OT: NAR agrees to $418 million in damages. A boon to home sellers/buyers?

[HTupolev]

Originally Posted by jlwdm

When I represent a buyer my fiduciary duties are to the buyer not the seller.

Since the beginning of human civilization, no invention has ever been devised which instills more suspicion than an argument against conflict-of-interest beginning with "fiduciary duty."

[avalonracing]

Originally Posted by Blown Reek

Good. The whole realtor game is a racket.

Just curious, what is your noble profession that serves the greater good with no middlemen, markup, or profit beyond only what is necessary to pay your basic needs as a human?

[BumbleBeeDave]

. . . is replete with middlemen who have managed to insert themselves into the process over the years and you now have to pay them for doing not much at all. Both houses I've bought, I had to sit there and pay money to people who I had no idea they were even part of the process, let alone knowing what exactly they did for me that benefited me, that merited them getting some of my money.

I can't locate who said it, but I think I read it in a Heinlein novel some years ago and it's turned out to be so true . . . "There will never be any shortage of people who try to take something that was free and make you pay them for it."

[hellvetica]

It's fascinating reading some of these comments. I am curious what would happen if you took out all the services involved in the process, then you end up with a lemon of a house and no one to legally recover any money from because you cut costs. Good luck with all that.

[Alistair]

Originally Posted by Gummee

Real estate agents sell (on average) 2-3 houses per year. Year! It's not like most of them are getting rich on your sale/purchase.

M

Who the heck would hire an agent that can only close 2-3 homes/year? That's crazy - what're they doing the rest of the year? My agent is closing 2-3/week just in peak season.

[prototoast]

Originally Posted by hellvetica

It's fascinating reading some of these comments. I am curious what would happen if you took out all the services involved in the process, then you end up with a lemon of a house and no one to legally recover any money from because you cut costs. Good luck with all that.

Yes, imagine... https://forums.thepaceline.net/showthread.php?t=304152

[Alistair]

Originally Posted by hellvetica

It's fascinating reading some of these comments. I am curious what would happen if you took out all the services involved in the process, then you end up with a lemon of a house and no one to legally recover any money from because you cut costs. Good luck with all that.

You think if you buy a lemon of a house, you can recover from either of the agents involved? LOL. You'll be lucky to recover anything from the home inspector, no way you're getting money back from the agents or brokers (or LOs or anybody else).

[Latestart]

The entire thread is about payments to people for services following a legacy workflow for transactions.

I think we are missing that we are on the cusp of very large disruption. Buying a house is (1) 'service' experience of 'finding a house' and 'preparing a house for sale' and a (2) 'process' experience of completing a financial transaction.

The value of the "finding" - knowing neighborhoods, transit systems, safety, hazards, etc is hard to automate as is helping people 'prepare to sell' and set initial price. These services will be likely to be preserved and paid well in relation to effort.

The value of the buying 'process' is likely to be radically changed as all of the service providers are automated.

In that future state, who gets the fee, and the fee split can and should change. I have no idea the impact, but debating the 'current status quo' seems unlikely to be accurate in a situation ripe for change.

[Alistair]

Originally Posted by HTupolev

Since the beginning of human civilization, no invention has ever been devised which instills more suspicion than an argument against conflict-of-interest beginning with "fiduciary duty."

This.

A buyer's agent should be on a flat fee, renegotiated monthly.

A seller's agent should be able to charge whatever they want based on the work and skill required to sell. Flat fee, 2%, 6%, whatever.

And whatever the case, it's amazing that agents in the US get ~6% compared to ~3% in the UK. What does an American agent do that adds double the value to the process? Especially today, with everything online (at least for the majority of homes - there are definitely oddballs/outliers that take special skill to sell and special skill to discover/buy).

[Alistair]

Originally Posted by Latestart

The value of the "finding" - knowing neighborhoods, transit systems, safety, hazards, etc is hard to automate

What % of home sales are to local buyers? I don't need to pay somebody for local knowledge when I'm buying a house in the same metro I've lived in for 20+ years.

I'd definitely be willing to pay more for a buyer's agent in another city/state. But local? I just need somebody to unlock the door.

And I'm not trying to belittle the work a good agent does. My last agent juggled 3 closings within a short time-frame (my buy, my sale, my buyer's sale), juggled repairs to my home in prep for sale, gave part of her commission to my buyer (who demanded money for repairs that I wasn't willing to fund), and also spent ~6 months showing my wife & I homes (narrowing neighborhoods, plus offers on ~10 homes in a competitive market). She worked her butt off, no question. But was it a $70k+ value add across the 3 transactions? I dunno.

[.RJ]

Originally Posted by hellvetica

It's fascinating reading some of these comments. I am curious what would happen if you took out all the services involved in the process, then you end up with a lemon of a house and no one to legally recover any money from because you cut costs. Good luck with all that.

In most states there is nothing in this process that truly protects the buyer.

There are no liabilities for the inspection company, for the title company, for the real estate broker, for the seller. All of the liabilities lie with the buyer because at the end of the day, they are holding the bank note. I've seen issues with all of the parties mentioned, both with myself and working on my HOA board.

Its all gatekeeping and money grabbing up and down the chain.

Things have improved significantly over the years - the MLS is a relatively recent addition, a lot of the changes post-2008 help protect the banks and buyers better, the internet has made information much more accessible. I always was baffled that the real estate brokerage business model had not changed, but, lobbying is a hell of a drug. I think in 10 years we'll be baffled that houses were sold the way they are now.

[ColonelJLloyd]

Originally Posted by hellvetica

It's fascinating reading some of these comments. I am curious what would happen if you took out all the services involved in the process, then you end up with a lemon of a house and no one to legally recover any money from because you cut costs. Good luck with all that.

Or how about those people get paid for the services they provide according to that work's value (time, expense, expertise) rather than the a percentage of the sales price?

[echappist]

Originally Posted by hellvetica

It's fascinating reading some of these comments. I am curious what would happen if you took out all the services involved in the process, then you end up with a lemon of a house and no one to legally recover any money from because you cut costs. Good luck with all that.

There isn't any entity from which to recover cost in the present situation. So cutting out the middlemen, well, doesn't really change anything, b/c it was neigh on impossible to collect damages beforehand and neigh on impossible to collect damages afterwards.

Buying a lemon, unless if 1) one could find proof of fraud or purposeful omission and 2) one is willing to spend $$$ upfront to bring suit, generally means the buyer is stuck with the lemon.

While inspections don't do much, at least it's something, and one could always hire a structural engineer and a plumber to look at potential issues. With waiving of inspection contingency becoming prevalent, it really has become even less savory of a transaction.

[slowpoke]

Originally Posted by hellvetica

It's fascinating reading some of these comments. I am curious what would happen if you took out all the services involved in the process, then you end up with a lemon of a house and no one to legally recover any money from because you cut costs. Good luck with all that.

In California and other hot markets, competition is cutthroat enough that as a buyer, you basically need to waive everything anyway while you're caught up in the bidding war.

Buying agents getting a % arguably have conflict of interest right there.

"It is difficult to get a person to understand something, when their salary depends on them not understanding it."

[JasonF]

Originally Posted by Alistair

You think if you buy a lemon of a house, you can recover from either of the agents involved? LOL. You'll be lucky to recover anything from the home inspector, no way you're getting money back from the agents or brokers (or LOs or anybody else).

You can probably forget about recovering anything from the home inspector too (unless it's gross incompetence which you as the buyer would have to prove). The disclaimers and limits on liability requiring my signature on the home inspection contract was almost as long as the inspection report itself!