Posted on 11/15/2023 12:33:19 PM PST by where's_the_Outrage?
Residential real-estate brokerages are seeking to reassure investors after last month’s $1.8 billion verdict against the National Association of Realtors, another potential blow to an industry already reeling from a severe housing-market slowdown.
Industry analysts say the historic verdict could prompt changes in how real-estate agents are paid and eventually push commissions down. A federal jury on Oct. 31 found NAR and two large brokerages conspired to keep costs artificially high.
Many brokerage executives have said this month that modifications to the system are likely to be small and could take years to play out. They maintained that any changes are unlikely to harm their businesses.
“We do not anticipate these lawsuits will result in any changes to our business that will significantly disrupt the agent-buyer relationship,” said Howard Lorber, chief executive of Douglas Elliman, during a Nov. 8 earnings call. Some analysts have been less sanguine. In a report released ahead of the verdict, Keefe, Bruyette & Woods predicted that the lawsuits could lead to a 30% reduction in the $100 billion that Americans pay in real-estate commissions every year and push well over half of the almost 1.6 million agents out of the industry
(Excerpt) Read more at msn.com ...
I sold my last house via zillow and bought another without any support dealing directly with the seller. Getting into the MLS system was a major reason to use brokers, but with the internest it is not difficult to list it yourself.
It seems agents are more interested in a quick deal rather than getting the best price.
That makes sense—more volume is a lot more important than small percentage increases on each deal.
In an ideal world I would like to see agents gave sellers the ability to participate in developing a compensation system for each deal—using percentages or various incentive schemes that could be beneficial to both parties.
If speed is important there could be a bonus (or penalty) for that. If price is important there could be a bonus (or penalty).
etc etc.
My last two houses sold on day one to the first buyers who walked in the front door. We are going to try to sell our present house FSBO. We have paid over $100k in commissions/fees and I am trying to avoid that.
There is a website that walks you through it - I think the cost is around $2000 but they provide the documents and closing attorney. A friend of mine did it and did pay the buyer’s realtor a small percentage.
Once an offer is made the commission system works against the seller.
If the house is listed for $350,000, a $325,000 offer means that the agent is only likely to make $1500 more to get a full price offer.
Better $19,500 in hand than a possible $21,000.
The percentage commission system is really rather absurd compared to a fee system.
“Once an offer is made the commission system works against the seller.”
And against the buyer. His agent wants a high bid for quick transaction.
Another problem is that agents usually split the commission with the brokerages. That 6% means 1.5% each to the listing agent and selling agent generally.
That’s only if it’s a double end sale. The buyer’s agent gets half of that and the seller’s agent gets the other half. A double end sale isn’t that common. Most commissions have already been reduced to 2.5% or even 2% in the last few yrs anyway, which means a buyer’s agent could end up with a whopping $6,000 after 2 months of working with a client. The average full time realtor makes $46,000 a yr.
Hubby pays his broker 10% of the proceeds. I don’t know where you’re getting your info but it’s not the case in Arizona.
My mom sold real estate in Pennsylvania 25 years ago. 25% to each agent, 25% to each broker. Commissions were negotiable but the seller had to ask.
I BELIEVE YOUR CALCULATIONS ARE CORRECT.
10% is usually the Brokerage’s commission to manage long term rentals, not for Buying or Selling.
Sounds like an open door to go after the Trial Lawyers and their 33%-50% fees on contingency cases.
But the agent isn’t the one that says “yes” to a 325k offer...the sell has to.
So if the seller wants 350 come hell or high water, the agent cant change that.
Good for you... having an attorney for the contract is most of what you need with the internet behind you.
In AZ, the broker gets 10% of the agent’s commission. My husband works out of our house or else the breakdown would be 80/20. His last sale was a $350k house, but he only took a 2% commission because it was a family friend. He made $7000 total on the sale and paid the broker $700, so it’s not a huge chunk but it can add up with a larger sale.
Not the case in AZ. It’s 20% to the broker if you have a desk in the office vs 10% if you work from a home office, which most ppl do.
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