I negotiated a commission on a recent home sale. Originally told me it was 7%, said no way, after more negotiations , was told lowest the company would allow was 5%, still said no and waited a month. Told my realtor if they could do 4% I would list it. It was accepted. House was sold after about 6 weeks. 4% was still 19k. Ridiculous.
Lots work selling and buying a major asset. This is no different with buying a yacht or an airplane. 5-6% is all relative to the work involved. Inspections, negotiation, price strategy, counseling all are part of the process. If you sell a business l, it is 10 percent.
@@ericpaffenroth4213 Not to be argumentative, but in my experience as a buyer and seller, many realtors enter your home into the MLS, let electronic searches spam your email every day, and do nothing else but take a few phone calls from interested parties. And of course the closing paperwork.
I have bought and sold over 20 homes in my life. Truth has always been that you could negotiate the commission. However I have never seen it outside of 5-6% for a full service agency. So yes you could negotiate but within a very tight window so not sure that truly equals an open negotiation.
I believe the industry changed when people could access listings and all the details on the internet. I am not sure what year that was but it is so sophisticated now. I bought and sold homes before that time and you had to go to the realtors office and look at listings because they were the only ones who had access.
(negotiated) Flat rates seem the best option. This forces buyers / sellers to ask themselves am I getting XXX $ worth of service? The more expensive the house the more this becomes true. Average SFH sold price on the SF mid-peninsula will be measured in millions. There is just no way I see 100k+ worth of service being delivered for a house in our neck of the woods. I'd love to see someone break down the actual charges in an invoice - be interesting to dig into those numbers. "27k for marketing? tell me more..." Maybe part of the "client education" should be how to negotiate - or that you even can negotiate.
With all the bells and whistles (virtual walk through, professional photos, drone fly over, interior staging ect) the costs can be upwards of $20,000 for some of those 15,000 sqft golf coarse homes. So maybe add in another $10-$20k for the agents knowledge, MLS access, insurance ect. Still nowhere near $100k in commissions that selling a multi-million dollar home brings.
The fee is split between the buyer and seller’s agent. So that 5% becomes 2.5% and then you have to give a cut to your brokerage. Then that money is actually taxable so it may not even be what you ultimately net.
I am really sick of Realtors and firms telling everyone that the commissions are negotiable. It's bull. I have worked for several large firms as an agent in NC and have always been told by each and every BIC that the commission is 6%. Period. No discussion, no option to negotiate with the seller. At one firm, the seller DID try to negotiate and I was told to walk.
I was too - if I did not get the 6% then walk away. In fact, I put what the seller wanted in the MLS and my BIC told me I was no longer welcome to partner with them - if it was truly negotiable, and we are Independent Contractors, then none of that should be dictated. Now that all of the brokerages settled that 6% is what is the "Standard" in our area, I am not fancy to stay with the NAR. In fact, I told the MLS, and the Local group to take a flying leap, and the brokerage I am with was pissed. I told them to take a long walk of a short cliff as well. These high fixed rates are going to kill the industry.
That is my experience as well; a couple of times when I tried to negotiate the commission, the agents told me the commission written into the contract, so is non-negotiable.
I saw the same thing when I worked in Southern CA (2006-2015) Brokers would say you're free to negotiate but if they see a listing with less than 6% they will not process the paperwork. They would also say that on the MLS we were only to offer 2.5% to the buying agent and not a 50/50 split.
The big Investors are throwing realtors under the bus and people are biting. Blackrock does not want you using an agent. They are trying to make buying more difficult.
The trouble is when the housing bubble extended realtors benefitted due to increasing prices and getting a % of the sale price...same applies to local councils. here in Australia that is.
Illinois has a clause in the listing agreement to address non-Realtors showing listed property. The seller makes the decision to allow non realtors to show or not.
I believe it needs to say non-members. A licensee is a professional broker whether the MLS and the state Real-ters like it or not. That is unethical behavior to not show a property to another licensee.
I bought my house using a buyers’ agency that took the usual 3% (half commission) and kicked 1% back to me as the buyer. Totally legal. Paid for my fridge and a lawnmower, both of which I needed as a new homeowner. This was 25 years ago. Seller’s agent howled and complained because she had to split commission and said it was “illegal”. Not so. Her brokerage (Ebby what’s her face) bought my agent’s brokerage SOLELY to shut it down to get rid of that 1% to the buyer. So corrupt. You do NOT need a realtor to make a home deal. All you need is a title company. They charge 1%.
Part of the problem is we are not told we can negotiate. Not to mention it’s expected that they get the 3 percent commission. The 3 percent has become the standard. When I look at our current home I’m not sure you did 20k worth of work. There was no drone footage and everything is put online. I scheduled all of my appointments and attended all of them for repairs or whatever with the sale of our last home. I saw my realtor twice. The next time we sell they won’t get a percentage, it will be a flat you make this much. Unless I’m not having to do anything. I was able to get away with just 4 percent on the sale of our old home. When you compare that to when I bought my first house. I didn’t have to do anything. My realtor did everything.
5-6% is entirely too much for a commission. Every homeowner tries to increase their sales price enough to cover the commission on their end. Realtors generally overvalue home prices, and with most of them doing it, it inflates home values. The inflation must eventually end. Realtors are complicit with the housing affordability crisis that we're in now. Bidenflation, irresponsible lending practices, (some) irresponsible buyers, and Realtors are why we're in a housing problem today.
Exactly! Which is why I will now hold off buying until this settles. Sellers need to knock 3% off the listing price if I’m paying my buyer’s agent. Right now that 3% is baked in listing price.,
All of the current rules are kept in place by buyer and seller IGNORANCE. If it is widely known and transparently communicated that all fees and commissions are negotiable, the market would change considerably.
@@rebeccalewis4947 not really. Your costs are yours. Tax deductible. Just negotiate in good faith. Competition will set the market fee regardless of costs.
If buyers pay their own commission, what is to stop the buyer from working with the listing agent and paying them more than the listing agent? Would the listing agent then work harder for the buyer than the seller and convince the seller to give the buyer a better deal?
How do you find a RE Agent with integrity? That’s the BIG QUESTION, Todd? What exactly should I be asking them as a Buyer’s Agent? Can you please share a list of questions or specific details that I need to ascertain. Thank you so much!
Todd really enjoy your show especially the ones with the realtors from different local markets! Also your guest's are really good and informative! I wish you continued success in 2024!
The public needs access to the MLS system!! Unfortunately there are a lot of shady realtors that have their commissions best interest not their client.
I mean, this is ridiculous. So they’re trying to say that home prices have skyrocketed because of fixed commissions, not because the feds lowered the interest rate to zero? Let’s be real😅
5-6 percent is not the issue when dealing with contracts, negotiation, pricing strategy, inspections, and much more. When you buy a business, its 10 percent. When you buy a yacht or airplane, its also around 6-10 percent.
A Realtor cannot disparage a neighborhood without probably violating the 1968 fair housing law. The realtor can under no circumstances give an opinion on whether or not the neighborhood is a good place to live or not. They can, however, furnish you with the websites were pertinent information regarding the neighborhood is such a crime, statistics or recommend you speak to the police department, but for overall , giving an opinion, that is a clear violation of the federal housing act.
As a seller. I should not have to pay 3% of the 6% commission to the buyers agent. This is such a scam. And I’m tired of hearing that these are negotiable. Total hogwash. If the MLS doesn’t show the buyer’s agent getting 3%… many won’t even show their clients your house. This is why the system must change. Glad to see all these lawsuits. The buyer’s agent does not work for the seller and are not your friend. The buyer should pay for their own agents.
Anyone that has ever sold a house knows that these supposed buyers never have a stick to rub together. And the ownerus is supposedly on the sellers and people are sick and tired of it. The seller constantly has to make concessions to the buyer. If you can't afford it because you ain't got to stick the rubber together then you shouldn't be out in the market looking for it.
Maybe Im misunderstanding this, but most buyers do not have an extra 3% cash laying around to pay the agent themselves. With it wrapped up in the house cost it becomes part of the mortgage. Sellers up their price based on having to pay this commission.
@@annehaverhals1750 not true. As a seller, I have never raised my house price to off set broker fees. My homes were always priced accordingly with the market values. If a seller doesn’t have the money for a house down payment and closing costs, they should not be buying. Period! I’m done paying the buyers fees as a seller. Appraisers determine values based on the market and area. Not the seller.
This is a very important question for many Buyers and Sellers. I am quoting from you at 11:16 in this video: "...experience is most agents don't answer their phone so it'd be ...." WHY don't agents answer their phones!! I am qualified ( possible a cash transaction---yes I carry around cashiers checks to match the amount I want to pay--no mortgage company no property search by mortgage company is required) ) have done research on a property and the seller is trying to SELL the house,I try phone, email, text FAX and smoke signals, NOT ANSWERING. .. Why wont agents answer the phone? I learned that if I as a Buyer use a smartphone with a Beverly Hills telephone number the agents pick up on the first ring! WHY?
As a consumer, what I **HATE** about realtors is how dishonest so many are. Even if I have a good realtor, the listings on the MLS entered by other agents are often plagued with "errors". I often see homes that are listed as waterfront but are not. Or duplex condos apartments that are listed as single family homes. Once had a realtor try to sell me some land that was clearly in a flood zone, but she argued it was not in a flood zone and had the "county engineer" call me and lie to me. I showed her the flood maps from FEMA and the realtor website(s). She never called me again, thankfully. Then there are realtors who show you homes above your maximum price point. They say they're doing this to ensure you don't miss your dream home because of a few thousand bucks but in reality they're doing it for bigger commissions.
There are many buyers who struggle with poverty. As a buyers agent I have helped buyers secure grants and place competitive offers for standard sales and government listings like HUD. Without buyer representation, most buyers would have little to no hope in winning a competitive bid in a multiple offer situation. Moreover, it is even less likely they have the foresight and ability to make sure all their taxes and settlement fees are covered, paid for by the sellers, or financed into the transaction.
A large percentage of lawsuits associated with real estate sales are due to FSBOs. I’m working on an assemblage, we needed to get the properties rezoned and property lines vacated. A lot of brokers don’t have the knowledge to negotiate the development process. This is a 2 or 3 year process. I’m not going to discount my commission even one penny. I earn it.
In the uk your Solicitor (lawyer) looks after the buyers interests, although what you pay is your decision…the buyer generally doesn’t have a buyers agent..although it’s probably different at the very top end.
You keep saying that rates are negotiable. Perhaps you should pump the brakes on that. In reality it's not that easy to do, at least from real world experience. It may be illegal for for the rates to be fixed but that is not what is happening in the real world which tells me that there are hidden forces at play that keep the rates from really being "negotiable". Also the fact that compensation is commission based is a large problem in of itself IMO. Not so much for the listing agent but a Huge conflict of interest for the Buyers agent. I think it is time for the real estate industry to go through a massive restructuring in order to eliminate the corruption and to bring the business model out of the 1960's and into the 21st century.
They really need higher education requirements and higher entry fees to prevent all types of unqualified people from entering that field. It’s ridiculous how someone who flipped burgers yesterday is now qualified to sell homes from passing a simple test and paying $300 and getting a website. It amazes me the public doesn’t vet their realtor and ask simple questions about the agents background at all. In addition, now there are a bunch of unlicensed wholesalers and large corporations who hire anyone off the street to mail a cheesy letter telling you the worth of your home and they’ll buy it as is and close right away. I can’t stand wholesalers. They tie up an unsuspecting persons home while they search for an investor buyer and then pocket $20k for doing nothing. The homeowner is shorted money because they don’t realize they can get much more money on the open market rather than dealing with a sleeze ball. Red flags all over the place in real estate. Has been that way for a very long time.
If these rates are normal, and wages don't surge, and there is no other intervention, the only way to bring some buyers and sellers together in 2024 is PRICE CUTS. You're so close to 100K...
The NAR founders objective was to get control of the market. The opposite of spirit of "free market". Opinion? Why cant I sell my house on my own? Id pay for marketing, the buyer can pay an agent if that makes them comfortable. But a seller sure dont need one
How many of you have been in the industry long enough to remember when "Help-You-Sell" was blowing up? The larger brokers didn't like what they were doing and in my area (Southern CA) they told their agents to not take their clients to any home listed by help you sell. This was a way of commission fixing because in order to sell through traditional means you would have to pay the extortion.
I’m all for a NAR bankruptcy. If a client chooses to use a buyers agent, that client should pay out of pocket for the buyers agent services. If a seller chooses to use a sellers agent, they should pay out of pocket for the seller’s services. Those two transactions should never ever cross. Ever. It’s a massive conflict of interest for a sellers broker to pay a buyers broker. Massive conflict of interest.
I foresee buyer's agents being gradually phased out. Listing brokers will have hourly/salaried W2'd agents on their staff to open doors and show their listings. Avg fees for home sellers will fall to 3% range. I think that this is the ultimate aim of the DOJ and they will (eventually) get their desired outcome.
There's simply an inherent conflict of interest in allowing the buyer's agent to receive a portion of the commission because the commission sum is based entirely on the sale price. Therefore, the higher the house sells for, the more commission and thus, the more money in the pot for the buyer's agent.
Buyers Agent don’t care if they house sells for 10k -20k more. It’s peanut on 2.5%-3% commission. It’s the Listing agent side that wants the Seller to sell too low so it’s easier. You have it backwards
Commission is ridiculous especially now that as a buyer I’m the one telling my own agent what houses I want to see and they just get me the viewings. There’s nothing a buying agent can do that the actually client can’t. I’ve fired 5 agents in the past year because they are worthless. With Zillow, realter redfin etc I can personally see all the homes currently on the market and there’s no need to an agent on my part really. I would just pay some lawyer a flat rate to write me up a contract. Real estate agents are become the sleaziest people ever now
I’m sorry but commission should not be based on the price of the home. Homes are up 50%+, that should not increase fee by 50%. In CA homes go for $1,000,000 for average home. $50,000 -$60,000 is not justified any way you cut it. Usury.
Pretty simple whats going to happen. The buyers bring the money to the table. Buyers are going to negotiate a contract with their buyers agent to represent them. Buyers agents are going to demand exclusive agency - no more shopping for homes with multiple agents. It will be similar to a listing contract - for example 90 days exclusive. I dont get why everyone thinks this is chaos and top realtors cant explain it to me. I think my theory is the likely outcome.
A lots of agents just greedy to get a listing contract and then do not thing to find buyers for seller instead just waiting for other agent to bring a buyer. There are some crooked agents in this industry.
The problem is you guys want the buyer to pay 3% to their agent?? Then I will be offering 3% less for the house or walk away. The 6% has always been baked in the listing price and gets to be part of the sold comps. This is insane.
Never buy in an HOA. Eventually, prices would drop due to lack of interest, and HOAs could be dissolved. All HOAs are bad. All of them. HOAs align well with socialism but do not meld with American values.
Your comment about used car salesmen I've said that a number of times. We came across a honest agent who advised us of many things and some were what our agent shd have wrote into our contract to protect us but intentionally didn't to make it easier for herself. Underhanded and unethical. But we didn't know those things at the time. And each situation is different knowing that they shd at least stay with you and suggest alternatives. Their working for us not us them
You keep focusing on that commission. That tiny 6% was the least of my concerns Just last month I asked you & Melissa for advice & neither of you could help me. The Problem is that listing agents working with buyers agents to ultimately control 1. Which houses Are shown 2., when a price drops Is COLLUSION plain & simple.
In reality the buyer is the one really paying for both agents. The seller wants a price the listing agent adds a commission and then they go sell the house. The buyer pays for the purchase price which in that price is the inflated commissions. So really who is really paying????
You need to be asking your realtor if you're on the buying side if he is getting a commission from the seller if that's the case it's a conflict of interest for you move on to the next realtor
This I think would make a great thought experiment, what would happen to the housing market if all the big apparent buildings across the country were restructured into condo associations became available for the current tenants to buy? Obviously a lot of details would need to be worked out but I'd be interested to hear your thoughts
It would make rent go up for those who didn’t want to buy, as you’re taking available units away from that sector. Apartments often aren’t set up to individually meter every utility, so either it would be an HOA type expense or very expensive to separate it all. Then comes the legal issues regarding deeds for individual units, zoning, parking, etc.
@@BDUBB24 I guess I should have fleshed out the question more, I was thinking more on the broader market level but you did bring up some points I had to thought of. I'm curious why the rent would go up for the renters? The landlords turned Condo managers wouldn't be hurting for funding they would be making hundreds of thousands of selling each unit and they would be taking association fees that would be pretty similar to what they were taking in before I would expect
Its a joke to say buyers and sellers are represented by their agents. The agents represent their own interests at the expense of the buyer and seller. The bogus negotiations between agents is to leverage the highest sale price, because the agents get paid on a percentage of the sale price. A conflict of interest by all accounts. Why do buyers need an agent? Why cant I make an offer to a seller without the listing agent getting double commission (racketeering by the agents). The listing agent certainly isnt representing me. Why are they getting paid. 5% made sense when home prices were $75,000 to $100,000. 5% of $400,000 is an obscene paycheck for unlocking a door to a property I researched. The system will hopefully get fixed now
As if the prices of houses weren't bad enough even if the real estate agent or broker kept the same rate as 2014 they're still making way more money because it's based off the percentage of the sale price now they're being greedy enough to raise their rates. That's messed up it's bad enough the buyer is having to pay that much more plus an interest rate that's even higher and then you're going to tack on a bigger Commission percentage percentage. Shame on those Realtors and brokers
Shoot if I was a realtor I would lowball my competition and to show that I am better than them I would just sell more it's all about the quantity of houses you sell that puts you in the top and you will make more money in the long run selling more houses than less. Just keep your standard rates low
Why can’t we have an ala cart system? Each brokerage can set their own prices, but that way, if you have special circumstances, you can purchase a higher service without the rest of the country having to pay for it. Just because some folks are a pain in the ass, and want every little thing, shouldn’t mean that everyone should have to pay for it
Hi. All this said can be said about any all unions. This is an absolute result of real estate union. Are you member of the union, yes then you are better off.
Seller's have been whipped unapologetically for decades by buyers and finally when the sellers actually get a good and decent fair deal everyone loses their mind. It's not fair for First time home buyer's. Give me a break. Cheers to all my sellers!
They should all get paid one set fee period. Better yet let's get rid of all of the greedy agents and have AI take over ooooooo don't worry I'm sure AI could pass the realtor test 😂 I've had a realtor share with me that if I did a for sale by owner she would do all my paperwork for $ 900.00 a other one said 1,200 sooooo that's what they should make . We the people can handle seeing houses on are own
Couldn’t you just mandate all agents serving as dual agents with all such responsibilities and then they get a full 3% ? That would cut everything in half and also protect both sides
@@tj2791There was an agreement in place with Trump. The Biden DOJ would not uphold it. They destroyed it and now they are destroying the real estate market. Go ahead. Keep voting democrap.
6 месяцев назад
You realtors make way to much and do NOTHING!!!!! Your days are NUMBERED.... It needs to be a flat rate company and I will Never use an agent, RIP OFF!!!!!!!
I negotiated a commission on a recent home sale. Originally told me it was 7%, said no way, after more negotiations , was told lowest the company would allow was 5%, still said no and waited a month. Told my realtor if they could do 4% I would list it. It was accepted. House was sold after about 6 weeks. 4% was still 19k. Ridiculous.
Lots work selling and buying a major asset. This is no different with buying a yacht or an airplane. 5-6% is all relative to the work involved. Inspections, negotiation, price strategy, counseling all are part of the process. If you sell a business l, it is 10 percent.
@@ericpaffenroth4213 Not to be argumentative, but in my experience as a buyer and seller, many realtors enter your home into the MLS, let electronic searches spam your email every day, and do nothing else but take a few phone calls from interested parties. And of course the closing paperwork.
I have bought and sold over 20 homes in my life. Truth has always been that you could negotiate the commission. However I have never seen it outside of 5-6% for a full service agency. So yes you could negotiate but within a very tight window so not sure that truly equals an open negotiation.
I've bought 4x homes, and we paid 1.5%, 3%, 5%, 5% commission we negotiated commissions - but we don't buy anything without negotiating- or we walk
I believe the industry changed when people could access listings and all the details on the internet. I am not sure what year that was but it is so sophisticated now. I bought and sold homes before that time and you had to go to the realtors office and look at listings because they were the only ones who had access.
(negotiated) Flat rates seem the best option. This forces buyers / sellers to ask themselves am I getting XXX $ worth of service? The more expensive the house the more this becomes true. Average SFH sold price on the SF mid-peninsula will be measured in millions. There is just no way I see 100k+ worth of service being delivered for a house in our neck of the woods. I'd love to see someone break down the actual charges in an invoice - be interesting to dig into those numbers. "27k for marketing? tell me more..."
Maybe part of the "client education" should be how to negotiate - or that you even can negotiate.
With all the bells and whistles (virtual walk through, professional photos, drone fly over, interior staging ect) the costs can be upwards of $20,000 for some of those 15,000 sqft golf coarse homes. So maybe add in another $10-$20k for the agents knowledge, MLS access, insurance ect. Still nowhere near $100k in commissions that selling a multi-million dollar home brings.
You and your wife are so cute😊
Realtor fees are not the cause. Corporate investors are but they pay the lobby fees to the politicians so all good!
Agent fees are too damn high!
It's really just super expensive hand holding.
It depends on the price of the house. .5% of $200,000 or $1,000,000?
Both are too high. It should be a flat rate per service.
The fee is split between the buyer and seller’s agent. So that 5% becomes 2.5% and then you have to give a cut to your brokerage. Then that money is actually taxable so it may not even be what you ultimately net.
It's still too high. Especially when you're talking about a home anywhere above $300k, which is almost every home these days.
I am really sick of Realtors and firms telling everyone that the commissions are negotiable. It's bull. I have worked for several large firms as an agent in NC and have always been told by each and every BIC that the commission is 6%. Period. No discussion, no option to negotiate with the seller. At one firm, the seller DID try to negotiate and I was told to walk.
I was too - if I did not get the 6% then walk away. In fact, I put what the seller wanted in the MLS and my BIC told me I was no longer welcome to partner with them - if it was truly negotiable, and we are Independent Contractors, then none of that should be dictated. Now that all of the brokerages settled that 6% is what is the "Standard" in our area, I am not fancy to stay with the NAR. In fact, I told the MLS, and the Local group to take a flying leap, and the brokerage I am with was pissed. I told them to take a long walk of a short cliff as well. These high fixed rates are going to kill the industry.
That is my experience as well; a couple of times when I tried to negotiate the commission, the agents told me the commission written into the contract, so is non-negotiable.
Amen Christine!
I saw the same thing when I worked in Southern CA (2006-2015) Brokers would say you're free to negotiate but if they see a listing with less than 6% they will not process the paperwork. They would also say that on the MLS we were only to offer 2.5% to the buying agent and not a 50/50 split.
@@admyank yep. I’m going inactive because I can’t stand being gaslighted and fleeced by the NAR and the whole industry that feeds off agents.
The big Investors are throwing realtors under the bus and people are biting. Blackrock does not want you using an agent. They are trying to make buying more difficult.
I appreciate your honest attempt to explain the changing procedures.
Having bought a house in 2019 sans agent and in August 2023 in my opinion the agents get paid too much for the value they bring to the table. My .02
The trouble is when the housing bubble extended realtors benefitted due to increasing prices and getting a % of the sale price...same applies to local councils. here in Australia that is.
I appreciate your honesty, you can tell you care and you want to do what is best for the buyers.
It's up to you to be educated and pick the best for your situation.
I honestly need to call the DOJ and rat out our local NAR.
Illinois has a clause in the listing agreement to address non-Realtors showing listed property. The seller makes the decision to allow non realtors to show or not.
I believe it needs to say non-members. A licensee is a professional broker whether the MLS and the state Real-ters like it or not. That is unethical behavior to not show a property to another licensee.
I bought my house using a buyers’ agency that took the usual 3% (half commission) and kicked 1% back to me as the buyer. Totally legal. Paid for my fridge and a lawnmower, both of which I needed as a new homeowner. This was 25 years ago.
Seller’s agent howled and complained because she had to split commission and said it was “illegal”. Not so.
Her brokerage (Ebby what’s her face) bought my agent’s brokerage SOLELY to shut it down to get rid of that 1% to the buyer. So corrupt.
You do NOT need a realtor to make a home deal. All you need is a title company. They charge 1%.
Part of the problem is we are not told we can negotiate. Not to mention it’s expected that they get the 3 percent commission. The 3 percent has become the standard. When I look at our current home I’m not sure you did 20k worth of work. There was no drone footage and everything is put online. I scheduled all of my appointments and attended all of them for repairs or whatever with the sale of our last home. I saw my realtor twice. The next time we sell they won’t get a percentage, it will be a flat you make this much. Unless I’m not having to do anything. I was able to get away with just 4 percent on the sale of our old home. When you compare that to when I bought my first house. I didn’t have to do anything. My realtor did everything.
The problem is not commission, its the price of housing.
Yes and up to now the common 6% is baked in listing priced and has been part of sold comps.
Buyers find the houses on Zillow
Buyer agents are not needed
Great analysis and explanation. Thank you so much Mr. Todd.
5-6% is entirely too much for a commission. Every homeowner tries to increase their sales price enough to cover the commission on their end. Realtors generally overvalue home prices, and with most of them doing it, it inflates home values. The inflation must eventually end. Realtors are complicit with the housing affordability crisis that we're in now. Bidenflation, irresponsible lending practices, (some) irresponsible buyers, and Realtors are why we're in a housing problem today.
Exactly! Which is why I will now hold off buying until this settles. Sellers need to knock 3% off the listing price if I’m paying my buyer’s agent. Right now that 3% is baked in listing price.,
All of the current rules are kept in place by buyer and seller IGNORANCE. If it is widely known and transparently communicated that all fees and commissions are negotiable, the market would change considerably.
They also need to understand the agent's costs.
@@rebeccalewis4947 not really. Your costs are yours. Tax deductible. Just negotiate in good faith. Competition will set the market fee regardless of costs.
I agree that agents/mortgage brokers are taking advantage of the ignorance of sellers and buyers which should be illegal.
The future is a battle of portals. A few large companies.
They’ll just need to contract you (agents) for the mechanics.
1% is fair .5/.5
Clueless
You are phenomenal at this! I felt like I was watching one of the big wig channels like CNN, MSNBC, or Fox Business. Keep up the hard work.
Excellent video
If buyers pay their own commission, what is to stop the buyer from working with the listing agent and paying them more than the listing agent? Would the listing agent then work harder for the buyer than the seller and convince the seller to give the buyer a better deal?
How do you find a RE Agent with integrity? That’s the BIG QUESTION, Todd? What exactly should I be asking them as a Buyer’s Agent? Can you please share a list of questions or specific details that I need to ascertain. Thank you so much!
Todd really enjoy your show especially the ones with the realtors from different local markets! Also your guest's are really good and informative! I wish you continued success in 2024!
The public needs access to the MLS system!! Unfortunately there are a lot of shady realtors that have their commissions best interest not their client.
I wish it were a flat fee system, so that there is no incentive to jack up the listing prices.
I mean, this is ridiculous. So they’re trying to say that home prices have skyrocketed because of fixed commissions, not because the feds lowered the interest rate to zero? Let’s be real😅
The buy broker's incentives aren't aligned with the buyer.
Keep it the way it is, just make a clear disclosure stating commissions.
5-6 percent is not the issue when dealing with contracts, negotiation, pricing strategy, inspections, and much more. When you buy a business, its 10 percent. When you buy a yacht or airplane, its also around 6-10 percent.
The government should never get his hands on people's money or income, if the market buys it, so be it.
ROBBER BARONS, FRATERNITY BROTHERS,LOBBIEST?
OH YES I FORGOT SLAVERY
A Realtor cannot disparage a neighborhood without probably violating the 1968 fair housing law. The realtor can under no circumstances give an opinion on whether or not the neighborhood is a good place to live or not. They can, however, furnish you with the websites were pertinent information regarding the neighborhood is such a crime, statistics or recommend you speak to the police department, but for overall , giving an opinion, that is a clear violation of the federal housing act.
As a seller. I should not have to pay 3% of the 6% commission to the buyers agent. This is such a scam. And I’m tired of hearing that these are negotiable. Total hogwash. If the MLS doesn’t show the buyer’s agent getting 3%… many won’t even show their clients your house. This is why the system must change.
Glad to see all these lawsuits. The buyer’s agent does not work for the seller and are not your friend. The buyer should pay for their own agents.
Imagine when it shows 0 buyers commission. Hope the listing agents have a lot of buyers.
Anyone that has ever sold a house knows that these supposed buyers never have a stick to rub together. And the ownerus is supposedly on the sellers and people are sick and tired of it. The seller constantly has to make concessions to the buyer. If you can't afford it because you ain't got to stick the rubber together then you shouldn't be out in the market looking for it.
Maybe Im misunderstanding this, but most buyers do not have an extra 3% cash laying around to pay the agent themselves. With it wrapped up in the house cost it becomes part of the mortgage. Sellers up their price based on having to pay this commission.
@@annehaverhals1750 not true. As a seller, I have never raised my house price to off set broker fees. My homes were always priced accordingly with the market values. If a seller doesn’t have the money for a house down payment and closing costs, they should not be buying. Period! I’m done paying the buyers fees as a seller. Appraisers determine values based on the market and area. Not the seller.
Great synopsis
This is a very important question for many Buyers and Sellers. I am quoting from you at 11:16 in this video: "...experience is most agents don't answer their phone so it'd be ...." WHY don't agents answer their phones!! I am qualified ( possible a cash transaction---yes I carry around cashiers checks to match the amount I want to pay--no mortgage company no property search by mortgage company is required) ) have done research on a property and the seller is trying to SELL the house,I try phone, email, text FAX and smoke signals, NOT ANSWERING. .. Why wont agents answer the phone? I learned that if I as a Buyer use a smartphone with a Beverly Hills telephone number the agents pick up on the first ring! WHY?
Unfortunately, agents do sort properties based on the commission they make.
The firm should get all the commission and pay the agents hourly!
🤣
Do you work at McDs or what?
lol wage slave mindset
As a consumer, what I **HATE** about realtors is how dishonest so many are. Even if I have a good realtor, the listings on the MLS entered by other agents are often plagued with "errors". I often see homes that are listed as waterfront but are not. Or duplex condos apartments that are listed as single family homes. Once had a realtor try to sell me some land that was clearly in a flood zone, but she argued it was not in a flood zone and had the "county engineer" call me and lie to me. I showed her the flood maps from FEMA and the realtor website(s). She never called me again, thankfully. Then there are realtors who show you homes above your maximum price point. They say they're doing this to ensure you don't miss your dream home because of a few thousand bucks but in reality they're doing it for bigger commissions.
I hear you loud and clear.
There are many buyers who struggle with poverty. As a buyers agent I have helped buyers secure grants and place competitive offers for standard sales and government listings like HUD. Without buyer representation, most buyers would have little to no hope in winning a competitive bid in a multiple offer situation. Moreover, it is even less likely they have the foresight and ability to make sure all their taxes and settlement fees are covered, paid for by the sellers, or financed into the transaction.
A large percentage of lawsuits associated with real estate sales are due to FSBOs. I’m working on an assemblage, we needed to get the properties rezoned and property lines vacated. A lot of brokers don’t have the knowledge to negotiate the development process. This is a 2 or 3 year process. I’m not going to discount my commission even one penny. I earn it.
Mine charges 2.4% but will negotiate lower. They are pretty reasonable.
In the uk your Solicitor (lawyer) looks after the buyers interests, although what you pay is your decision…the buyer generally doesn’t have a buyers agent..although it’s probably different at the very top end.
Time for the NAR monopoly to go away.
You should have Rob Hahn on. He's a GREAT guest to talk about this topic. I think you would like him.
You keep saying that rates are negotiable. Perhaps you should pump the brakes on that. In reality it's not that easy to do, at least from real world experience. It may be illegal for for the rates to be fixed but that is not what is happening in the real world which tells me that there are hidden forces at play that keep the rates from really being "negotiable". Also the fact that compensation is commission based is a large problem in of itself IMO. Not so much for the listing agent but a Huge conflict of interest for the Buyers agent. I think it is time for the real estate industry to go through a massive restructuring in order to eliminate the corruption and to bring the business model out of the 1960's and into the 21st century.
They really need higher education requirements and higher entry fees to prevent all types of unqualified people from entering that field. It’s ridiculous how someone who flipped burgers yesterday is now qualified to sell homes from passing a simple test and paying $300 and getting a website. It amazes me the public doesn’t vet their realtor and ask simple questions about the agents background at all.
In addition, now there are a bunch of unlicensed wholesalers and large corporations who hire anyone off the street to mail a cheesy letter telling you the worth of your home and they’ll buy it as is and close right away. I can’t stand wholesalers. They tie up an unsuspecting persons home while they search for an investor buyer and then pocket $20k for doing nothing. The homeowner is shorted money because they don’t realize they can get much more money on the open market rather than dealing with a sleeze ball. Red flags all over the place in real estate. Has been that way for a very long time.
Love your show! I wish you had an office in the sw twin cities.
I have a broker that will list for 1% but she said we need to give the buyers agent the 3% commission or we won’t sell it. So I pay a total of 4%
Buyers agent commission is big in California and pure BS. I never hired a buyers agent...:/
If these rates are normal, and wages don't surge, and there is no other intervention, the only way to bring some buyers and sellers together in 2024 is PRICE CUTS. You're so close to 100K...
The NAR founders objective was to get control of the market. The opposite of spirit of "free market". Opinion? Why cant I sell my house on my own? Id pay for marketing, the buyer can pay an agent if that makes them comfortable. But a seller sure dont need one
How many of you have been in the industry long enough to remember when "Help-You-Sell" was blowing up? The larger brokers didn't like what they were doing and in my area (Southern CA) they told their agents to not take their clients to any home listed by help you sell. This was a way of commission fixing because in order to sell through traditional means you would have to pay the extortion.
I’m all for a NAR bankruptcy. If a client chooses to use a buyers agent, that client should pay out of pocket for the buyers agent services. If a seller chooses to use a sellers agent, they should pay out of pocket for the seller’s services. Those two transactions should never ever cross. Ever. It’s a massive conflict of interest for a sellers broker to pay a buyers broker. Massive conflict of interest.
Ok- then sellers need to adjust asking price accordingly
I foresee buyer's agents being gradually phased out. Listing brokers will have hourly/salaried W2'd agents on their staff to open doors and show their listings. Avg fees for home sellers will fall to 3% range. I think that this is the ultimate aim of the DOJ and they will (eventually) get their desired outcome.
Seems to me we should be paying Google these commissions --- the web is doing so much for us to sell homes today
This was z good video
There's simply an inherent conflict of interest in allowing the buyer's agent to receive a portion of the commission because the commission sum is based entirely on the sale price. Therefore, the higher the house sells for, the more commission and thus, the more money in the pot for the buyer's agent.
Buyers Agent don’t care if they house sells for 10k -20k more. It’s peanut on 2.5%-3% commission. It’s the Listing agent side that wants the Seller to sell too low so it’s easier. You have it backwards
@@ShulaTheDon13 Come see how things are in Los Angeles, where 2 bedroom condos are selling for $3.5 million and you'll see what I'm talking about.
Commission is ridiculous especially now that as a buyer I’m the one telling my own agent what houses I want to see and they just get me the viewings. There’s nothing a buying agent can do that the actually client can’t. I’ve fired 5 agents in the past year because they are worthless. With Zillow, realter redfin etc I can personally see all the homes currently on the market and there’s no need to an agent on my part really. I would just pay some lawyer a flat rate to write me up a contract. Real estate agents are become the sleaziest people ever now
You sound like a broke tire kicker that will never buy. Stop wasting people time and save some more money till you can actually afford a house.
I’m sorry but commission should not be based on the price of the home. Homes are up 50%+, that should not increase fee by 50%. In CA homes go for $1,000,000 for average home. $50,000 -$60,000 is not justified any way you cut it. Usury.
Pretty simple whats going to happen. The buyers bring the money to the table. Buyers are going to negotiate a contract with their buyers agent to represent them. Buyers agents are going to demand exclusive agency - no more shopping for homes with multiple agents. It will be similar to a listing contract - for example 90 days exclusive. I dont get why everyone thinks this is chaos and top realtors cant explain it to me. I think my theory is the likely outcome.
A lots of agents just greedy to get a listing contract and then do not thing to find buyers for seller instead just waiting for other agent to bring a buyer. There are some crooked agents in this industry.
The problem is you guys want the buyer to pay 3% to their agent?? Then I will be offering 3% less for the house or walk away. The 6% has always been baked in the listing price and gets to be part of the sold comps. This is insane.
If a commission has to be paid then it should be a percentage of the realized profit or loss on the home..not based on the selling price.
Is something going to be done regarding the ridiculous high cost of hoa’s?
Never buy in an HOA. Eventually, prices would drop due to lack of interest, and HOAs could be dissolved. All HOAs are bad. All of them. HOAs align well with socialism but do not meld with American values.
Your comment about used car salesmen I've said that a number of times. We came across a honest agent who advised us of many things and some were what our agent shd have wrote into our contract to protect us but intentionally didn't to make it easier for herself. Underhanded and unethical. But we didn't know those things at the time.
And each situation is different knowing that they shd at least stay with you and suggest alternatives. Their working for us not us them
You keep focusing on that commission. That tiny 6% was the least of my concerns
Just last month I asked you & Melissa for advice & neither of you could help me. The
Problem is that listing agents working with buyers agents to ultimately control 1. Which houses
Are shown 2., when a price drops Is COLLUSION plain & simple.
In reality the buyer is the one really paying for both agents. The seller wants a price the listing agent adds a commission and then they go sell the house. The buyer pays for the purchase price which in that price is the inflated commissions. So really who is really paying????
I’ll discount if I’m getting both sides, but otherwise, no.
It's ironic those suing over paying 3% to a Realtor are willing to pay 30-40% to an attorney.
I have been meaning to ask, what screen is that? I love it! I need sonething that size ( even bigger than Melissa 's laptop)
Thank you!
You need to be asking your realtor if you're on the buying side if he is getting a commission from the seller if that's the case it's a conflict of interest for you move on to the next realtor
I've never seen a movie where the broker is the hero
This I think would make a great thought experiment, what would happen to the housing market if all the big apparent buildings across the country were restructured into condo associations became available for the current tenants to buy? Obviously a lot of details would need to be worked out but I'd be interested to hear your thoughts
It would make rent go up for those who didn’t want to buy, as you’re taking available units away from that sector. Apartments often aren’t set up to individually meter every utility, so either it would be an HOA type expense or very expensive to separate it all. Then comes the legal issues regarding deeds for individual units, zoning, parking, etc.
@@BDUBB24 I guess I should have fleshed out the question more, I was thinking more on the broader market level but you did bring up some points I had to thought of.
I'm curious why the rent would go up for the renters? The landlords turned Condo managers wouldn't be hurting for funding they would be making hundreds of thousands of selling each unit and they would be taking association fees that would be pretty similar to what they were taking in before I would expect
Its a joke to say buyers and sellers are represented by their agents. The agents represent their own interests at the expense of the buyer and seller. The bogus negotiations between agents is to leverage the highest sale price, because the agents get paid on a percentage of the sale price. A conflict of interest by all accounts. Why do buyers need an agent? Why cant I make an offer to a seller without the listing agent getting double commission (racketeering by the agents). The listing agent certainly isnt representing me. Why are they getting paid.
5% made sense when home prices were $75,000 to $100,000. 5% of $400,000 is an obscene paycheck for unlocking a door to a property I researched. The system will hopefully get fixed now
I wonder why they don't hit the Auto Industry as hard as they're hitting the Real Estate Industry
The biggest challenge I think is real estate went “Hollywood” We lost professionalism for fame.
Brokers need to pay a hourly wage, not a Commission. Plus insurance.
As if the prices of houses weren't bad enough even if the real estate agent or broker kept the same rate as 2014 they're still making way more money because it's based off the percentage of the sale price now they're being greedy enough to raise their rates. That's messed up it's bad enough the buyer is having to pay that much more plus an interest rate that's even higher and then you're going to tack on a bigger Commission percentage percentage. Shame on those Realtors and brokers
Check the bathrooms
This guy is not for real. In California, can't get rid of that "Buyers agent" tacked on 2.5-3.5%...:/
It's a seller's market currently and you can dictate the terms. If there's stock at two and a half percent move on it's always redfin
Shoot if I was a realtor I would lowball my competition and to show that I am better than them I would just sell more it's all about the quantity of houses you sell that puts you in the top and you will make more money in the long run selling more houses than less. Just keep your standard rates low
Your channel really shoot up. Good content. Good job
Why can’t we have an ala cart system? Each brokerage can set their own prices, but that way, if you have special circumstances, you can purchase a higher service without the rest of the country having to pay for it. Just because some folks are a pain in the ass, and want every little thing, shouldn’t mean that everyone should have to pay for it
Todd's really "WORKED-UP" over this!
Just wait until he starts talking about the price of eggs in 1989!!!
Hi.
All this said can be said about any all unions. This is an absolute result of real estate union. Are you member of the union, yes then you are better off.
Seller's have been whipped unapologetically for decades by buyers and finally when the sellers actually get a good and decent fair deal everyone loses their mind. It's not fair for First time home buyer's. Give me a break. Cheers to all my sellers!
I want my listing agent to clean my house. They’ll probably do a better job than me anyway.
Wha Wha WHAT? Broker buyer Buyer Broker????? MONOPOLY ???? FOR SURE!!!!!!
They should all get paid one set fee period. Better yet let's get rid of all of the greedy agents and have AI take over ooooooo don't worry I'm sure AI could pass the realtor test 😂 I've had a realtor share with me that if I did a for sale by owner she would do all my paperwork for $ 900.00 a other one said 1,200 sooooo that's what they should make . We the people can handle seeing houses on are own
Hey Todd there’s a bug crawling on your shirt lol
We’ve been invaded with Box Elder bugs 🫣
Couldn’t you just mandate all agents serving as dual agents with all such responsibilities and then they get a full 3% ? That would cut everything in half and also protect both sides
The buyer broker still wants you to pay top dollar as they get more when you spend more
Oh I am sure of that. Just suggesting a potential solution as clearly the status quo is not going to be tenable into the future.
The seller compensating the buyer agent's commission? Sounds like a joke
They always have- the two agents split the 6% that the BUYER pays.
MLS is owned and maintained by REALTORS
Confusing talk,but you look better without the jacket and better on the road!
Trump come back
😂
@@tj2791There was an agreement in place with Trump. The Biden DOJ would not uphold it. They destroyed it and now they are destroying the real estate market. Go ahead. Keep voting democrap.
You realtors make way to much and do NOTHING!!!!! Your days are NUMBERED.... It needs to be a flat rate company and I will Never use an agent, RIP OFF!!!!!!!