6% no more? - Page 4

bubblesthechimp

5:58a, 3/21/24

Quit being so sensitive

On this thread alone we've had folks compare realtors to doctors and compare pharmacists to the guy who works at Dairy Queen

It's about compensation structure for the service provided

jja79

7:54a, 3/21/24

In reply to Medaggie

Medaggie said:
Most laypeople just believe and accept that 6% is standard and do not believe they can negotiate the percentage. With this law and word of mouth, more sellers and buyers will be negotiating percentages.

The ignorance of the real estate buying public isn't Realtors fault.

bubblesthechimp

8:10a, 3/21/24

In reply to jja79

We just had someone say

"There isn't that human connection where you know a person will take care of you and be with you to the end. So much of this job is psychological and being reassuring and coaching/teaching. This is why successful Realtors have repeat clients and gain an abundance of referrals."

I have a hard time squaring that notion of "we're here to walk you through the process of buying a home" with "the ignorance of how this is all gonna be paid for is not my fault"

Ed007

8:30a, 3/21/24

In reply to Houston Lee

I own a title company, and I do 700 closings per year. This is word salad. Realtors do not do an abundance of work. That's a fact. Open a door and fill out a simple form. Y'all have done a great job convincing the market of all this though. I'll give you that. You are all salesmen. I'd say a realtor's worth on a deal is probably $300-$500.

Ok, that broad stroke is harsh. The bad realtors that do bare minimum (and there are many) and bring no value deserve $300-$500 for their time. These are the realtors that absolutely frustrate me because I know the value they brought to a closing, and I know how much I had to pick up their slack. The good realtors that do bring value (and there are many) are absolutely worth a fair commission percentage (and often 6% is fair). The realtors speaking out on this thread seem to be in the good realtor category, so I apologize for the broad stroke. My hope is that this NAR case and the media attention it is getting will educate the market in order to weed out and/or hold accountable the bad realtors. My industry has good and bad too, so it deserves criticism and disruption too---which I have no doubt is coming (and has come to certain degrees), and hopefully for the overall better.

Red Pear Realty

Sponsor

9:03a, 3/21/24

In reply to Ed007

While we are on the subject of overpriced services, why is title insurance so expensive? Why couldn't we put chain of title on the Blockchain and charge almost nothing for it?

Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty

Aggiemike96

9:03a, 3/21/24

In reply to Ed007

Ed007 said:
I'd say a realtor's worth on a deal is probably $300-$500.

I'm glad change is coming, but this statement is ridiculous. For a highly seasoned real estate buyer who knows exactly which property they want to purchase at what price? Probably correct. For your average home buyer? Come on man!

Sea Speed

9:06a, 3/21/24

In reply to Red Pear Realty

Red Pear Realty said:
While we are on the subject of overpriced services, why is title insurance so expensive? Why couldn't we put chain of title on the Blockchain and charge almost nothing for it?

Especially for some suburban tract home that has been owned by Mr and Mrs Jones for the last 20 years

Aggiemike96

9:10a, 3/21/24

I think there's a thread on the General board about ridiculously overpriced items. We can now add Realtors and Title Companies/Insurance to that list.

TxAG#2011

9:15a, 3/21/24

In reply to Houston Lee

Are you actually helping your case here? A lot of that stuff you listed is just busy work. Administrative office work. Not really requiring much skill, just time.

The drive in person at tastee frezee is busy also.

bubblesthechimp

9:18a, 3/21/24

In reply to Red Pear Realty

Red Pear Realty said:
While we are on the subject of overpriced services, why is title insurance so expensive? Why couldn't we put chain of title on the Blockchain and charge almost nothing for it?

Great point! Entire process needs to be evaluated! There's over priced services riddled throughout!

jja79

9:21a, 3/21/24

In reply to Ed007

I would bet if you post the name of your company you won't have 700 closings/year. Having been in the residential real estate business, primarily mortgage lending, for 45 years you seem to be in a business more dependent on Realtor referrals than any others. Very curious post.

Oh and as Jamie said there's no scam bigger than title insurance.

jja79

9:26a, 3/21/24

In reply to Red Pear Realty

Red Pear Realty said:
While we are on the subject of overpriced services, why is title insurance so expensive? Why couldn't we put chain of title on the Blockchain and charge almost nothing for it?

We have bank charter in most of the American west in addition to Texas and the other states I've done deals in have very minimal title insurance costs as compared to Texas. Why are Texas title companies in particular such a huge cost to both parties in transactions?

Houston Lee

9:31a, 3/21/24

Here is a fun fact that some of you anti-Realtor, Big Tech supporters may not know.

The MLS is the core to all of this Real Estate technology that you like so much. The reason why anyone can get on a website and find a home is because the listing in on an MLS.

MLSs are private databases that are created, maintained and paid for by real estate professionals (Realtors) to help their clients buy and sell property. In most cases, access to information from MLS listings is provided to the public free-of-charge by participating brokers.

Zillow, Realtor.com, Homes.com and every website out there gets their listing information by pulling it from all the MLS databases around the country. Those websites would not exist if they were not able to populate their site with the info and pictures they take off the MLS.

Who inputs all the data on the MLS? Each and every Realtor.
Who pays to keep the MLS running? Each and every Realtor.

---

-Realtors pay over $1,000 per year just to be able to access and use the MLS.
-To get legal protection, training, guidance and support, Realtors must work with a broker. The cost of monthly dues and deducted fees out of Realtor commissions can be $22,000 a year or more.
-Realtors only keep 1/3 of the commission earned. The other 1/3 goes to taxes and 1/3 goes to a broker.
-Realtors are not employees. They are contractors. They pay for their own healthcare, car, car maintenance, gas and mileage.
-The cost of professional photos, 3D matterport and drone shots for your home is around $400-$600 and Realtors usually pay for this upfront for their clients.
-The cost to run social media campaigns, print out flyers, make videos and pay for Facebook/Google ads for your home can be well over $1,000. And this is done prior to getting any commission. The longer your house takes to sell, the more money is spent by the Realtor on your behalf to keep ads going.
-Realtors must renew their license every 2 years by taking classes and testing. $500-$1000.
-If a Realtor has their own website, they are paying $150 or more per month.
-And then there is the time required to spend on each transaction over a period of 30-45 days. Its not uncommon to spend 30-40 or more working hours on each transaction. (Listing appointments, pre-qualifying buyers, coaching/teaching, MLS Research on each home showed, CMA development, showings, negotiations, hosting open houses, travel time and mileage, creating ads, marketing, creating social media posts/videos, creating and reviewing contract paperwork, reviewing inspection reports, Coordinating and communicating with You, the other Realtor, Lenders, Inspectors, Title Company, Survey company, appraisers, Contractors/Trades and the list goes on.
-There is never a finite set of tasks to do because each transaction is different.
-Would you rather a Realtor to charge you 3% commission or do a cost plus 15% model for each expense and task they perform and hours spent?

The list of expenses and costs go on an on. And this is why so many Realtors are not successful. They simply can't afford to exist with all these expenses required to work.

Now you want to take the MLS to court and you want to cut Realtor commissions. When you have destroyed the Realtor profession and the MLSs disappear you will be left with nothing.

Your house will sit on the market for months because few people will know its for sale. Buyers will be left with a small sample size of the homes for sale because there is no centralized database of listings.

Big Tech wont be able to save the day, because they dont have the bandwidth to input all the data. And if they do, then they will be the ones to get sued because now they are the go-to tool for people to get info.

So, please be excited about figuring out ways to cut your Realtors commission. You will get what you pay for...

Heineken-Ashi

9:37a, 3/21/24

In reply to Ed007

Ed007 said:
I own a title company, and I do 700 closings per year. This is word salad. Realtors do not do an abundance of work. That's a fact. Open a door and fill out a simple form. Y'all have done a great job convincing the market of all this though. I'll give you that. You are all salesmen. I'd say a realtor's worth on a deal is probably $300-$500.

That makes your worth less than $50.

“Give it hell Heinekandle, I’m enjoying it.”
- Farmer @ Johnsongrass, TX

“No secure borders, no alpha military, no energy independence, no leadership and most of all no mean tweets - this is the worst trade I’ve ever witnessed in my lifetime. ***Put that quote in your quote/signature section HeinendKandle*** LOL!”
- also Farmer @ Johnsongrass, TX (obviously in a worse mood)

jja79

9:37a, 3/21/24

In reply to Houston Lee

Couldn't the owners of the information make it private? I'm assuming that's where Zillow and others get it too.

AggiePlaya

9:46a, 3/21/24

In reply to Ed007

Ed007 said:
I own a title company, and I do 700 closings per year. This is word salad. Realtors do not do an abundance of work. That's a fact. Open a door and fill out a simple form. Y'all have done a great job convincing the market of all this though. I'll give you that. You are all salesmen. I'd say a realtor's worth on a deal is probably $300-$500.

Title companies are the biggest ripoff with their "Title Insurance" fees. That's rich coming from a Title company owner

Houston Lee

9:48a, 3/21/24

In reply to jja79

jja79 said:
Couldn't the owners of the information make it private? I'm assuming that's where Zillow and others get it too.

Zillow gets their information from the MLS. Sometimes Zillow may have info on a home because the owner is selling it themselves as For Sale By Owner and has inputted his homes info on Zillow. But, then that home only shows up for people that search on Zillow.

Making the info private kind of defeats the purpose of marketing and expanding the reach of every listing.

jja79

10:09a, 3/21/24

In reply to Houston Lee

I get that but one of the arguments being made is the information is so easily available what value does the Realtor bring?

Tex117

10:10a, 3/21/24

Does HoustonLee honestly think that a MLS service will not immediately take its place if relators quit supporting it?

Seller Relators can sometimes be worth it. (I sold a house, and the one referred to me was absolutely outstanding and worth the price tag). BUYERS side, that is where its all b.s.

All I know is, the bottom feeding relators where the job is basically a hobby are about to get effed.

jja79

10:40a, 3/21/24

In reply to Tex117

It's Realtor not relator but you are correct this will thin the herd. Bidenomics is doing a pretty good job of thinning the herd in residential and commercial as well as the related businesses.

Red Pear Realty

Sponsor

10:55a, 3/21/24

In reply to bubblesthechimp

bubblesthechimp said:
Red Pear Realty said:
While we are on the subject of overpriced services, why is title insurance so expensive? Why couldn't we put chain of title on the Blockchain and charge almost nothing for it?

Great point! Entire process needs to be evaluated! There's over priced services riddled throughout!

I agree. Been saying and doing something about it for years!

Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty

htxag09

11:06a, 3/21/24

What I'm just really confused about is some of the rhetoric around all this....

First, people have options for lower commission agents. Maybe not a ton of options, but they have options. We, for example, went with Red Pear. So these options are available but the overwhelming majority continue using 3% realtors. At what point is that on them? If more people were choosing to use these alternative commission options more would be popping up.

Second, I know people in general are dumb, but I really don't get this "the fees are hidden" rhetoric. It's all pretty damn straightforward that the seller is paying both realtors' commission. Also pretty straightforward that it's typically 3% each.

bubblesthechimp

11:16a, 3/21/24

In reply to Red Pear Realty

yall hit the nail on the head in your faqs about why this is such an issue

Quote:
Q. If I'm selling, can I offer less than a 3% commission to the buyer's agent?

A. Absolutely. The unfortunate reality though, is that your home won't get the same attention that it would if you offered buyers agents 3%. It could either take longer to sell, or may not sell at all.

Houston Lee

11:43a, 3/21/24

In reply to Tex117

Tex117 said:
Does HoustonLee honestly think that a MLS service will not immediately take its place if relators quit supporting it?

Seller Relators can sometimes be worth it. (I sold a house, and the one referred to me was absolutely outstanding and worth the price tag). BUYERS side, that is where its all b.s.

All I know is, the bottom feeding relators where the job is basically a hobby are about to get effed.

In years past, the listing agent did all the work and buyers never really had separate representation. Just because the agent was talking with the buyer, they still were working for the seller. Deals would fall apart and sellers would get sued by buyers. Thus the buyers agent was born. The seller has a vested interest in buyers agents bringing qualified buyers to the table and having both agents work together resolving issues that eventually lead everyone to the closing.

Here the worth of Buyers Agents:
(Typical buyers usually see 5-10 or more properties before making a decision and their search can take weeks or months to find the right one. Agents can spend 20-40 working hours just traveling to and showing properties to one buyer.)

Before showing a house:
1-Help Buyers get with lenders to make sure they get pre-approved for a loan. Therefore, the buyer knows how much house they can buy and afford. A loan pre-approval letter or proof of funds is required in order to make an offer and is submitted with the paperwork. Now the agent can do an extensive search for homes based on the buyers criteria and can give the buyer a pre-screened list of properties to pick from.
2-Coach the Buyer on how they can get "Sellers Contributions" towards their closing costs so they can buy down their interest rate. Explain how all that works.

Pre-screen properties before showing:
1-Check to see if the property is in a flood zone. (This can require flood insurance and higher home insurance premiums)
2-Review the Sellers Disclosure form to find out things like:
---Has the home ever flooded?
---How old is the roof?
---What problems have the sellers disclosed about the property?
---Has the seller ever filed an insurance claim on the property. (This can cause the property to have high home insurance premiums)

3-Review the tax rolls
---Find out who the current owner is (Individual or investor company
---Check to see when the owner got a mortgage and how much the mortgage was. This may help determine how much equity the owner has in the home and give the Agent an idea of how low they may be willing to go on an offer.

4-Review the listing
---How long has the home been on the market?
---What price was it initially listed at and what price is listed for now?
---Is the home being sold "as is" with no repairs offered?
---Is the home in an HOA and how much are the yearly dues?
---How many times has the home pended and then when back on the market? This may indicate that a home inspection report has been done by the previous buyers that terminated and the agent can ask for a copy to review.

While showing the property
1-Walk the outside of the property
---Check the condition of the roof
---Check the age and condition of the AC units
---Check the foundation and walls for any visible cracking or issues.

2-Walk the inside of the property
---Check for previous signs of home settling or shifting
---Check for signs of previous water damage in ceilings and walls
---Look in the attic to see if the home has galvanized piping
---See of the doors can close easily and if they swing open/closed by themselves
---Get a feeling if the home has been well maintained or not. This can be a clue to if the home may require a lot of repairs.

Before making an offer
---Make sure the buyer fully understands the condition of the property and the potential issues with the property before making an offer.
---Check with the listing agent to see if there are any current offers
---Come up with an offer strategy that includes seller contributions

Negotiate the contract
---Negotiate favorable price, sellers contributions, option period, closing date, have the seller pay title and HOA fees, have the seller pay for the survey, have the seller pay for a 1 year home warranty, have the seller pay for the owners title policy

During the 7-10 day option period conduct Inspections and Negotiate Repairs
---Provide a list of reputable inspection companies they can choose from
---Attend the inspection with the inspector
---Fully review the inspection report (Usually 50-100 pages)
---Coordinate any trades needed to further review property based on inspection report (Roofers, HVAC, Plumbers, Electricians, Pool/Spa and Foundation)
---Negotiate repairs on any safety issues and broken items that should be working
---Negotiate credits for worn out items like roof and HVAC systems
---Advise client dates they will need to terminate by (if needed) so they can get their earnest money back. (Option period, Buyers Approval and Property Approval periods) and keep track of those dates for the buyer.

Ensure all Negotiated repairs have been completed prior to closing

Communication is key
Consistently coordinate and communicate with Buyer, Sellers Agent, Lender, Title Company, Home Warranty Company, Home Insurance Company, Trades, Appraisal, Survey and others as needed resolve issues and to get the contract closed in 30-45 days.

Schedule final walkthrough and closing

Red Pear Realty

Sponsor

11:48a, 3/21/24

In reply to bubblesthechimp

One of our agents is working a deal right now with 1% buyer comp. House has been on the market a while, and is overpriced, but it looks like we may come to a good outcome. Are we going to abandon our client or try to steer them away from it? Heck no. Would a lot of agents? Heck yes. And it's shameful that it's that way. I've listed residential homes with less than 3% to the buyers agent before and have had agents call and ask me if it's a typo then hang up before I could even finish speaking. They were making their point very clear. That kind of thing has happened more than once with multiple listings of mine. Personally, when I go to list, I'm probably going to offer more than 3%. It's all part of the game.

Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty

htxag09

11:50a, 3/21/24

I've always heard in negotiation classes/trainings the more you say and defend your position the weaker it makes your argument seem.....

Tex117

11:54a, 3/21/24

In reply to htxag09

htxag09 said:
I've always heard in negotiation classes/trainings the more you say and defend your position the weaker it makes your argument seem.....

The lady doth protest too much.

The end is coming for that gravy train. I don't know how it looks in the long run for the market at large, but there is no question disruption is coming...and MANY Relators are about to get effed.

The vast majority of real estate people I've ever dealt with (both personally and professionally) are absolutely morons at best.

Red Pear Realty

Sponsor

12:23p, 3/21/24

In reply to Tex117

Serious question. Are you just trolling or do you not know how to spell "realtor"? The former, I'm ok with. But the latter, especially with your commentary on intelligence, I'm not sure I can handle.

Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty

southernskies

12:34p, 3/21/24

Why do the brokerages take large cuts from their agents? Other than insurance costs.

Know1

2:25p, 3/21/24

In reply to southernskies

southernskies said:
Why do the brokerages take large cuts from their agents? Other than insurance costs.

Every brokerage is different. Costs often vary based upon what is offered to agents. Agents have to have a broker, while brokers don't have to have agents.

Heineken-Ashi

2:55p, 3/21/24

In reply to Tex117

Tex117 said:
htxag09 said:
I've always heard in negotiation classes/trainings the more you say and defend your position the weaker it makes your argument seem.....
The lady doth protest too much.

The end is coming for that gravy train. I don't know how it looks in the long run for the market at large, but there is no question disruption is coming...and MANY Relators are about to get effed.

The vast majority of real estate people I've ever dealt with (both personally and professionally) are absolutely morons at best.

I've been in some form of real estate or finance my whole career. There are tons of smart people. If the vast majority you have encountered are dumb, I take it that you keep dumb company more than the entire industry is dumb.

Now, will I deny that half of all agents are idiots? No. Fully agree. The field needs a purge. But it won't be the ones you are interacting with here. So maybe stop purposely insulting the few who likely earn every dollar they make rightfully so.

“Give it hell Heinekandle, I’m enjoying it.”
- Farmer @ Johnsongrass, TX

“No secure borders, no alpha military, no energy independence, no leadership and most of all no mean tweets - this is the worst trade I’ve ever witnessed in my lifetime. ***Put that quote in your quote/signature section HeinendKandle*** LOL!”
- also Farmer @ Johnsongrass, TX (obviously in a worse mood)

Tex117

3:12p, 3/21/24

In reply to Red Pear Realty

Red Pear Realty said:
Serious question. Are you just trolling or do you not know how to spell "realtor"? The former, I'm ok with. But the latter, especially with your commentary on intelligence, I'm not sure I can handle.

Yall are so inconsequential, I don't care to bother.

Tex117

3:14p, 3/21/24

In reply to Heineken-Ashi

Heineken-Ashi said:
Tex117 said:
htxag09 said:
I've always heard in negotiation classes/trainings the more you say and defend your position the weaker it makes your argument seem.....
The lady doth protest too much.

The end is coming for that gravy train. I don't know how it looks in the long run for the market at large, but there is no question disruption is coming...and MANY Relators are about to get effed.

The vast majority of real estate people I've ever dealt with (both personally and professionally) are absolutely morons at best.
I've been in some form of real estate or finance my whole career. There are tons of smart people. If the vast majority you have encountered are dumb, I take it that you keep dumb company more than the entire industry is dumb.

Now, will I deny that half of all agents are idiots? No. Fully agree. The field needs a purge. But it won't be the ones you are interacting with here. So maybe stop purposely insulting the few who likely earn every dollar they make rightfully so.

Oh, I suppose I should somewhat limit my "moron" comment to the agents. I stand corrected.

AggiePlaya

3:21p, 3/21/24

In reply to Tex117

Tex117 said:
Red Pear Realty said:
Serious question. Are you just trolling or do you not know how to spell "realtor"? The former, I'm ok with. But the latter, especially with your commentary on intelligence, I'm not sure I can handle.
Yall are so inconsequential, I don't care to bother.

You sound like a pompous prk

Tex117

3:28p, 3/21/24

In reply to AggiePlaya

AggiePlaya said:
Tex117 said:
Red Pear Realty said:
Serious question. Are you just trolling or do you not know how to spell "realtor"? The former, I'm ok with. But the latter, especially with your commentary on intelligence, I'm not sure I can handle.
Yall are so inconsequential, I don't care to bother.
You sound like a pompous prk

Glad to see that's coming across.

(I'm just jacking around...I do think there will be some shake up in the industry, but no idea or can even guess how it will playout).