Comment by roflyear | Hacker News Reader

Comment by roflyear | Hacker News Reader

Lots of people hating on realtors here, but my buying realtor:

- Put up with me through several offers that fell through due to issues with the house

- Met me quickly several times to see houses in a very hot market (covid)

- Constantly found me homes that met my criteria

- Was able to "get the dirt" on the homes and give me good advice for the homes that fell through, not pressuring me to buy

And my selling realtor, for a home where they will probably only get 2-3k:

- Took outstanding photos of my home

- Constantly fought for me on a few issues and gave me great advice

- Stuck through some legal issues related to the home

- Received and passed along info from other realtors to help me improve the value of the home and quickly get a sale

For the buying realtor, it is true I had to go through 2-3 realtors before meeting her. There were some SHIT realtors I worked with, for sure. Racists, assholes, lazy fucks. But I don't see the issue paying a realtor for their work - though maybe 6% ends up being quite a bit in this day and age.

That's all great.

And nobody's saying don't pay realtors for their work.

They're saying, certainly don't pay them 6%, and preferably not a percentage at all. Just pay them like a contractor or anyone else you hire -- either a flat fee or by the hour, depending on the exact services.

I think they’d love to be paid a flat fee or by hour, regardless of whether the transaction goes through or not, just like restaurant staff being well paid and not rely on tip. But such is the commission world and have no idea how it all came to be this way.

It became this way because the industry intentionally rigged it this way through out-in-the-open collusion, via NAR and MLS rules.

Fully agree. Another option would be to add some incentive structure. If I know I can selly home for $200k myself and you sell it for $200k...your value to me was basically $0. If you can sell it for $300k, then I'd be pretty happy to give you a nice chunk of that. 6% no matter what is crazy.

You can sell your house yourself, though? You don't need to use a realtor.

Yes, but it is a bit of work. I wouldn't mind using a realtor for their experience in the field, but 6% is absolutely bonkers for most normal house purchasing processes. Their work simply isn't that valuable and is being kept at that level due to non-competitive practices. If the realtor just shows me the home and does a little negotiating and some paperwork for me....maybe $2k at most for that service, but $12k for a $200k house? Ridiculous.

Okay so that's a good service. Is that worth $20,000? $40,000?

I'd love to pay by the hour for service. There aren't many such realtors.

Well, you're paying TWO realtors. Buyer and seller, so it's really half that. But yeah, I would say $10k is a pretty sweet deal in a lot of cases.

$10k is 6% of $166k. Not many homes selling for that now a days.

The median home sale price in June was $426k. Or $25.6k of commission.

Typical Sunnyvale prices were about 2.4million, or $144k commission.

They each get $10k - buyer and seller. For very expensive homes realtors will often "take a hit" to secure a sale.

5% commission (or even 4%) of a multi-million dollar sale is still a ton of money for the work/expertise/risk I’ve seen Bay Area realtors put in anyway. I’ve never seen anything less than 4%, and the realtors were very cranky.

Rural area realtors can be pieces of work too, but at least they aren’t claiming to be worth as much money. ;)

You can fire your realtor, and you should if they are a jerk or unresponsive. Like you say, they get a lot of money.

Yup, and I certainly have plenty of times. Most people don’t have the context to even know they should/can though, so a lot of crap still happens.

Also messy to do halfway through closing. Especially if you don’t want to have to deal with a lawsuit from the realtor.

Easier if you already have the brokers direct line of course. They’re the ones on the hook anyway, the realtors are just the ‘front’.

10k is 3% of 333k. Fewer and fewer houses are available at that price point. You can easily pay double or even quadruple this amount per agent. And two agents are getting paid.

How many hours did your agent spend with you? How did their hourly rate turn out? One of the totally shitty things about realtor pay is that you are subsidizing the pay for all the people who never closed. I'd be happy to pay an excellent agent $100/h for expert advice and to leave out the filler that I can do myself. But this is rarely much of an option, especially as a buyer.

No way are you paying 6%+ per agent.

My realtor drove 160 miles today on my behalf, just to make sure I didn't forget something minor during a pre-closing walk-thru. I've had prior realtors that would have absolutely found an excuse to miss things like that. She also realized that I might not be able to make closing time due to commute logistics with my job and so proactively rescheduled it for 1 hour later in the morning. I found out about the problem in a text message after it was already solved.

My realtor is about saving me time & frustration. I don't have to think about what a title company or MLS is, how many there are, how they work, who to talk to, etc. None of it. I say "I want to look at houses in area XYZ" and next thing I know I have an agenda with route in my inbox and tentative dates for viewing. Even closing feels like it goes warp speed with this person. I've never had it take more than 45 minutes and I'm going on the 4th time. Every part of the experience should feel like cruise control if you are working with good people.

I totally get the arguments on the other side though. If you are looking for something modest/routine & you also don't have a lot of constraints, the 3%+ fees start to look very manipulative. Additionally, if you are willing to spend some of your own time to do legwork on various logistics, then I can understand why you'd rather that money just stay in your pocket.

For me, I'd happily burn thousands of dollars to save half an hour depending on how mentally stressful that 30 minutes is expected to be. Look to tax filing services if you need another example of the same psychology. Turbotax never takes me more than an hour and never comes back weird, but I'd happily cut a check to make the whole notion of doing my own taxes mostly go away.

What you are saying is that the realtors have created an environment and now some of them (!) have mastered it.

How many of those issues are created by a poor system, perpetuated by realtors though?

Probably some, sure. But also I can see things being much worse in other systems.

Like, figure the haircut you take bringing your car to a dealership...

Is what you’re talking about worth… $10k? Or the likely $100k you paid?

You think I paid $100k in realtor fees???

A lot of folks here have been in Bay Area markets - and that’s on the low end for commissions there for awhile.

That's a $2m home.

Welcome to the Bay Area. It’s clearly starting to hit its peak insanity (this cycle) though.

Ok, but it's not really useful to talk about extreme outliers. Median sales px of a home in the US is 431,000.

Totally agree. Honestly reading through the comments they sound a lot like spectator comments: The naysayers don't really sound like they've really sold a house before or bought one either. There's even some commenters steering the conversation toward renting apartments.

Realtors really are awesome when you need to get from one house to another quickly and smoothly.

There's always a better solution, but I always think of the haircut you take at car dealerships: it could be a lot worse for selling your house. Like, you're getting 20-40% under the value of your car at the dealership. 6% isn't a lot considering that.

Reply on news.ycombinator.com