All Forum Posts by: Account Closed

The NYT stated the following:

IMHO, this makes no sense. I think the exact opposite is true. Wouldn't an agent want to price the home higher so they can continue to make the most money from a lower commission?

If they were getting 6%, and this will not be the standard moving forward, why lower the price of the house only to make less money? And please don't give me the line about "service."

The NYT stated the following:

IMHO, this makes no sense. I think the exact opposite is true. Wouldn't an agent want to price the home higher so they can continue to make the most money from a lower commission?

If they were getting 6%, and this will not be the standard moving forward, why lower the price of the house only to make less money? And please don't give me the line about "service." 

The National Association of Realtors has agreed to change its policies to settle several lawsuits brought by home sellers — a move that could reduce commissions.

A settlement reached this week threatens to strike a blow to an established standard of residential real estate: the 6 percent sales commission. It also will change who pays it. The deal, reached after a yearslong court battle initially brought by a group of home sellers in Missouri, calls for the powerful National Association of Realtors, which has long regulated the way U.S. homes are sold, to amend its rules on how Realtors for sellers and buyers are compensated.

In most real estate transactions in the United States, both the seller and buyer have an agent representing them. For decades, there’s been a standard for paying these agents: a commission of between 5 and 6 percent of the home’s sale price, covered by the seller and split between the two agents.

https://www.nytimes.com/2024/03/16/realestate/buy-sell-house...

Decades ago, the National Association of Realtors set the standard commission at 6 percent, to be split between an agent representing the seller and an agent representing the buyer. If a home seller tried to negotiate, an agent would often issue a veiled threat: You won’t find a good seller’s agent to work with you, and buyers’ agents won’t show your house to clients.

The Realtors’ hardball tactics succeeded because they operate much of the network that’s crucial to the housing market, such as the database of listings. They could keep out agents who would have competed on price.

This is the same line that many posters have said to me

The solution to this concentration of economic power often requires political power — namely, antitrust enforcement by the government. After years of refusing to change their tactics, the Realtors’ agreed to a settlement now because they were vulnerable to government action.

3% maximum for commissions. Period

Excellent explanation and insight. Now, here is my question...

I am using a flat-fee agency, which will charge me 1/2% with a minimum of $2500. No problem with this at all. Now, if a Buyer's agent comes in, has a few buyers, and one agrees to buy the house, I assume the agent would want a commission from me; which is only fair. If I am reading things correctly, a fair commission to the agent would be 1-2%. Correct?

My example would be a house selling for $550K.

1/2% commission to the flat fee agent = $2750
1% commission to Buyer's agent = $5500 -or-
2% commission to the Buyer's agent = $11,000

Total Commission = $8250 - $13,750*

I think this makes sense and is completely fair. What do you think?

*If I hire a full-serve agent, and negotiate a commission of 3%, the commission on a $550K sale would be $16,500

Now, here is my question...

I am using a flat-fee agency, which will charge me 1/2% with a minimum of $2500. No problem with this at all. Now, if a Buyer's agent comes in, has a few buyers, and one agrees to buy the house, I assume the agent would want a commission from me; which is only fair. If I am reading things correctly, a fair commission to the agent would be 1-2%. Correct?

My example would be a house selling for $550K.

1/2% commission to the flat fee agent = $2750
1% commission to Buyer's agent = $5500 -or-
2% commission to the Buyer's agent = $11,000

Total Commission = $8250 - $13,750

I think this makes sense and is completely fair. What do you think?

600K to 800K is a HUGE swing. If someone said that to me, I'd walk as well. I was talking more in the $30-50K range. We all know that you ask and list high, and negotiate downward. Many of the homes in my area were listed at X, and in this market, the majority sold at that number, some even higher. But being the pessimist that I am, reality steps in and that $30-50K bump that a Seller adds to the listing price, is the room that I can use to negotiate with a Buyer (if need be). I am realistic if anything. 

During my 35 business career, I negotiated millions and millions in contracts. I have no problem negotiating the sale of my own home. As far as not getting top dollar for it. I totally disagree. I already mapped out the comps in my area, and even went to see several of them to see how they compare with mine. So I have a pretty solid handle on what my house is worth, and the range that I should list it at.