Why cant we solve the real estate agent 6% ripoff?

[FelixDeCat]

Lets get this topic back on track. Real Estate Agents are overpaid.

 

[BoberFett]

Lets get this topic back on track. Real Estate Agents are overpaid.

As are you, I'm sure.

 

[Markbnj]

Lets get this topic back on track. Real Estate Agents are overpaid.

On the contrary, people are worth exactly what someone is willing to pay them. Any other measurement of value is just the superimposition of ideology on economics.

 

[purbeast0]

You try really hard, too bad your shortcomings don't allow you to be successful at it.

Programming was boring to me and the money in it wasn't good enough.

My job was much more simple though...15 min commute, 9-5 with an hour lunch, nothing to do when off the clock...not bad for $60-70k at the time.

it's just that you weren't good at it so that is why you got compensated so low.

 

[alkemyst]

On the contrary, people are worth exactly what someone is willing to pay them. Any other measurement of value is just the superimposition of ideology on economics.

QFT

 

[alkemyst]

it's just that you weren't good at it so that is why you got compensated so low.

$60-70K in S. Florida was good money for programming at the time. early to mid 2000's was bad for programming jobs here.

Cost of living is not that high and we have no state taxes.

That was about what I was making prior to going back to school in banking without a completed degree though in the mid 90's in my 20's.

 

[purbeast0]

$60-70K in S. Florida was good money for programming at the time. early to mid 2000's was bad for programming jobs here.

Cost of living is not that high and we have no state taxes.

That was about what I was making prior to going back to school in banking without a completed degree though in the mid 90's in my 20's.

that makes it even worse then and pretty much solidifies that you weren't good at it.

 

[alkemyst]

that makes it even worse then and pretty much solidifies that you weren't good at it.

You are an idiot.

I was able to buy a nice house in an equestrian community at 23 on the water. The income was solid.

 

[MrDudeMan]

On the contrary, people are worth exactly what someone is willing to pay them. Any other measurement of value is just the superimposition of ideology on economics.

I'm not so sure I agree with that statement. I know what you mean and it's not like that's an uncommon saying, but I think the main issue being raised in this thread is that people may not really be aware of how much money they're spending to get relatively little value. It may appear to be worth it to them, but I bet if most people understood what a realtor really does and how they could quite easily duplicate that work, they'd be willing to invest more time to save literally thousands of dollars. I'm equally sure not everyone would bite and that the profession would remain, which is fine, but there's no way it would have the prominence that it does today.

if you as the seller sign with an agent, you must use that agent for the duration of the contract. If you find an offer by yourself, you must refer the potential seller to your agent. At least thats how it works in NJ and NH. Not sure how you do things in FL.

That's only true if you didn't negotiate up front. I listed a house with a realtor once and I made him put an exclusion for any buyer I found on my own. I only agreed to sell through him if he found a buyer and the total price including his commission beat anything I was able to find. He failed to do that and we parted ways peacefully as he knew up front what I wanted to do.

Regarding the buyer's agency agreement: I discourage people from signing those as often as I can. The buyer can get screwed if the agent decides to spend their time working for other clients. I have personal experience with this. Story:

Before my wife and I really understood what it meant to sign one of those documents, we did exactly that and the realtor basically vanished a few weeks later. He talked it up well enough to convince us to use him from the beginning obviously, but that didn't matter in the long run. We were easy clients - no complaining, always on time, moved at a brisk pace through houses, and worked around his schedule. He simply stopped communicating with us. Side note: my wife actually found all of the houses we went to even when he was communicating with us.

Anyway, fast forward 2.5 months. We found the house I mentioned earlier after leaving a friend's house and eventually got under contract. Somehow he became aware of this (I still don't know how) and immediately sent us a letter from a lawyer seeking $35k (the full 6% commission on the house) in damages for breach of contract. Technically, we did breach the contract, or at least it appeared that way at first. I didn't intentionally do that to be totally honest. What came to pass is that he had to drop it due his failure to procure cause for the commission. He didn't make us aware of the property, show it to us in a significant capacity, or really have anything to do it. Agency agreement or not, he had no legal or rightful claim to any money.

The agency agreement is definitely designed to protect the realtor and I very much understand the point of it in concept. However, it gives them a free pass to do whatever the fuck they want for the duration of the contract period and they can take advantage of it even if it's purely due to laziness. I've since spoken to several realtors about it and none of them even mention the agreement. They firmly believe if they do a good job that people will pay them and I heard no stories negating that. Fair enough in my book - I don't agree with their commission structure, but, setting that issue aside, if they do a good job and someone agreed to pay them up front, they deserve that commission and surprisingly most people aren't unethical assholes when it comes to that.

 

[purbeast0]

You are an idiot.

I was able to buy a nice house in an equestrian community at 23 on the water. The income was solid.

and you still weren't good at programming and clearly don't know anything about it based on your comments in here. but that explains why you made pennies doing it.

 

[BikeJunkie]

Cost of living is not that high and we have no state taxes.

Yet you still managed to overpay for your house.

Oh wait... your house was worth it because you were willing to pay for it :biggrin:

 

[BikeJunkie]

Before my wife and I really understood what it meant to sign one of those documents, we did exactly that and the realtor basically vanished a few weeks later. He talked it up well enough to convince us to use him from the beginning obviously, but that didn't matter in the long run. We were easy clients - no complaining, always on time, moved at a brisk pace through houses, and worked around his schedule. He simply stopped communicating with us. Side note: my wife actually found all of the houses we went to even when he was communicating with us.

This has been my experience, as well. This is what a lot of people don't understand (and what I didn't understand until I gained the proper experience): your agent's primary responsibility is to himself. His primary job, interest, and motivation is drumming up new business. Once you sign a contract with him, he can move on.

That's his job: new clients. Period.

 

[Markbnj]

I'm not so sure I agree with that statement. I know what you mean and it's not like that's an uncommon saying, but I think the main issue being raised in this thread is that people may not really be aware of how much money they're spending to get relatively little value.

Perhaps not, but you seem like a reasonable guy, and so surely you recognize the danger of unfounded arrogance when you assume that you've peered into something obscure and figured out that a market of millions of thinking individuals is wrong 🙂.

 

[MrDudeMan]

Perhaps not, but you seem like a reasonable guy, and so surely you recognize the danger of unfounded arrogance when you assume that you've peered into something obscure and figured out that a market of millions of thinking individuals is wrong 🙂.

Indeed. I think time will tell.

 

[alkemyst]

and you still weren't good at programming and clearly don't know anything about it based on your comments in here. but that explains why you made pennies doing it.

Actually I was really good at programming. I am not going into details on AT because some of you fuckers sent letters and contacted professors from my past. I figured out a good method from a scripting language over the C+ that was leaked out for most of my classes. For projects that didn't work with scripting, I asked to be allowed to deviate from C+ to something else.

I scored all A's in my programming courses, I even know SCHEME and LISP. I can code in C/C+/C#, FORTRAN, COBOL, ASP, TCL, VB, VB/JavaScript, JAVA, and probably more I forget.

The market tanked then. I was able to work it out though and still work out my lifestyle. I rolled in a 1996 Saturn SC2, had spending money for good clothes and able to go out a lot to mingle. What were you making in 2000-2001?

Going back to the mid 90's I was still lazy in that time as well, I had busted my ass working up to 3 jobs while my parents covered my gas and insurance.

I ended up with a trophy wife and an awesome house, two new cars (1997 VW GTI VR6 and her 1996 Camaro RS that I had to pay more than a Z-28 cost 🙁), a pool, 1/3 acre of land (it was 1/4 acre with a huge easement to the water), 3/2/2 dwelling around 2500 sq ft, I ate out almost every night, was saving major, etc.

She ended up getting rear ended at a red light by someone going around 60 mph.

It broke her neck, they fixed it but then her parents wanted her to work, so the spinal fusion didn't take and she spent six months in a bed/hospital over time and got addicted to painkillers and other things far worse. In that first divorce I had, I took a knee. It really wasn't her fault and it helped her at my expense. I didn't realize what I gave up with doing that until 10+ years later. I don't regret it, but it was more of a sacrifice than I realized.

What did you do in your early to mid 20's years old?

What's your claim to fame?

I am a genius, I have taken a full on doctor given IQ test at times. My emotions may get to me at times though, the funny thing is that concerns them.

I am fortunate that money doesn't drive me. I just want a good woman at the end of the night and in the morning, good conversations, fun in the sun, a nice car for driving, a comfortable home, and a few brews at the end of my night.

 

[alkemyst]

This has been my experience, as well. This is what a lot of people don't understand (and what I didn't understand until I gained the proper experience): your agent's primary responsibility is to himself. His primary job, interest, and motivation is drumming up new business. Once you sign a contract with him, he can move on.

That's his job: new clients. Period.

Now if you dudes just realized this extends to your fry guy, your mayor, your senator/representative, your police, etc.

You can KumaMaTaTa.

🙂

However, you are explaining listing agents vs selling agents.

There is a difference.

 

[alkemyst]

Indeed. I think time will tell.

All welcome our new Pharaoh!

If you want me to cowtow, better have your 'men' there.

 

[cubby1223]

On the contrary, people are worth exactly what someone is willing to pay them. Any other measurement of value is just the superimposition of ideology on economics.

Eh, I don't agree with that.

When there is a job to be done, there are two kinds of people - those who are capable of getting the job done, and those who know how to convince you they are the best fit for the job.

The former is the significantly more valuable person, but the latter is the higher paid person.


I picked up a real estate agency for tech support couple years ago, and I work for a lot of local small businesses, most people are respectful people and understand and value honesty, loyalty, & hard work. Working for this real estate agency and some of the agents, the industry is defined by selfish greed far more than any other industry I personally have for clients. I was shocked at how little they cared about other people, how much fake attitude they can project, how much their lives revolve around themselves and their own personal gain. Never trust a real estate agent. There are a few good ones out there. Most are not.

Real estate agents are overpaid because they sell you on far more than they deliver. People pay for what the real estate agent promises them. When the agent does not make good on their promises, they are, essentially, stealing from their clients. Agents are overpaid.

 

[Tiamat]

When my wife and I were negotiating with the home builder, we got the best price we could (basically they covered closing costs entirely and 50k$ worth of upgrades, due to breaking apartment lease, buying immediately, and builder promotions, and mortgage through their preferred bank). Then we gave the builder the business card of our agent. Prior to this we found a real estate agent my wife had worked with previously. We told him there was nothing left but to simply sign. All he had to do was show up. The builder would pay him 3% and we negotiated with him to get 2 of the 3%. Everybody was happy. Builder got paid, agent got paid, we saved a lot of money and got a house built the way we wanted from the ground up.

 

[vi edit]

When my wife and I were negotiating with the home builder, we got the best price we could (basically they covered closing costs entirely and 50k$ worth of upgrades, due to breaking apartment lease, buying immediately, and builder promotions, and mortgage through their preferred bank). Then we gave the builder the business card of our agent. Prior to this we found a real estate agent my wife had worked with previously. We told him there was nothing left but to simply sign. All he had to do was show up. The builder would pay him 3% and we negotiated with him to get 2 of the 3%. Everybody was happy. Builder got paid, agent got paid, we saved a lot of money and got a house built the way we wanted from the ground up.

Used homes I can understand. But brand new? Talk about doing nothing but inflating the cost of things.

Yes, I have built my own home.

 

[NetWareHead]

Story:

Before my wife and I really understood what it meant to sign one of those documents, we did exactly that and the realtor basically vanished a few weeks later. He talked it up well enough to convince us to use him from the beginning obviously, but that didn't matter in the long run. We were easy clients - no complaining, always on time, moved at a brisk pace through houses, and worked around his schedule. He simply stopped communicating with us. Side note: my wife actually found all of the houses we went to even when he was communicating with us.

Anyway, fast forward 2.5 months. We found the house I mentioned earlier after leaving a friend's house and eventually got under contract. Somehow he became aware of this (I still don't know how) and immediately sent us a letter from a lawyer seeking $35k (the full 6% commission on the house) in damages for breach of contract. Technically, we did breach the contract, or at least it appeared that way at first. I didn't intentionally do that to be totally honest. What came to pass is that he had to drop it due his failure to procure cause for the commission. He didn't make us aware of the property, show it to us in a significant capacity, or really have anything to do it. Agency agreement or not, he had no legal or rightful claim to any money.

The agency agreement is definitely designed to protect the realtor and I very much understand the point of it in concept. However, it gives them a free pass to do whatever the fuck they want for the duration of the contract period and they can take advantage of it even if it's purely due to laziness. I've since spoken to several realtors about it and none of them even mention the agreement. They firmly believe if they do a good job that people will pay them and I heard no stories negating that. Fair enough in my book - I don't agree with their commission structure, but, setting that issue aside, if they do a good job and someone agreed to pay them up front, they deserve that commission and surprisingly most people aren't unethical assholes when it comes to that.

Your story is uncommon as far as I am concerned and tells a tale of a shitty realtor. There are so many places where he screwed up. I bet you could get realtors to tell their own stories of how unscupulous clients took advantage of a realtor's hard work, went around him and tried to cheat him out of his fee.

IMO the problerm was with the realtor not the buyer agency contract. Sounds like you had a lazy realtor who abused the intent of the contract. By ignoring you and leaving you to your own devices, my take is that it was he who was in breach of the contract first and breached his fiduciary duty to you.

 

[PricklyPete]

Actually I was really good at programming. I am not going into details on AT because some of you fuckers sent letters and contacted professors from my past. I figured out a good method from a scripting language over the C+ that was leaked out for most of my classes. For projects that didn't work with scripting, I asked to be allowed to deviate from C+ to something else.



I scored all A's in my programming courses, I even know SCHEME and LISP. I can code in C/C+/C#, FORTRAN, COBOL, ASP, TCL, VB, VB/JavaScript, JAVA, and probably more I forget.



The market tanked then. I was able to work it out though and still work out my lifestyle. I rolled in a 1996 Saturn SC2, had spending money for good clothes and able to go out a lot to mingle. What were you making in 2000-2001?



Going back to the mid 90's I was still lazy in that time as well, I had busted my ass working up to 3 jobs while my parents covered my gas and insurance.



I ended up with a trophy wife and an awesome house, two new cars (1997 VW GTI VR6 and her 1996 Camaro RS that I had to pay more than a Z-28 cost 🙁), a pool, 1/3 acre of land (it was 1/4 acre with a huge easement to the water), 3/2/2 dwelling around 2500 sq ft, I ate out almost every night, was saving major, etc.



She ended up getting rear ended at a red light by someone going around 60 mph.



It broke her neck, they fixed it but then her parents wanted her to work, so the spinal fusion didn't take and she spent six months in a bed/hospital over time and got addicted to painkillers and other things far worse. In that first divorce I had, I took a knee. It really wasn't her fault and it helped her at my expense. I didn't realize what I gave up with doing that until 10+ years later. I don't regret it, but it was more of a sacrifice than I realized.



What did you do in your early to mid 20's years old?



What's your claim to fame?



I am a genius, I have taken a full on doctor given IQ test at times. My emotions may get to me at times though, the funny thing is that concerns them.



I am fortunate that money doesn't drive me. I just want a good woman at the end of the night and in the morning, good conversations, fun in the sun, a nice car for driving, a comfortable home, and a few brews at the end of my night.

Your level of insecurity is astounding for a "grown" man...but thanks for the Jerry Springeresque blog entry anyway. And nothing you said regarding programming makes any sense at all. C+? Did you write a driver in C+ yesterday? It is laughable that you think doing well in a programming class at a community college equals "good at programming".

 

[PricklyPete]

On topic, I think realtors have their place, but the current expected rate is way overcompensating most of them. The first realtor I ever worked with (who was recommended to me) was a complete idiot who was just pressuring me for a sale.

The two realtors I have worked with since have gone above and beyond. Not saying they earned the going rate, but I would not hesitate to use them again. The current house I am selling is out if state. My realtor managed the whole process of getting the house up for sale (5-6 different workman) and staged the entire house over a 3 day window. Her brokerage, who specializes in a niche market if the city (a specific "old town" part of the city) has a multi page add in several local periodicals where my home is prominently displayed. I currently am negotiating an offer that is way above what I thought I ever would have gotten for the house. The 3% she/her company will get may still be a bit much, but for the hands off approach with better than expected returns, I am not complaining.

 

[MrDudeMan]

Your story is uncommon as far as I am concerned and tells a tale of a shitty realtor. There are so many places where he screwed up. I bet you could get realtors to tell their own stories of how unscupulous clients took advantage of a realtor's hard work, went around him and tried to cheat him out of his fee.

IMO the problerm was with the realtor not the buyer agency contract. Sounds like you had a lazy realtor who abused the intent of the contract. By ignoring you and leaving you to your own devices, my take is that it was he who was in breach of the contract first and breached his fiduciary duty to you.

That's my point. He broke the contract and it really served no purpose anyway. They have to actually do something to deserve it, so the agency agreement is a strong-arm tactic that most people don't really understand. It has too much potential to screw the buyer/seller while offering very little additional protection for the realtor. They can get paid without one quite easily if they're even marginally organized.

I agree this isn't a common situation, but it's also not as rare as you may think. After it happened to me, I did some digging on the net as well as by talking to people around town and found several instances of a similar situation. He was definitely a craptastic realtor as you suggested and he played a primary role in creating this issue, but the agreement forced me to deal with it in a legal capacity for basically no reason. The bottom line is that agency agreements aren't in the best interest of the client at all. Realtors think it's a one way ticket to do whatever they want and clients don't seem to realize that's not true. I sure didn't until I was faced with the problem.

 

[vi edit]

Yeah I can't totally bag on realtors. When I sold my house back in March I listed on a Saturday, my realtor shotgunned out a lot of texts to other realtors and I had a line of showings on Sunday. By Sunday night I had multiple offers on my table and ended up dealing for more than $10,000 over my asking price. He damn near paid for himself with that. Figure in the rebate I got back that was pre-arranged prior to listing and it was basically a zero cost to me at the bottom line. Still had to cough up the 3% on the buyers side but likely would have to do that anyway if I listed FSBO.

I still ended up doing a pile of things through backchannels with the buyer since her buyers agent was a loathsome, uncooperative bitch. She sat on the repair amendment for three weeks and finally coughed it up 4 days before closing. She also jacked around with the closing date and blamed it on the buyer. Did a lot of work arounds without the realtors involved.