Teslag said:

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maroon barchetta said:

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Shooter McGavin said:

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Teslag said:

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We need legislation allowing sellers to drag appraisers out of their homes to beat the living **** out of them.

Until that happens nothing will change.

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What's your beef with appraisers?

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Pretty sure he means county appraisal districts who just keep raising appraisals every year based on the fact that government never gets tired of spending money.

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Nope, the ones who will appraise a home for way less than multiple buyers are willing to pay for it based on comps that in no way compare. Then when you object they tell your to find some better comps and contest it. Then you do. Then they still don't budge. And even if they do it's ridiculous you had to do their job for them.

Beating is mild. Should be shot now that I think about it.

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"Better comps" is subjective. The comps are only better because you think they support the price. I hear all the time about "it should appraise for X" by people who have never done one effing appraisal. It's not rocket science, but there also lots of other factors in play. Plus, appraisers are heavily regulated. They just aren't interested in risking their livelihood for one deal that the market has reacted with "irrational exuberance". Not every transaction is going to have the data to support a raging hot market. By the way, the folks that paid huge amounts over asking are going to hate life when it is time to try and refi.

Granted, some appraisers, like some Realtors and some Doctors and some lawyers and some football coaches and some engineers are stubborn a-holes and won't listen to reason.

No reason to start shooting.

Shooter McGavin said:

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I know the internet exists, but it doesn't provide sales prices. Without those you are flying blind. You going to trust Zillow? LOL. Even an "informed buyer" doesn't know what they don't know.

Also, you are negotiating a legal binding contract that can cost you thousands if you don't know what you are doing. There are also time sensitive elements that the layman is not aware of.

It's not as simple as everyone is making it seem, you know, just unlocking doors and putting pictures on the internet.

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Sales price info isn't shrouded in a veil of confidentiality. You can find it and establish a credible range of market price per foot within an area. From there you adjust up or down based on unique factors. If we're talking about buyers having to pay an agent 2.5% to 3% of the value of the home for "info," that's A LOT of money. I can make some small errors myself and still be way ahead from a cost standpoint.

At the end of the day, it comes down to what a seller will accept, not what some price sheet says somebody else got. Of course the two are related, but loosely. Informed buyers will start negotiating at the low end of the range and the parties will either reach an agreement or not. I agree that there will be occasional buyers that blow the top out because they're uninformed, but that's on them. That exists today in the market for just about anything.

Not saying there won't be buyer's agents. There will. But it won't be automatic anymore, and only those that add value that a client can clearly feel will remain viable. Since a lot of agents typically engage as both a listing and buying agent (not for the same client obviously), I think the practical effect will be to reduce the overall compensation pool and thin out the ranks of agents. The good ones will remain and likely flourish, while those that didn't really add discernible value for their clients will gradually phase out.

MemphisAg1 said:

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Shooter McGavin said:

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I know the internet exists, but it doesn't provide sales prices. Without those you are flying blind. You going to trust Zillow? LOL. Even an "informed buyer" doesn't know what they don't know.

Also, you are negotiating a legal binding contract that can cost you thousands if you don't know what you are doing. There are also time sensitive elements that the layman is not aware of.

It's not as simple as everyone is making it seem, you know, just unlocking doors and putting pictures on the internet.

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Sales price info isn't shrouded in a veil of confidentiality. You can find it and establish a credible range of market price per foot within an area. From there you adjust up or down based on unique factors. If we're talking about buyers having to pay an agent 2.5% to 3% of the value of the home for "info," that's A LOT of money. I can make some small errors myself and still be way ahead from a cost standpoint.

At the end of the day, it comes down to what a seller will accept, not what some price sheet says somebody else got. Of course the two are related, but loosely. Informed buyers will start negotiating at the low end of the range and the parties will either reach an agreement or not. I agree that there will be occasional buyers that blow the top out because they're uninformed, but that's on them. That exists today in the market for just about anything.

Not saying there won't be buyer's agents. There will. But it won't be automatic anymore, and only those that add value that a client can clearly feel will remain viable. Since a lot of agents typically engage as both a listing and buying agent (not for the same client obviously), I think the practical effect will be to reduce the overall compensation pool and thin out the ranks of agents. The good ones will remain and likely flourish, while those that didn't really add discernible value for their clients will gradually phase out.

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Agree.

But remember, you are an educated person with brain power and experienced in buying and selling of real estate.

You are an outlier, just like the agents that add value.

One ah-hah I'm realizing from this conversation is that really good agents shouldn't be concerned by this because it actually creates an opportunity for them to stand out and grow their business if they truly add value for clients.

The days are numbered however for agents that don't add discernible value... they were somewhat protected by the industry compensation model. With that transitioning to one that is more transparent, their goose is cooked.

Shooter McGavin said:

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MemphisAg1 said:

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Shooter McGavin said:

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I suspect in the future seasoned listing agents representing the sellers will have no mercy on know-it-all unrepresented buyers.

The squealing will be loud. Consumer advocates will have a field day. Then the pendulum will swing wildly in the other direction.

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Lol, it's not that hard these days to get educated as a buyer without an agent. Plenty of info out there and ways to get access to even more info. It's not a nebulous, mysterious space like it used to be before the internet. There will always be lazy, uniformed buyers who don't do their diligence and pay an unnecessary premium when buying a house, a car, or anything else for that matter. And for those buyers who do use an agent, I maintain that the average comp won't be anywhere near the automatic 2.5% to 3% that we saw in the past.

Listing agents, on the other hand, put the property on the market, make great recommendations on how to maximize value, and help cast a wide net of potential buyers. They are incented to maximize value and earn a commission appropriately. I don't see their comp changing materially.

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I know the internet exists, but it doesn't provide sales prices. Without those you are flying blind. You going to trust Zillow? LOL. Even an "informed buyer" doesn't know what they don't know.

Also, you are negotiating a legal binding contract that can cost you thousands if you don't know what you are doing. There are also time sensitive elements that the layman is not aware of.

It's not as simple as everyone is making it seem, you know, just unlocking doors and putting pictures on the internet.

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This is without a doubt the biggest value added by Jamie and his folks at red pear. They will get you things you don't even know you need.

Can some of them please be teachers? It's getting so bad. My wife got a new hire teacher partner fresh out of college. Her and her husband just bought a house and he was set to join her in a few months from wherever they lived before. My wife was worried because she seemed like a deer in headlights from the moment she met her.

After the first day of school, the teacher quits. Via text.

Set aside the anger or frustration I might have at the position this puts my wife in, but I can't help but wonder...wtf is she thinking?

Her teaching degree is now meaningless. House? I want to know how that conversation went with her husband.

The kids? Really?

My god. Anyone else but this generation.

I don't think this is going to change much of anything... So a seller can now say they don't want to pay the buyers agent commission of 3% so maybe they drop the price of their $500k to $485k but then the buyer will owe his agent $15k at closing so it's a wash.

permabull said:

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I don't think this is going to change much of anything... So a seller can now say they don't want to pay the buyers agent commission of 3% so maybe they drop the price of their $500k to $485k but then the buyer will owe his agent $15k at closing so it's a wash.

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That $15K commission could be more like $150K, because today the realtors are paid with borrowed money. For a seasoned buyer that's selling a home that has appreciated it might be more tenable, but for first time buyers this could be a showstopper.

42 said:

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I see agencies eventually offering flat fees to buy or sale instead of percentages, since they do basically the same thing no matter the cost of the house. There will be less realtors, but those left will make their money per transaction and agencies will pay out bonuses due to volume.

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This is the (eventual) inevitable outcome.

Successful agents don't mess with cheap houses, because it's essentially the same amount of work for an expensive house, but way more payoff.

Flat fee for all, and concierge fees for those wanting extra service.

I've never used a buyers agent when purchasing property. There was a time when I was shopping for my first house I tried using an agent and ran into one of the concerns several have mentioned here - the agent is incentivized to get us to pay the highest price possible for a property. We told the guy what our budget was, and he consistently showed us properties that were anywhere from 25% to 50% higher than our budget.

I'm confused. It's now Tuesday and there has been no collapse of the real estate market. All the Realtors that I know are still working. Homes are being sold.

I was told that there would be mass confusion and agents would be attending job fairs and leaning how to code.

Looks like business as usual.

MemphisAg1 said:

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Listing agents will still make their 2.5% to 3% because they're still doing work to market a property for the seller. That's where they create value for their client.

Buyer's agents, however, are in for a rude awakening if they think they're going to reap 2.5% to 3% of a home's value simply for showing homes to buyers. Technology has long since erased the need for that role. We bought six homes from 1997 to 2005 before building our home, and by 2000 the internet made it possible to do your own homework. We only needed an agent to open the doors to homes that we selected. My company paid for all agent fees at the time, so it was no skin off our back. But if we were buying today, we would bypass a buyer's agent and go directly to the seller's agent to arrange showings of the homes we wanted to see. And if for some reason we needed a buyer's agent for a one-off showing, we wouldn't pay a fee anywhere approaching 2.5% to 3% of home value.

Edit to add: you've already seen this transition in other industries. You no longer have to use a travel agent to book travel. You go directly to the site of the seller (airline, cruise, hotel, car rental) and deal directly with them. For the travel agents that remain in business, they do so because they add unique value for their clients that they can't produce themselves. There will still be buyer's agents, but in total they won't rake in near the compensation they did in the past when the industry colluded to protect the scheme.

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Just as an FYI, sometimes our rates as travel agents are cheaper than what you can get. Not always. Usually we are not more unless one chooses to charge fees (I do not, but I also do not book a lot of travel - I'm pretty specific). But yes, I understand your point.

Realtors are a scam for most part. They don't deserve to make 6% of a house selling price. Prices were fixed and not free.
There must be ways for sellers to hire as needed and get things done.

JMac03 said:

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MemphisAg1 said:

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Listing agents will still make their 2.5% to 3% because they're still doing work to market a property for the seller. That's where they create value for their client.

Buyer's agents, however, are in for a rude awakening if they think they're going to reap 2.5% to 3% of a home's value simply for showing homes to buyers. Technology has long since erased the need for that role. We bought six homes from 1997 to 2005 before building our home, and by 2000 the internet made it possible to do your own homework. We only needed an agent to open the doors to homes that we selected. My company paid for all agent fees at the time, so it was no skin off our back. But if we were buying today, we would bypass a buyer's agent and go directly to the seller's agent to arrange showings of the homes we wanted to see. And if for some reason we needed a buyer's agent for a one-off showing, we wouldn't pay a fee anywhere approaching 2.5% to 3% of home value.

Edit to add: you've already seen this transition in other industries. You no longer have to use a travel agent to book travel. You go directly to the site of the seller (airline, cruise, hotel, car rental) and deal directly with them. For the travel agents that remain in business, they do so because they add unique value for their clients that they can't produce themselves. There will still be buyer's agents, but in total they won't rake in near the compensation they did in the past when the industry colluded to protect the scheme.

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Just as an FYI, sometimes our rates as travel agents are cheaper than what you can get. Not always. Usually we are not more unless one chooses to charge fees (I do not, but I also do not book a lot of travel - I'm pretty specific). But yes, I understand your point.

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Wife and I 5 years ago did a Disney vacation with the kids. We spoke to and got a quote from a Disney travel agent and looked up what we would have paid if we booked it all ourselves.

The travel agent wasn't cheaper but we figured at least if we used them and had issues with reservations and such the Disney travel agent would be able to get them resolved more quickly so we went with them.

Ags4DaWin said:

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JMac03 said:

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MemphisAg1 said:

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Listing agents will still make their 2.5% to 3% because they're still doing work to market a property for the seller. That's where they create value for their client.

Buyer's agents, however, are in for a rude awakening if they think they're going to reap 2.5% to 3% of a home's value simply for showing homes to buyers. Technology has long since erased the need for that role. We bought six homes from 1997 to 2005 before building our home, and by 2000 the internet made it possible to do your own homework. We only needed an agent to open the doors to homes that we selected. My company paid for all agent fees at the time, so it was no skin off our back. But if we were buying today, we would bypass a buyer's agent and go directly to the seller's agent to arrange showings of the homes we wanted to see. And if for some reason we needed a buyer's agent for a one-off showing, we wouldn't pay a fee anywhere approaching 2.5% to 3% of home value.

Edit to add: you've already seen this transition in other industries. You no longer have to use a travel agent to book travel. You go directly to the site of the seller (airline, cruise, hotel, car rental) and deal directly with them. For the travel agents that remain in business, they do so because they add unique value for their clients that they can't produce themselves. There will still be buyer's agents, but in total they won't rake in near the compensation they did in the past when the industry colluded to protect the scheme.

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Just as an FYI, sometimes our rates as travel agents are cheaper than what you can get. Not always. Usually we are not more unless one chooses to charge fees (I do not, but I also do not book a lot of travel - I'm pretty specific). But yes, I understand your point.

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Wife and I 5 years ago did a Disney vacation with the kids. We spoke to and got a quote from a Disney travel agent and looked up what we would have paid if we booked it all ourselves.

The travel agent wasn't cheaper but we figured at least if we used them and had issues with reservations and such the Disney travel agent would be able to get them resolved more quickly so we went with them.

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You may think that, but if an agent books your trip/flights, they are usually the only ones who can make a change. You should have seen the line of angry travelers at the airport during the crowdstrike outage because they couldn't make an update to their own itinerary and their agents couldn't log in to make a change. Airport workers pretty much told them they were SOL until travel agent can log in and make the changes. Your agent being unavailable or its after hours etc mean you have no control to make changes until its convenient for the travel agent.

It depends how the tickets were ticketed. I don't use a GDS, and so I don't usually have that issue, however if airlines were down then my stuff would've been down to make changes on the airlines websites. Yes it was a cluster for all involved.

But when my clients had major flight issues, I still got them to Ireland. Didn't have luggage. I spent hours on the phone ensuring their luggage went to Dublin and not Shannon. About 5 phone calls and total of 3.5 hours while they were able to enjoy the trip.

Shooter McGavin said:

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fc2112 said:

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I love watching the realtors bloviate on this thread. Their whole livelihood was built on a cartel that just got outted.

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You didn't mind Realtors so much when I was dragging you around to buy a house. Sold your house on the cheap too didn't I?

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Oh snap

fc2112 said:

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Shooter McGavin said:

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fc2112 said:

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I love watching the realtors bloviate on this thread. Their whole livelihood was built on a cartel that just got outted.

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You didn't mind Realtors so much when I was dragging you around to buy a house. Sold your house on the cheap too didn't I?

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Well, you're more of an appraiser than an agent, right?

And you're the exception to the rule. And you know it.

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Nice backtrack

Shooter McGavin said:

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fc2112 said:

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I love watching the realtors bloviate on this thread. Their whole livelihood was built on a cartel that just got outted.

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You didn't mind Realtors so much when I was dragging you around to buy a house. Sold your house on the cheap too didn't I?

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Was "located near schools" a criteria for his search?