Slate: Why do you still need a realtor to buy a home? Why hasn’t the web done for real estate transactions what eBay has done for other exchanges? The 3-5% realtors get on both the buying and selling sides adds up to a huge chunk of change, given that the percentage hasn’t changed even as property values have shot up over the years. Agents – both buying and selling – earn tens of thousands of dollars in commission for a home sale, after putting in what generally amounts to a few days worth of work. And it’s not like realtors are magical specialists – it takes only 60 hours of training to get your realtor’s license, while it takes nearly 1,000 hours to become a hair stylist.
After all, escrow companies and home inspectors already do much of the heavy lifting in a real-estate transaction and add more value than most realtors while working for a flat fee.
In an industry with actual, healthy competition, realtor percentages would be a fraction of what they are, and would be commensurate with the amount of effort and skill put into the deal. But every effort to deflate the exaggerated traditional role of the realtor in the digital age is fought tooth and nail by the National Association of Realtors. Now the NAR is up against the DOJ for antitrust.
I’m not saying that realtors are crooks, or that there aren’t a million hidden landmines that realtors help innocent homebuyers to avoid. It’s a complex business and realtors provide an important service. But realty commissions need to enter the realm of fair competition. It’s time for the NAR to be taken down a peg.
52 Replies to “Realtors Are A Rip-Off”
Nothing about realtors but… I just did a double-take when I saw the “Music” at the bottom of your post. I used to live in Leytonstone. Never saw any UFOs (that I remember) though. I was just very surprised when my eye glanced across the word on your site.
BTW I keep meaning to reply to you about that maths problem, been busy, maybe soon…
I actually think that the Realtor’s give decent value for the money (in my area, there are lower cost alternatives, so there is some competition). It’s the escrow companies (where I work) that are the scam artists. The services that they provide are essential, but their pull with state and federal regulators ensures that there are no low-cost alternatives for those with fewer needs. Just one example–if you refi, you may get a 25% discount on the title insurance given to your lender– but the escrow company does literally 90% less work and carries a far, far lower risk that there will be a claim on the policy and on a sale.
While I’m not disagreeing with you, I think the core issue is deeper than that. Buying a home has been made a hideously complicated event, with several different entities – banks, lawyers, munincipalities, insurance companies, utilities, realtors – all struggling to add complexity and obfuscation in order to cement their role in the process and guarantee their ongoing income from self-perpetuated middleman activities.
Gosh. Reminds me of Microsoft’s role in IT.
You need a realitor because he or she (in theory) knows the process, has done it a hundred times, knows where to find the kind of home you want, knows inspectors, knows where the seller’s agent will try to screw you. You pay the realitor for that knowledge. That seems fair to me.
Sure thing – like I say, realtors provide a valuable service. But there are big chunks of the process that can be / should be disintermediated, especially for people who have bought before, or who are willing to do a bit more legwork and research to save themselves 10 or 20 thousands bucks.
We loved our realtor. He had a lot of good advice and steered us away from neighborhoods we might not ultimately have been happy in. He was a good man. But we had the internet, and we looked up MLS listings almost daily. He provided us with very few listings that we hadn’t already seen in the MLS, and we often thought “What are we paying him for?” This wasn’t his fault – the point is that we have almost the same access to listings as he did. The real scores are the ones that don’t show up in MLS, but those are rare. That’s not his fault, but he was far more useful to us in the transaction phase than in the home search. And if we were more experienced, we could have managed parts of the transaction ourselves, or would have been happy to pay a pro a fraction of what we paid him for what amounted to very little work.
I’m not really in a position to say whether or not realtors are a rip-off in general. I’ve only purchased one house in my life, and have never sold one.
That said, my realtors (I had two, who worked as a team) were instrumental, and truly were my “best friends” in the whole home buying affair. Hours upon hours of driving, late night phone calls, encouraging us when we were discouraged, etc. In the end, they only earned 2.5% of the total transaction (their normal is 3%) but were cool about that – even though it was a 5 month long nightmare.
While it may be possible to buy/sell a home without them, I don’t think I’d have wanted to. They were absolutely worth it.
On the flip side, though, the seller’s agent was a complete joke. He didn’t fax in the proper documentation even after multiple phone calls from our agents and after legal deadlines had passed (if we had been so inclined, we could have left the table at that point and caused the seller to lose a month’s worth of work), seemed genuinely confused about common real estate practices, didn’t show up when he was supposed to, etc.
Later, we found out that his base of operations was the Fiesta Market in Fontana. Not exactly confidence inspiring.
I’m a big fan of disintermediation – cutting out the “middle man” – but buying a home is a big deal. Even buying a car is something that you can largely do using your own research, but buying a home? There are just too many pitfalls to watch for, idiots to route around, and forms to submit. The idea of compensating realtors for actual work performed seems like a good one, but I wonder how that could be implemented in practice without giving less scrupulous agents reason to invent work for themselves.
I love Squarepusher. That is all.
(He puts on a surprisingly entertaining live show, btw… Even though he is a laptop warrior he is also an amazing bassist and plays bass on most songs).
You have to pay a realtor in CA to find you a home? My realtor here in OR made her commission from the person selling the house that I bought. On the flip side, my sister just tried to sell her house FSBO and she had someone interested in her house who was using a realtor. The realtor insisted that my sister had to pay her commission even though my sister did all the work of advertising and showing the house. My sister told the realtor to take a hike.
> You have to pay a realtor in CA to find you a home?
Not just in CA — that’s the normal role of a buyer’s realtor, as far as I’ve ever heard.
> My realtor here in OR made her commission from the person selling the house that I bought.
But wasn’t the seller already paying her selling agent a fee? So she paid both her realtor and yours? Did that jack up the amount the seller had to pay, or was the fee to your realtor a slice of the fee?
I know that this is an old thread but let me tell you what I did for my clients as a Realtor.
They wanted to sell by themselves. Got an offer for their asking price within 3 days.. Not bad for a FSBO.. (For Sale By Owner) but it made them think… 3 days means someone JUMPED at their house.. now, they asked a fair price. But they wondered if they could get more. They rejected the offer and decided that they asked me to list their house and I gave them a break on commission at 5%. I sold their house in 2 weeks after marketing it and guiding them to make changes to their paint etc.. They got $80,000 more than their last offer. The list price was $589,000… what they wanted. The sales price after I got them 13 offers with a set date was $670,000. They paid $33,500 in commission between the other agent and myself which still left them with $47,500 more than they were going to get and they had NO IDEA that they could do it. So…don’t underestimate the power of a good realtor to get you more money even after commission. That couple could have LOST 47 GRAND. I can send you the MLS sheet of that sale to prove it.
I disagree with the statement realtors are rip offs. We actually do do a lot of work. However, I agree that the industry needs to change and it is. I use to be with a big commercial brokerage and did only a few transactions a year and had to charge 6% because the brokerage required this. Now, I am with a smaller brokerage (discount) yes, but I am doing a lot more business and charge a flat fee of $5995.00. I am actually making more money also. So really it is not the realtors fault that they charge 6% it is the greedy broker’s.
It is said that Realtors represent 85% of purchasing market accross North America. The need for Realtors is great because we are a purchasing community. As a community we pool hundreds if not thousands of buyers in the local markets. The pool or community is regularly called the Association of Realtors. Realtors are constantly marketing themselves to reach Buyers, whether that realtor has a listing or not. Advertising a listing is not what we get paid for. We get paid for procurring the cause. Commissions are negotiable and each realtor is an independent contractor subject to his or her office policies as it relates to commissions. Commissions are not fixed, they are not standard, they are not common and they are not governed by law. It is the only true free market left. We exist because the consumer beleives we should and still has a tremendous need for the service we provide. Quit complaining. The biggest expense in selling your home is the mortgage you encumbered it with, not the commission. Your commission is deductable, your loan payoff is not. Take advantage of the service and stop your weeping.
>It is the only true free market left.
You make it sound like all free markets are good for consumers, as if the freedom of a marketplace somehow magically makes it a healthy thing, even when that is clearly not the case in realty.
>We exist because the consumer beleives we should and still has a tremendous need for the service we provide.
If many/most consumers feel that way, that is their right and no one wants to stop them. If some consumers feel they can do the job themselves and save themselves some money, that is their right too. We paid a realtor’s commission and wish we hadn’t. We don’t feel that the commission paid to the realtor was in any way shape or form commensurate with the amount of work the realtor put into the process. When homes were $50,000, the commission made sense. When homes are $500,000, the commission is ABSURDLY and UNFAIRLY high.
Umm… why? Are you suggesting that when a product or service is irrationally expensive, consumers should just buck up and take it, keep their mouths shut, and not complain? That’s some very scary thinking, Sal.
>The biggest expense in selling your home is the mortgage you encumbered it with, not the commission.
LOL – I should hope so! I could charge you $500.00/hr for computer support and consulting or for building web service packages for you, and then tell you to stop complaining because the computer itself cost more than that. That’s an absurd position.
>Your commission is deductable, your loan payoff is not. Take advantage of the service and stop your weeping.
We did take advantage of the service, we did feel ripped off, and we have every right to complain. That’s part of what makes it a free market too, you know.
I am a real estate lawyer – and we lawyers bust our ass covering the legalities of the transactions and making the deal fly. Lawyers ivest $100,000+ in our education and we make a PITTANCE of what these high school graduate realtors make. It is a total joke and i am tired of cleaning up their incompetance! Realtors are parasites. TRUTH
I disagree. A realtor with their expertise in advertising and knowledge can typically get more for a seller than they can get themselves. Example: a fsbo is expected to discount much like a personal automobile versus that same automobile at a dealership. So, lets say a home is worth $300,000. The fsbo sells it for $282,000. But if you add 6% it would be $298,920. So an agent not only get the seller more money but does all the work! It is risky for a fsbo to open their doors to strangers who can then learn their layout and their schedule!
As for what an agent earns….I think they are paid for what they “know” not how much time is spent!
In Nevada buyers do not pay the Realtor, the sellers do. Just thought everyone would like to know that.
As far as houses going up in price and us charging the same commission. That is our natural way of getting a raise in salary. It would not be fair to get paid the same amount of money as was paid in the 80’s 70’s 60’s etc. Otherwise you would be buying a house from an agent who didnt even own one because we couldn’t afford it.
There are worse things than Realtors, like political figures.
And for what the attorney has to say about us I would like to remind her that there are more jokes about lawyers than Realtors. And Paralegals do most of her work I am sure. But I bet she bills the customers the same.
Anyone jealous of people making too much money for waht they do should take up that business. If it is such easy money why not. You will see why 90% of real estate agents give it up their first year.
We bought fsbo and it was the easiest thing I had ever done, of course I did some research first. The sellers got the purchase agreement from the local book store for our state, I called an inspector and the mortgage broker did the rest and I bought the house under price because the sellers didn’t use a realtor and I didn’t use lawyers, why, I graduated high school and can read an agreement. So go ahead and use a realtor if you don’t like doing things for yourself and learning and also spending way more money, I had instant equity.
You made a point I always make to sellers. When they FSBO, the buyer expects a discount. Just like you expect a discount to buy a car on the side of a road as opposed to a car lot. You did get the advantage over the seller by getting a lower price. This is great for you when possible, but the seller could probably got more money with a real estate company doing the work and finding people willing to pay more. I am a Realtor in Las Vegas. We have so many homes that most people would have a hard time finding the right one for them. Using Realtors to track down a home is easier and costs my buyers nothing out of pocket.
Hey Lawyer, your justifications that realtors are idiots because they only have a high school diploma is rediculous. Bill Gates only has a high school diploma, are you superior to him as well?
I think people would really take a step back and think about the costs of using a realty service if they had to actually pay the expense out of pocket. Just the same as the way income taxes are far more palatable simply because (for most people) they are withdrawn on a monthly basis BEFORE you even get your paycheck.
The realty is For Sale by Owner is the fastest growing sector in the real estate industry and that scares (or it should) the crap out of realtors – maybe not individual realtors but certainly the association as a whole. The Canadian Real Estate Association (CREA) has been running an anti-FSBO campaign all summer â€“ â€œFOR SALE BY OWNER is not for this ownerâ€ â€“ give me a break. The usual crap â€“ we are trained professionals, we screen our clients (BS), we professionally market your home – blah blah-blah. If I was a Realtor the opportunity that the internet provides for significant FSBO growth would scare the crap out of me. The fact is thousands of homeowners have successfully sold their homes and saved literally thousands of dollars in real estate fees. Realtors will tell you that FSBO isnâ€™t for everyone, they will even resort to scare tactics to steer you away from FSBO – but for the homeowners that are successful the savings are significant. Did you know that there was 91 BILLION dollars paid last year in real estate commissions!!!! So you truly appreciate the magnitude of that number, that is 91 BILLION dollars in lost homeownerâ€™s equity. One FSBO site in Wisconsin facilitated $300 million in FSBO sales and generated $300,000 in related FSBO fees associated with those sales â€“ real estate commissions on those sales would have been $18,000,000! I have done some research (internet based) into the FSBO phenomena (Google returns 38 million sites based on a search for â€œFSBOâ€). While the general concept remains intact (home owners selling their own homes) the approach, presentation, fees, options, etc literally run the gambit. The most noticeable consistency I noticed was the overall unprofessionalism and downright ugliness of most sites. Some were so ugly it was shocking – they looked like sites developed by Grade 3 students. From my experience in sales and marketing you only get one chance to make a good first impression – most FSBO sites miss the mark significantly on this point. I did however come across a few sites that have embraced the concept – one in particular was actually FREE! While many FSBO sites claim to offer â€œFREE FSBOâ€ there is only one that I came across actually delivers on that claim. The site is http://www.freefsbo.com – they offer a Free FSBO Kit that includes a professional lawn sign that actually looks good (and modern), a free online listing complete with unlimited pictures, full feature sheet and some FSBO tips that were somewhat helpful. The bizarre thing is the FSBO Kit, as advertised, is actually free. There is no bait and switch, nothing underhanded whatsoever – there is no â€œupchargeâ€ to put in your contact information, no fee to expedite the listing, no fees to upload pictures, or any fees to get a â€œbetterâ€ webpage. The way they do this is simple – they sell your name to companies that want to solicit business from home owners – big deal. I have certainly gotten less for more. No idea who buys this information, I suspect moving companies, legal forms, mortgage brokers – Iâ€™m sure realtors are likely lined up to buy this information (I would be if I were a Realtor). I personally donâ€™t have a problem with it. Please note they are very upfront about what they do. Anyways – just an opportunity to get something for nothing – pretty rare these days :). PS, I signed up, my webpage was active within 3 days and I received my lawn sign via UPS within 5 days and it cost me nothing. Apparently the war is heating up – http://news.com.com/Real+estates+Net+turf+war/2100-1038_3-6099762.html?tag=html.alert.
Realtors are a joke. Plain and simple. I could pay my way through realtor school sell my own house and still save a bunch of money than paying their commission. Plus I’d be set for life, so I could cut all my buddies huge deals in selling their houses. The title company does most of the work. The realtor just comes in with a big grin and some pre printed papers. 15 minutes later, your good faith estimate on what your payments would be are out the door and the realtors getting a huge chunk of change. The NAR does not allow agents to give back rebates. It’s against the law i think. They don’t want the internet to take over and all those realtor’s will be shit out of luck. They’ll have to go get real jobs. When I do decide to sell my house, I’m going to get my realtor’s license and sell it myself. Same with the car salesman. Don’t worry companies will soon start to cut out the middle man if they want consumers to buy their products.
Not everyone needs a real estate agent (btw, not all real estate agents are REALTORS(R), but all REALTORS(R) are real estate agents). But, most people would be better off with one. No different than doing taxes, auto repair or computer programming; some people have the skills and the knowledge, but others… not so much. For many people, what took the real estate agent a few hours to do would take them a couple of days.
I have a neighbor that went the FSBO/limited service route. He accepted a contingency contract with no kick out. The buyer didn’t release him for 6 months. So, he made 6 months of payments, and had to drive 5 hours (each way) a couple times a month to cut grass and do things to maintain his property, while he couldn’t actually sell it. Furthermore, he didn’t even get to keep the earnest money, since the contract didn’t require the buyer to close unless their other home sold. Stack the $9000 in house payments (while paying on the new house where he was transferred to) along with the gas cost and other costs of commuting every other week for 6 months against the 3% he might have saved on his $180,000 home.
Doesn’t look so good. Oh yeah, he also paid for his own marketing and to put the house on the MLS (that’s $500).
In other situations, it can work out.
The truth about board of RealtorsÂ® owned MLS throughout the country
Antitrust complaint unfair trade practices update to previous complaints.
Shutting off service to your MLS as stated in the letter below and shutting out to prevent non Realtors ( real estate agents) on Realtor owned MLS boards in my opinion is unfair trade practices on a large scale.
When a Realtor list a home is it disclosed to homeowners at the time of listing that all Non Realtors (real estate agents) will not be able to sell or show any homeowners listings unless they join the local board? Of course not, therefore limiting competition in the marketplace by the thousands of potential home sales from real estate agents nationwide with Realtor own MLS boards… I do believe that there are around 1.7 million real estate agents VS 1.3 million Realtors that leaves a Hugh gap for home buyers and home sellers if this information is not disclosed up front.
Now that shutting down Supra display keys attached to Realtor owned MLS boards because of unpaid Realtor Board dues, Not unpaid MLS dues only compounds this problem even further for the consumers who have active listings on the Realtor own MLS boards with the agents that are now shut out from a service that is provided by GE/Supra and in which the dues are not not in default..
Lets look at what I call the poster child state, Georgia
Georgia has two major Non MLS Realtor Boards GMLS and FMLS that do not discriminate between Realtor or Real Estate Agents therefore providing 100% competition for the consumers and has created a fair marketplace with a level playing field for all to enjoy.
Why have I choose not to renew my Realtor dues is a very simple explanation for me, I am shammed to be associated with NAR and to be dragged into the DOJ lawsuits against NAR for all the public to see and judge me as a not trustful Realtor (Anti trust) guilty by association, and to further damage the already scarred reputation of being a Realtor.
Were is NAR ethics here ? http://www.google.com/search?sourceid=navclient&I.e.=UTF-8&rlz=1T4GGIH_en__214__214&q=the+doj+vs+nar
So with an estimated Realtor loss of 10% at the Orlando Regional Board of Realtors not renewing next years dues and are paid up MLS dues have had there Supra keys shut off also, what do they tell there listing homeowners clients and Home buyers? When they can not gain access to there listing, or show potential home buyers homes..
This is fair practice!! Sorry I call it unfair trade practices on a large scale and I support The Department Of Justice actions 100% to protect the general public from this unfair trade practice.
I got ripped off when I bought my house. I bought it with a VA loan, got all the inspections done. I had been liveing here for about six years and the cealing in my son’s room caved in. I called theinsurance co. They came out and said” we won’t cover the cost because the leakage was log term”. I found out the roof was rotted out. The Propane heater was so old they didn’t make parts for that type any more. I had to go for two years saving to buy a new one. Because you see I’m a %100 service connected disabled veteran and I only live on my pension and SSI. Now I tried to sell the house and I find out that the septic system won’t pass inspection. My question is HOW did thes things pass six years ago when I bought it? I called the VA and their answer was for me to “GET A LOAN” I can’t I’m too streched out financially. Can somebody HELP me Please.
Sue the inspectors. It’s not the Realtors fault and not the VA’s fault (for once).
Having now sold a house in *this* market, I thought I’d add something. Your selling agent is your marketing person, and it makes all the difference in the universe to have one who’s good at what they do, knows all the ins and outs, knows where to advertise your house, and has a good mechanism for computing the price for your house. I had two selling agents. One did not know these things well. We were with him for 4 months. The other did. We were with her for less than two months, and most of that time was waiting for the bank to process the loan. The second agent had two offers for our house within two weeks of us signing on with her.
You get what you pay for. In this housing market (2007/2008) a good realtor is worth his or her weight in gold.
Realtor = Moral Hazard + Agency Problem.
Why do we allow a person who has minimal education, whose only qualification is to pass a simple exam, who is not allowed by law to provide any legal advice (and must provide a disclosure to the buyer regarding this notion), who is only self interested in making the greatest return possible, handle the most valuable asset we own and charge 6% for it.
Assessing a realtors true worth can be done by adding two numbers together: the cost of a secretary + the cost of a courier, at the maximum 1% of a transaction. Nothing More.
With the amount of public information available online, we as individuals have ample information on local markets, trends, etc. which allow us to both buy and sell for the true prices of real estate, not the inflated self serving prices realtors suggest.
How right you are. I just had a realtor tell me that my reduced commission (which would still land him several thousand dollars for an afternoon’s work) was not worth his time. I’ve bought and sold several houses without a realtor’s help and I can tell you that there’s not much too it. Realtors will lead you to believe that it’s a horrendously complicated process, but once that contract is signed, the title company does all the rest. It’s a sham of an industry if there ever was one.
You are an idiot and have no idea how the process or commission works. The buyer doesn’t pay the commission and a Realtor doesn’t always represent both sides. Also the agent has to split that commission with their broker. So your 6,000 commission after splitting and paying fees is now down to $1500 for all those hours of work. Those that think that the fee is not worth it really has not had much experience in real estate.
You are an idiot…
A) It’s not clear who this is directed at.
B) Starting a sentence that way is a sure-fire way to get people to ignore everything else you might have to say.
Mark, you can’t possible tell me that a realtor is worth their time in dollars. A house is going to sell itself if it’s a nice house. Also, there isn’t much to it. If you want to buy a house first go to a bank and get a preapproval for a certain amount. After you see the house you want the loan officer will send an appraiser out, provide a title company, set a settlement date and then you’re done. No realtor involved. However, some people use realtors because they feel they need them. Anyone can list their house on the MLS for around $500 bucks. Everyone needs job, but I wish the consumers didn’t have to pay the middleman’s salary. If I buy anything it’s because I like it. No one persuaded me to buy something against my will. Simply display what you are saying with the price and I’ll take it from there. Check out Zillow.com. No realtor real estate.
You know, every time I’ve heard the words “[blank] will sell itself, it usually has meant the speaker doesn’t know what he or she is talking about. I had a real estate agent tell me that. It was a good house at a fair price. You know what? It didn’t sell itself.
When I got an agent with a marketing plan and some valid market analysis, the place sold in two weeks. There are some times it is worth paying a middleman. Marketing is a skill, and not everyone is good at it. Those of us who aren’t, who need marketing done on our behalf wind up paying marketers. For a selling agent, that’s their value add.
Buying agents earn their keep by knowing neighborhoods in your new town. They are good at listening to what people say they want and figuring out what they really do want, and then finding houses that are pretty close to that. They save a huge amount of time that way. They also have the experience to tell you when the seller/selling agent is jerking you around, they already have a title insurance company and all the other legal bits of the puzzle in place. They are /professionals/ at helping people buy houses. Sure, you can do it yourself, and maybe you’ll get lucky, but having moved in the last couple years, I wouldn’t do it without my hired guns.
Jim’s obviously a realtor trying to validate his job. What about the real estate agents who knowingly pushed a market that was overpriced? They could have taken a stand and refused to push overpriced houses knowing full well that the market couldn’t hold those prices. Two words “Greedy Bastards”. It’s ugly out there. People still shouldn’t buy houses because the prices will continue to fall. BTW their are too many tools someone can use to sell and buy their own home. You’d have to be borderline retarded or very lazy not to be able to handle those actions. Go get a real job buddy. I’ve owned 7 houses not 1.
The real estate agents who knowingly pushed houses they knew were overpriced is not what we were discussing, else we would probably agree more. And for reference, no, in fact I am neither borderline retarded nor particularly lazy, nor a realtor myself. (My occupation is clearly discussed in other threads in this blog. Perhaps you should read it.) I am just a satisfied customer of two very good realtors in my most recent transaction, and alas, I sometimes find it difficult not to feed the trolls. That stops now.
are not. Bleah. Too early in the morning for this stuff.
Here’s why people should not use realtors. The incentives are assbackwards! The “Buyers” agent has every incentive to get a house purchased, which means making the deal as favorable as he can for the seller. And the Seller’s agent only gets paid when the house sells, so his real incentive is to make the terms as favorable as he can for the buyer.
For example: In my case here are the following: Scam (1) my realtor suggests her mortgage guy to me. She suggests that to make our offer favorable, to make the closing date two weeks instead of 30 days, which basically meant that I was stuck with her loan shark, since most regular banks take at least 30 days to close a deal. Lucky for me, the seller changed the closing date to 30 days, and I was able to get a better rate from a regular bank; Scam (2) she sets the home inspection contingency to 24 hours and says, hey use my guy. So we use her home inspector, who obviously like the loan guy is her little business partner. He of course proceeds to tell us how wonderful our 1950’s rambler is. He of course gives a pass. After we move in, I realize that our realtor did not have us do a Radon contingency or a mold test in a house that clearly should have had it done. I now have to have that tested and having lived in this home over the past year with a new baby, it seriously irks me that our realtor did not even mention this to us at all. Nor did the home inspector.; Scam (3) Her advice on price was to give them asking, because there was 1 offer. Even though that offer had unfavorable contingency and now that I think back in the market, I am 99% sure that the offer was below asking. Instead of recommending a lower price w/o that contingency, she fully supports paying the full asking price. Here is where MOST BUYER’s agents have an adverse interest. Her interest is having the house sold! Her interest is having our contract win. We were in no rush to buy a house and she knew that we wanted a deal. But it is in her interest ($$$ and time) not to have to make a counter offer and to have us make the highest offer she thinks we will reasonably make. That is clearly against our interest. In this situation, her interest is really where the seller’s agent should be.
Another scam is that real estate agents may very well not even show a seller an offer, if there is an offer from their own company or a realtor friend. This is the problem with agents whose interests are completely aligned with selling the house.
Here’s yet another scam: They always tell you that it’s time to buy/sell. If the market is going up, you better buy now. If the market is going down, they say buy now when it’s low. They say buy now when interest rates are low. They are going up, but what they don’t tell you is that when interest rates go up, home prices go down!
Real estate agents should not be paid a commission based on the sale of the house regardless of their performance. In my case, I found my own house. She did absolutely nothing but STEAL 3% of my money on top of me over paying by at least $20,000. I easily lost $38,000 using a buyer’s agent.
They should be paid by the hour for the actual services they perform-just like a real estate attorney. BTW Real estate attorneys truly represent your interests, because they get paid for their work-not whether the deal goes through. Unfortunately, the system is completely set up in favor of real estate agents. But there needs to be serious reform, which is very difficult to be had when an entire “profession” is against it. Anyone who has taken law knows that realtors are not true agents.
I also forgot to add how a different seller’s agent brought me a zillow sheet on my condo in DC, and basically told me the median price for two bedroom condos and told me to accept that my condo was worth $100,000 less. And that is what she would list for. She had never even stepped foot in my neighborhood to even know that our condo was much nicer than any recent sales. We decided to rent our condo, but interestingly, our below neighbor sold for $100,000 more than what she wanted to sell ours for and ours is the penthouse condo. In a nutshell, she did not know the DC condo market and only wanted to list out condo at a bargain price that would essentially require no work whatsoever. This is completely unethical. Unfortunately we dumped her and hired the shark I posted above do to a recommendation from a “friend.”
Mark: Buyer’s and Seller’s pay the commission. The only person who brings money to the table is the BUYER. Whether it’s subtracted out of the Seller’s paycheck on the closing papers is neither here nor there. This is yet another scam that Buyer’s Agent’s feed buyers. Your Buyer’s Agent is costing you 3% more to buy your home. It doesn’t matter how it’s worded, the BUYER PAYS COMMISSIONS!
I have a neighbor that went the FSBO/limited service route. He accepted a contingency contract with no kick out. The buyer didnâ€™t release him for 6 months. So, he made 6 months of payments, and had to drive 5 hours (each way) a couple times a month to cut grass and do things to maintain his property, while he couldnâ€™t actually sell it. Furthermore, he didnâ€™t even get to keep the earnest money
my experience is realitors think they deserve a commission of a couple grand for doing a couple hours of work and sending you some links in an email. They have a high ego and get in the way of finding properties. They just send you links they want to send and don’t try to find the lowest priced house. I mean, how hard is it to send emails, but realtors I have talked to in emails get so pissed off if you’re not going to give them an immediate return and a high commission..
REALTORS ARE LEECHES!! PARASITES!!! THEY HURT NOT HELP THE REAL ESTATE MARKET… HOW IS ADDING 10%TO THE PRICE OF A TRANSACTION A GOOD THING? WHERE’S THE VALUE IN THAT. REALTORS SHOULD BE OPTIONAL AND PEOPLE SHOULDN’T HAVE TO HAVE A LICENSE TO BE A REALTOR. WHAT A LOAD OF CROCK…
ATTENTION REALTORS… YOU SUCK.
They are a rip off. The Buyer’s agent and Seller’s agent are in collusion to get you to spend too much.
They are both motivated by a higher asking price. And do nothing but taxi and provide paperwork.
Buyer’s agent = Seller’s agent wing man.
Bid at 80% and make them cover 3% toward closing, BAM! I just saved you $5000 in realtor fees.
Real Deal. Your post was spot on. Here is another scenario that a lot of people do not understand and are getting shafted in the process. I call it the “Corral”. Here is how they do it. You, as an unrepresented buyer, call the listing agent to see the property (The listing agent hates this for a number of reasons. One, he or she will only get 3% and two, he or she actually has to actually work i.e. drive to the house and let you in). So, you make your phone call and ask to see the house. The listing agent then says “yes, sure, I will have Betsy, or to be PC, Bob “show” you the property. You like the house and decide to make an offer. The Corral is now complete and you do not even realize what has happened. In the Corral, the “Buyers agent” (Besty/Bob) works for the listing agent. Now the listing agent gets 3% and Betsy/Bob gets 3% minus fees. Now, you the home owner just got corraled for 6%. An extra 3% on a $400,000 home is $12,000!! You just paid Betsy/Bob $12,000 to bring over the key and let you in.
A realtor may seem like he/she does not do anything! but if the realtor were to make a list of what he or she has done.. (ASSUMING… you have one that DOES their job in the manner they should…) IT is VERY important that you have a realtor and on top of that it INSURES your house title and cash transfer. If your dealing with a house that is potentially worth 500,000$ wouldnt you want to spend… 10,000 or whatever amount you do.. to ENSURE your house gets transfered and you dont get scammed??.. WITHOUT a realtor.. you have to consider that.. if a THIEF or SCAM ARTIST… were to come and purchase your house…. they possibly could give you laundered money!.. OR they can transfer your title of the house without the owners signature! and if theyfurther sell that house to a bonafide buyer (to someone else… who is unaware of whats happened…) the ORIGINAL OWNER can NOT get that house back.. no matter what!. NOT even in the court of law!. A Realtor also protects you.. and WORKS on your behalf to give you a BETTER price for your house… the extra amount you get for your house….. only partial amounts of that go towards a realtor!!… AND the amount of money a realtor SPENDS ON ADVERTISING + MARKETING towards your house is EXPONENTIAL….. for all of you who say that realtors are overpaid… and this and that…. we can say the same thing about a doctor, dentist or ANYONE else. The fact of the matter is…. if your dealing with 6 figure properties… your going to want to spend a little bit of money to ensure that the process is as smooth as possible and you get the most bang for your buck from your house.
I am shocked at some of what I have been reading here. I am a Realtor, and I work very hard. Being a Realtor is not an easy job. I usually work at least 50 hours per week, and I can easily spend well over 40 hours on one deal. I take a risk in everything I do, because if the house doesn’t sell, or the transaction doesn’t close, I get nothing, even though I may have spent hours and hours of my time, not to mention out-of-pocket expenses.
Furthermore, the Realtor, and not the broker, does most of the work. The broker provides training, marketing tools, and an office, but the Realtor has to pay for these things, in addition to many out of pocket expenses that arise when marketing a home.
I work hard as an advocate for my buyers and sellers, and they have all been very satisfied with my services. I have had hundreds of hours worth of training, and this training is ongoing. I am held to a high standard of ethics. To say that Realtors are worthless is to tell me that I’m worthless, because I put my heart and soul into my job, and yes, I do take this very personally.
This is a helping business. I put in many more hours than you will ever realize. And by the time all my fees are paid and the commission is split four ways, I make a pittance for all that work, yet I still have to hear insults from ignorant people such as yourselves. Shame on you. Shame on all of you.
I hope all of you people do go FSBO, because I would pity the Realtor who would have to work with you. I don’t have a problem with people selling by owner, they’re no threat to me. Only 10% of all home sales last year were by owner. I actually offer services to FSBO’s to help them succeed in selling by owner. But I will say, do it at your own risk. If you get sued later for failing to disclose something, I hope you can prove your case. Better hire an attorney and pay him to make sure all your t’s are crossed. At least when you hire a Realtor you only pay if the house sells.
I’ve wasted enough time on you ignorant people. Go ahead and pick my post apart and insult each line or paragraph. I know how your types work.
arealtor, you need to relax :) I can tell that you are passionate about your work.
I agree with you. Some realtors, on the buying side, do put in an extremely large amount of hours…sometimes not even getting the sale in the end. I, personally, would rather be on the listing side…much less workâ€¦.i.e. meeting with the hebetudinous homeowner (I say this facetiously), putting up a sign, adding the house to MLS, and coordinating emails and/or phone calls for showings.
As far as FSBO’s….I agree again, only 10% of total sales is telling. Selling your house is a hard thing to do without a realtor. Restricted access to MLS has really monopolized the listing side. Frankly, I donâ€™t see how it is legal. You really have to use a listing agent to sell your house. The other thing about FSBO is that the home owner usually shows the house. Not good. No one wants the owner of the house showing them the house. Its just creepy LOL.
However, you must concede that people, free people, should be able to exercise buying and selling their own homes fairly, without being limited to the same resources granted to realtors. Moreover, this person should also not be, as I have seen personally, strong armed or “black listed”. It is not ethical to be deterred or handicapped in anyoneâ€™s efforts in buying or selling real-estate unrepresented.
I did not use a realtor on the buying end. It was done in efforts, not to hurt your or any realtors feelings, but to maximize my buying potential. You do not need a realtor to purchase a home in this new era of the internet. The good news is that I see a lot of realtors putting MLS access on their websites. This is extremely helpful when looking for a house. I used a realtorâ€™s web site to find my house in just under a week. This realtor was not tied to the property in anyway, so I didn’t, as a prior post says, get corralled. I saved nearly $20K on my new home purchase by doing it myself. That is awesome no matter how you look at it. 20K is a lot of money to me….and 20k is a lot of money for one week of work! I just decided to put the money in my pocket and do the work myself. Buying a home was unbelievably exciting.
I do not concur with the “make a pittance for all that work” statement. If you sell or buy 3 or 4 of these types of homes a year at 3-6% commission, you will be on the Obama tax radar!!! I know, I know…some realtors may claim that dealing with these unrepresented people, will have added costs and will they will have to face the hassle of managing the financing, the home inspection, setting up the appraisal and termite inspection. Dealing with these unrepresented people who are, as you say, “ignorant”, will cause me to have to manage all these tasks…and for what? Only a pittance.This, “I have to manage all these things and deserve to get paid for it” argument, is not true. I coordinated all these things myself and took the pittance and put it into my pocket.
The reality is, most people who are buying or selling a house without a realtor are generally educated people. Far be it that someone with a certificate try to hinder or question ones ability on process when they themselves are not bound to manage that process that they create to seemingly add value.
Arealtor, unfortunately, I think your profession has some bad apples and has inspired websites like this one. I have a good friend who is a realtor and he is as passionate and as ethical about it as I believe you are. He does provide value to people as I am sure you do too. Some people have to use realtors. The process has been made very complicated and some people must use realtors. I see that. I just hope that they are not being taken advantage of by the bad apples due to their lack of understanding. Yes, there are bad people in most all professions, but when you are in a position of managing hundreds of thousands of dollars, then it becomes imperative that there are no bad apples or at least that they are all brought to light. Peopleâ€™s dreams and futures are on the line when it comes to these transactions.
Its not a free market!! For if it truly were Houses would be very affordable …The federal government keeps house prices artificially inflated…wish they would just buzz off so we could all afford to own a house.
REALTORS ARE CROOKS!! Having sold my own property, I can tell you that realtors have so inflated their value as to make the fees they’re asking criminal. For a realtor to spend 30 minutes in my home showing a THEIR clients and then expecting me to fork over a percentage of the sale as payment is downright deplorable. Now I understand that everyone should get paid for what they do – no disput there. But look at it from my point of view; all the realtor has done so far is to pick up the phone and make a viewing appointment. If an offer is made and I accept, it takes approximately 30 minutes of paperwork to close the deal. I still have to consult and pay my own lawyer and HE is the one that makes sure everything is in order. The purchaser’s lawyer takes care of their interests and makes sure all is in order. The realtor carries no responsibility there. So for about an hours work FOR THEIR CLIENTS, the realtor now wants to slug me an $8000 fee. Give me a break! I don’t even think the leading brain surgeon on the planet earns that much an hour. I would gladly and cheerfully pay $2 – 3000. But please – don’t rob me blind.
I agree with all that said realtors are crooks. They do little to nothing. It takes no training or knowledge to become a realtor, and they make thousands from doing what a person can do themselves. I bought my first home on my own from a private owner and did it all. It is fairly easy and the closing attorney can do everything to help you. You do not need a realtor!
Realtors are awesome and you know it. You have to be able to lead people and be a leader or else you don’t survive in the business. Realtors also play the role of marriage counselors and wear several other hats based on their diverse experiences and working with all walks of life. You who disagree are simply a particular breed that most realtors hope not to cross paths with. Sure, let’s buy a home for $500K off the Internet. You make it sound like it’s as simple as buying an ipod or some other gadget. Real smart move! And Mr Aunrepresented, realtors do hope that most buyers and sellers are educated people but that doesn’t qualify them as having the same knowledge about real estate. Hello! Doctors are very educated people and they may have knowledge about a roof, for example, but they are darn sure not going to install the roof themselves just like a roofer is not going to ask the chef to diagnose his illness. But that doesn’t mean the chef is not educated. Realtors Rock and you don’t. Most of you are scared of the liability that the job comes with and working long and odd hours. Funny how people like to criticize about something they have never done or invested any time and effort in. Big deal if you use the internet, I do the same thing when shopping for tires but that doesn’t mean I know all the ins and outs about tires. Good luck nay sayers from Planet X and to Daniel from parasite island.
The current parasitical system where a realtor is “needed” to buy or sell a home should not exist. Realtors want a sale, any sale. Collect commission and go on to the next score. But for most buyers/sellers, this is a one-time event, the most important and expensive they will ever make. Having control of it is paramount, and that includes not having to pay 6 f***ing percent if the sale to someone who basically parks the listing on a few websites.
1. Dual agency/double ending hu$tling, 2. Intentional overpricing to buy listing. 3. Massive 5-6% (not fixed) commissions to open up doors/turn on-off lights/glorified showman. 4. 60 hours easy exam to be a real estate SALESman versus 1000 hours to be a hair dresser. 5. Many real salesmen won’t retire, too much psy ops and propaganda to spew.