OT: Real Estage Agent Commission Changes
- Thread starter RU_03
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Break the realtor monopoly. Cap commission at 1% for each the buyer and seller agent.
I know in the past that would be 2.5/3% usually coming from the seller side. What's the new going rate for buyer agents now?
For some lower priced residences that might not make minimum wage. But if you're just looking to stir the **** I guess that doesn't matter. And for the record I am not in the real estate business.
In this market I would give no more than 1% for the buyers agent.
My wife is a real estate agent. My sense there is some pressure to reduce fees WRT real estate transactions, but the industry is generally impervious. The agents who charge 1% typically provide less services and expertise. Like anything, you get what you pay for.
As for the new rules, buyers will need to negotiate fees/commissions up front with their agent - for every property they intend to purchase. Talk to a few agents before selecting someone to represent you. Check references. Do your due diligence. It is perfectly acceptable to haggle on commissions, though some agents will refuse to lower their commission.
Don’t ever go with an agent who double ends (represents both the buyer and seller in a transaction). There is no way they can perform fiduciary responsibilities to the seller and buyer at the same time.
Typically, sellers pay the buying agent’s commissions, but this may or may not be so every time - especially under the new rules. There should be forms that clearly specify how each agent is compensated for any real estate transaction.
As for the new rules, buyers will need to negotiate fees/commissions up front with their agent - for every property they intend to purchase. Talk to a few agents before selecting someone to represent you. Check references. Do your due diligence. It is perfectly acceptable to haggle on commissions, though some agents will refuse to lower their commission.
Don’t ever go with an agent who double ends (represents both the buyer and seller in a transaction). There is no way they can perform fiduciary responsibilities to the seller and buyer at the same time.
Typically, sellers pay the buying agent’s commissions, but this may or may not be so every time - especially under the new rules. There should be forms that clearly specify how each agent is compensated for any real estate transaction.
Good luck getting an experienced agent to help you purchase a property at a 1% fee. If you are experienced, maybe you don’t need an agent.
Some tech companies are doing this. I’ve yet to hear of a success story for any of the real estate disruptors.
What I meant was: As a seller in this market I would give no more than 1% for the buyers agent. Always thought it was weird that the seller was paying for the buyers agent.
Whether or not it aligns with minimum wage is irrelevant. Algorithms/AI will make most realtor activities obsolete, so where's the value in the service?
What never really made sense is that the realtor fees for a $100K house were ~$6K, but for a $1M house, the fees were $60K. Is it really 10X more work to sell a $1M house versus a $100K house?
Worked with a real estate agent in Austin, TX after the bubble here had burst. Bought my first house here after living in NYC for 12 years.
She didn't look for houses for me. I found every house I wanted to look at on Zillow, Redfin, and the MLS database and texted them to her. Then she gets her hands on the keys and we go look. Sure, she's knowledgeable, she knows just about everything there is to know about homes here, trees here, roofs here, HVAC units here. 90% of what she told me is stuff you learn when buying a home... one time. She negotiated at a moment when the bubble had burst here to the amazing outcome of, wait for it, exactly what the seller wanted for it.
I am convinced being a buyer's real estate agent is the ultimate loophole in the American economy. She benefited from not getting me a deal below sticker price. Nice person, sure. But this is the most insanely, grossly overpaid business I've ever seen in my life. It's unreal. Makes your head spin the commission she got for what amounted to about an hour or two of time spent with me, opening doors. I understand she's had years of experience spotting pitfalls and details that can devalue a home, but like I said, you learn 90% of this when YOU, the buyer, buy one, once. She was nice, seemingly, on a surface level I liked her. But that's all these people are.
I get paid very handsomely to do what I do, but I have a master's degree and got paid nothing for at least the first 6 years of my career. The hours I put in were insane when I was young, weekends, late nights, years of my life, just gone. At a certain point the balance shifted and I started making money quite quickly. But that's because I do a job that very few people can do.
A real estate agent is a job anyone can do, quite frankly, if they're selfish enough to do what I witnessed. I honestly encourage everyone under the age of 20 reading this to not bother learning how to do something that contributes to the world - instead get into real estate and leech off others. Make money, then live. Life is short.
She didn't look for houses for me. I found every house I wanted to look at on Zillow, Redfin, and the MLS database and texted them to her. Then she gets her hands on the keys and we go look. Sure, she's knowledgeable, she knows just about everything there is to know about homes here, trees here, roofs here, HVAC units here. 90% of what she told me is stuff you learn when buying a home... one time. She negotiated at a moment when the bubble had burst here to the amazing outcome of, wait for it, exactly what the seller wanted for it.
I am convinced being a buyer's real estate agent is the ultimate loophole in the American economy. She benefited from not getting me a deal below sticker price. Nice person, sure. But this is the most insanely, grossly overpaid business I've ever seen in my life. It's unreal. Makes your head spin the commission she got for what amounted to about an hour or two of time spent with me, opening doors. I understand she's had years of experience spotting pitfalls and details that can devalue a home, but like I said, you learn 90% of this when YOU, the buyer, buy one, once. She was nice, seemingly, on a surface level I liked her. But that's all these people are.
I get paid very handsomely to do what I do, but I have a master's degree and got paid nothing for at least the first 6 years of my career. The hours I put in were insane when I was young, weekends, late nights, years of my life, just gone. At a certain point the balance shifted and I started making money quite quickly. But that's because I do a job that very few people can do.
A real estate agent is a job anyone can do, quite frankly, if they're selfish enough to do what I witnessed. I honestly encourage everyone under the age of 20 reading this to not bother learning how to do something that contributes to the world - instead get into real estate and leech off others. Make money, then live. Life is short.
If you really know an area, a neighborhood, home values , and have a decent lawyer , you don’t need an agent when buying a house. I think it can actually help you since the sellers agent will now get the full commission .
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I have generally found realtors to be useless. Most homes can be found online. It is only a matter of time when a website can replicate all that a realtor does for a buyer. If you pay a good person to do your inspection, then that would be enough to assess the problems in the home. As for understanding the closing costs and loans, etc there are plenty of websites to assist folks. In the end very few people will need realtors to buy or sell homes. My guess is that only the top 5% or so will survive.
I keep forgetting some states require lawyers…that’s a scam…
I was so confused when it came time to close on my house in California and there was no attorney review
Hmm.. so there is an incentive for the buyer agent to get the highest seller price the buyers will go for... while at teh same time trying to make sure their buyers get the house.. interesting.
I have to say I agree with you and my daughter is a realtor. My wife and I have bought and sold 5 houses since we got married and most of the time we did the legwork ourselves in finding the homes once the internet was a thing. I get the pre internet need for them with the big book and all. My daughter dropped out of college after a year and she does quite well. She’s Making Much more than what I see engineers with masters degrees where I work making vaccines, but the same could be said for anyone in sales. What do they all really do?
I own a brokerage for some context and have a banner ad at the top of the forum so...I think I can help answer your question. In a nutshell, it's going to help you and hurt you. Bad agents are leaving the industry and quickly. The good agents now will tell you EXACTLY what they expect to get paid as a buyers agent. The best agents in the area are not working for 1% like some of the ignorant folks on this board are bloviating about. It hurts you if you're a first time home buyer and can only put 3.5-5% down because now you MAY also have to pay your agent 2-3% on top of that. Some sellers are still offering a buyers agent commission. I have listings now and many we do 2% (so if you had an agreement with a buyers agent for 3% and the seller was offering 2% on a particular house., you would owe 1% to your agent). Feel free to DM me for more of an explanation. I can possibly help you as well depending on the area of NJ.
Dual agency is allowed in NJ. I do it a lot and don't get a complaint. It's a fine line to walk but you can do it ethically.
You're paying them for their experience, knowledge and to make the transaction smooth, not their time. This is like being upset your surgeon took an hour to repair your shoulder.
It's actually harder to sell the cheaper homes. The people in those price ranges argue over the most asinine things. Outlets, water spigots. They fight over commission...I pass on them sometimes. The higher priced homes people understand time value and expertise and the skill set it takes to sell a more expensive home.
I think 90% leave the industry within 2 or 5 years. No one cares about degrees anymore. They care about skill set. You sound upset that they made your transaction smooth and painless.
The bad ones give the good ones a bad name. It frustrates me as an agent because some can be quite stupid. However, the good ones make a lot of money for a reason. I saved a recent buyer (who was very skeptical of using a realtor and was kind of talking down to me the entire transaction) easily 75k negotiating a deal with them. Then by the time we closed they walked into 135k of equity. In your scenario that would never happen.
Wrong again TK.
As part of the settlement all OHs must have a sign displayed that the agent standing in that house represents the seller. Not YOU. You will need to hire a buyers agent to write up an offer and that buyers agent cannot submit an offer without a buyers agency agreement signed.
Why couldn’t a lawyer write up the offer? Then I would spend less money in attorney review for my attorney to just rewrite the “contract” the realtors just “wrote”?
Because realtors lobbied politician buddies to make it this way. You'll still need to pay the lawyers also.
BINGO! Realtors and lawyers rigged the system in Trenton and all NJ resident has to paid for it. Title search/insurance is the biggest scam of them all. A high school student can write the code to automate this.
When I sold my house, my agent did a number of superficial home repairs, had a tree and bushes removed, planted landscaping and staged the house. She ran ads, put together flyers and ran an open house that produced 40+ people over three weekends. Then, she helped us on both pricing and negotiation strategies throughout the process, which went back and forth between attorneys and the buyer, who had made a great offer but also had some pretty annoying requirements. She knew the market, including comparable homes and was aggressive in a way that neither I nor my wife are.
She knew what houses were going for in the market at that moment, not just what Zillow predicted they were worth.
It’s a service business- you aren’t getting any of the above from AI or algorithms and it was well worth the commission to have that kind of expertise driving the process.
I think I would rather have an attorney review my contract than have a buyers agent.
A fair question is the cost benefit. Way back, closings cost $500. Have heard that attorneys now charge $1500 or more to do a closing. For the large majority of closings, the attorney does very well at that rate. There are some closings that take more time and negotiating (e.g., an environmental issue such as an oil tank on the property or a zoning issue such as an easement or shared driveway). We closed two properties in Arizona through the title company without any issues. But there seems to be fewer land use and other regulations in Arizona than NJ. NJ is a lawyer's paradise!!
In a hot market buyers will be expected to pay the fee to a buyers agent but that could change in a soft market. The buyers fee might go back to the seller.
I think you technically use the buyers agent. In NJ in this instance. . I bought my first house this way .
The realtor and seller didn’t mess around . I am pretty sure the realtor was happy to take my offer and get 6 percent (this was the commission back then).
I am actually good friends with this realtor now and have used him to buy and sell since
Because a lawyer is not a realtor? Who is going to allow you in for home inspection, for appraisal, for fire inspection, for any other inspection required?
If we are being honest, the attorney doesn't look at anything. Their paralegal does all the work and they only step in if there is a bigger problem.
Right . But if I want to see a home and don’t have a realtor, the sellers realtor is supposed to show it . Then I can cut deal with sellers realtor so they don’t got to split commission.
Wrong. I cannot show you the house without a buyers agency agreement signed. If you come to my open house you don't need that, but to submit an offer you do. There is no getting around it.