Sellers DON’T WANT TO PAY! Realtors Will QUIT IN MASSES
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- čas přidán 2. 11. 2023
- Recently NAR, Berkshire Hathaway, and Keller Williams lost a massive lawsuit where home sellers were awarded 1.8 billion dollars for these companies conspired to inflate brokerage commissions. Let's dive into what happened, what might happen next, and how this will affect the housing market.
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This lawsuit was utterly ridiculous. It will be thrown out on appeal UNLESS the NAR did something to muddy the waters. They have no responsibility in how sellers and agencies negotiate their commissions. When I was a licensed broker there was no "standard". Everything is open to negotiation. END OF STORY
Yes, buyer's real estate agents have a fiduciary responsibility to their client. This means that they must act in the client's best interests, even if it means putting their own interests aside. Any agent not performing as such is opening up a can of worms..
Defund the NAR, the NRA, and Realtors.
Michael, have you heard that builders are now offering huge interest buy downs so buyers can have a lower payment? Huge 100k to 200k buy downs being given to the buyer so they can purchase. They are purposely not discounting the sale price to keep the comps high! Insane!
Yes, I have heard of this. I will touch on it in tomorrow’s video.
We were selling my wife’s parents home after they passed away, in Waco TX. The Realtor had drawn up a contract for our listing. I told her I wanted a day or two to review it first. There was a clause in there that if the buyers agent wasn’t associated or a member of some Realtor Association, MLS, I can’t remember exactly what it was, that they would only get a 2% commission vs 3% and she would pocket the 1%. I called her on it and said I would sign but she would get a total of 5% (vs 6%). She laughed at me. I didn’t sign with her. I found a Realtor who had a buyer and he charged me a total of 4.5%. After that we had two rentals that I fixed up, put our own sign up in the yard. A guy came by and bought them both for cash. No commission, my lawyer handled the transaction, he owned a title company so I saved at least 7-10%.
luv it!
Or possibly left 10-15% profits on the table excluding competing buyers
@@christopherrivera1724 once again you expose yourself, it’s MLS that get the buyers pouring in and the realtor just bangs the till!
Sold an estate property direct to buyer because agents were gaming both sides. Took property off the MLS, waited the full exit window, and then sold it to the next buyer without all the agent aggravation & games.
@@andrewrivera4029 can’t see the forest for the trees. Zoom out Andrew and read up on the history of the industry as a whole
The whole real estate model needs a drastic overhaul.
Starting with home prices. 40% haircut would be a good start.
We'll need cheap oil to reduce the costs of construction for that to happen.
Yea bro 60-70k k on a million dollar property is criminal, the property isn’t yours you just blew in and spread lala and let the machine sell the house , all we the homeowners are paying for is access to MLS. 10-20k max!
And we ain’t worrying about brokers quitting in mass!
Be cheaper for everyone to just get their realtor license. 😂
@@cicicorleo
Don't NEED a "License" !!
Sold my last homes myself. No realtor! It was a breeze and I am no rocket scientist. lol
Me to Alex.
When? What year?
Some buyers agents completely fail. We had one when we moved to Texas. She showed us 4-5 homes. Once we chose the one we wanted, it was complete crickets even after we closed. She didn’t even show up to closing. So she made 3% to just show us less than 5 homes and just waited for her check. We constantly had to keep asking her what the next steps were during the process instead of her guiding us. We were completely disappointed with her services. Like who doesn’t show up to their buyer’s closing to assure everything you’re signing is correct & legit. Not even a thank you card for being a client, absolutely nothing! NEVER AGAIN!
That’s horrible. My realtor kept me informed of every step, she was at the closing and still to this day, calls and see how everything is going. That’s rare from what I’m reading
the last two homes that I sold, I used a flat fee agent. They only charged me $1000. for their commission. I still had to pay the 3% buyers fees, but using the flat fee realtor really saved me money. Most realtors HATE flat fee realtors! They don't want their dirty secrets to be exposed.
I e used them twice myself, and prefer the flat fee over a standard agent.
I did the same on the house I sold in 2013.
They are crooks they try to get you with other fees and if u say no they put a line on your house
We can always stop using real state agents , as long as your price is reasonable, you can always sell your house
Most don’t because it’s not as easy as they say neither. The first time a weirdo shows up or stiffs them they are in the phone to their realtor.
A real estate transaction has a lot of moving parts and if people don’t stay on top of it there is a good chance the transaction can easily fall apart. When this happens it’s not uncommon for lawsuits to occur. I’ve been served a few times but was able to remove my name because I had a paper trail and didn’t do anything wrong. Others weren’t so lucky. Buying a house is the most emotionally charged transaction in people’s lives and when you have emotion and money involved you’ve got a recipe for disaster. A lawyer’s dream. I’ve had a few owner sellers involved in an escrow approach me and ask me to take over because the potential buyer was threatening them and they were freaking out.
So when strangers knock on the door for a showing, you will just invite them in?
That can be a shit deal because a good realtor can sell your property for an unreasonable price. There is no point in saving 20k to lose 100k. Tuna’s the dumbest math in the world. A good realtor may even able to get your property in a bidding war, where the price can go nuts.
If you own some kinda dog kennel close to the Projects you’re probably better off selling yourself because you’ll probably be struggling to sell.
So who will write the offer?
If the 6% has always been negotiable, agents have ALWAYS KEPT THAT A SECRET FROM ME! (9 homes sold)
No they haven’t. You just never asked. They aren’t going to give you a deal without you saying something.
Let me guess, you are a realtor. How many times have you discounted the rate?@@noneofyourbusiness2554
Another consideration is this. When the price of houses were 150K - 200K I can see asking for 6%, since it isn't that substantial of a number. But when houses like mine cost around $700,000, 6% of that is $42000? Does anyone deserve $21,000 to list or show a house? There are just too many people with their hands out when you want to sell. My first house I sold was by owner, and I paid an attorney around $1000. Now, that was fair. I think that's just ridiculous, and when it comes time for me to sell, I will definitely negotiate that down.
I probably said I was going to sell my own place from the beginning. If you have a good property, you don't need an agent. You need a great attorney and a great escrow company
@@ginacardarella
EXACTLY. HOME'S SELL THEMSELVE'S. A BUYER
EITHER LIKE'S IT OR NOT.
@@ginacardarella Here in California, anywhere really, you probably don't need an agent. All new houses set out on the market are like raw meat to hungry lions. I know the media has everyone believing that there is a mass exodus from CA. But, I don't see it.
Idx syndication sells the home, not the house itself. Because brokers share their data with everyone your home is able to sell to someone around the world. Your home is one of a million.
I sold my house in San Jose for 1.6M in one day! Listed for one day and paid 5%. 80K for one day. Not even one open house. It’s crazy
I used a flat fee broker in 2021. Sign in the yard, listing on all the sites, lock on the door, done. Saved me over $20K.
Now that the market is changing the environment of easy sales is over.
What does a hard sale look like?@@KarieJacobs
But did you LOSE $20K in net proceeds due to unmotivated listing agents?
If I used a regular realtor then that would have been a wash and pointless. Right? I set my own price. I looked at tons of comps, set the price, and got tons of offers. I took the over asking offer. Not my first rodeo. I’ve sold my own house before. @@dawhike
From 2020-2022 that was a good bet… not now.
Sorry, no person is worth $100k commission on a $1m plus house that I found on my own
That's what i said when we sold my wife's parents house. The percentage is to high and the house literally sold in less then 12 hours.
If it sold in less than a day your real estate agent priced it too low .
I quit mortgage lending because I hated dealing with realtors. It warms my heart that they are now being forced to go back to waiting tables. So sad!
I was in mortgages and your comment is probably the reason why you had to quit.
@daleckio I am guessing you lost a lot of deals due to Realtors helping their people find a better deal on a loan when you were just about to overcharge them for a loan. You put in all that work to get them approved, jam in a few extra fees and don’t give them the best rate and some Realtor comes along and says they will save $5k on closing day and $40k over the life of the loan if they go with another lender and now you lost the deal. Mortgage is a tough business especially with Realtors who help their people shop for the best loan.
No Never. I sent deals to them. I rarely lost a deal because of a realtor. @@joellee5863
@@noneofyourbusiness2554 Interesting you used a past tense. What is your excuse for quitting? I was a realtor and I got tired of lousy, lazy and sleazy realtors!
@@joellee5863 You sure know a lot for making assumptions.
Broker commissions are stupidly extraordinary expensive! Median sale price x 6 or 7% commission is Highway robbery!
I've sold a property for a total of four and a half percent commission. I even gave more to the buyer than I got and I did all the work..
extraordinarily
After taxes, travel, expenses, office fees, state fees, mls fees…. That’s not a lot unless the house is 500k plus.
@@noneofyourbusiness2554 There are no travel expenses if you just have a seller's agent. A seller's agent is all you need . When you shop for a car or appliances you only have a seller's agent. In the neighborhood where my house where I no longer live is located, most houses are over $4,000,000. 6% of $4,000,000 is an astounding $240,000. Most houses there sell in a couple of months so agents are making a fortune for saying this is the den , this is the back yard etc.
If i price my home correctly, why should i pay $60k in commission to sell my million dollar house? Then pay closing costs on top of that! Thats almost $100,000. Thats ridiculous. My last realtor pulled up in a ferrari one day then a rolls royce at closing! He gifted me a doormat at closing! How nice of him!
😮
Hope it was a nice doormat 😆
That realtor was over the top. You don’t need a realtor to sell your home.
You do need a title company. They are the ones who really do the work.
@computron5824 not really. He also said he would take me to dinner. Never happened! Next time I'm doing things different
Bigjon- what to you mean by saying not really. I would never buy real estate without the help of a title company . They make sure the property is clear of all encumbrances.
People lie.
And if you have questions talk to an attorney.
More information then ever about a house is available online, yet real estate agents still want high commissions for doing less work. Also buyer agents are incentivized to bargain for a lower price on your home. So why should a seller want to pay them for that?
I've also had seller agents lying about there being other offers. And when I called the bluff, all the sudden they yield to a lower price.
Just like how nobody wants to deal with car salesman, nobody wants to deal with real estate agents. I welcome the day AI will replace real estate agents.
I’ve sold and bought several houses on my own. The title company does all the work behind the scenes and the realtors get paid for passing you the forms and paperwork that the title company generates. It’s a complete racket.
I completely agree. I’ll be glad when real estate agents are a thing of the past.
I just closed a transaction that the buyers lender said couldn't be done. I was able to get the complex approved by the secondary mortgage market. The sale wouldn't have closed without me and my product knowledge.
@@KarieJacobs if they had that much trouble getting a mortgage they probably shouldn’t be buying a house.
Because brokers share that data. Brokers will go back to the old days of not sharing.
6% is not a small amount of money... especially with the prices these days...
Sellers should not have to pay 6% or really any % based commission. Buyers find their own homes anymore, all software based online. Real estate is like newspapers of old, hanging on to how it used to be to keep their pockets full. Everything can be performed by software now, contracts, title work etc. realtors can just charge a flat fee and if they do extra work, pay the realtor for your time. Let the sellers keep their hard earned equity
'Realtors are like newspapers' very true. But what they do it tie up the conventional online advertising so only Realtors can post, like MLS.
@@tommak6516 yeah, that’s why it has been so weird to watch over the years. The MLS is the only reason they exist. If we had a national public MLS that sellers could just pay to list their home, that would be the next sensible step. Funny how I can sell my own cars, or anything else I own…but not my house. No, I need special gatekeepers for that.
IME, when we sold our house in 2008 , 6% was painful . They made almost as much as I did after paying an expensive mortgage for 8 years , lots of 60 hr weeks , and a few nervous breakdowns from exhaustion , commuting 2 hrs per day . The commissions should be capped at $20k- $25k .. nobody should be paying $50k to sell their home, no matter house much the house sells for .
u should Not HAVE SOLD IT..........shopped around for a greenback......who would have loved a 5-10k comminsion....?......u were impulsive...
Remove price fixing and let the free market reign
They were lucky to find a buyer in 2008. Do you remember what happened during 2008? Places were selling for hundreds of thousands lower. People were losing their jobs. Downsizings, mergers took jobs. The stock market crashed. I called that one one year in advance. Anyway have mercy on a person who was doing whatever they could to pay their mortgage. People were turning in the keys to their homes to banks and walking away.
easy legal theft. It may change on sellers end as per ruling on a case in Illinois.
Yeah, in 2008, hard to find buyers. Even if you have buyers, many weren't able to get loans.
I've never understood this in the US market, what does a buyer agent actually do? In Australia you have a seller agent and you go to an inspection, if you like the property you make an offer to the selling agent. Some people may retain a buying agent (advocate) and they are paid by the buyer in a fee for service basis. Maybe the US has too many realtors. 6% seems a ridiculous amount to pay on expensive property.
We definitely have too many realtors that’s for sure and this is gonna make a lot of them quit I think but besides that traditionally buyers agents will find properties and set up showings for buyers and help negotiate the deal and write up all the paperwork for them and walk the deal into closing
Thanks I always wondered how other countries do it.
None of these agents work for anyone except themselves. Both of them promote the quickest sale possible so they can get their commissions ASAP. It's a total BS industry. So many parasites involved in buying a home in the US. And then you have "professional" appraisers and title agencies. It's all a joke.
What does a buyers agent do??? Shows you all the homes. Makes sure you don’t get screwed when writing an offer. Follows up with all parties for 2 months until closing. Helps you get your deposit back if you need to back out. It could take 6 months of home showing to find you a house and you don’t pay a cent out of pocket for it. Maybe you should find out.
Buyer's Agents save you from making a tragic mistake. They negotiate a reduction in prices, repairs to the home etc. Realtor's are sales people. If you approach a Seller Agent directly to "make an offer" I am not sure what you reference would be if it's a good deal or not. I can't tell you how many Buyers we've worked with that wanted to over x amount for a home, and said hell now, and saved them 5 figures. There is no way as an average individual you can know what a home is worth or what you should pay given the current market. There are websites out there that try to give estimates, we, Realtors laugh at those. If you were in my market and asked me this question, I would pull our or log of deals and show you how much we've save clients, how many times we told clients to run from a home for various reasons etc.
In the UK, full-service 'realtors' charge about 1.5% commission. The use of buyers' agents is unknown. And my last legal bill, for a sale, was less than £1000. The very high charges in America are a continuing source of amazement to me.
So are Your Taxes Brit !!!!😝😝😝😝
The buyers agent does the pre shopping. Looking at all the listing the school district how many beds and baths. Price range.location. and can go look at houses and upload pictures if you live out of town and need to move for work. Then when you fly in you have a short list that checks ✔ all your needs and only look at thoes. You can find what you want faster.
Finally.. doesn't make sense to pay 10k+ for someone to open a lockbox for us lmao
It’s much more than that. Are you only looking at one house? I doubt it.
@noneofyourbusiness2554 I looked at 3-4 so I guess 3-4 lockboxes😂
And making sure your contract is properly written. Following up with many parties until closing and more. Get a clue.
@@noneofyourbusiness2554 I'm sure anyone can download the same contract and edit a few lines pertaining to their situation and answer phone calls😂 What a joke
NEVER bought or sold using an agent. Always bought/sold FSBO and used a good RE atty to handle everything. Saves a bunch of $.🎉
You can do much of your house search online and without the assistance of an agent. A 3% overall commission is more than sufficient.
Agree, Especially since there's apps now to search properties.
All they really do is help with paperwork. They are mostly just useless middlemen
I agree.
You still need an agent to open the house if you want to see it in person and see it actual condition. Don't think sellers would like to open their houses to random strangers knocking on their door to see the house
So yo can do that by checking their background first
No one needs a real estate agent anymore .
We find our own homes online .
And an attorney can do the paperwork cheaper . I know because my husband is an attorney.
You don’t need a real estate agent. You can do everything with a real estate lawyer and skip the shenanigans
you need an agent to list your house (or at least a service)
@@novadhd that’s what they told you.
You do know that many attorneys can take the commission and will. This is an example of people not knowing what they are talking about. Attorneys are basically licensed to take commission.
A home buyer who utilizes the listing agent as his agent is equivalent to going to court and letting opposing counsel represent you.
I think the idea of a buyer paying a fee to a buying agent could work. Or get a lawyer to handle the paper work. We sold a house by owner once. We had a lawyer and so did the seller.
I’m sorry but I’ve met very few realtors with the skill of an attorney. Like zero. How much training do you have to go through to get your realtors license? I think you can do it online in about 2 hours.
Lol like a realtor does anything except convince you to buy regardless.
well said haha.
The last few years have been an extreme seller's market. Real estate agents haven't been having to WORK since houses were selling within 2 weeks (or less) with multiple offers and waved contingencies. This made the perception/justification for their "fee" seem a bit excessive for filing the paperwork and an hour of their time at closing.
Your'a ahowed up for closing? I've thought them overpaid for years.
in my opinion, Realtors don't just earn fees for that one particular transaction, what about all the other transactions that do not turn in money, all the days and nights spent on work that falls apart, most people go to work and make a paycheck whether they do a great job at the end of the week or not. A Realtor works most of the time and it yields nothing, so one large commission will compensate for all the time buyers and sellers walk out on transactions after months of a Realtor working..
@@peggythibodeaux1519 So one unlucky seller gets screwed by paying for all the other deals that didn't make money. Doesn't seem fair to me!
I worked with buyers and with sellers. To say buyers agents don’t have to work hard during a sellers market is pure BS. I worked harder and longer hours with buyers who couldn’t get homes because the sellers had multiple offers. My buyers IF they got in contract paid for home inspection & appraisals and still did not get the home because the sellers were demanding $50k or more than appraisal. This was for homes under $300K!!!
Listing agents are the ones who don’t have to work hard. Hardest part of listings is dealing with the insane sellers.
@@peggythibodeaux1519that my friend, is called being self employed. I was a principal broker for 15 years
Know a few people who sold themselves, for sale by owner and offered a 2% commission to the buyers agent. They said it was so easy and sold fast. So much cheaper!
With today’s current home prices 6% is quite a bit of money!
And, they'll keep the house price high for the commission.
If I had a bouse for 400 K, the commission would be 24K. 2 brokers and 2 agents would get 6K each. If I sold it for 350K, the commisision would be 22K. 2 brokers and 2 agents would get be 500 less per agent. They'd be happy for me to come down.
Without the buyer, no one gets paid. The buyer is the one who pays the realtor fees no matter how realtors spin it. Oh, and the buyer gets to pay property taxes in perpetuity on those realtor fees.
? ITS ON MY CLOSING DOCS
@@lovly2cu725 So?! That doesn't mean you're the one ultimately paying for them.
Exactly!
The financial illiteracy and expectations on display here are honestly frightening.
@@floweringevergreen3584yes you are very illiterate. That is like sayin in a buyout the lawyers of the other company represent the buying company since they are the new owners. That ant how it works guy living with your mom.
I am thinking about selling my home in Ohio. I interviewed two seller's agents and both insisted that the traditional 3/3 commission is non negotiable. So I am questioning how negotiable these commissions really are. Perhaps they will be more so when realtors get a little hungrier? All this makes FSBO worthy of a closer look.
Bypass the realtor and knock on the door. Who gives a shit what they "say" talk to their employer direct if you want the house bad enough.
Bottom line here is commission s. Are negotiable period
It is negotiable just the two you talked to don’t want to negotiate it
The entirety of the real estate agent / realtor profession can be replaced with a redfin search (access to the realtor database) and some fields on a webpage to be filled in when the buyer decides, maybe a $15 fee to process. Every agent I've worked with didn't care anything more than trying to show me some overpriced garbage they could get a cut on.
redfin in my market as compared with actual MLS comps in real time is about 22% off more expensive. not to defend realtors being scummy, as since i've had my license all i've ever told people is not to buy as things are overpriced, but redfin is a joke. it will give you a 240p version view of your house, aka vaguely useful.
real estate agents are very neccisary for buying a home, if they do their job, as they can save you from all kinds of legal, municipal and other possible problems.
that's not to say all of them do, most are quite useless indeed. If you want to do it by your self than i say, good luck ol chap, have fun not getting screwed!
or you could do what i did, get a real estate license so you don't have to rely on these money hungry vultures and do it yourself. than again, most people dont plan on buying and selling hundreds of houses like i do.
Most don’t need a buyers agent except to open the door.
Chat GPT will print you out an offer contract with about 10 minutes of input. An attorney for closing is about 2-3k. Realtors are an unnecessary middleman. They can't tell you about the schools, they can't tell you about the crime in the area or anything else of value. They open the door and go "lookie, crown molding!"
Sorry hard pass on paying them a fukn dime. I think it's great.
Gone are the days when only REAs had access to the mysterious MLS. They would pick you up in their Cadillac or BMW with a list of selected properties just for you based on your criteria. Drive you around all day and sing the praises of each house which BTW they had firsthand knowledge of. They took the pics, composed the listing. There was a lot of time and effort involved. Now, I research the available properties online, provide the REA with my list, and I follow the agent (in my own car) to each address. The agent typically doesn't know anything more about the house than I do. Where's the value in this "service"? They collect tens of thousands of dollars for doing what exactly? $45 worth of paperwork? No thanks. The world has changed.
@@dianeturner9503 Just like their much harder working grocery store counterparts, the cashier, they will be around until they are replaced by automation. Someone needs to create an app that let's you put down a deposit (in case of any damage, etc), collects your information, vets users to filter out any weirdos, then allows users to simply book appointments and unlocks the doors from the app. Cameras can be placed around the home, for the seller's security. The app could charge a convenience fee for each showing. So much better than being hounded by another agent looking for their next commission. Using the app would cost maybe a $5 showing fee, plus maybe $20 per year to use the app, vs the thousands that a buyer's agent wants to collect for DOING NOTHING. This would also help curtail inflation. The app could be called, "My cousin the realtor", lol
I’ve never met an honest real estate agent. They always tell you they’re working for you but it’s always for themselves. And since it’s been a skewers market, I’ve been told by agents that they will not ask agents to ask their sellers to lower the price. And told me lies that I needed to be as high as $25k over asking, which I did. After moving in, I realized tiny one else was interested or wd have paid this much for the house.
A listing agent isn't going to be honest to a buyer that he/she has no contract with. This is where a buyer's agents contract comes into play because when you have a contract signed with a buyer's agent, the buyer's agent legally represents you. If you don't have any contract signed and there is a problem you're out of luck if you want to sue for malpractice.
In my state by default if a buyer's agent contract isn't signed then the buyer's agent, again by default represents the seller which in many cases the buyer's agent doesn't even know the seller.
what state is this?
People. More Commission to the Buyer's Agents = More Showings = More Offers = Higher Selling Price. Without paying Buyer Agents you save 3% and but you lose a whole lot more with a lower selling price. I'm an agent and when I sell my own properties, I gladly pay 3% to the buyer's agent for the added exposure and multiple offers they bring. I'm only one agent but when I offer 3% I have over a thousand agents trying to sell it. The system works perfectly. This will become a disaster - You may quote me.
That was a point I was trying to convey in this video. A lot of people think it’s an easy job. Clearly they’ve never worked it. Also, I think a lot of people‘s opinion of how easy it is to sell a house is skewed with how quickly homes were selling over the past couple years.
@@smbd6 If being a Realtor is so one-sided to benefit the Realtor, you should get your license, share in the good life and report back in a year.
I think flat fees make more sense in most scenarios. From what I have seen, the listing agent isn’t doing much after the home is listed, I guess they will have to start being the one to show it to the buyers and earn that 3%
From what you’ve seen? Are you sitting with the listing agent doing a documentary? It takes on average 4-5 hours just to get a home listed.
I sold my house in 2013 and did exactly that. I paid a flat rate to have my house listed then offered a full 3% commission to the buyers. To me, the buyer's agents are the ones really putting in the time, legwork, etc.
@@noneofyourbusiness2554 4 to 5 hours to list it. The seller agent just sends the code for the lock to the buyers agent and don't even show up. SO 4-5 hours .... 120-160 bucks is what your worth as the sellers agent. Thanks for clarifying that!
Buyers have always paid for their agent as they pay the whole price of the house and the 6% comes out of the proceeds. Just another way to look at it.
Exactly and I pretty much mentioned that in the video when I talked about how sellers artificially inflate the price still the realtors commission. So in the end the buyer is paying everybody.
In Europe the don't even have "buyer's agents." In the UK there's no such thing. So perhaps it will just be the same here. They simply see no need for a buyer's agent... as my dad says, "what do they do anyway?" The houses are all online.
When I lived in Canada, "For Sale by Owners" were very popular. The only downside of doing it yourself was that your Open House signs kept "falling over from the wind" when there wasn't a wind. I wonder how that happened?
what?
@@sooofunny37 Sarcasm. Don't over-think it.
A Realtor is useful as a Car Salesman!
As a seller of two homes, I feel like both times, the realtor listed the home on MLS took a few pictures and then I never saw the realtor until it was time to discuss an offer and sign papers. The realtor that finds the buyer should be paid sooo much more than the realtor that listed the house on the MLS in my opinion.
Based on your experience with those realtors that makes sense. A good realtor will give you a weekly update on how many showings and offers you’ve received and how much online traffic you’re generating. More realtor should also do variable rate commissions where they guarantee that they’ll get a certain result for you. For example “I’ll sell your home in 27 days guarenteed or I’ll discount my commission.” If more realtors did that sellers would be much more open to paying them and have a much better experience.
FACTS !!!
We actually explain this on our radio show and our podcasts. The seller hires 1 Broker. The listing Broker. The listing Broker then offers to pay a "buyer's" Broker from their commission. The seller is never asked (in NY) to pay the buyer's Broker. The NAR lost their case because they have weak attorneys that are not aggressive enough...that and the fact that most people think that Realtors are all rich and they do nothing and are overpaid. (We also address this on our show) The reality is that the average Agent makes about 45k a year on commissions...no salary, no health benefits, all of their risk is theirs...however we agree, there are going to be a lot of agents and agencies that will be going out of business because of how difficult Real Estate sales are.
I just sold my second home and don’t see any way that an agent is worth what I have paid them. They were making 6% when houses were 30k and they still think they’re worth 6% of a 500k sale? They’re not. They should get maybe $2500 a sale regardless of home price. Stop sticking it to the sellers. We don’t all have deep pockets.
Did you pay the agent when you bought the house? Probably not.
@@noneofyourbusiness2554 i found the house online before my agent so no reason to pay him imo.
I was a Realtor in Iowa for 40 yrs. I never had any problems with sellers not wanting to pay the buyer's agent. It was all disclosed on the listing agreement & the agency disclosure.
I’ve never had this issue personally either. But clearly others have hence the lawsuit.
I’ve never had this issue personally either. But clearly others have hence the lawsuit.
Exactly. Seems a lot of numbskulls have recently been licensed since 2020 and do not understand how to appropriately explain the fees. There has never been a “set” rate for anything. Everything has always been negotiable. Being an agent and doing it correctly representing clients is hard work and costly for crazy MLS fees and marketing, let alone what a broker charges. Once the market slows down, good agents will be in demand. Anyone who has never done the job full time to make a living has no idea. There are too many part time sometimes agents making side money that do nothing and give the rest a bad rap. People who have been in bad by owner deals can tell you why 😂
Never had an issue and they won’t even after this silly lawsuit is done.
In 2002 I was warning that THIS IS NOT SUSTAINABLE and that was after reading an article in the Sun Sentinel saying the "average" cost of a home in Broward was $400,000. WE NEED the entire housing market to collapse so bad until the REAL affordable $100k homes return back to the market. People earning $15-20/hr should be able to afford a single family home and not be forced to rent.
the reset is coming. huuuuge.
@@jongonegone1262the reset is UN AGENDA 21 2030 DEPOPULATION
If you aspire to own a home, do more with your life than unskilled minimum wage labor.
People earning 15-20 bucks per hour living in a single family home is not sustainable anymore either. Maybe it was the case 40 years ago, but not now 🙁
@@floweringevergreen3584 Nope. Unsustainable. Correction coming. Printing dollars has caused inflation and debases the currency over time. 34 Trillion and counting.
I wanted to sell and buy a few years ago until a major illness stopped me. Honestly, from my experience, the agents do earn their commissions. It is when the markets are deformed that things stop working.
As a female, I felt better with representation buying and selling. These new legal developments can work or cause more problems.
I dont need to pay someone 10k to open the lock box and show the bathroom.
Say bye bye to real estate agents! Signing an exclusive deal with an agent is a massive mistake and you will regret it as a seller or a buyer. This lawsuit only benefits the people making money in the settlement and real estate agents.
Sellers, get yourself a really good title company to advise through the sale. Pay to put your house on the MLS and close the deal without the hassle of dealing with an agent. I have bought and sold 4 of my 5 houses without an agent and it has saved me tens of thousands of dollars. I even had bidding wars on two of the houses I sold (one in 2014 and one in 2020). The process is much simpler without the hassle and nonsense that real estate agents bring to transaction.
Buyers, protect yourself by doing your research and finding a good lawyer or title company to assist with the transaction. Don’t be a sucker and do your due diligence. Don’t fear homes for sale by owner. You have more to fear from a pushy deadbeat trying to make a buck on the purchase of your new home.
As a buyer how do you see houses on mls?
Many states can’t close with title companies and agents aren’t going anywhere. This will hurt the consumer much harder than the agent.
@@noneofyourbusiness2554 a licensed attorney or title agent it’s about the same process. I’ve used both through the years. Either way the realtors are an unnecessary and costly expense in the home buying/selling process. In fact agents make the process more not less difficult for their clients.
A title company isn’t going to give you expert advice about the market and selling the home
@@Nogi-aka-DJNugz right, the market, lol. You must be a realtor. We get it, nobody is as intelligent and all knowing about the "market" as your local real estate agent. Realtors are in the same class of middle man trash as car salesman and all the rest. You don't own your clients homes they do.
The Commission should not be more than 1%. The buyer has to pay his 1% commission and the seller has to pay his 1% commission.
Agreed 💯
Yep, a 1% each is a good number.
So glad you're the arbiter of what people should earn! Maybe we should look at what you make and decide if its correct?
@@trumpshare No one is stopping you from paying them more. I notice a lot of people like you expect everyone else BUT THEMSELVES to eat the cost of everything.
now naff off...
Who knows that might happen
Ive worked with several agents as buyer, seller, and tenant. All but one of these agents were completely useless and undeserving of their commission.
I guarantee no one on that jury knows anything about real estate or real estate law.
Neither do Realtors
@@grandpapete417if they didn’t, I don’t think they would’ve passed the course or exam, which is administered by the state.
I have sold my homes with a listing agent and by owner. I'll probably sell by owner exclusively from now on as the commissions are getting up there. I never had a problem handling the sale myself.
The buyers agent gets paid for bringing a buyer... Kind of important sometimes... otherwise all you have is 3 or 4 people there pulling their pud.
A lot of people here think that buyers agents don’t bring any value. Will be interesting to see where it all goes from here.
We sold a property for $1.65 million. Our agent was absolutely fantastic. He earned his pay. We had major permit issues. On the day before closing the city he wrote us up for not having permits for an addition to one of houses. It got worse from there. It was ridiculous the stupid things he wrote us for. He found something wrong in every home. There were 4. Our agent went to the city and fought for us. We ended spending $45k to fix everything. If the agent and contractor hadn't gone to the city and argued our case it wood have cost us $145 K. The realtor and contractor continued to fight for us. It took 3 months to do all the work. The realtor came and checked the progress every other day and sometimes every day. Great experience. 4 years later my father-in-law passed away and my Mother-in-law couldn't live alone. We sold the property for $ million. He was there all the time checking on us. Needless to say he was Great! By the way each property sold within 3 days of listing it.
This is good for private investors like myself who prefer to buy from private Sellers as we can get a property way cheaper. Most sellers don't even know how to price their homes and they always price it well below what it's worth.
My best deals are always from FSBOs and wholesalers. Keep them coming! Great for investors since we have zero competition from the public.
Especially during Covid the number realtors went up 700%
Even if you get a buyer to sign an agreement stating they will use you. That does not stop them from using a family member or friend when it comes time to buying. Lose lose scenario for realtors unfortunately.
Real estate agents are only good for paper work after the sale. Especially now that the mls listings are easily accessible.
You clearly have never worked beside an agent after the paperwork. The attorneys are a nightmare and so are most title companies. I’m working on a deal right now for 4 months because of crappy legal counsel. Finally closing next week because of me, not the attorneys.
@@noneofyourbusiness2554 I had a fine experience working with just a title company selling my last house.
Sold my last two homes without a realtor saving me over 50k in commissions. It takes a little bit of work but definitely not rocket science
Excellent discussion! Throws a lot of things up in the air as things get sorted out. We Realtors will be walking on eggshells to avoid running afoul of existing laws & FREC regulations. Thanks for the "heads up" & I'll be watching for your future update videos.
Having bought and sold a few houses over the years, my opinion is that the present system works best, having the seller pay to get the house sold. If buyers have to pay half, they will try to cowboy up and get the calf roped by themselves, creating no end of headaches for the seller’s agent and the seller. The volume of time spent for diminishing returns will drive up the sellers’ commissions to the selling agents over time.
This can get complex. There should be different options available. Buyers aren't going to want to pay upfront commissions, most of them.
Not happening.
Buyers who have no $$ won’t be able to buy. The mls is going no where. The agent is going no where. If you can’t pay commissions no one will help you. Not good for the consumer.
Let's talk about the elephant in the room. Why are we paying a percentage commission on a house sale? It should be a flat rate and if a particular real estate company wants to charge more than another, it's up to the consumer who they want to use. What extra work is the agent doing when they sell a SFR that is 2000 sq ft vs 3000 sq ft.? Same amount of work is being done, yet the seller of the more expensive house is paying a higher commission. Plus most people can see listings on more than one website about houses available for sale. You're correct in saying you can always negotiate the commission being paid. I have always negotiated with the agent the % if the offer price wasn't enough. They want the "sale" they lower their commission or risk losing the sale...this is not rocket science.
Just list your house with 2 prices. One with a buyers agent. One without. Like cash or credit pricing.
You can’t. Mls makes the rules. Not that simple.
@@noneofyourbusiness2554 are you saying it is a MLS rule on listing?
I was looking at a truck yesterday online and the price reflected a bunch of stuff (cash price after $2000 down). It was written in the description.
When the buyer shows up with an agent, you just boost the price accepted over asking.
I can list on MLS for $400k, then make pending/closing result be $425k. The last few years there were plenty of over asking bids.
I'd imagine the MLS doesn't care.
When I bartended half the staff were real-estate agents / bartenders and servers
I’m not surprised at all, considering there’s more real estate agents in Florida than practically anywhere lol
@@MichaelBordenaro lol makes sense
I disagree. The more I learn about NAR the more I believe it's a racket. The realtor pays a lot more fees to just to say they are a realtor when they don't get paid for gas, marketing, sitting at open houses, etc. I know the sales process and I don't think Brokers offer that much value. The house is appraised and titled through 3rd party company. I mean the negotiation process is simplistic in nature. I work in media sales and its more harder than real estate negotiations.
I used to be a recruiter. Sales in any profession is a bitch. Having said that. Realtors are an unnecessary middleman. Most are useless. Other than telling you it a great time to buy! or it's a great time to sell! and ohhhh lookie crown moldings!. Useless. Utterly useless. 90 percent of them are not ethical or even useful.
@@1969bones69 i wouldnt say useless just because as a real estate investor i see how stupid most people are. Get excited if you said “hi” instead of “hey!” Lol. They wont be able to buy or sell without agent just because most ppl are idiots that work with emotion and deals will blow away in second because “she looked at me funny!deal is off!” Lol
Thanks for the info, I sold a house through Berkshire in the summer. Class actions a long process & usually recipients only get a few bucks. This suit will differ by states too, so may be like Vegas cab drivers only set rates.
We have the internet. We do not need a realtor to open the door to a house you can find youself on the mls. Realtors are overpaid for unlocking the door. Should be 1 percent for buyer and 1 percent for seller max. We don't need you anymore.
Unless it’s a short sale, the only person who is bringing money to the table is the buyer. Therefore, the buyer always has paid the commission for both sides, either directly by paying them, or indirectly by folding the price of the commission into the house.
Will sellers knock the price down 3% out of the goodness of their heart? No. But an extra 3% will hit aggregate demand because that puts housing even further out of buyers’ reach. The reduction in demand will push prices down in the long term. In the short term anything can happen. But in the long term, the market will be efficient.
For years I have used a fixed amount commission on all my flip sales. I use a flat fee broker that allows me to set the buyer co op. Rather than a % I use a flat amount. I mention it in the listing and in on site detail pamphlets in the house at time of showing so the buyer is aware of the agents pay. If the agent tries to sway them off my house over my lower co op the buyer will know. But I am not paying an agent more than I paid for whole rehab just for showing a house. In fact as a former agent I know full well it’s far work to find and close a low priced house vs a high priced house. More work, more issues w condition, more showings, more offers denied over higher offers etc. why would I pay double for a 300k listing that’s all new and easy to close vs a 150k house that required far more work from the buyers agent to deal w? I shouldn’t. So I don’t. Key is you have to be in a position to say “don’t like my deal, walk”. And mean it.
Thanks Michael 🙏
The last house I sold and bought were without a realtor....don't need them.
Only ones that win in class actions are the winning parties attorneys. Nobody else will get much of anything Pennies
That’s not always true; I’ve been made whole in 2 cases.
@@sarahterry2140 i'll need your lawyers info.. i got 5% of what i lost in my class action... and the law firm got around 900k i got less then 6% of that amount.
The payment model for real estate agents is absolutely insane. Think about it. They get paid a percentage based on the sale price of the house. They're incentive isn't to get you the best price, they're incentive is to get the largest commission they can. Where else in life do you see anything is ridiculous as this? This is why it's going away. Your representative is working against you!
Im an investor so i dont use agents but have a lot of friends who are agents. Problem is most people are cheap / bsers that never buy anything, and the agent shows them houses for 2-3 months without getting paid. I like michaels idea - u want a buyer agent? Pay $2k upfront, commit and put your money where your mouth is
I disagree (sort of). I believe their incentive is to get the most on their commission with the least work possible almost agreeing to sellers terms not in the best interest of their clients so they can make their money with the least amount of work possible. So I’m sure they would sacrifice some bags to get the sale thru as quick as possible
How about they just make the commission reasonable? This 6% or 5% is way too much. Make it 3% split between both buyers and sellers agent- problem solved. The problem in typical fashion is greed. I’ve been doing loans for 20 years and we make 1% on every transaction. When I first started I could make 2.5% but clearly it was too much. I still make a good living and am not breaking people’s backs in commission. Agents have been making way too much for way too long.
@@notsofamous240 I just need you to explain to me how the real estate commission model is in the interest of the buyer? When your commissioned earnings are predicated on the sale price of the house, meaning you make more money the higher the price of the house, how is that possibly any interest of the buyer? Give me one other example. Consider you are a pro athlete, or a musician, or anybody who has an agent working for them, now imagine that agent doesn't try to get you the most money possible. That would never happen. Because they get a commission, your agent will try to get you the biggest contract possible, the most amount of money! As in show me the money! Real estate agents are not working in the interest of the buyer.
Excellent video as always from MB. Thank you!
Thanks, Michael, for the walk about.
This is fantastic news. RE agents, and I have many friends that do this, don’t really provide a benefit equal to the cost.
Stop lying. Do you tell them this?
I sold my house in California to leave the state. I negotiated with my realtor down to 4.5% and he staged the
house for free. The house sold for $1.05 m which saved me $15,750. remember people you can negotiate that price. Especially now !
You are correct. Commission s are negotiable
And that’s how it’s done. People are just whiners by nature.
You can’t compare Agents in other countries to Agents in USA because most of them are salaried. In US it’s a 100% commission.
Great video Michael. This is HUGE news. I think what might happen due to this lawsuit, could be that all buyers would have to use the listing agent to write the offer. Then the listing agent would both list and sell the property for only 3%. paid by the seller. I agree about many agents quitting in masses.
Hi Mike, Love your channel! Just want to remind your viewers it really isn't that difficult to buy or sell your own home without a realtor and many realtors are lazy and useless. I am 70 years old and since I began dabbling in real estate back in 1979 with over thirty transactions; spec buying and flipping homes, lot purchases while doing my own architectural design and homebuilding (9) homes in California and Nevada, I accomplished all this often without using realtors all. Commission free transactions are certainly possible and more favorable to us. It's not that difficult in most cases. But true, sometimes a realtor can be useful on more complicated transactions..
😂 A lot of potential buyers are already whining and stomping around and carrying on about the prices these days. Most of these young'uns are going to grow old waiting on that phantom $100,000 house that was supposed to show back up on the market a year ago like it was 1988 or something. These prices are here to stay. Little do they know that they're going to have to suck it up and learn how to get along in this insane world that they created.
Everyone involved with this class action lawsuit thinks they're going to be getting big bucks. In the end the majority of the money goes to the lawyers and anyone receiving money is going to average around $20 a piece.
If that much.
Sometimes - the potential buyer will find a FSBO (For Sale By Owner) and walk away from you. PLUS - please mention each side will FIRST take care to pay the BROKERAGE and all other expenses and get the buyer's commission AFTER those expenses are taken care of. Paying for leads is one example.
Thank you for starting it from the beginning
Lawyers and accountants get paid by the hour. So can real estate agents
Be careful what you wish for. I know agents that spend 20-30 hours on a deal and at $200 per hour that can be expensive.
A time card for each listing! LOL
I have to stick up for my agents, they are invaluable, but they respect me and I know how to say no and if it wasnt for working with agents I couldn't have made the money that I have made recently or gotten the deals I have gotten, of course all agents aren't made equal but a good agent is invaluable
100%.
Always appreciate the steady content and good info
Agree with most of what is said, however if market starts declining then many of the dynamics you describe will be different. This includes comps. In declining market, lenders will start to look at list prices of available properties. Many do not know that appraisals contain not only data for closed sales but also typically will have 2 or more listing or pending comps with pending being preferred. This requirement came in the last downturn where asking price on listings became more indicative of security for a loan. So much that people do not know about.
Compensation for Buyer’s Agents will eventually be a fixed price fee based on competition, which is the way it should be. 3% of the house price is crazy high. For what they do, a few hundred is reasonable.
You can’t…. That’s price fixing boss. Buyers with no money are screwed because there won’t be a realtor that will help them for free. Good luck.
@@noneofyourbusiness2554 If a buyer can’t afford to pay a buyer’s agent ( a fixed fee, not a percentage of the home value) then they likely cannot afford to buy a house. When the smoke clears, this fee will likely be rolled into the mortgage. Banks will support this so as to encourage sales. Collectively we ( gov, banks, etc.) play a lot of games to get marginal buyers into a home. Understand the intent, but we end up often getting these buyers in trouble.
What needs to change is the cost of having real estate agents handle a property sale. 6% has been too high for a long time. I want to see a flat price charged so that real competition can come back to the real estate business. $10,000 to $20,000 is plenty of dough for 2 agents to make on a sale given the general amount of work that is performed.
they have flat fee servives. Just that some buyers / sellers dont want to have to lift a finger
I completely agree with you. The Buyers agent should have a contract in place with the Buyer. You spend all of your time to assist the Buyer. For the buyer to say, oh, I have a new friend in Real Estate is complete nonsense. You are professionals who need to be paid for your time.
In my country where there are to many agents, the selling commission has come down to 1%. There is no buyers agent commission. What does a sellers agent do to earn that amount. They will advertise the house on all available mass media and wait for a buyer to show up. For that there are given 6%, thats 60000 for a million dollar house. I will put up a for sale signboard in front of my house and wait for a buyer.
For rental its half a % for a years rental and 1 % for 2 years rental. You people need to do some legwork to save the money you will give to the agent to fund his rich life style. Look at the car they drive and house they live in, all because of the insane amount of money they make for doing nothing.
In Western Australia the average real estate commission rate ranges from 2.44% to 3.25%. And this is only for the Sellers Agents commission. Sellers can sell privately if they want to do all the work. Buying Agents are very rarely used, only if the buyer may live elsewhere they can negotiate for an agent to seek suitable properties on their behalf. i would guess that 99% of buyers do not use an agent. They do use a solicitor, conveyancer or settlement agent when the contract is finalised and settled, these are usually about $500 in fees paid by the buyer. The seller will also have their own settlement agent. They deal with all the title transfers, mortgages, etc.
The major cost is State Government Stamp Duty paid by the buyer. On a $400,000 home the duty is about $25,000. The upside is that typical annual council rates are about $2,000 depending on the area and value of the property.
Stamps on a $400K home is about $15k
No agent BUT lawyer ($600) 3% in ORD..Town Bones u on Way Out..😝😝😝
When I bought my condo in 2021 I had already been tracking the market in the area for a year. I knew which complex I wanted to buy in, the floor plan I liked, and the price range that would work. When I was ready to buy I found one, called the listing agent, the condo I had found was already gone, but there was a unit that wasn’t listed yet. Looked at it, made an offer, done. Maybe they should have paid me 3%.
Yes, I would ask for and negogiate a reduction in commission as you represented yourself.
You seem to forget that you only found out about it because of the agent. You didn’t do anything.
She didn’t pay commission. The seller did. Her story is fictional.
His job was so complicated. He met me at the unit down the street from the other listing. I would have seen it when it was listed. Made it super easy for the seller. . @@noneofyourbusiness2554
Thank you Michael for talking about the lawsuit.
I live in Missouri and worked for Coldwell Banker who was involved in the lawsuit. Price fixing is a possibility. At Coldwell Banker they have the listing contract at 7% however as an agent you could lower it to 6.5% , if you went lower they would charge the agent or the seller $ 350. You have said it all THE STANDARD by saying 6% is the norm . I see the real estate industry rewriting the laws for how and who gets paid and what . The commission structure has always burdened the seller to pay the commission and the buyers agents get commission from both sides . Indirectly the buyer is paying the commission. After all the sellers are working on a net figure and if the commission is a cost then the price goes up to meet the sellers net . It will be interesting to see how this plays out , im sure there will be an appeal in the case .
Push back: Buyers are smart. They have so much more info than in years past. Buyers will reach out to the listing agent directly to make a deal. The losers will be agents who can not secure listings. They will be the ones who will need to find a new job. Yes, these lawsuits will cause a paradigm shift how commissions will be paid and earned. Disruptions will create opportunities.
Any opportunities you can think of top of mine? Especially from an investor perspective?
Watch your county foreclosure websites, Xome, Hudson and Marshall, Hubzu. Proceed with caution. Slow, Slow, then Suddenly.
Lol buyers are smart. Yea the guys buying everything over asking with no inspections are smart.
I told my broker “I’m not stupid and I’m not gonna be duped.”
I also don’t like your $2000 up front cost to a buyers agent. Realtors are so lazy and don’t even freakin know the contracts they sign!!!
This is going to be interesting. It may make it harder to buy and it might incentivize people to not sale. Basically good news for a seller.
If you want to sell your house and you now don't sell it. How is that good for you?
It’s going to make it 5000 % harder to buy. Wait and see.
We are in North Scottsdale AZ and Sellars are suing buyers that are backing out of their contracts in record numbers. Just FYI