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

[avalonracing]

Originally Posted by Erikg

It is a weird settlement. I can't help but think the tech industry are the biggest winners here. I believe Redfin charges a 1% fee to the seller to list on Redfin and requires 3% to go to buyers agent, this buyers fee will soon be gone.

Redfin may have a lower commission for the listing side of the transaction IF you also bought a home with Redfin because then they would receive a buyer's agent commission (they also recommend that you pay the buyer's agent a rate that is best for the market). But collecting the buyer's agent commission on the deals where they only represented a buyer is where Redfin made most of their profits because it costs Redfin more money to list a home due to photography and marketing. If sellers aren't offering a buyer's agent commission Redfin will be losing money on those deals as they pay a salary to their agents. Their previous business model won't be sustainable if there is no buyer's agent commission. They are putting a positive spin on it right now but they'll have to figure something out.

[jlwdm]

Originally Posted by avalonracing

Redfin could go as low as 1% for the listing side of the transaction IF you also bought a home with Redfin because then they would receive a buyer's agent commission which was often another 2.5% (they also have recommended that you pay the buyer's agent a rate that was best for the market). But collecting the buyer's agent commission on the deals where they only represented a buyer is where Redfin made most of their profits because it costs Redfin more money to list a home due to photography and marketing. If sellers aren't offering a buyer's agent commission Redfin will be losing money on those deals as they pay a salary to their agents. Their previous business model won't be sustainable if there is no buyer's agent commission. They are putting a positive spin on it right now but they'll have to figure something out.

My experience with Redfin is that you get what you pay for. Agents come to showings and meet their clients for the first time and know little about them.

On higher end houses someone calls to set up a showing and I ask for information about the buyer before approving the showing. The person calling has no information and no one ever gets back to me and the showings don't happen.

Jeff

[jlwdm]

Originally Posted by pff

Last house I sold, they turned up the HDR knob to 11 and hosted 2MP images at fullscreen on the sales website. I was livid. I told them to fix it, and they said that's "industry standard".

Real estate agents are obsolete in the internet age.

Real estate agents are not obsolete in the internet age. In the primary area I sell in about 1/2 the houses are not in MLS. No photos anywhere on line. And the public does not know what a property sold for. I live in a non-disclosure state where sales prices are not reported to the county.

Appraisers contact the high end Realtors to find out why certain houses sell for more than others.

Jeff

[jlwdm]

Originally Posted by echappist

...

Personally, if I'm still looking past July, I'd be looking for a RE attorney with a license.

As a former attorney who is now a Realtor I would not necessarily agree. My legal skills help, but just because someone is an attorney it does not mean they are a good real estate agent.

Jeff

[bigbill]

Originally Posted by jlwdm

Real estate agents are not obsolete in the internet age. In the primary area I sell in about 1/2 the houses are not in MLS. No photos anywhere on line. And the public does not know what a property sold for. I live in a non-disclosure state where sales prices are not reported to the county.

Appraisers contact the high end Realtors to find out why certain houses sell for more than others.

Jeff

I agree, real estate requires human beings to talk to each other. The intangibles, such as proximity to schools, history of property, neighbors, future developments, etc, are things that a good realtor can provide to buyers. I spent my high school years putting up signs, checking on open houses in vacant properties, and doing some last-minute repairs so the closing could stay on schedule. It's not like buying a car.

As an example, I lived in Paris, TX, from 2012 to 2018. When I bought a house in December of 2012, my broker mom drove up to look at properties with me and my realtor. She walked around the properties with me and pointed out the foundation and roof repairs, things like a gap in the fascia boards that might indicate a foundation problem or poor repair, and what would be a fair offer less than asking. Realtors matter.

[happycampyer]

Anyone who thinks that sellers will reduce asking prices by 2 - 3% (i.e., the buyer’s agsnt’s portion of the commission) once they are no longer on the hook for the buyer’s agent’s commission is delusional.

[NHAero]

I think any scrutiny on this industry will ultimately be beneficial to the public.

With apologies to our resident realtor, in my experience real estate is full of people with marginal ethics. At least car salespeople don't try to dress things up with the label of "professional". Does anyone think that the % of people in the professions that are unethical is similar across doctors, attorneys, engineers, dentists, architects, etc. to that % in real estate agents?

My last realtor experience was when my siblings and I sold our mother's condo in Newton after her death. It was in a five story 100+ unit buildings, plenty of comps. My sister chose a realtor who was recommended who also lived in the building. She gave us a higher than realistic expectation of selling price, did a marginal job on any type of prep work, and then tried to get us to accept a real lowball offer that turned out to be from a friend of hers (and she'd get both sides of the commission). We basically put the process on hold until her contract ran out, found another realtor, and got it sold fairly fast for a reasonable price. And we weren't either greedy or unrealistic about what it was worth, fortunately we none of us needed the money and we just wanted to get the modest estate settled.

What other major type of service do we buy that has the same likelihood of working with someone like our first realtor?

I'm a consulting engineer with 45 years of experience helping teams of architects, engineers, builders, and developers create efficient, durable, healthy building projects. I have encountered professionals in these fields with wide ranging levels of competence, but I can't say I've found more than one or two that are unethical, out of thousands.

[avalonracing]

Originally Posted by happycampyer

Anyone who thinks that sellers will reduce asking prices by 2 - 3% (i.e., the buyer’s agsnt’s portion of the commission) once they are no longer on the hook for the buyer’s agent’s commission is delusional.

Exactly, and so many new buyers will not have the money to pay an agent which won't allow them to take that first big step toward wealth-building. Yes they can go straight to the listing agent, but that agent is contractually working for the seller and will only do things to sell the home. Yes, buyers can hire a home inspector but a random home inspector isn't going to be able to advise them on anything other than some material facts found on the day of the inspection. When working as a buyer's agent I never talked anyone into a home... but I talked buyers out of countless homes that were poor investments.

[.RJ]

Originally Posted by NHAero

Does anyone think that the % of people in the professions that are unethical is similar across doctors, attorneys, engineers, dentists, architects, etc. to that % in real estate agents?

The barrier to entry for Realtors is far lower than the things you mentioned.

I live in an area full of expensive houses and I really wonder where the money is going because the realtors dont seem like they're getting rich off of it.

[NHAero]

Originally Posted by .RJ

The barrier to entry for Realtors is far lower than the things you mentioned.

I live in an area full of expensive houses and I really wonder where the money is going because the realtors dont seem like they're getting rich off of it.

As mentioned upthread, I think many agents are working part time or a RE company has a passel of agents and each one except for a couple isn't doing al that well. The most successful agents and the company owners are doing very well.

[echappist]

Originally Posted by jlwdm

As a former attorney who is now a Realtor I would not necessarily agree. My legal skills help, but just because someone is an attorney it does not mean they are a good real estate agent.

Of course you would say this, defending your profession.

Even the real estate agent who was recommended to me ended up being deficient in some ways. Another buyer and I were both interested, but inspection report from seller listed $30 k of potential issues. Wouldn’t even tell me 1) what he thinks the house is worth (which is to say, price at which I should walk away) and 2) best strategy for maximizing my chance of winning the offer.

Then there were the various agents I interacted with, ranging from merely incompetent yet greedy to the downright mendacious. If there’s such a low chance of finding a worthwhile agent, i might as well not waste my time looking for one, for the vast majority of situations.

[NHAero]

Originally Posted by echappist

Of course you would say this.

Even the real estate agent who was recommended ended up being deficient in some ways. Another buyer and I were both interested, but inspection report from seller listed $30 k of potential issues. Wouldn’t even tell me 1) what he thinks the house is worth (which is to say, price at which I should walk away) and 2) best strategy for maximizing my chance of winning the offer.

Then there were the various agents I interacted with, ranging from merely incompetent and greedy to the downright mendacious. If there’s such a low chance of finding a worthwhile agent, i might as well not waste my time looking for one, for the vast majority of situations.

As .RJ says, low barrier to entry. I think it's similar to people working for investment firms, the ones where they get a % of your assets win or lose, and they steer you to investments they make the most from with fees.

I remember when a friend who'd been a school teacher for 25 years was all of a sudden an investment advisor at the local Merrill Lynch or similar (can't recall). So if I walk in there tomorrow, he's gonna advise me on how to invest my money?

I've had a not so great dentist but at least he had to study a long time to earn that Dr.

[benb]

We all have a bias about the people working in the profession we work in.

We are probably always going to overestimate the ethics of those we share a profession with, no matter what that profession is.

I think when you look outside that though there are certain professions that get misjudged harshly. Not really sure what I think about Realtors but IMO attorneys would be way up the list of professions harshly judged by the public without reason, often times by people who might have never actually had any direct experience with an attorney!

[HenryA]

Originally Posted by benb

We all have a bias about the people working in the profession we work in.

We are probably always going to overestimate the ethics of those we share a profession with, no matter what that profession is.

I think when you look outside that though there are certain professions that get misjudged harshly. Not really sure what I think about Realtors but IMO attorneys would be way up the list of professions harshly judged by the public without reason, often times by people who might have never actually had any direct experience with an attorney!

Although you will from time to time hear breath taking stories of the actions of bad lawyers, attorneys are highly regulated. The result that usually follows egregious bad acts is disbarment. And there goes years of schooling and your livelihood. Would you like fries with that?

There are dishonest plumbers, contractors, engineers and most any profession you can name. Doing a little study and using common sense can help you avoid them.

[HenryA]

Originally Posted by NHAero

As .RJ says, low barrier to entry. I think it's similar to people working for investment firms, the ones where they get a % of your assets win or lose, and they steer you to investments they make the most from with fees.

I remember when a friend who'd been a school teacher for 25 years was all of a sudden an investment advisor at the local Merrill Lynch or similar (can't recall). So if I walk in there tomorrow, he's gonna advise me on how to invest my money?

I've had a not so great dentist but at least he had to study a long time to earn that Dr.

This, so much this. ^^^^^^^