[retiredguy123]

Originally Posted by miadford@gmail.com

You all don’t seem to understand who gets what as far as the commission goes:
Let’s just use a sale of $100,000.
For a 6% commission that would be $6000
Let’s even assume that the split between brokers is even. So both sides receive 3%=$3000.
Seller’s broker gets the $3k and then has an agreed upon split with the listing agent and we wi say 50% so the agent then gets $1500 and their broker gets $1500.
The same happens on the buyer representation side.
So if the splits are all even, (which in most cases it isn’t), the real estate agent is splitting any commission they receive 4 ways. And they still have to pay percentages to lead creating companies such as Zillow and many others. So out of $6k, the agent may get to keep about $800.

Note that, if I am the seller, I would not allow any of the commission that I pay at closing go to an agent who has a written agreement with the buyer. To me, that is a conflict of interest. If an agent represents the buyer, they would need to be paid by the buyer.

[Dsritchey]

If I believed that, I would never hire an agent.[/QUOTE]

I don’t use a realtor. The last 3 houses I sold FSBO . Go to a title company they do the paperwork and I control who comes in and out of my house. No lock box on the front door. Easy peasy.

[retiredguy123]

Originally Posted by Dsritchey

If I believed that, I would never hire an agent.

I don’t use a realtor. The last 3 houses I sold FSBO . Go to a title company they do the paperwork and I control who comes in and out of my house. No lock box on the front door. Easy peasy.[/QUOTE]

I would not hire a broker to do paperwork. The title company always does the paperwork, broker or not. The reason to hire a broker is for their marketing and salesmanship skills. If I believe that I can get the same price in the same amount of time by selling the house myself, I would not hire a broker. I have a lot of skills, but salesmanship is not one of them. I don't think listing a house as a FSBO is a good idea for a lot of people.

[Dlbonivich]

Meeting with the seller, and touring your home. Preparing your market analysis and getting pricing right. Not always so easy. Have to look at other homes sold in the area and determine what is the same and different. Meeting with you to discuss price and explain the listing contract. Checking county tax office and permitting to verify all information. Check flood maps etc…. List home in mls.create online ads to market the home. Advertise and do open houses. I think a lot more than 3 in the current market. Field sales calls review and negotiate contracts with you. Arrange inspection times verify receipt of escrow and be present. Negotiate repairs. Schedule repairs and supervise. Communication with buyer agent in regard to loan status, make sure you are communicating with title and getting any and all paperwork correct. Along with numerous other little details I know just from having 27 years experience. If you think you can put a value on my knowledge so be it. Do you do the same when your car breaks? Or do you pay for mechanic’s knowledge?

[Idahodale]

I loved this thread. The original post was spot on, and correct. I haven't paid a full commission for a house in 20 years (16 houses). The last house I sold (2020), I paid only 2% to the buyers agent for finding the buyer. I listed that house for $395K and sold it in 3 days for $402K. The best agent I have ever used, was as a buyer(2021), and she was wonderful. She treated the wife and I to lunch after we took possession. And I showed my appreciation by handing her $500 in cash for a job well done. But in general, I think the average Real Estate agent has the mental ability of a new cars salesman. After all in a lot of States there is only an 80 hours training course required for licensing. I have even collected the 3% Buyers commission included in the original Sellers contract, as a non Realtor private individual. I bucked the system for 20 years and had a lot of fun and rewards.

[JP]

I think the reason that this has become an issue is the difference in the fee received between a $100,000 sale and a $1,000,000 dollar sale which is $6,000 vs $60,000 for basically the same work. This certainly doesn't seem right.

[frayedends]

Originally Posted by rsmurano

For the ill informed or rookies in the stock market, they still pay loaded funds and high expense funds, this hasn’t changed.

Same goes for the real estate sector. The main objective of the listing agent is to list your home, sit around while someone else sells your home, all while your listing realtor makes 2.5-3%

I sold my last 2 houses by putting them on the subdivisions web page. The house before here, I got 6 calls within a couple of hours wanting to see the house. Friends of residents bought the house, and it was very easy to do. You need to get a couple of forms from a lawyer on the contract, and then the disclosure form. Then you close with a lawyer of yours or your buyers.
With talk of the villages app, Nextdoor, Facebook marketplace, I would think it would be easy. Also placing your house on nyc/LA/San Francisco Facebook marketplace pages.

You get 6 offers. One is fha, one is va. One is cash but wants home inspection. One is 5% down but no inspection. You don’t know the market value and have no idea what it will appraise at. The cash offer is low. But the high offer has low cash and you have no idea if the place will appraise to meet mortgage requirements. The FHA is a good offer but is the mortgage amount allowed by FHA in your area? You disclosed that the paint is chopping but aren’t aware that will fail FHA financing. Or maybe you overvalued the house and can’t understand why you have no offers. You looked at other similar homes but didn’t know one had structural damage and one had millions of upgrades.

Yup sounds easy.

[VillagerNut]

Great Post! I agree! There is one other BIG expense that the Customer does not realize about our perceived commission. Even after the 2 way split with 2 Brokers / Agents and even after the commission split with the Real Estate Broker, we then have to pay ALL of our expenses related to that transaction and real estate in general. One of the big expense items is as independent contractors we pay the TOTAL FICA amount of 15.3% instead as an employee we would pay 7.65%. So for every dollar we NET from our Broker, we actually keep 50% (50 cents on dollar) between income tax, FICA and other real estate expenses. Most folks think Real Estate is incredibly easy and profitable. It is far from easy or profitable for 80% of all real estate agents.

Originally Posted by miadford@gmail.com

You all don’t seem to understand who gets what as far as the commission goes:
Let’s just use a sale of $100,000.
For a 6% commission that would be $6000
Let’s even assume that the split between brokers is even. So both sides receive 3%=$3000.
Seller’s broker gets the $3k and then has an agreed upon split with the listing agent and we wi say 50% so the agent then gets $1500 and their broker gets $1500.
The same happens on the buyer representation side.
So if the splits are all even, (which in most cases it isn’t), the real estate agent is splitting any commission they receive 4 ways. And they still have to pay percentages to lead creating companies such as Zillow and many others. So out of $6k, the agent may get to keep about $800.

[rustyp]

Originally Posted by VillagerNut

Great Post! I agree! There is one other BIG expense that the Customer does not realize about our perceived commission. Even after the 2 way split with 2 Brokers / Agents and even after the commission split with the Real Estate Broker, we then have to pay ALL of our expenses related to that transaction and real estate in general. One of the big expense items is as independent contractors we pay the TOTAL FICA amount of 15.3% instead as an employee we would pay 7.65%. So for every dollar we NET from our Broker, we actually keep 50% (50 cents on dollar) between income tax, FICA and other real estate expenses. Most folks think Real Estate is incredibly easy and profitable. It is far from easy or profitable for 80% of all real estate agents.

What about those items you wrote off - part of the room in your house as an office, mileage, all those many wine and dine the client events, depreciation on the car, etc. 50% ?

[Randall55]

Originally Posted by Pamalla12

Obviously this person has no idea what a real estate agent does. There is more than simply putting a home owners home in the MLS and having open houses. It is people like this that cause lot of problems for everyone in our industry to have problems because all of a sudden they think they are experts in everything going on and yet they know nothing. Leave the real estate agents to do there job, just like an accountant knows his job and doctors know there jobs. Would you take your car to a dentist for repairs or your boat to a barber shop to be fixed? Well this is the same and taking information on a site like this from some one who knows nothing about what a professional real estate agent does or spends money on to get your home sold is the same thing!

The OP stated the only thing a listing agent does is place a new listing on MLS. I can see the reasoning. Once it gets views, buyers call or email to see the house. More often than not, the seller prepares the home for showings. The buyers agent merely walks through the house with the potential buyer.

For many of us in the Villages this is not our first rodeo. We have bought and sold homes in the past. We do not need someone holding our hand along the way. If selling your home, use VLS to set the price. Type in your model name and review the same style homes currently listed and the asking price. Then, set your price, accordingly. This IS NOT ROCKET SCIENCE.

Negotiate? As the seller, I know my bottom line. No realtor, no matter how good they believe they are at getting the best price, will change that. They merely take all the credit when a seller agrees to a lower price he/she had in her mind throughout the process.

I am with the group who believe a buyer's agent is unnecessary. Like a home you see on MLS? Call the listing agent and work with him/her. There is no need for a middle man. The listing agent will accept your offer or explain why it was declined. You do not need a buyer's agent in the middle causing confusion.

If you are getting a mortgage, the bank will get an appraisal and do ALL the legwork needed to protect their investment. A buyer merely has to show up at closing and sign the paperwork. Again, a buyer's agent will only cause confusion and slow the process.

People use a buyers agent because they ARE FREE. The seller pays their commission. Once a buyer is asked to pay an enormous fee for their service, I believe most will be unwilling. They will simply work with the listing agent and bank with no additional cost to them.

[frayedends]

Originally Posted by Randall55

Again, a buyer's agent will only cause confusion and slow the process.

People use a buyers agent because they ARE FREE. The seller pays their commission. Once a buyer is asked to pay an enormous fee for their service, I believe most will be unwilling. They will simply work with the listing agent and bank with no additional cost to them.

You are way off. I can't tell you how many buyer's would screw up and lose their deposit because they didn't have guidance. Sure there are some smart people that could navigate it on their own. But you would be surprised how many don't pay attention to the contracts. Buyer's agents make the process much smoother.

You figure the seller pays the buyer's agent? Nope, not at all. After all who is the person putting out the money? It's the buyer, every time. The buyer pays their agent indirectly. They pay for the home, the seller takes some of their money to pay their agent and their agent pays the buyer agent. Any cash ultimately came from the buyer. Of course, how that changes after the lawsuit is still anyone's guess.

Also remember, NAR made a settlement. Some brokers had different settlements and some had no settlement. Real Estate Agents don't need to be a member of NAR.

[MightyDog]

Originally Posted by frayedends

1) Buyer's agents make the process much smoother.

2)You figure the seller pays the buyer's agent? Nope, not at all. After all who is the person putting out the money? It's the buyer, every time.

1) I put that in the distinct 'maybe' category. If the buyer's agent is experienced and ethical, they can be helpful. Plenty of them are neither and if they lack in just one of those, the buyer can be in for a hellish time. Buyer's agents can be especially useful for people new to buying real estate - that is for sure.

I've used them but, I especially dislike not knowing what the two agents are communicating to each other. Because I have no idea if I'm being represented accurately and a buyer better stay very close-lipped about particular details that could cost them plenty of the sell side knew of them -- because that info has a good chance of getting to them if it will help facilitate the trade. Same on the sell side -- tell the listing agent only what is necessary to do get the house traded.

I prefer to negotiate directly myself so, no longer use agents on the buy side.

2) I understand the larger point you're making but, it may be confusing to some. Because, quite literally, the commission fees for ALL of the agents involved IS deducted from the sellers proceeds in the final contract.

[Randall55]

Originally Posted by frayedends

You are way off. I can't tell you how many buyer's would screw up and lose their deposit because they didn't have guidance. Sure there are some smart people that could navigate it on their own. But you would be surprised how many don't pay attention to the contracts. Buyer's agents make the process much smoother.

You figure the seller pays the buyer's agent? Nope, not at all. After all who is the person putting out the money? It's the buyer, every time. The buyer pays their agent indirectly. They pay for the home, the seller takes some of their money to pay their agent and their agent pays the buyer agent. Any cash ultimately came from the buyer. Of course, how that changes after the lawsuit is still anyone's guess.

Also remember, NAR made a settlement. Some brokers had different settlements and some had no settlement. Real Estate Agents don't need to be a member of NAR.

With homes EASILY ACCESSIBLE to everyone online, there is no need to work with a buyer's agent. It is time to admit and adjust. Other countries have already adapted to the new format.

I will not use a buyer's agent simply because they cause confusion. I will submit an offer direct to the seller. No, is an acceptable response. There will be no haggling from a buyer's agent who doesn't want to lose a commission. I live in a community with cookie cutter homes. Lose one gardenia model I like? Plenty more to choose from. I will simply wait for an owner to accept my offer. Can't do that? Then, I will buy a new construction at a lower price. No sweat off my back.

[OrangeBlossomBaby]

Originally Posted by Randall55

With homes EASILY ACCESSIBLE to everyone online, there is no need to work with a buyer's agent. It is time to admit and adjust. Other countries have already adapted to the new format.

I will not use a buyer's agent simply because they cause confusion. I will submit an offer direct to the seller. No, is an acceptable response. There will be no haggling from a buyer's agent who doesn't want to lose a commission. I live in a community with cookie cutter homes. Lose one gardenia model I like? Plenty more to choose from. I will simply wait for an owner to accept my offer. Can't do that? Then, I will buy a new construction at a lower price. No sweat off my back.

As a potential buyer, who didn't live in The Villages, I think it would've been really monumentally stupid to consider the seller's agent, and not a buyer's agent. Why? Because I don't know which home I want to buy yet, and out of three dozen possible homes, there are at least two dozen sellers' agents representing the sellers of those homes. I'd need to deal with at least 24 agents, just to narrow down my options to a couple or three homes. And then, I'd have to maintain two or three different agents representing those two or three homes, to ensure that I'm looking at exactly what I want to look at, and not just some hype from an eager sales agent.

With a buyer's agent, they do all the leg work on my behalf. They check with those two dozen agents representing up to three dozen properties. They rule out any homes that are absolute deal-breakers for me. They then sift through the rest to provide me with the two or three homes they feel I should actually check on. And all this is done, with me making one or two phone calls to a sales person who is helping ME buy, rather than helping Jimbob Homeowner sell.

Once my agent has done all this legwork, THEN I come down for a visit, and check on those three homes. Maybe I don't like any of them. Maybe one is perfect and I put down a deposit. But rather than spending countless hours, days, weeks even, calling dealing with a couple dozen people I've never met but who want the person THEY represent to profit as much as possible with me paying the bill, I'm dealing with one person - who might or might not get any commission at all (if it's a Villages sales agent), or who might only get a piece of whatever commission is conveyed through the sale.

[Escape Artist]

Originally Posted by APovi

NAR - Much ado about nothing? Realtor's Commissions.
Thanks to the many people who have asked me about the proposed changes in Real Estate commissions this summer.
The answer isn't very complicated.
Regardless of the 'rules', Realtors predominantly charge Home-Owners/Buyers a 6% commission based on the eventual sales price of the home.
Some say it's the Seller who pays because the final 'Net-To-Seller' is reduced by, for example $24,000 on a $400,000 sale.
Others say that it's the buyers who pay, because they are paying $24,000 more than they would for a direct "Seller-To-Buyer" sale.
For home buyers and sellers the proposed changes are a simple reminder that you set the commissions.
In the typical transaction, sellers pay a Realtor $12,000 for the simple process of typing the listing info into the local Multi-List.
(This, by-the-way, is less work than an Appraiser does for $500.00).
The other $12,000 goes to which ever Realtor makes the sale.
Is there a significant, mandated to change?
NO!
The plan is to prohibit the Listing Realtor from typing in the commission split they are offering to the Realtor who makes the sale.
That's it!
The other side of the deal is to force buyers to sign an agreement with their Realtor. But that agreement can simply say that their Realtor is being paid, just as they always have been.
Is there any likely positive outcome?
In my opinion there could be if Owners/Sellers would wake up!
Its the selling Realtor who does the work and gets the sale.
A 'Listing Factory' gets a $12,000 fee for a $500 job.
What to do?
When your listing expires, maybe there is.
Ccall a State Certified Residential Appraiser who is also a Realtor.
Give them $1,000 for a basic appraisal and entry of the data into the Multi-List.
Whomever gets you a buyer gets, the (3%) $12,000 commission.
The Seller saves $11,000.
The buyer saves $12,000
Who's the loser?
Not our Home Buyers and Sellers.
That's who we should be protecting isn't it?

Who decides on the agent’s percentage, the commission fairy? These fees are arbitrary and were found by the court to be akin to price fixing and collusion. States differ on what the norm is for commission and furthermore brokers can agree to any or no fee regardless of the fake, phony “standard” for a commission. The court ruled that the seller should not be responsible for paying both the listing agent’s commission AND the buyer’s agent. Why should a seller pay anything to an agent who brings a prospective buyer other than a nominal “finder’s fee”?