Posted on 03/15/2024 11:08:04 AM PDT by where's_the_Outrage?
The National Association of Realtors has agreed to a landmark settlement that would eliminate real estate brokers' longstanding automatic commissions, commonly of up to 6% of the purchase price.
Instead, home buyers and sellers would be able to negotiate fees with their agents up front. If the $418 million legal agreement is approved by a federal court, consumer advocates predict the ranks of real estate agents will thin, further driving down commission prices.
"For years, anti-competitive rules in the real estate industry have financially harmed millions," said Benjamin Brown, managing partner at the Cohen Milstein law firm and one of the settlement's negotiators. "This settlement bring sweeping reforms that will help countless American families."
The NAR acknowledged the pending settlement in a statement Friday and denied any wrongdoing.
“NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers," said Nykia Wright, interim CEO of NAR, whose previous chief stepped down late last year amid fallout from a federal lawsuit.
"It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals,” Wright said in the statement.
(Excerpt) Read more at nbcnews.com ...
The realtors used to basically have a monopoly with the MLS system, for sale by owner didn’t work that well by basically only having newspapers to list, but with sites like Zillow there are now other listing options about equal to the MLS.
Real estate agents are on a normal curve like any other profession.
The average agent is mediocre but the top 5% earn every dollar they get.
Tell me what does a real estate agent do to earn that commission? An average home is , let’s say, 500,000. 6% commission is 30,000. Divided between buyer and seller agents is 15,000. The average family medical physician makes 500 an hour. It would take 30 hours of work by that physician to equal the 15,000. Real estate agents probably didn’t even graduate college. You don’t need to pay someone that much to sit at an open house, or drive potential buyers around town to look at homes. You can pay someone an hourly rate for that.Real estate agents don’t do the complex paperwork, escrow and lawyers do that.I estimate my agents over the course of years didn’t spend more than 4 hours selling my house, at a cost of ( for a 500,000 home) 3750 an hour. Another comparison, a surgeon makes around 1300 for a hip replacement. Thats a two hour surgery by a person with 14 years of post high school training.
The math does not work out, it’s been a profession that has made a lot of money by doing very little. This will reduce actual real estate agents .Brokerage firms will then hire hourly lower paid non licensed ( but background checked people)to sit at open houses and drive customers around. You can pay them 20 an hour by those firms, which reduces the numbers of real estate agents. It actually will still be profitable for the owners of these firms, and let the real estate agents find another line of work.
Instead, home buyers and sellers would be able to negotiate fees with their agents up front.
You can do that now...
Whatever...
Good news. Thanks of posting.
If there’s less friction then there is less money to enrich those benefiting from the friction. Creative destruction - those people will have to get real ie productive jobs instead of living off the friction.
The last time I checked, which was probably 20 years ago, REAL ESTATE types were the top lobbyists in DC. Given what’s transpired since (vax, military contractors, Ukrainian government, FBI), they probably no longer have that honor, but they must still be very high up there.
You have obviously never met truly skilled real estate agents.
That is not surprising—they are fairly rare—and usually work with high end sellers.
The best ones start by helping the seller decide what work needs to be done to maximize the value of the home—and equally important what tasks do not need to be done.
They have contacts with the best local contractors to make sure the job is done correctly and at a reasonable price.
They then help the seller manage the appearance of the home for sale—what furniture to show, what to remove—what possessions to show, what to remove—to make the place look appealing but not cluttered. They may decide everything needs to go to show the best features—but they know what they are doing and there is a reason for every decision.
They then target a specific audience of buyers—they know how to reach them with appropriate marketing. They are not wasting time and resources with mass marketing.
As a result the seller is not inconvenienced with lots of looky-loos but only serious prospective buyers.
They are truly skilled skilled sales-people, and that is a profession where most people who do it are not very good at it.
If they do the job correctly the seller is getting the maximum price reasonably available for the house—and the transaction is relatively quick and painless.
It looks like effortless magic if done properly. It has to be seen to be believed.
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