this post was submitted on 31 Aug 2024
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Economy
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If you haven't read the article, this is terrible news for people trying to buy a home. Touring homes and making offers was previously free for the prospective buyer and entirely paid out by a 3% commission paid out by the seller who was already making money off the sale.
Now, not only do landlords no longer have to pay real estate agents, this startup of theirs would force prospective buyers to pay flat fees per tour and per offer.
You don’t really understand how real estate works.
Yes the seller pays the 3% but you are paying the seller as the buyer. You could easily negotiate that 3% the seller traditionally pays to a buyers agent down in the offer as part of your offer. I’ve seen this done hundreds of times
This companies take on flat fee is shit, but not all flat fee ways of doing real estate are this stupid.
And your understanding is outdated based on a recently passed law
We just bought our first house and the way our realtor explained it was something like this:
Yes, the new law says the buyer pays the buyer's realtor fees (typically around 3% of the purchase price). Seller's think they're getting more money because, "hey! I don't have to pay both my realtor and the buyer's agent". But the law doesn't say the buyer must pay - it's still negotiable. And if the seller won't pay the buyer's fee, nobody will show their house to potential buyers.
I literally work in the industry. There is no recently passed law.
There is a recent lawsuit settlement that only applies to members of NAR which is not all agents in the United States but instead only members of a certain trade group.
Stop talking out of your ass.
Edit: NAR = National Association of Realtors just in case that was also confusing for you.
And just to be extra clear I’ve spent the last few months working with different multiple listing services (both run my NAR members and not) to ensure they are in compliance with the settlement or that they are not open to the same liability that lead to the NAR settlement. I am as much of an expert in this area as you are going to find
And this is exactly what the NAR said would happen if buyers' agents' commissions went away. Yes, the "standard fee" was anti-competitive, but it favored customers, not agents. All of the risk, all of the upfront costs, it was all on the agents. It's like reverse insurance.
Agents were mostly individuals drawn in by the promise of large comissions, but it was a losing proposition. 90% of agents make less than minimum wage. Now that they have no incentive to do the work, the void creates an opportunity for predatory corporations to exploit a captive market.
I'm not defending the NAR or its anti-competitive practices. In fact, I'd argue that the way they atructured the settlement just created another vector for them to control the market and squeeze home buyers and sellers. They could have encouraged rate negotiations and MLS competition without eliminating the buyer's broker commission and made it more obvious that it is negotiable. By removing commissions from the MLS entirely, they screwed agents and buyers at the same time.
Commission encourages both sides of agents to push for as many closings as they can in as short amount of time as they can. It does not favor the buyer or the seller.
Commissions encourage closings, yes, but buyers and sellers want closings, and ultimately the buyers and sellers are entirely in control of the closing. If the buyer or the seller refuses to sign on the dotted line, it is nearly impossible, and possibly career suicide, to collect any payment at all. And while I agree the NAR engaged in bad faith practices making commissions standard, they have always been negotiable. It's like the NAR got caught with their thumb on the scale, so they threw out the scale and started charging entrance fees to the market instead.
Claiming the buyers and sellers are totally in control is a cop out when they're relying on these experts' opinions. Yes, they technically are in control.