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

[pdonk]

Originally Posted by prototoast

Everything is negotiable, but negotiations on how to set prices between unaffiliated service providers in the same industry is illegal collusion, and they shouldn't do that.

True, we just went through the changes to realtor regs in Ontario to reduce this

I meant trying to negotiate with your agent on a high dollar purchase,primarily where you've done most of the footwork.

[makoti]

Originally Posted by Gummee

If the realtor doesn't sell a home, he/she doesn't get paid. Ditto with your loan officer. Neither get paid till the home settles.

There are very few if any real estate brokerages out there that draw and commission. Lots of those brokerages out there only pay the agent a percentage of the commission depending on their contract.

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

So a broker works for XYZ. They sell the house for, say, 500K. So $30K commission (atm). Who gets what? How much to XYZ? How much to the agent? Anyone else take a cut? Where does my $30K go?

[prototoast]

Originally Posted by makoti

So a broker works for XYZ. They sell the house for, say, 500K. So $30K commission (atm). Who gets what? How much to XYZ? How much to the agent? Anyone else take a cut? Where does my $30K go?

No inside info but a general rule of thumb for service companies is 1/3 goes to labor, 1/3 goes to owners, and 1/3 covers costs.

[.RJ]

Originally Posted by makoti

So a broker works for XYZ. They sell the house for, say, 500K. So $30K commission (atm). Who gets what? How much to XYZ? How much to the agent? Anyone else take a cut? Where does my $30K go?

The comission is split between agents (buyer/seller), so each gets $15k. Sounds great, but a big chunk of that goes back to the brokerage. I think thats the bigger scam going.

I have no idea what it costs to get a brokerage license to list/use the MLS, but there's gatekeeping up and down the chain in that whole industry. All the money being pumped in by Redfin and Zillow has done **** all in changing the model.

[bigbill]

Originally Posted by jlwdm

And it has not been happening.

Jeff

My 83-year-old mom is a broker in the DFW area. She has her own company and rarely charges 6%. The commission rate is discounted if it's her listing and her clients. She keeps threatening to retire, but real estate is her social life.

[jlwdm]

Originally Posted by prototoast

In that case nothing will change, and we don't need to be having this discussion.

It is a antitrust violation to talk to someone from another brokerage about commissions. Some commissions are 6%, but commissions are all over the place. In the local MLS you could not insert zero for the buyer's agent's commission, but you could put $1. Commissions are all over the place. Commissions are often a function of the skill required for the type of property being sold.

Relocation companies generally take 40% of the commission on a referral also.


Jeff

[jlwdm]

Originally Posted by .RJ

The comission is split between agents (buyer/seller), so each gets $15k. Sounds great, but a big chunk of that goes back to the brokerage. I think thats the bigger scam going.

I have no idea what it costs to get a brokerage license to list/use the MLS, but there's gatekeeping up and down the chain in that whole industry. All the money being pumped in by Redfin and Zillow has done **** all in changing the model.

First of all most commissions are not 6%. And the commission is not necessarily split equally between the agents on both sides. The stronger the market the more likely the listing agent will get less then 3% in a price point where homes are more of a commodity. But a skilled agent will often get paid more for their skills in obtaining higher offers. The key is the net to the seller.

A lot of big brokerages with good agents take around 155, but there are numerous brokerages that just charge a desk fee and a fee for each transaction. You don't pay the brokerage much but you don't get much support. Other brokers take say 20% but cap it at a certain level of commissions and then the agent gets it all. My brokerage spent $2b on technology in recent years - but there are a lot of agents.

As you get into really high end homes the marketing expenses can be really high. And if you don't sell the house it is a big hit on your business. There are good times and bad times. When times are good everybody wants to be a Realtor.

There are all kinds of choices.

Jeff

[ColonelJLloyd]

Originally Posted by jlwdm

These articles on this subject talk about the standard 6% commission which just isn't true.

Originally Posted by jlwdm

First of all most commissions are not 6%.

The definition of standard is an idea or thing used as a measure, norm, or model in comparative evaluations. It may be the case that you personally never receive a 6% commission, or that realtors in your particular market do not. But regurgitating an N.A.R. talking point doesn't make it true.

It's reprehensible that this area has been so ill-regulated for so long. But the real estate industry writ large is probably only behind pharmaceutical, petroleum, and defense contracting industries in terms of lobbying capital/power.

[Ralph]

Does this mean if I picked out a house I wanted to buy...and it was listed, I could negotiate with listing agent for only the commission they would receive as the selling agent and avoid paying the other half of the commission normally paid to buyers agent? Not aware they would do this in past.

Around here, it's pretty common for listing agent to agree to a 4-4.5% commission. Maybe 2% to selling agent, and 2%-2.5% to buyers agent. It's still a pretty big commission with todays higher priced homes. And BTW I'm in total agreement a good agent should be well compensated for their work and expertise.

[jlwdm]

Originally Posted by ColonelJLloyd

The definition of standard is an idea or thing used as a measure, norm, or model in comparative evaluations. It may be the case that you personally never receive a 6% commission, or that realtors in your particular market do not. But regurgitating an N.A.R. talking point doesn't make it true.

It's reprehensible that this area has been so ill-regulated for so long. But the real estate industry writ large is probably only behind pharmaceutical, petroleum, and defense contracting industries in terms of lobbying capital/power.

The 6% commission is not a standard that is just a fact. Nothing to do with NAR. I did not say I have never been on a transaction with a 6% total commission.

So should we regulate fees for attorneys, the tech industry and all other fields? I am not a fan of big government.

Jeff

[Gummee]

Originally Posted by jlwdm

The 6% commission is not a standard that is just a fact. Nothing to do with NAR. I did not say I have never been on a transaction with a 6% total commission.

So should we regulate fees for attorneys, the tech industry and all other fields? I am not a fan of big government.

Jeff

I have, but I was the Loan Officer and didn't see a penny of the RE commissions.

The govt has stepped in to regulate what LO's can get too. Used to be 'whatever the client agrees to' was fine. These days? Dunno. I know one of the brokers I used to work for kvetched at me for not charging enough... but he also had one of the biggest houses in Tierrasanta to pay for.

M

[XXtwindad]

Originally Posted by jlwdm

The 6% commission is not a standard that is just a fact. Nothing to do with NAR. I did not say I have never been on a transaction with a 6% total commission.

So should we regulate fees for attorneys, the tech industry and all other fields? I am not a fan of big government.

Jeff

I’m far from an expert on this topic. And my realtor is the epitome of integrity and professionalism. But why did the NAR settle if there was no collusion? And why did the people cited in the article (presumably with reputations to uphold) think it was such a landmark decision?

[vertr]

What's that quote? “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

[Ozz]

Originally Posted by vertr

What's that quote? “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Upton Sinclair said it first.....

[prototoast]

Originally Posted by vertr

What's that quote? “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

In this case, I think certain realtors betray themselves. If prices were already being competitively negotiated and reflected the value-added by the agents, then this is just a technical change and nothing to worry about.