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Shifty Pony posted:Iirc the studies tend to show that agents don't push for high prices but fast easy transactions. A 10% higher sale price boosts their income by 10%, but if it took twice as much effort their hourly income is still down by nearly half. This makes sense because another part is that they don't get paid if nothing is bought so it's very possible for any number of hours of work to essentially go unpaid because the buyer got cold feet or something else happened that caused them to back out.
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Jan 25, 2023 04:12
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Sundae posted:Perhaps this is also a regional thing, but many listings I've seen and realtors I've spoken to here in CA split the seller fee between the two realtors involved. You'd save literally nothing on an offer from a self-rep'd buyer because your selling agent would just take the whole fee for himself instead. It isn't 3% to seller and 3% to buyer; it's 6% (give or take, YMMV if using a low-fee agency, blah blah) divided between the two. It doesn't surprise me that some agents get away with this, because real estate agents are professional con artists, but you shouldn't sign anything that gives your agent double the fee for no reason In my experience as a seller the selling agent negotiates their fee (our most recent one actually offered "tiers" of service fee, you could pay 2.5% if you wanted a pretty basic listing or 3.5% if you want one of those 3D walkthroughs of your floor plan and some video taken with a drone), and the offer contains the buyer agent's fee (typically 3%).
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Jan 25, 2023 04:12
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Hadlock posted:The agent doesn't get the full 2.5% for selling/buying. The agency (whose agency license they work under, in addition to their on REA licence) takes their cut, I think almost half of their payout, for junior, and somewhat less for senior REA. From what I understand it is a process of several (more than 3) years to graduate to senior. This is all hearsay though, may not be true. A coworker is getting into the real estate industry and is working for Coldwell. She was working on a million dollar home, and bitching about it, and I said something like "hey, at least you're gonna clear like 25k on it". She laughed, started breaking down all the people who get a cut, and how much, and etc, etc, she ends up with like 3k.
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Jan 25, 2023 04:22
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Xelkelvos posted:This makes sense because another part is that they don't get paid if nothing is bought so it's very possible for any number of hours of work to essentially go unpaid because the buyer got cold feet or something else happened that caused them to back out. This happened on my almost first purchase. Relator spent maybe 30-40 hours with me, put in a couple offers, and then I bailed and took a job across the country.
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Jan 25, 2023 05:47
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I’m not defending realtors at all, but one I talked to said they net about 1% of the transaction. The other 2% of their commission goes to the brokerage, fees, taxes and other expenses. They’re all independent contractors and depending on how well they perform the brokerage can take 5 to 50% of the gross.
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Jan 25, 2023 06:34
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"fees, taxes, and other expenses" - this reminds me of that old WSJ chart where CEOs break down their busy 60-hour day and half of it is exercise, meals, and personal appointments. "Oh no not the fees!" I cry as I watch a percentage of my paycheck go into my 401k lmao
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Jan 25, 2023 06:55
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Literally half of the 3% goes to the broker. 1/2 a percent to taxes and expenses sounds about right.
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Jan 25, 2023 09:43
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QuarkJets posted:"fees, taxes, and other expenses" - this reminds me of that old WSJ chart where CEOs break down their busy 60-hour day and half of it is exercise, meals, and personal appointments. yeah but this time you're talking about peanuts, not multi-million dollar base salaries with tens of millions of dollars in stock options/bonuses. If we say the median home price is $350k, 1% of that is 3,500. Assuming that's net of taxes, then with an effective tax rate of 20% we're saying that's $4,375 per house. So if we say $100k/year gross is making good money, then as a realtor you have to close more than 23 houses a year. Google tells me that most realtors close 2-10 per year, and some site is saying the median number is 12 I guess, so we're realistically looking more like $50k/year gross for being a real estate agent.
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Jan 25, 2023 14:09
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Upgrade posted:handled by an attorney, which you have to hire anyway for closing Be careful giving "advice" like this. Your state is not how all states operate. Dik Hz posted:The average buyer is too dumb to buy a house without a real estate agent. Also this. Your RE agent can be/probably is a bottom feeding moron, but they've been through 20 transactions and you've been through probably 0 to 3. They know how the state forms work. They know what needs to be done in what order, at least roughly if they're paying attention and not too hung over. carticket posted:There is a lot to coordinate and if your agent isn't helping you do that, your agent isn't good. I am close friends with a few actually good real estate agents (and you won't be working with them unless you are buying a multi million dollar house, of course) and they have all kind of stories from earlier in their careers of handling either side of a transaction with an unrepresented buyer or seller. It's especially bad with unrepresented sellers. They basically have to do all the work of both sides. Popete posted:It would be nice if their pay wasn't based on the sale price of the home, it's such a bizarre way to get paid in the first place. Like is selling a multi million dollar mansion that much more difficult than a $200k home? Yes. It is also more expensive. Not proportionally, but it absolutely is. If you want to have an entire discussion on how and why I'm happy to engage on that. I don't think percentage of sale price is the correct way to set compensation, but that's not mutually exclusive with your statement being wildly off base.
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Jan 25, 2023 15:14
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DaveSauce posted:yeah but this time you're talking about peanuts, not multi-million dollar base salaries with tens of millions of dollars in stock options/bonuses. my impression of real estate agents is that a huge percentage of them only ever close on a few houses, and get in and out as the market booms and busts. it ends up being a lot like an MLM
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Jan 25, 2023 15:26
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Inept posted:my impression of real estate agents is that a huge percentage of them only ever close on a few houses, and get in and out as the market booms and busts. it ends up being a lot like an MLM My regular agent is also a lifelong friend from highschool. 50k to 80k is typical. Can be more if you are a top agent in an insane market like the Bay area. Any idiot can get their license and try it out, most fail. A good agent really adds their value when things start to go sideways.
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Jan 25, 2023 21:05
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Motronic posted:Be careful giving "advice" like this. Your state is not how all states operate. again the point isn't to argue individual edge cases, its to point out that in general real estate agents are a cartel that function to raise overall home prices, that in 2023 their utility has decreased vs. 30 years ago because of the advent of sites like Zillow, and that a meaningful replacement should exist (i.e. flat fee lawyers, etc.) i'm not advising anyone to not use a real estate agent, but talking in general about how they're parasites
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Jan 26, 2023 00:42
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Upgrade posted:again the point isn't to argue individual edge cases I'm not talking about edge cases. You said: Upgrade posted:all the legal elements of an offer should (and would be) better handled by an attorney, which you have to hire anyway for closing This is not an edge case. Most states do not require this. I'm not saying the rest of your advice is not good. I'm telling you to watch your "this is how my state does it" bias in the real estate thread where every state does it at least slightly differently.
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Jan 26, 2023 00:55
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Texas. 2 houses purchased so far. I have hired zero attorneys.
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Jan 26, 2023 00:58
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I don't think my state requires a closing attorney, but isn't the conventional (and correct) advice is that you should always hire an independent real estate attorney as part of a house buying transaction? also someone upthread said that agents can be helpful in helping find inspector... but again, doesn't this thread always recommend finding an independent inspector? the first house we went under contract with we used the agent's recommended inspector... who absolutely glossed over serious defects and encouraged us to just buy the house.
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Jan 26, 2023 01:08
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I bought a foreclosure, in california. We did not need or use an attorney; you don't really get to negotiate terms with a bank anyway. Many of us in this thread do recommend an attorney as generally good advice, yes; but it's not "required" and also an attorney is not a substitute for everything an agent does. IMO whether or not to use an agent is a discussion to have, not just a thing to unilaterally lobby against.
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Jan 26, 2023 01:12
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Leperflesh posted:I bought a foreclosure, in california. We did not need or use an attorney; you don't really get to negotiate terms with a bank anyway. i think until something breaks the existing cartel (regulation? a realistic, lower priced alternative?) its hard to advise someone not to use an agent. in another example of why agents are bad, the real estate agent lobby in my state is trying to push through a law that exempts any short term rental property managed by a real estate agent from any regulations, regardless of locality. insane. and these aren't onerous regulations - things like limiting the number of people you can rent to based on bedrooms, requiring parking depending on how many people you rent too, etc.
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Jan 26, 2023 01:15
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skipdogg posted:Texas. 2 houses purchased so far. I have hired zero attorneys.
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Jan 26, 2023 02:35
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Upgrade posted:i think until something breaks the existing cartel (regulation? a realistic, lower priced alternative?) its hard to advise someone not to use an agent. I think zillow and redfin, despite their side projects, have done a fantastic job of democratizing the real estate market. We really only used our agent for making the offer and as a voice to speak through to the listing agent. You should not take investing advice from the internet but I think if anyone was going to "disrupt"* the real estate market, I think those two have the mindshare and groundwork laid out to do it. I think at the beginning of the pandemic redfin was already offering 2% flat brokerage services so they definitely recognize a market desire for a lower priced product. Zillow did some dumb poo poo with flipping houses but I suspect they and redfin will probably succeed in "disrupting" a handful of local markets. If they can find/develop a better financing solution for TIC and co-ops they can probably clean up on the next housing upswing (2024/5?) *just watched glass onion last night, apologies
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Jan 26, 2023 03:19
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Upgrade posted:I don't think my state requires a closing attorney, but isn't the conventional (and correct) advice is that you should always hire an independent real estate attorney as part of a house buying transaction? Keep moving those goal posts and eventually you won't have to admit to being wrong on the internet.
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Jan 26, 2023 14:57
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Motronic posted:Keep moving those goal posts and eventually you won't have to admit to being wrong on the internet. I deeply apologize for not realizing my original post contained subtext which implied that it was legally required to hire an attorney for closing even though I didn't explicitly post that; I should have realized that the word "have" can be read differently than intended.
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Jan 26, 2023 16:48
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Upgrade posted:my original post contained subtext which implied See? You're almost there. Yer doin great at this. Just a few more feet.
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Jan 26, 2023 16:50
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“It depends on what the meaning of the word ‘is’ is.”
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Jan 26, 2023 17:08
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Upgrade posted:I deeply apologize for not realizing my original post contained subtext which implied that it was legally required to hire an attorney for closing even though I didn't explicitly post that; I should have realized that the word "have" can be read differently than intended.
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Jan 26, 2023 17:21
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Dik Hz posted:You really ought to have your opinion surveyed so you know exactly what you own. It can prevent conflicts with your neighbors. Is there some sort of posting 'title insurance' I can purchase, independent of anything owned by a bank?
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Jan 26, 2023 17:46
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I think title insurance is just buying a new av to replace the red text.
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Jan 26, 2023 18:53
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Upgrade posted:the point about real estate agents being largely worthless isn't in individual transactions, its that they've essentially baked a 6% price increase across the market. they might have been more valuable, say, in 1995, but in 2023 in general most of your searching is being done yourself through Zillow, and all the legal elements of an offer should (and would be) better handled by an attorney, which you have to hire anyway for closing, they are essentially a parasite middleman increasing the cost of homes If you’re finding houses through Zillow you have a really bad agent. Market dependent etc but in high demand areas the stuff you see on Zillow / Redfin is generally the lower tier properties that haven’t moved yet. I know more than one person who got a house right after it listed (or even before public listing) but before it hit the websites. I forget what the lag time is between mls and Zillow but there is one.
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Jan 26, 2023 19:45
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How do I actually find a halfway decent agent, as a buyer, if I've got no one whose recommendations I trust?
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Jan 26, 2023 20:00
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GlyphGryph posted:How do I actually find a halfway decent agent, as a buyer, if I've got no one whose recommendations I trust?
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Jan 26, 2023 20:14
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Cyrano4747 posted:If you’re finding houses through Zillow you have a really bad agent. Market dependent etc but in high demand areas the stuff you see on Zillow / Redfin is generally the lower tier properties that haven’t moved yet. I know more than one person who got a house right after it listed (or even before public listing) but before it hit the websites. I forget what the lag time is between mls and Zillow but there is one. The general homebuyjng public sucks and as a seller it’s worth a premium to not have to deal with that.
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Jan 26, 2023 20:16
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I would really love to know what separates the agent who deals in $2M+ houses - $4M in California, NYC - from the rest of the industry. How much of the “Million Dollar Listing” show is true once you drain it of all the forced drama?
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Jan 26, 2023 20:26
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Nybble posted:I would really love to know what separates the agent who deals in $2M+ houses - $4M in California, NYC - from the rest of the industry. How much of the “Million Dollar Listing” show is true once you drain it of all the forced drama? The agents who are in luxury real estate are typically experienced and established in their wealthy area, at least somewhat wealthy to begin with, college educated, and with a network of wealthy friends. Choose which parts of that are cause or effect. You need to have the presentation (diction, clothing, manners, common shared interests/topics, friends and acquaintances in common, appropriate vehicles) to even have a chance.
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Jan 26, 2023 20:33
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Motronic posted:diction, clothing, manners, common shared interests/topics, friends and acquaintances in common, appropriate vehicles Stop, no, my meritocracy illusions
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Jan 26, 2023 20:45
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Epitope posted:Stop, no, my meritocracy illusions Yeah, exactly. $2-$4M is a new money market. You have to walk and talk like new money thinks old money would want/require/demand. (old money will tell that same agent they are charging too much if they can afford to show up in a Range Rover)
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Jan 26, 2023 20:49
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Dik Hz posted:100% agree. Pocket listings are a thing, especially in hot markets. I remember when Redfin first started gaining traction and the National Association of Realtors' legal team was playing whack-a-mole with the various local associations who were encouraging pocket listings or straight up binning Redfin offers as a way to prevent Redfin from ruining their commission structure. "Stop saying the quiet part out loud morons, you're gonna get us sued!"
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Jan 26, 2023 21:51
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spwrozek posted:This happened on my almost first purchase. Relator spent maybe 30-40 hours with me, put in a couple offers, and then I bailed and took a job across the country. We've been working with ours for like a year now, on and off. We've dragged him all around the SF area, from Santa Rosa to San Mateo to Livermore, and I can't really fault him on his willingness to show random weird properties I dig up (even when he makes it clear he thinks it's not a good house) or his communications (fast replies to text and email at pretty much any hour, and he's been really quick on the document turnaround for the few offers we've made). It's still entirely possible we'll move away and he'll never make a cent.
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Jan 26, 2023 22:09
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Pham Nuwen posted:We've been working with ours for like a year now, on and off. We've dragged him all around the SF area, from Santa Rosa to San Mateo to Livermore, and I can't really fault him on his willingness to show random weird properties I dig up (even when he makes it clear he thinks it's not a good house) or his communications (fast replies to text and email at pretty much any hour, and he's been really quick on the document turnaround for the few offers we've made). You're a good investment anyway if you're going to recommend him to all your friends. This is why smart real estate agents go the extra mile for every client, even the ones who are buying at the bottom of the market or might not buy at all. You want happy satisfied clients who will spread the word, because that's how you build a clientele base that can sustain a career.
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Jan 27, 2023 02:41
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Motronic posted:See? You're almost there. Yer doin great at this. Just a few more feet. I thought it was obvious that they were referring to a common thread mantra, not making a claim about legal requirements. Not sure how that went over your head  e: It's true that more people should hire an attorney, someone to represent their interests specifically, to help negotiate one of the largest transactions they'll possibly ever undertake. At that point the buyer's agent is really just there to fill in paperwork and to keep your blinders on as you walk around a house. I already do a good enough job keeping my blinders on myself, thank you very much QuarkJets fucked around with this message at 04:46 on Jan 27, 2023 |
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Jan 27, 2023 04:41
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I had a friend whose father charged a 12% commission, but worked almost exclusively with complex comercial deals where there were zoning issues and local politics crap to deal with. He also would do multi-million dollar homes as a favor to people that he already knew. Apparently it was rare that anyone balked at his price because he’d been fixing deals in the area for over 30 years and would solve problems that a lot of other agents couldn’t. He also had a very congenial air about him and a very disarming Persian accent, and was about the last person you would suspect of being a salesman.
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Jan 27, 2023 06:03
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therobit posted:Persian accent This must not have been in Los Angeles.
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Jan 27, 2023 06:57
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