Again I'm not one, but it's Realtor, not relator.

Not agent related but revamping the very oppressive title insurance situation in Texas would be a step in the right direction.

Why is every Realtor entitled to the same amount? Why does a Realtor who takes his or her job seriously be paid the same percentage as the stay at home mom who thinks of it as a fun thing to do on the weekend?

I am in mortgage and easily half of the agents I encounter don't know what they are doing. They interview the client and find out what they are interested in. Then they go to HAR and plug that data in and see what pops out. Then they put the buyer in a marketing campaign where each new listing gets automatically forwarded to them. What is the difference in that vs. just logging into HAR or Zillow on your own and seeing what is available? Buyer can even request showings online with a push of a button.

I understand the value in the seller's agent. As a buyer, you can absolutely go through the process without a "professional."

Now, if you want to talk about the future of our industry, I am concerned about the likelihood of needing me in the future. I can totally see where a mortgage will easily be obtained without speaking to a human. Sure, you will have operations people on the back side to make sure guidelines are met and there is no substitute for human intuition, but there really isn't a need for a Loan Officer. The people who disagree also thought you would always go to a grocery store for groceries or go inside a bank to open accounts or make a deposit or apply for credit cards and that there will never be a substitute for Channel 2's reliable weather reports. All of that can easily be done online. I see a future where the Zillows of the world have a bank and system that allows you to look at a house online and immediately be approved. Push a button that runs your credit, submit your W-2s, paystubs and bank statements online and a computer program will read the data and know instantaneously whether or not you are approved.

cagwell10 said:

---

Why is every Realtor entitled to the same amount? Why does a Realtor who takes his or her job seriously be paid the same percentage as the stay at home mom who thinks of it as a fun thing to do on the weekend?

I am in mortgage and easily half of the agents I encounter don't know what they are doing. They interview the client and find out what they are interested in. Then they go to HAR and plug that data in and see what pops out. Then they put the buyer in a marketing campaign where each new listing gets automatically forwarded to them. What is the difference in that vs. just logging into HAR or Zillow on your own and seeing what is available? Buyer can even request showings online with a push of a button.

I understand the value in the seller's agent. As a buyer, you can absolutely go through the process without a "professional."

Now, if you want to talk about the future of our industry, I am concerned about the likelihood of needing me in the future. I can totally see where a mortgage will easily be obtained without speaking to a human. Sure, you will have operations people on the back side to make sure guidelines are met and there is no substitute for human intuition, but there really isn't a need for a Loan Officer. The people who disagree also thought you would always go to a grocery store for groceries or go inside a bank to open accounts or make a deposit or apply for credit cards and that there will never be a substitute for Channel 2's reliable weather reports. All of that can easily be done online. I see a future where the Zillows of the world have a bank and system that allows you to look at a house online and immediately be approved. Push a button that runs your credit, submit your W-2s, paystubs and bank statements online and a computer program will read the data and know instantaneously whether or not you are approved.

---

Someday !!!!!!!! Perhaps you might have missed those uber- annoying Rocket mortgage ads or those other tv ads for on- line mortgage companies. It's already a significant sector for folks without many financial issues. It seems to be pretty easy to get a note without ever talking to a human now unless you have issues or bad credit. I also question the need for the swank padded title suites for closings. I've closed on multiple properties remotely where all I need is a notary and a fedex overnight .
The hope is that in the near future the need for realtors, title agents, closing officers , mortgage agents and the like will go the way of gas station attendants for buyers and sellers with few issues and IQ's higher than room temperature. The process just ain't that hard.

cagwell10 said:

---

Why is every Realtor entitled to the same amount? Why does a Realtor who takes his or her job seriously be paid the same percentage as the stay at home mom who thinks of it as a fun thing to do on the weekend?

I am in mortgage and easily half of the agents I encounter don't know what they are doing. They interview the client and find out what they are interested in. Then they go to HAR and plug that data in and see what pops out. Then they put the buyer in a marketing campaign where each new listing gets automatically forwarded to them. What is the difference in that vs. just logging into HAR or Zillow on your own and seeing what is available? Buyer can even request showings online with a push of a button.

I understand the value in the seller's agent. As a buyer, you can absolutely go through the process without a "professional."

Now, if you want to talk about the future of our industry, I am concerned about the likelihood of needing me in the future. I can totally see where a mortgage will easily be obtained without speaking to a human. Sure, you will have operations people on the back side to make sure guidelines are met and there is no substitute for human intuition, but there really isn't a need for a Loan Officer. The people who disagree also thought you would always go to a grocery store for groceries or go inside a bank to open accounts or make a deposit or apply for credit cards and that there will never be a substitute for Channel 2's reliable weather reports. All of that can easily be done online. I see a future where the Zillows of the world have a bank and system that allows you to look at a house online and immediately be approved. Push a button that runs your credit, submit your W-2s, paystubs and bank statements online and a computer program will read the data and know instantaneously whether or not you are approved.

---

Nobody says they are entitled to that amount. People are more than welcome to properly vet their potential Realtor and decide on a commission rate that they want to pay them. If they refuse to work for what you are willing to hire them for, then it sound like the free market is telling you to find a different Realtor or figure it out on your own.

Remember, this is easy and Realtors aren't worth much. Should be pretty simple for the average Joe to sell their own home. Just jump on a website with a team of minimum wage Realtors. There are plenty of those these days.

You have all the power to make your own decision. Nobody is forcing you to do anything.

Sticking up for the lawyers

To play a little bit of devil's advocate... here's an analogy.

I'm a lifelong hunter. I love it. I'd hunt every day of the week and twice on Sunday if I could figure out how to make that happen. As my personal experience goes, the average Joe Public seems to think that I spend the bulk of my hunting time killing animals, when the truth is that in all my hunting excursions I probably spend less than 1% of my time pulling a trigger or launching an arrow.

I've learned long ago that there are people that value the services I provide and those that don't.

We had a flat fee company for a while and, in my experience, the "experienced" clients that wanted to beat me down on pricing were to biggest PITA's.

For that reason, I stopped spending much time trying to defend the existence of my industry.

Quote:

---

the "experienced" clients that wanted to beat me down on pricing were to biggest PITA's.

---

That's called negotiating. Some people ARE aholes about it though.

HeightsAg said:

---

Yes - I do know what monopolistic means and a textbook example is the National Association of Realtors admitting to antitrust behaviors aimed at blocking online competition in a suit that they settled with the DOJ. See link below if interested in more detail.

https://www.law360.com/articles/57440/doj-realtors-settle-antitrust-suit

And "where the hell do you even read that he's saying anybody is entitled to an income level?" Well, let's see - in response to a tiered compensation model based on number of showings, OP replied, "After brokers fees and taxes and cost of doing business.. the average Realtor would be looking at somewhere between $25,000 - $30,000 in take home pay. Now.. a Realtor who grosses $80,000 per year could still take home over $50,000 if they reduced their average sale rate to 2%. So it can work at higher levels."

Basic reading comprehension leads me to believe that OP is saying a tiered approach wouldn't work for the average Realtor because they would only be "looking at somewhere between $25,000 - $30,000 in take home pay." so it isn't a viable option. All I was arguing is that if the services provided by the average realtor only justifies $25,000 - $30,000, then it is all they should get.

You can call it "entitled to an income level" or "has to make a living" but they are two of the same thing. And I agree with you 100% that I am not "entitled to a certain level of income either". I am a management consultant that works with c-suites to shape and develop long-term corporate strategies. The average rate for our services is between $6000 to $8000 per day. Some may say that is absurd but our ability to charge these prices is 100% contingent on our ability to deliver tangible business value, nothing more and nothing less.

Regardless of whether you like it or not, change will be coming. And it is coming not because people want to put poor Realtors out of business but rather, many people do not believe they are getting full value for what they are paying for (which is why we are conversing about this in the first place). So if I were a large real estate agent franchise like Century 21, I'd embrace the digital revolution rather than fight it, get more creative with the commercial model, and/or find ways to use AI or other means to provide more value to the customer. Otherwise, realty will become the latest in a line of industries that didn't evolve and got left behind.

---

Good find on the NAR suit... that said the industry has had 10 years to evolve... and little has happened so what does that tell you about the nature of the transactions themselves? I think the likes of Har and other web based services have made home finding more efficient, but there still is no alternatives to actually making a market for your home that buyers and sellers are comfortable with.

Also 'entitled to' and 'making something worth your while' aren't the same thing. And I would think that a 6-8k a day consultant would ask what alternative is to the current system vs talk about how consumers 'feel' when the stats backup that the feeling is from hindsight rather than foresight which is a very important consideration.

Bottom line is there are other alternatives to selling a home than using realtors that anybody can utilize. The idea that people just subject themselves to paying 4-6% of their home value because they have to is absurd when you really think about it for a minute. Realtors primary job is to make as large of a market for your home as possible. If there's no markets, the bids and asks for homes get really wide and suddenly people aren't moving anymore. Everybody knows the value of realtors and it's easy to say 'oh I didn't get value for what the realtor did'... but it's easy to dispute that by asking how would have you gone and found a buyer for your home without the realtors involved? That's how you have an honest conversation about realtor value vs ***** and moan about how much you paid and how little of time they spent to complete your transaction.

I just bought a house and think it is likely a 15 year place for my family. I'd love for there to be a cheaper solution for me to be confident abt my house getting the right market made around it and therefore me getting good value and having it sell in a timely manner in 2033... but my guess is there won't be still and that's because homes will still be somewhat illiquid and bespoke in the future just like they are now and therefore serious brokering will still be necessary.

I'm taking about after they're already a client.

Quote:

---

The industry is a GIANT SCAM with jihad inspectors, phony appraisers ( whole different topic) and far too complicated useless CYA documents ( many caused by the nanny state government garbage)

---

I seem to recall some Federal Law changes back in late 2015 that spooked the crap out of Underwriters, Appraisors and Inspectors. I think it increased, or isolated, liability for errors in the process that made everybody jumpy. We closed on a house in June, 2016 that we had built, and that process was a nightmare.

The Underwriter was a spastic, couldn't make up his mind and adding and changing requirements as we went along...I guess he was reading through the law and TREC guidelines as if for the first time.

The Appraisor seemed knowlegeable, did all the right things (I guess you would call me one of those "experienced" persons - builder, tradesman, remodel/flipper). But his firm kicked the write-up back because of not enough comparable detail (!??!). So we had to putz around for another 3 weeks.

Just after that went through, we experienced the "April 2016 Tax Day" flood in Houston. Our house and neighborhood was high & dry. But the underwriter, not being from around here, heard on a newscast that Houston had experienced massive flooding.

Well, that caused a kerfuffle because he shut it down, forced another Elevation Certificate Survey, plus another Appraisal, that required an inspection of the building, Mechanical Systems, the floors, the surrounding properties to confirm the extent of flooding. There was none... So we spent from mid-February to end of May in Loan Application. We also heard stories of similar delays for other buyers in Houston, so it was not an isolated case.

All due to fear, uncertainty and doubt regarding their liability risks from the new law, in my estimation.

As a closing example, I just finished a make-ready for sale, not in the Houston city limits. The owner quickly got a contract, and the buyer sent in the Clown ("inspector").

He produced this massive 62 page report, with pictures of everything, including dead cockroaches in the yard, recommending, "A qualified Pest Control Contractor to inspect and price an application". Also recommended that owner get a licensed Plumber, A/C Specialist and Electrician to inspect and recommend costs to repair the systems. And, every stinking item on the list had a clause added to it that said "need a qualified contractor to inspect and estimate costs for repair". This is for paint touch-up items too, mind you.

The changes in the laws, and TREC clamping down on these providers has made it an oppressive transaction. I chatted with my favorite agent (4 transactions!) about possibly getting a RE license to short circuit the process from my side. He kinda held his breath for a second then launched into a tirade about all of the "new paperwork" required, the coursework, the "apprenticeship" to an experiended broker, and of course the brokers in general.

Okay, detailed rant over. I, most certainly, would like to uncomplicate my work, but I don't see a way of doing it, short of loading all of them into a bus headed for a cliff. But stripping some of the current regulatory control of TREC, plus the Fed and State laws driving them would help me, and perhaps could help the RE marketing profession.

If that's successful, then we start on CoH Permitting and Inspection. But, we will need to get a bigger Bus...

thank Fannie Mae for that. As you mentioned, it's just a CYA move.

Diggity said:

---

I'm taking about after they're already a client.

---

Ha... yeah, some people are just aholes.

Quote:

---

If that's successful, then we start on CoH Permitting and Inspection. But, we will need to get a bigger Bus...

---

Start another thread on this and I will start post padding! What an absolute joke. I am fine with the regulations that they represent. The issue I have is the complete disregard for common sense.

Quote:

---

When the market turns south, and it will again someday, the value of the Realtor will increase again while the supply of Realtors decreases as it always does.

---

Fed raised interest rates today. Is the worm turning or is the worm a snake? It could be just a noodle.

LEJ said:

---

Quote:

---

When the market turns south, and it will again someday, the value of the Realtor will increase again while the supply of Realtors decreases as it always does.

---

Fed raised interest rates today. Is the worm turning or is the worm a snake? It could be just a noodle.

---

Every increase in interest rates diminishes purchasing power due to increasing cost of borrowing, so it will impact the residential real estate market to a degree. This is minimized by 30 year mortgages. However, we have been in substandard mortgage interest rates for a prolonged period of time, and every increase toward a healthy interest rate I believe is a step toward a stronger overall economy. Banks pay interest as well as charge it. It would be nice to get back to a point where there is a financial incentive to save, and reduce the incentive to borrow. Higher interest rates will also increase competition among lenders.

mazag08 said:

---

That's fantastic that you are happy with that strategy. But you aren't always getting what you think you are getting. You are just winning the deals, so your happiness is on the fact that you got what you wanted, not that you saved money. You have no idea what a GOOD agent could have negotiated on your behalf.

Look at it this way.. why would a Realtor ever need to make less when buyers like you exist who can help them make 6%. If anything, you are doing the most damage to reforming the industry with that strategy.

But I'm glad it works for you. If there was a rule that every Realtor make the same flat fee no matter what, you now have no strategy.. and no representation.

---

Some how you have all the insight and I don't. So your point is if any of us don't use a realtor we might win the deal but not get the best deal! I call BS on that logic but each their own we will leave it at that.

Your point: why realtors need to make less when I am willing to help them make 6% is precisely one of the changes that might need to be made in the industry. My strategy hurts the seller and actually puts the seller at a disadvantage. Conflict of Interest is real and at this time legal so I intend to take full advantage of it.

You state if anything, I am doing more damage to reform the industry. I'm sorry you have me mistaken, I am NOT TRYING to reform the industry. I am taking the rules of the game and working them in my favor. I am all for the status quo to stay. But it is not up to me or you to keep the status quo. The industry will change due to market forces. Redfin is becoming a major player in the industry and is changing how buying and selling is done. ListingSpark is starting to gain market share. It will take a little more time but buyers and sellers are seeking more efficient and cost effective ways to buy and sell real estate. With newer technology it is becoming easier to achieve.

This is some of the changes that are coming my friend. 6% commissions have been the standard since the 60s so change will take some time but we are moving into a more cost effective methodology for the buying and selling of real estate.


Lastly your point:
If there was a rule that every Realtor make the same flat fee no matter what, you now have no strategy.. and no representation.

Again flat out wrong. I am not advocating flat fee but I am not against it either. But to say there would be no representation is hog wash. There is still competition to acquire the client no matter how compensation is divvy up. Bottom line strategies will evolve with rule changes ect. Most realtors don't want change but it is really funny when they really want your business they are willing to cut their commissions. You might say you were never one of them but I'm sorry more so than not my experience is business is business....money talks!!!

scrap said:

---

mazag08 said:

---

That's fantastic that you are happy with that strategy. But you aren't always getting what you think you are getting. You are just winning the deals, so your happiness is on the fact that you got what you wanted, not that you saved money. You have no idea what a GOOD agent could have negotiated on your behalf.

Look at it this way.. why would a Realtor ever need to make less when buyers like you exist who can help them make 6%. If anything, you are doing the most damage to reforming the industry with that strategy.

But I'm glad it works for you. If there was a rule that every Realtor make the same flat fee no matter what, you now have no strategy.. and no representation.

---

Some how you have all the insight and I don't. So your point is if any of us don't use a realtor we might win the deal but not get the best deal! I call BS on that logic but each their own we will leave it at that.

Your point: why realtors need to make less when I am willing to help them make 6% is precisely one of the changes that might need to be made in the industry. My strategy hurts the seller and actually puts the seller at a disadvantage. Conflict of Interest is real and at this time legal so I intend to take full advantage of it.

You state if anything, I am doing more damage to reform the industry. I'm sorry you have me mistaken, I am NOT TRYING to reform the industry. I am taking the rules of the game and working them in my favor. I am all for the status quo to stay. But it is not up to me or you to keep the status quo. The industry will change due to market forces. Redfin is becoming a major player in the industry and is changing how buying and selling is done. ListingSpark is starting to gain market share. It will take a little more time but buyers and sellers are seeking more efficient and cost effective ways to buy and sell real estate. With newer technology it is becoming easier to achieve.

This is some of the changes that are coming my friend. 6% commissions have been the standard since the 60s so change will take some time but we are moving into a more cost effective methodology for the buying and selling of real estate.


Lastly your point:
If there was a rule that every Realtor make the same flat fee no matter what, you now have no strategy.. and no representation.

Again flat out wrong. I am not advocating flat fee but I am not against it either. But to say there would be no representation is hog wash. There is still competition to acquire the client no matter how compensation is divvy up. Bottom line strategies will evolve with rule changes ect. Most realtors don't want change but it is really funny when they really want your business they are willing to cut their commissions. You might say you were never one of them but I'm sorry more so than not my experience is business is business....money talks!!!

---

Fair enough, and thanks for the well scripted reply. I think we are debating the same topic but not discussing on the same page. I wasn't implying you were doing anything wrong or distasteful. You have a strategy that works for you in a free market system that you are willing to fight for every penny in.

You are not the average buyer. The average buyer doesn't think like you, doesn't care like you, and needs full service that you obviously don't. I would never try to convince you to use me and that it's somehow better off for you.

Redfin and whatever other website is a decent solution. You get a very average Realtor who is willing to take less money to get guaranteed leads. For the most part, you've ilk get what you paid for and if you don't need a lot of service then you will be very happy. They don't have to personally invest as much time and energy in every deal, and are therefore willing to take less money. Most of the time though, these are the lazy Realtors, as a Realtor who is not lazy would be willing to spend the time and energy to obtain full service clients that are willing to pay a full commission.

As for the sites themselves, they are a hell of a lot better than Zillow and I have learned that they are pretty accurate. The only reason is because they pay their member Realtors to report (steal) info that is not supposed to be disclosed to the public. I still don't see how TAR and TREC haven't made any headway against them. Non disclosure is not because Realtors have something to hide.. it's because people don't want their financial details being public information. Nobody has the right to know what you paid for your property. Nobody.

mazag08 said:

---

Redfin and whatever other website is a decent solution. You get a very average Realtor who is willing to take less money to get guaranteed leads. For the most part, you've ilk get what you paid for and if you don't need a lot of service then you will be very happy. They don't have to personally invest as much time and energy in every deal, and are therefore willing to take less money. Most of the time though, these are the lazy Realtors, as a Realtor who is not lazy would be willing to spend the time and energy to obtain full service clients that are willing to pay a full commission.

As for the sites themselves, they are a hell of a lot better than Zillow and I have learned that they are pretty accurate. The only reason is because they pay their member Realtors to report (steal) info that is not supposed to be disclosed to the public. I still don't see how TAR and TREC haven't made any headway against them. Non disclosure is not because Realtors have something to hide.. it's because people don't want their financial details being public information. Nobody has the right to know what you paid for your property. Nobody.

---

I've really enjoy this discussion on this topic, however I must say your last post of yours really takes a turn for the worst.

You imply a realtor who takes a cut in commission from the norm can be no better than average, I have to laugh! Next thing you do is start taking shots at Redfin, implying they can't give full service because their fees are lower and lastly you want to imply they play dirty and any minute TAR and TREC should be coming down on them. It is sad that you think, the only way to make you look better is to tear down the competition.

Redfin only takes experienced realtors! They compete for territories and it is highly competitive. I am fairly confident they don't employ part time realtors, unlike most brokerage firms throughout the U.S. They give full service and is handled in a very organized manner. My son used them for selling his last home in San Antonio and raved about their service. He has bought 3 homes, sold 2 and bought 2 duplexes, so I think he possesses the experience to make a sound judgment about a real estate company.

I do agree some people need more hand holding over others. But the industry doesn't educate those people in how to choose a GOOD realtor. If they are not experienced in real estate how are they going to get experienced in picking the right realtor?

Lets face it, 20 years ago the only reasonable way you could think about selling a house would be networking with realtors at 6% and who had exclusive MLS access only with other realtors. Now days there are so many additional strategies consumers have that are naturally bringing in more competition which eventually bring down consumer cost.

Back in the 60s you could only buy stock from a full service stock broker who charged high commissions and had research not available to the public, not so much today. Real estate is in the early stages of change as well.

scrap said:

---

mazag08 said:

---

Redfin and whatever other website is a decent solution. You get a very average Realtor who is willing to take less money to get guaranteed leads. For the most part, you've ilk get what you paid for and if you don't need a lot of service then you will be very happy. They don't have to personally invest as much time and energy in every deal, and are therefore willing to take less money. Most of the time though, these are the lazy Realtors, as a Realtor who is not lazy would be willing to spend the time and energy to obtain full service clients that are willing to pay a full commission.

As for the sites themselves, they are a hell of a lot better than Zillow and I have learned that they are pretty accurate. The only reason is because they pay their member Realtors to report (steal) info that is not supposed to be disclosed to the public. I still don't see how TAR and TREC haven't made any headway against them. Non disclosure is not because Realtors have something to hide.. it's because people don't want their financial details being public information. Nobody has the right to know what you paid for your property. Nobody.

---

I've really enjoy this discussion on this topic, however I must say your last post of yours really takes a turn for the worst.

You imply a realtor who takes a cut in commission from the norm can be no better than average, I have to laugh! Next thing you do is start taking shots at Redfin, implying they can't give full service because their fees are lower and lastly you want to imply they play dirty and any minute TAR and TREC should be coming down on them. It is sad that you think, the only way to make you look better is to tear down the competition.

Redfin only takes experienced realtors! They compete for territories and it is highly competitive. I am fairly confident they don't employ part time realtors, unlike most brokerage firms throughout the U.S. They give full service and is handled in a very organized manner. My son used them for selling his last home in San Antonio and raved about their service. He has bought 3 homes, sold 2 and bought 2 duplexes, so I think he possesses the experience to make a sound judgment about a real estate company.

I do agree some people need more hand holding over others. But the industry doesn't educate those people in how to choose a GOOD realtor. If they are not experienced in real estate how are they going to get experienced in picking the right realtor?

Lets face it, 20 years ago the only reasonable way you could think about selling a house would be networking with realtors at 6% and who had exclusive MLS access only with other realtors. Now days there are so many additional strategies consumers have that are naturally bringing in more competition which eventually bring down consumer cost.

Back in the 60s you could only buy stock from a full service stock broker who charged high commissions and had research not available to the public, not so much today. Real estate is in the early stages of change as well.

---

I'm willing to accept that I could be wrong about Redfin.. or that that the people I've talked to maybe got a bad apple. When they first started out, it was mostly younger realtors who wanted free and easy leads. They were definitely not the most experienced. I'm glad to hear that it might have changed.

And you guys keep saying "change" and talking about how it's coming. The point of this thread is to give specific examples and measure them against a mix of people from consumers to industry experts to figure out the potential viability.

If Redfin is the change, then do t expect to see anything change. We are already at the stage that they could ever potentially take us to. And they have more to lose than The standard brokerage if non disclosure is ever fully protected like I believe it should be.

Once again, it seems a bunch of people seem to think that Realtors are just big time colluders and dishonest people who want to monopolize the industry. While there are probably some who think that way, non disclosure does not exist to prop the Realtors up. Non disclosure is based on privacy and it's benefactors are largely commercial owners who don't think they should have to disclose how they structured their leases and income streams to their competitors.

As for the change that is coming Other than additional websites and discounted brokerages, I have yet to seen an example that I think is truly viable. A couple of people of mentioned reforming the laws like non-disclosure, but being a disclosure state hasn't necessarily hurt realtors in other states.

I'm sorry if I've missed it previously in this thread, but can someone point me to an actual change that is coming that is truly going to disrupt the nature of the real estate world?

Lastly, does anyone have any complaints against the commercial real estate world? Do Commercial brokers deserve their commissions? Because any reformation of the laws Will be fought hardest by the commercial world.

Quote:

---

And you guys keep saying "change" and talking about how it's coming. The point of this thread is to give specific examples and measure them against a mix of people from consumers to industry experts to figure out the potential viability.

---

There have been a few recommendations, but for the most part we've gotten "I am smarter than agents so eff them." Then you see "if you are so smart, why did you use and agent...or get a license yourself."


Actual contributions include:
- no collusion amonst industry against FSBO
- broker / agent relationship change
- commission reduction on transactions above XYZ value
- a la carte real estate showings and transactions
- commodity trading of houses
- lawyers should become the only agents we need

Quote:

---

I do agree some people need more hand holding over others. But the industry doesn't educate those people in how to choose a GOOD realtor. If they are not experienced in real estate how are they going to get experienced in picking the right realtor?

---

This is a point that I think deserves some discussion. But first, it is not the industry's job to educate the masses. Is it a car salesman's job to educate the consumer? Is it a lawyers job to educate their client? Is it an engineers job to educate their client?

All industries have a standard to which they must provide fair and honest service. The real estate industry is heavily protected in the consumers favor. Their is a ton of risk in being an agent.

But back to the education point.. there are resources out there that attempt just that. Have you ever gone to TAR, TREC, NAR, or any localized realtor associations website? Go take a look and browse around. There are plenty of attempts to educate consumers. Websites like Zillow, Trulia, home.com, Realtor.com, Redfin, and many others also offer education and tips. A lot of them even have extensive Q&A resources. Should there be more of an effort in making sure inexperienced customers know about these resource sites before they dive in? Should the standard be any higher than any other transaction where a simple google search can net you a wealth of information? I'm not sure you can play the ignorance card if the information is out there.

But I would be open to even more education. Hell, I think high school seniors shouldn't be able to graduate until the pass a class proving they understand how money works, how to balance a checkbook, and how credit works. But it's not those industries jobs to educate.

Any Realtor preying on ignorant clients, taking advantage of their client, or not providing honest and fair representation as laid out in "information about brokerage services" can be brought up charges against them. And everybody Realtor must provide their client with that simple form.

evestor1 said:

---

Quote:

---

And you guys keep saying "change" and talking about how it's coming. The point of this thread is to give specific examples and measure them against a mix of people from consumers to industry experts to figure out the potential viability.

---

There have been a few recommendations, but for the most part we've gotten "I am smarter than agents so eff them." Then you see "if you are so smart, why did you use and agent...or get a license yourself."


Actual contributions include:
- no collusion amonst industry against FSBO
- broker / agent relationship change
- commission reduction on transactions above XYZ value
- a la carte real estate showings and transactions
- commodity trading of houses
- lawyers should become the only agents we need

---

'Commoditizing' houses and 'digital revolution' aren't really contributions because neither one really fixes the frictional cost of real estate being relatively immobile and customized. Those gaps need to be solved for digitization to make real estate transactions cheaper.

That's why in reality title companies and the lending process will likely become cheaper and quicker all the while real estate agents won't ever go away in our lifetimes.

Sasappis said:

---

Relators do have a monopoly on the market even if people can still purchase and sell property without one. There are also anti competitive regulations and practices in place that help protect relators.

I suspect one thing that will change is some court rulings or regulatory changes that help open up the market to other business models. Taxi regulations and uber is a good example of what may happen to force change.

I do think there will be a place for agents to be involved but I do think the economics and business model will seriously change.

Allowing the public to do their own showings will likely be the first step. Once that is available to both buyers and sellers I think you will see a lot of the general public starting to question the use of relators.

---

Monopoly means one. Attorneys can charge fees for real estate services, so that would be two. And, a big number two at that. The larger commercial real estate industry is dominated by the legal profession. What is your profession? That's right, your an Attorney, and that profession is very prevalent if not mandated to the best of my understanding in the real estate industry in states like California and New York. Your post is blatantly self serving.

You then compared the real estate industry to the Taxi industry. That is simply an utterly ridiculous comparison. I am curious how this thread would read if Realtors charged by 10 minute increments for every phone call, e-mail, text or personal meeting whether or not the full service and desired results were achieved. We are living in very comparable glass houses, so I might suggest you slow down on throwing the stones.

Real Estate Professionals have Associations. The National Association allows members the use of the term Realtor. BTW, it is correctly spelled Realtor not relator. Such associations could possibly be compared to unions as they are protections for their industry participants. Local Associations offer paid membership to individual Multiple Listing Services contingent on following strict user guidelines and ethical requirements. Members pay monthly for the service and are required to populate the database with unpaid personal time. Each service is expensive and requires continuous hours of data input to remain current. Salaries are paid to employees of such associations to maintain the integrity of each database. How and why should that be available to non paying or participating parties?

In a later post you state that disclosure laws should be abolished as if that is a real estate industry rule. It is an individual state law, and varies state to state. As an Attorney, I assume you are aware of this fact.

The real estate industry has changed dramatically over the past 30 years, and changes are occurring at startling rate with the ever growing implementation of the internet. Sites such as Realtor.com, Trulia.com, Zillow.com, Redfin.com, Houzz.com and many others have found entry points to construct data bases of prospective buyers and sellers, and sell such information as well as their advertising platforms to real estate professionals. They do not provide the day to day processes or legal document construction and delivery or negotiation advice necessary for a real estate transaction as it is regulated state by state. Nor do they bear any liability for the protection of the property. It should also be mentioned that real estate professionals must be licensed in each state they wish to do business within, and are additionally required to pay the mandated fees for each state as well. The state real estate commissions are the licensing entities, and are ardent consumer protection advocates.

The aspect of legal responsibility is a hurdle that will be difficult to overcome. "Allowing the public to do their own showings will likely be the first step". I suggest you act as the pioneer and advertise your house for sale with instructions for open access to the public, and report back on how that works out for you. This single aspect has been overlooked throughout this entire thread.

There are avenues available for those who do not wish to employ a real estate professional. Attorneys have not been received as a better solution due to even greater related costs. Title companies can provide some services, but many consumers find the job is much more intensive than expected, thus the limited number of For Sale By Owner offerings. Educated buyers and sellers utilize this option due to their expertise, and find it financially worthwhile. Discount Brokerages and Flat Fee products are coming and going with some success, but I believe the real estate professional will always have a place in the industry.

The simple fact is that the real estate industry has a multitude of facets, so it can not be pigeon holed into one neat and simple box like the "Taxi industry" as you compared.

Diggity said:

---

Don't assume your market is every market

---

I hear you, but its still going on. Without such an existing platform facilitating, it hasn't deterred buyers from bidding on properties and never seeing them in person. People are going to buy what they want to buy.

I like the mechanic example. If you can do it yourself, why not? If you need one, you use one. That's how I see realtors.

Well let's keep it going. This thread has been great dialogue. I appreciate everyone's input and thank everyone for the civility.

I do find this discussion enlightening from both sides. I have bought many properties in my life and have a good portfolio of rentals.

I have had a long time real estate broker give me 2% back when he sells or buys
I have had some that would only give 1%
I have had some that refuse to budge.

I don't have any firm thoughts on what the % should be b/c it all depends on each person's situation. Factors such as if you are buying, selling, need hand holding or not, like to look at a bunch of places just to look or you know what you want&price you are willing to go, etc....

I spent 2 afternoons looking for houses (5 total - 5 hrs), and closed on a house where the agent 10K (2%) and gave me back 1% (5k). I would say very little work and gave me very little advice. I would think he spent 5 hrs total outside of showing doing the paperwork, arranging inspection, etc. He even told him not to show up at closing as I have been through this too many times already.

I was completely fine with him making 10K even for around 10 hrs as all transactions are not as easy as ours.

I bought a group of duplexes together and another agent made 30K (3%) and I didn't get anything back as I was not alert enough to negotiate before we looked at investment properties. We may have met for 30 min and as I did my own search, emailed her the listing. She showed it to me in one afternoon, we had a contract within 5 days. She did not show me another house as I knew what I wanted.

Other than getting the places inspected, she didn't so much more. She didn't go to closing as I didn't need her there. I did all the work with financing, etc.... With this, I am quite sure she did very little to make 30K. I think she prob spent 3 hours TOTAL.

My point is for my situation, 3% is too high. If I was the average person, I do find 3% to be very reasonable.

Were these situations dealing with Broker/Owners? I ask because sponsored sales agents typically have commission split arrangements with the sponsoring broker as defined in their company handbook. Splits vary from broker to broker. In come cases the split can be as low as 50/50, so the numbers you are providing could represent half of what the agent might have actually earned. At the same time, there are other expenses outside of the time actually worked such as state licensing fees, national and state board dues, monthly MLS fees and last but not least federal income taxes which are not withheld. Taxes alone could represent 25% to 30% of the total commission earned.

In both scenarios I would have more than likely been willing to negotiate my commission due to the ease of the deal unless there were unusual financing considerations or extended closing dates. Most sponsored salespersons must have prior approval from their sponsoring broker before they can negotiate commissions. Commissions are due to the Broker of the company not the agent.

I would also like to make perfectly clear that there is NO SUCH THING AS A STANDARD COMMISSION RATE. All commissions rates are negotiable, and that is determined between the Listing Broker and the Seller. The Listing Broker and property owner negotiate and determine the commission rate they are willing to pay a Buyers Agent. The only exception would be when a Buyers Agent negotiates a commission with a buyer in a Buyers Representation Agreement.