6% Hopefully gone forever

It’s always been absurd and an outrage that homeowners were for all intents and purposes forced to pay 6% of the sale price of your home to a realtor.

But 25 years or so ago there wasn’t easy access to houses listed on the internet or good marketing options.

If you sold a house for $350,000
they would traditionally demand a staggering $20,000!

To do almost nothing. Yes I know years ago they did do some things. But now it’s take pictures, post on MLS, and maybe write up a contract that is already mostly boilerplate.

Well, the NAR was sued over all of this and while admittedly no wrong or collusion, are ordered to pay millions.

They’re a bit panicked right now, knowing people aren’t going to pay these outrageous fees anymore.

I’d be interested hear your stories about your home buying process.

Different story in Australia. Our agent sold our house in less than two weeks. They charged 2% commission. There were two weekend open for inspections. They had two people at the house. They spent a good amount of time with us prior to listing the home, offering advice as to how to present it well and also where not to spend money unnecessarily. That saved me hours of work that I did not look forward to. The agent was with us when the building inspection was done. That was not necessary, but the after sale service has been excellent. There are good agencies and bad, like any other business. I would not do the job for however much it pays, and it pays well in good times. Not so much when the market collapses as it does from time to time.

2% sounds reasonable.

Yes. I am very happy with the result, especially as the timing is so good. Our retirement unit will be ready at about the same time as the settlement date. I don't suggest you move to Australia though. Housing is expensive and there is a chronic shortage. No shortage of immigrants, mind you. I think China has injected the Canberra water with a stupidity drug.

Here is the details of the story:

The 6% commission on buying or selling a home is gone after Realtors association agrees to seismic settlement:

https://www.cnn.com/2024/03/15/economy/nar-realtor-commissions-settlement/index.html

I recently paid a 36K commission for the sale of my home. It seems like a lot but realtors do play an important role in the sell of the house. I don't begrudge paying that commission.

How many homes does the average realtor get a commission on in a year? It gets split between the buying and selling agents. Surely the home office gets a good cut for their overhead. I wonder how many homes a realtor has to sell in a year to make a decent living.

The only aspect of the 6% commission I didn't care for was the seller paying the buyer's agent. The buyer should be paying for their "agent" if using one. Way back when the person showing you homes was technically working for the seller...

It's hard to know at the moment how things will play out but with a less generous fee structure the seller may have to pay for some of the services that the listing realtor usually pays for like the professional photography that ends up in the online listing. The realtor may keep a tab of their expenses and have the seller pay those separately from whatever commission is settled upon. It might just turn into a mess...

It works fine in Australia. The seller pays the commission, expenses for photography, a "For Sale" board, brochures and listing on the internet. A professional writer wrote the script. A surveyor measured the size of the rooms. This was done (to me) amazingly quickly. The writer came to the home to ensure that she wrote accurately.

The fees seemed reasonable to me. The most expensive part was listing on realestate.com.

We needed to approve everything proposed. This was not a drama as the proposal was well done. We've known the agent for maybe 20 years. He is a Christian and has a great reputation among his peers. He sold 3 houses for one of our fellowship about 15 years ago. We had dealings with him prior to that.

We have learned to pray about everything. When I was first saved, I had no idea that God was interested in such mundane things as my job, the car I drove or where I lived. We are God's children. What matters to us matters to Him. If we attach too much importance to something, He will show us. That's the grace of God.

That may be what their meaning is going on in Texas. I own my home but have been approached by buyers asking if I would sell(my homes not worth much I don't see why they bothered,lol) Later though as time went on I think whats going on is that investor groups are using their financing abilities to finance homes but instead of selling them at a profit they are renting them to so that the renters are actually paying the monthly notes(renters buying the home for the investors) because they are not putting them back on the market for sell. I suppose it's going on on a scale that Abbott is stepping in. https://www.texastribune.org/2024/03/15/texas-greg-abbott-institutional-homebuyers/

My wife and I have bought and sold 5 houses in our life. I briefly got my Realtor license and listed and sold several houses in the mid 90s. (Not my own house).

So I completely understand your mentality in thinking an absolutely insane amount like $36,000 is ok.

Think about that amount of money vs. the service provided. It's literally crazy we ever thought that was reasonable.
ESPECIALLY since just putting a sign of your own out front and placing it on different websites yourself, in this market, will fetch almost immediate results. There are many sites that will tell you what your house is worth. You don't even need a realtor for that anymore.

So I don't think it's ok any longer. There really can be no justification for handing a commission of that magnitude for listing your property.

And that is why this change, brought about by this lawsuit is so vitally important. You are going to see 2, maybe 3 percent commissions become common place.
Further, I think we are going to see a lot more flat fee rates.

A flat fee of $2000 to maybe as much as $5000 is about the most I'd now be willing to pay to not try FSBO.

My grandfather had a very thriving blacksmith business at the turn of the last century. We all know what happened to the living standards of guys like him. But he adjusted to market forces like we all must. Obviously if you want to donate to anybody I certainly wouldn't be against that! But that's basically what it is vs. the work done.
If you added them ALL up, between you handling a few of them yourself, and hiring out piecemeal to contractors, even a lawyer, you would STILL get nowhere NEAR $36,000.

Honestly, you could take almost as good pictures and video yourself. No one cares when they're buying a house if the pictures aren't quite as polished as a professionals.

On this we agree. There will be an ugly and messy transition as more and more people refuse these fees and try and navigate the process.

Simple solution to this:

Buy a house that comes on wheels like Ole Mailman Dan did,,,,

(hehe)

I've never had use for one, but heard that they are like lawyers. Most do only the bare essentials if that.

Although I don’t like government regulation, this is necessary to stop Black Rock from destroying home ownership forever.

https://www.wsj.com/real-estate/wal...-buying-homes-a-crackdown-is-looming-f85ae5f6

What we really need to do is unleash America's production capacity, DE-REGULATE, and BUILD.

I don't care for overpaying commissions either, but I don't think that RE agents/Realtors are the biggest bad... at least not yet.

Investors, flippers and boomers can keep their garbage rental properties that were built before World War I. I'm not paying 160k for a mud-hut that is about to fall down; it's not happening.

1st sentence-.

Not just new housing either! We're bringing back American muscle cars and driving all of these hideous excuses for transportation into the nearest ocean or canal. When us millenials finally crawl out of our parents' basement and vote, every Chevy Equinox will be required by law to be destroyed immediately.

What does a real estate broker do? They help you price your house based on several factors which AI could do as well as a person. They put the house on the market, they also help you find a house on the market, again a process AI could do as well if not better than a person. They also drive you around and show you houses, recommending a price to offer. Although AI wouldn't be able to drive you around many of these showings are now done remotely with sophisticated video of the home that allows you to walk through the home online. Here is the kicker, AI could do all this for a tiny fraction of the cost of what a person gets. 6% of 300k is 18k. I think it is quite reasonable that people view that as exorbitant. Instead 1k might be a much more reasonable fee for AI.

We had submitted offers made two offers on home in the past five years, the first was $140K offer and about two years later one for $199K and both offers did not come to full fruition, which was only discouraging that we should even continue in our search, especially since it's hard to see a quarter million value in what had been barely worth $70 at the dawn of the century. This news provides at least a little glimmer of hope things might move in favor of the buyer's market but because while the first failure was disappointing, the second was heartbreaking. However, in the perspective of keeping a positive outlook, the properties we had chosen were incrementally moving closer toward our ideal location so, perhaps the third time...

Actually what does any salesman do that AI can't do better, faster, cheaper?

How about a home that floats. If you compare the cost of a residential mooring to property tax on a house it is quite competitive. Also, no grass to cut.