6% Hopefully gone forever

[PennEd]

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

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

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

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

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

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

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

 

[Gideon300]

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

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

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

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

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

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

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

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

 

[PennEd]

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

2% sounds reasonable.

 

[Gideon300]

2% sounds reasonable.

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

 

[PennEd]

Here is the details of the story:

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

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

 

[Tall_Timbers]

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

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

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

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

 

[Gideon300]

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

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

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

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

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

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

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

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

 

[iamsoandso]

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

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

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

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

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

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

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

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

 

[PennEd]

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

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

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

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

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

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

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

 

[PennEd]

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

My grandfather had a very thriving blacksmith business at the turn of the last century. We all know what happened to the living standards of guys like him. But he adjusted to market forces like we all must. Obviously if you want to donate to anybody I certainly wouldn't be against that! But that's basically what it is vs. the work done.

some of the services that the listing realtor usually pays for

If you added them ALL up, between you handling a few of them yourself, and hiring out piecemeal to contractors, even a lawyer, you would STILL get nowhere NEAR $36,000.

like the professional photography

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

It might just turn into a mess...

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

 

[p_rehbein]

Simple solution to this:

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

(hehe)

 

[HealthAndHappiness]

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

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

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

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

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

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

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

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