8 grand.  I do think the traditional system is set up to encourage behavior not in the best interest of the buyer/seller.  Still, I'm sure the majority of agents are perfectly decent people, and I don't wish any ill upon them.  I'll certainly be shopping around when we look for an agent to sell our current place, and I would consider a traditional agent if the fees are reasonable. 

[BlueHouse]

To be honest, I harbor a deep prejudice against real estate agents and I assume most of them are just looking for easy money without working hard or having any great skill.  I have actually met a few who are quite skilled and who take their profession seriously and work hard to provide an exceptional service.  But those are few and far between. 

So many people around here decide it would be fun to get their license, and then just do it as a hobby.  If agents had to make a minimum each year or had to pay a large fee to stay in the business, I'd be more willing to give them the benefit of the doubt.  But when I'm serious about buying a house and I can't find someone who wants to work normal (full time) hours and is only available when their kiddo is in school, then I have no time for that.

[Bloop Bloop]

I'm pretty surprised by all the dislike for real estate agents. Even if it were the case that the commissions are "easy money", the low barriers to entry in the profession would mean that only the best salesmen and saleswomen get through. I have never been one to criticise high-performers in any industry, and I also don't begrudge real estate agents for making good money (though I have a feeling that, just like used car dealers, only a few do). Also, while I personally wouldn't use a used car dealer or real estate agent working on a commission scale, that doesn't mean that I don't think they have a place in society. It sounds to me like a cut-throat profession, and those that succeed should be applauded just like those who succeed in any profession. So for any agents reading, just know that you have my support - if not my patronage.

[ctuser1]

I'm pretty surprised by all the dislike for real estate agents. Even if it were the case that the commissions are "easy money", the low barriers to entry in the profession would mean that only the best salesmen and saleswomen get through. I have never been one to criticise high-performers in any industry, and I also don't begrudge real estate agents for making good money (though I have a feeling that, just like used car dealers, only a few do). Also, while I personally wouldn't use a used car dealer or real estate agent working on a commission scale, that doesn't mean that I don't think they have a place in society. It sounds to me like a cut-throat profession, and those that succeed should be applauded just like those who succeed in any profession. So for any agents reading, just know that you have my support - if not my patronage.

The dislike is due to their cartel-like behavior that actively seeks to defend a market inefficiency. Anybody who is a supporter of free market economics would be against their rent-seeking and efficiency destroying behavior.

There IS always going to be a set of clientele who would gladly pay 6% of transaction costs for basically being chauffered around to three or four houses (and it *is* the buyer who is paying it in the form of higher prices). Nothing wrong here!

The problem is when they actively steer clients away from FSBO's, block access to MLS (i.e. the marketplace) except through them, collude with other service providers etc. etc. etc.

[afox]

On the buying side, they are free so get the best one you can and make them work their rear off to find you the best property, negotiate the best price, and manage the inspection process.

Is this serious? Free? Have you actually sold a house with an agent?  Have you done the math?  They would work their but off to get u the best price and they would get less money,  only an idiot would do that.

[ReadySetMillionaire]

Regarding the "cartel like behavior," a conspiracy theory I pretty deeply hold is that Congress/state governments intentionally create complex laws that necessitate professional service cartels because America no longer manufactures much of anything. Lack of service jobs would mean nobody would be employed.

Lawyers -- the rules of procedure, evidence, appeals, etc., plus the substantive case law, are way harder than they need to be, thus requiring people to obtain lawyers for even small disputes.

Accountants -- the tax code is comical, but people cannot figure it all out, thus requiring accountants

HR Professionals -- employment and labor laws are so dense that they are impossible to follow, but their complexity has created human resources as a department at any mid-size company

You could go on with a ton of industries and professions; real estate is just one of them. The laws will never, ever be simplified because if we really simplified everything as much as it should be, then tens of millions of people would be out of a job.

[Metalcat]

Regarding the "cartel like behavior," a conspiracy theory I pretty deeply hold is that Congress/state governments intentionally create complex laws that necessitate professional service cartels because America no longer manufactures much of anything. Lack of service jobs would mean nobody would be employed.

As a member of a regulated profession and someone who is aware of the relationship between the government and the representatives of my profession, this concept is pretty funny.

Our relationship with the government is downright adversarial most of the time, with them constantly pushing legislation that encroaches on our autonomy and erodes our independence. They hit us with a direct shot a few years ago that permanently damaged my entire industry.

Real estate is a massive industry, which means it yeilds a massive amount of influence. Unless there was a huge public will to deconstruct a protectionist industry, the government will leave it alone rather than poke a bear.

Most of these complex professions are the way they are due to longstanding history, and it's incredibly difficult to change anything that's well established without causing a total shit storm, and cumbersome, difficult to resolve shit storms are political napalm.

[DadJokes]

Regarding the "cartel like behavior," a conspiracy theory I pretty deeply hold is that Congress/state governments intentionally create complex laws that necessitate professional service cartels because America no longer manufactures much of anything. Lack of service jobs would mean nobody would be employed.

As a member of a regulated profession and someone who is aware of the relationship between the government and the representatives of my profession, this concept is pretty funny.

Our relationship with the government is downright adversarial most of the time, with them constantly pushing legislation that encroaches on our autonomy and erodes our independence. They hit us with a direct shot a few years ago that permanently damaged my entire industry.

Real estate is a massive industry, which means it yeilds a massive amount of influence. Unless there was a huge public will to deconstruct a protectionist industry, the government will leave it alone rather than poke a bear.

Most of these complex professions are the way they are due to longstanding history, and it's incredibly difficult to change anything that's well established without causing a total shit storm, and cumbersome, difficult to resolve shit storms are political napalm.

I'm on the other side of the spectrum.

I see my profession working to make things as complex and convoluted as possible in order to make the profession more necessary.

[Metalcat]

Regarding the "cartel like behavior," a conspiracy theory I pretty deeply hold is that Congress/state governments intentionally create complex laws that necessitate professional service cartels because America no longer manufactures much of anything. Lack of service jobs would mean nobody would be employed.

As a member of a regulated profession and someone who is aware of the relationship between the government and the representatives of my profession, this concept is pretty funny.

Our relationship with the government is downright adversarial most of the time, with them constantly pushing legislation that encroaches on our autonomy and erodes our independence. They hit us with a direct shot a few years ago that permanently damaged my entire industry.

Real estate is a massive industry, which means it yeilds a massive amount of influence. Unless there was a huge public will to deconstruct a protectionist industry, the government will leave it alone rather than poke a bear.

Most of these complex professions are the way they are due to longstanding history, and it's incredibly difficult to change anything that's well established without causing a total shit storm, and cumbersome, difficult to resolve shit storms are political napalm.

I'm on the other side of the spectrum.

I see my profession working to make things as complex and convoluted as possible in order to make the profession more necessary.

Oh, my profession does this as well, I'm just saying that it's the professions doing it, not the Feds making us do it.

[DadJokes]

Regarding the "cartel like behavior," a conspiracy theory I pretty deeply hold is that Congress/state governments intentionally create complex laws that necessitate professional service cartels because America no longer manufactures much of anything. Lack of service jobs would mean nobody would be employed.

As a member of a regulated profession and someone who is aware of the relationship between the government and the representatives of my profession, this concept is pretty funny.

Our relationship with the government is downright adversarial most of the time, with them constantly pushing legislation that encroaches on our autonomy and erodes our independence. They hit us with a direct shot a few years ago that permanently damaged my entire industry.

Real estate is a massive industry, which means it yeilds a massive amount of influence. Unless there was a huge public will to deconstruct a protectionist industry, the government will leave it alone rather than poke a bear.

Most of these complex professions are the way they are due to longstanding history, and it's incredibly difficult to change anything that's well established without causing a total shit storm, and cumbersome, difficult to resolve shit storms are political napalm.

I'm on the other side of the spectrum.

I see my profession working to make things as complex and convoluted as possible in order to make the profession more necessary.

Oh, my profession does this as well, I'm just saying that it's the professions doing it, not the Feds making us do it.

Well, the federal government has also done everything it could to give us job security.

The greatest accounting scandal in history resulted in Sarbanes-Oxley, which drastically increased the need for accountants.

[ecchastang]

Based on work performed and skills required, the average fair price of a realtor these days is somewhere between $1000-5000. 

[nereo]

Based on work performed and skills required, the average fair price of a realtor these days is somewhere between $1000-5000.

how did you come up with this figure?

[ecchastang]

Based on work performed and skills required, the average fair price of a realtor these days is somewhere between $1000-5000.

how did you come up with this figure?

Based on the education and training to learn the job, and the hours put in while performing the work for an average client.  Obviously those numbers are my opinion.  Where I live, average home price is over 400k.  So in a sell with a realtor, $24000 would get split between buyer and seller agent.  That, my friend, is a rip off.  Even at a high $100 per hour, they are not coming anywhere near 120 hours.  Probably about 10-20 hours total. 

[CSuzette]

Sued the real estate agent that sold me my condo for failure to disclose future assessment   Since he had lived there for over 25 years and had even signed a petition objecting to the associated legal fees he was a liar. Especially since he had been asked the question and said that there were none on the horizon as he looked at the view from the window.

[CSuzette]

My ownership interest gave me a 90K share. It was a very upsetting part of my life for five years.

[Nick_Miller]

Based on work performed and skills required, the average fair price of a realtor these days is somewhere between $1000-5000.

how did you come up with this figure?

Based on the education and training to learn the job, and the hours put in while performing the work for an average client.  Obviously those numbers are my opinion.  Where I live, average home price is over 400k.  So in a sell with a realtor, $24000 would get split between buyer and seller agent.  That, my friend, is a rip off.  Even at a high $100 per hour, they are not coming anywhere near 120 hours.  Probably about 10-20 hours total.

Just curious, since you are trying to equate their compensation to an hourly rate, would you support a setup where the client pays the agent per hour? Obviously that means they would get paid whether or not there is ultimately a buy or sale, as you would be paying them for their time, not the result. I think it's somewhat easy to point out sales where the agent probably gets overpaid while ignoring the time they spend with clients that doesn't result in a sale, meaning no earnings at all.

Can any agents chime in with % estimates of how many clients they sign up that ultimately result in a sale/buy?

[ecchastang]

Based on work performed and skills required, the average fair price of a realtor these days is somewhere between $1000-5000.

how did you come up with this figure?

Based on the education and training to learn the job, and the hours put in while performing the work for an average client.  Obviously those numbers are my opinion.  Where I live, average home price is over 400k.  So in a sell with a realtor, $24000 would get split between buyer and seller agent.  That, my friend, is a rip off.  Even at a high $100 per hour, they are not coming anywhere near 120 hours.  Probably about 10-20 hours total.

Just curious, since you are trying to equate their compensation to an hourly rate, would you support a setup where the client pays the agent per hour? Obviously that means they would get paid whether or not there is ultimately a buy or sale, as you would be paying them for their time, not the result. I think it's somewhat easy to point out sales where the agent probably gets overpaid while ignoring the time they spend with clients that doesn't result in a sale, meaning no earnings at all.

Can any agents chime in with % estimates of how many clients they sign up that ultimately result in a sale/buy?

I am open to a flat fee system, but my last 3 real estate transactions I did without any agent involvement, and the process is quite simple. 

[nereo]

Based on work performed and skills required, the average fair price of a realtor these days is somewhere between $1000-5000.

how did you come up with this figure?

Based on the education and training to learn the job, and the hours put in while performing the work for an average client.  Obviously those numbers are my opinion.  Where I live, average home price is over 400k.  So in a sell with a realtor, $24000 would get split between buyer and seller agent.  That, my friend, is a rip off.  Even at a high $100 per hour, they are not coming anywhere near 120 hours.  Probably about 10-20 hours total.

Just curious, since you are trying to equate their compensation to an hourly rate, would you support a setup where the client pays the agent per hour? Obviously that means they would get paid whether or not there is ultimately a buy or sale, as you would be paying them for their time, not the result. I think it's somewhat easy to point out sales where the agent probably gets overpaid while ignoring the time they spend with clients that doesn't result in a sale, meaning no earnings at all.

Can any agents chime in with % estimates of how many clients they sign up that ultimately result in a sale/buy?

Our own situation is an interesting counter-example.  We've had an agent (actually a 2-person team) that I know has spent considerably longer than the 10-20 hours of work suggested above.  For starters. they have shown the house at least 24 times and held two open houses.  I don't blame them for the lack of a sale as there's been an absolute crap-storm of circumstances beyond their control (including an abnormally soft market and two municipal claims that have forced us to re-list the property and essentially restart the practice).  To date I have not paid them a penny*. If I had to guess I'd say between our meetings, viewings, phone calls, photographs, media listings and open houses they've put closer to 150 hours... and we might pull out and rent it full time anyway.  Their cut of the eventual sale - assuming I don't just npull it off the market - would be around $5k, which is rapidly becoming less than $30/hour -- and then they will have to pay taxes on that and of course the agency takes a sizable cut.

If you go back to my earlier comments you will see that I dislike that we have a system that almost requires an agent, but I also don't think that it's nearly as easy money as has been suggested by some.  When you are in a hot market and properties get sold in less than a month with multiple bids it might seem like stealing candy from a baby.  But markets tend to be cyclical and I don't envy an agent's job when properties can spend months on teh market, and often owners will pull them off with no compensation to the agent despite all the work that has been done.

[Just Joe]

Regarding the "cartel like behavior," a conspiracy theory I pretty deeply hold is that Congress/state governments intentionally create complex laws that necessitate professional service cartels because America no longer manufactures much of anything. Lack of service jobs would mean nobody would be employed.

Lawyers -- the rules of procedure, evidence, appeals, etc., plus the substantive case law, are way harder than they need to be, thus requiring people to obtain lawyers for even small disputes.

Accountants -- the tax code is comical, but people cannot figure it all out, thus requiring accountants

HR Professionals -- employment and labor laws are so dense that they are impossible to follow, but their complexity has created human resources as a department at any mid-size company

You could go on with a ton of industries and professions; real estate is just one of them. The laws will never, ever be simplified because if we really simplified everything as much as it should be, then tens of millions of people would be out of a job.

So how is this going to play out as automation makes more and more jobs redundant? Genuinely curious, not rattling your chain.

[ecchastang]

Regarding the "cartel like behavior," a conspiracy theory I pretty deeply hold is that Congress/state governments intentionally create complex laws that necessitate professional service cartels because America no longer manufactures much of anything. Lack of service jobs would mean nobody would be employed.

Lawyers -- the rules of procedure, evidence, appeals, etc., plus the substantive case law, are way harder than they need to be, thus requiring people to obtain lawyers for even small disputes.

Accountants -- the tax code is comical, but people cannot figure it all out, thus requiring accountants

HR Professionals -- employment and labor laws are so dense that they are impossible to follow, but their complexity has created human resources as a department at any mid-size company

You could go on with a ton of industries and professions; real estate is just one of them. The laws will never, ever be simplified because if we really simplified everything as much as it should be, then tens of millions of people would be out of a job.

So how is this going to play out as automation makes more and more jobs redundant? Genuinely curious, not rattling your chain.

Andrew Yang talks a lot about job killing automation, and thus, his reasoning for a Freedom Dividend. 

[ctuser1]

I have seen a couple of cases where the RE agent added a lot more value than is asked for from an agent, by acting more like an investor and less like an agent.

When we were looking at houses 3-4 years ago, we saw 2 cases where the agent purchased old houses in estate sale at a low price, updated/fixed the house and then sold it.

In this case, they acted as an investor, took the risk and fully deserved any premium they earned!!

Acting solely within the bounds of RE Agent role - I don't see how they would add a 6% value in an efficient marketplace.