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re: Why do Realtors exist?
Posted on 5/12/18 at 10:50 am to Sneaky__Sally
Posted on 5/12/18 at 10:50 am to Sneaky__Sally
Door is a flat $5,000 fee regardless of the price of the home. Clearly, this is more beneficial for higher priced homes since the percentage model impacts them more in absolute dollar terms.
0
Posted on 5/12/18 at 10:57 am to lynxcat
I work in commercial real estate so the same principles may not apply to the residential side. I'm not an agent but work with them often.
But while time / turnover is certainly better (selling more homes gets you more money), there is obviously also added revenue for an agent for selling at a higher value. Neither agent nor seller wants to hold on to a property for two years seeking the highest possible value, but they also don't want to sell it at liquidation value.
With a flat fee the agent with only their own interest in mind would basically try and sell everything at liquidation value as quickly as possible (not saying this is how agents actually treat that in practice). This is certainly a good pay structure for those not looking for a full service agent to market their property.
Personally I feel that a percentage basis aligns the interest of the parties to selling for true market value, certainly for higher priced properties. There are of course many other factors that come into play such as maintaining strong business relationships.
But while time / turnover is certainly better (selling more homes gets you more money), there is obviously also added revenue for an agent for selling at a higher value. Neither agent nor seller wants to hold on to a property for two years seeking the highest possible value, but they also don't want to sell it at liquidation value.
With a flat fee the agent with only their own interest in mind would basically try and sell everything at liquidation value as quickly as possible (not saying this is how agents actually treat that in practice). This is certainly a good pay structure for those not looking for a full service agent to market their property.
Personally I feel that a percentage basis aligns the interest of the parties to selling for true market value, certainly for higher priced properties. There are of course many other factors that come into play such as maintaining strong business relationships.
This post was edited on 5/12/18 at 11:09 am
Posted on 5/12/18 at 11:10 am to OweO
(no message)
This post was edited on 5/15/18 at 3:08 am
Posted on 5/12/18 at 11:24 am to Janky
quote:
It’s not physical, stupid
Fair enough. So what do they mentally do that doctors, techs, nurses can't?
Posted on 5/12/18 at 11:30 am to Alt26
They are educated in the chemicals. I would venture to say they have a better understanding of the chemical makeup of the drugs than the doctors. The doctors and nurses are focused on the human body. The pharmacist are specialized in the drugs that go into the body. They serve as a last line check to make sure drug cocktails aren’t be prescribed.
At least, this is how I understand it.
At least, this is how I understand it.
This post was edited on 5/12/18 at 11:31 am
Posted on 5/12/18 at 11:37 am to Paul Allen
quote:
Paul Allen
Shut up paul
Posted on 5/12/18 at 11:57 am to HoustonGumbeauxGuy
quote:
Realtors, good ones anyway, are capable of explaining the fine print on every page of paper you signed when buying a new house. If you own your own house, you will know the packet full of papers you have to sign and our realtor gave us a summary of each page we were signing instead of us spending six months reading (with a magnifying glass) through every single word on every single piece of paper.
If I am purchasing or selling a asset for 100s of thousands of dollars, a attorney is going to be reviewing my contract not someone that went to a night class fro 6 weeks to get a license.
Posted on 5/12/18 at 12:07 pm to lynxcat
quote:
Use the 6% assumption and consider the marginal benefits for the parties. If the agent sells the house for an extra $1,000 then the agent gets $60 and the homeowner gets $940. The most important thing for the agent is to turnover as many deals as possible as it maximizes their returns for a given time period. Agency issues are well documented and the percentage fee system does very little to align incentives the way you describe.
There was an entire chapter in the book "Freakinomics" on how the commission based fee provides little incentive for a realtor to get the highest price possible.
Posted on 5/12/18 at 12:11 pm to EA6B
Out of that 6%, after the brokerage firm takes its cut, expenses and taxes, the agent isn’t really taking home a whole lot. Especially if they have to split it with another agent.
Posted on 5/12/18 at 12:19 pm to Hoyt
I’m a poor rant from the OP
Good luck on the closing if you go FSBO
Good luck on the closing if you go FSBO
Posted on 5/12/18 at 12:26 pm to ellishughtiger
quote:
Good luck on the closing if you go FSBO
The title company handles the closing regardless if it is FSBO or realtor, only difference with FSBO is the realtor wont be there to pick up their check.
Posted on 5/12/18 at 12:30 pm to ItNeverRains
quote:
Oh, you were trolling. Sorry for the logic. Here's a picture of what that useless profession has afforded me
Posted on 5/12/18 at 12:34 pm to Hoyt
They exist to take overproceesed and overaccessorized advertising photos of themselves.
Posted on 5/12/18 at 12:53 pm to brgfather129
Dude is very proud of his house. Probably the 5th time I’ve seen him post a pic of it 
Posted on 5/12/18 at 1:09 pm to yellowfin
I bet he doesn’t even have a pool
Posted on 5/12/18 at 1:14 pm to Hoyt
We are moving back to Texas. The realtor on the hoise we are selling is collecting 12K for the listing. The house was shown once with no open house and then sold. The house we bought in Texas had a realtor that didn't show us one house. We were in the area while she was "on vacation". We bought the house and she gets 14K by virtue to making the offer and setting the deal up with the builder. We couldn't get out of it since we are in a relocation. Bottom line... We didn't have to pay the cost to either realtor but... it seems excessive to me.
Posted on 5/12/18 at 2:25 pm to Hoyt
repub. politicans
Posted on 5/12/18 at 10:56 pm to EA6B
I guess we lucked out. A very close family friend has a successful realty business in Houston and made our close process simple and quick.
Charlie Kriegel is his name if anyone in the Houston area is looking to buy a home.
....and no, I’m not Charlie.
Charlie Kriegel is his name if anyone in the Houston area is looking to buy a home.
....and no, I’m not Charlie.
Posted on 5/13/18 at 4:56 pm to lynxcat
quote:
their pay structure as a percentage of sale price is archaic.
Commissions are "archaic"?? You can negotiate commissions for real estate agents and most tier up the
higher the price.
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