Quote from @Yongming Huang:
Quote from @James Hamling:
@Yongming Huang to your question, your not fully informed.
The truth of the fact is a person can sell there home for $0.00 in the U.S. because a person can choose to just sell it themself.
Or one could spend a few hundred and self-list on any number of platforms.
Or one could spend a few hundred too a few thousand and use a Discount Broker, be on the MLS, and all various forms of this.
OR or or, use any number of real estate agent's both REALTORS and non-realtors to list/buy and what fee is agreed upon, which range's literally all over the place from dirt cheap too arguably really expensive.
People right now, and for a great many years, in the U.S. have ALL of these options available. Nobody is forced to use any specific service.
The lawsuit had NOTHING to do with how much commissions are, it was solely about sellers feeling forced to offer buyer broker compensation. And arguing, retroactively, that they would have kept more $ on there property sale "IF" they hadn't paid that. Ignoring fact buyers would have paid LESS if buyers had to pay for buyer agent ON-TOP-OF the purchase price.
How do we know this? DATA. We see it happen over-and over-and over again in FSBO sales. We are talking decades of data. FSBO's simply get less on average. Listings where buyer's pay all fee's in addition get-less.
It's not an item for debate, it's a fact as shown and proven in the data.
The suit argued collusion in the big name brokerages and by NAR, that they were in secret agreeance to force sellers to offer such. And group think can look a lot like collusion, but it's not.
That's what's going on here, group think, long established and Brokers with hundreds of agent's under them directing them NOT to take a listing UNLESS seller does offer ___ as buyer broker compensation and guess what, they CAN do that, legally, it's the Brokers business, they can demand whatever there heart desires. They could demand new client's put there left foot in and shake it all about or "no service for you!". That's how a free economy work's.
It had nothing to do with what fee's are, was not meant to bring down fee's, it was sellers remorse, greed, saying it's all done but I don't want to pay the bill I agreed to at start.
All those sellers could have used a different listing service with NO buyers broker compensation, they choose not to. This is why NAR will fight it and NAR will win, eventually. Nobody "had to" use the service they did, they choose to.
Nobody has a "right" to use a specific product or service. Nobody has a "right" to a REALTOR.
Hi James, let's see about this. Are there alternative ways to sell a house? Yes, of course. No doubt about that. But the market shares of those alternative choices matter. Specifically, what percentage of transactions has commissions in the 5%-6% range? 90%, or maybe 95%? We are talking about the normal here, not about the outliers. Similarly, when I say the fees in the UK are around 1.5%-2%, I'm not saying there are no cheaper or more expensive options. I just want to compare apple to apple.
From the earlier discussions, I see why brokers simply cannot offer lower fees. Their expenses are high, so they have to have commissions at a certain level to make money. I understand that. I'm not against brokers or pointing fingers at anyone. I genuinely want to find the rationale behind the 5%-6% commissions.
David Greene's explanation for this is that "probably 95%-98% of the times that a Realtor helping clients, they don't get paid for...You have to compensate them enough so they make enough to support themselves for all the people that are not paying them." This brings my next question: Is the situation in other countries any different? Agents in any country can not close on every prospect, right?
Another argument I constantly hear is that we have to have buyer's agents because if not, buyer wouldn't be protected. Then how come most buyers in the UK don't hire an agent? Are they seeing more headaches and problems in their model?
I think the real question is, is our current model really the best one in the world?
It's an act of insanity trying to compare U.S. Real Estate "median" commission to other countries. I say this as a person who's done, and is currently, involved in things in other countries.
First, the most obvious; it's a different COUNTRY. The laws are different, financing and banking is different, how mortgages are made, packaged, securitized, sold, is all different. Literally every aspect is DIFFERENT.
So as capitalization changes, risks change, law's change, everything else adjusts in same vein.
You can't ignore all the other changes and pick 1 thing like commissions to compare and say look at difference and ignore all else.
Talk was on Germany before. Ok, well were you aware the "average" income tax on people in Germany is around 40%? Things are DIFFERENT.
So you will not find 1 bit of intelligent meaning, or actionable anything, saying in a vacuum "agent's in this country charge ___, agent's in that country charge ___". Look at price of daycare country to country, that's different too. You name it, things are different country to country, because it's a different country, different law's, systems etc..
And with that there is no such thing as "the best in the world" because as long as different countries have different systems, different governance systems, things will be different. China is a plutocratic communism, North Korea a Monarch Communist system, Even the UK which many like to think is so similar to US is actually radically different.
About closest one can compare to the U.S.'s Socialist Republic structure is Greece, where founder's took inspiration from in designing and forming this form of governance. And even Greece is WAYyyy different in legal system than U.S. now.
The U.S. arguably has the #1 biggest lawsuit "industry" by far of any nation on earth. That means all that legal risk carried in any business operation. That's unique factor to U.S..
Look at Divorces in U.S., they are very costly to people. Now let's look at Scandenavian countries where people are not allowed attorney's in divorce, especially with kid's, and there is no big crazyness in things. Or in Greece where Judge's can call there own witness's and defend the best interest of the kid's as matter of national/state importance.
It's different, everything around it, different.
CONTEXT..... this whole thing comparing vs other countries is taking things WILDLY out of context.
Did you know the legal age to drink alcohol in Germany is 16? How about that, what would happen vs U.S. at 21? Obviously the legal system is radically different.
And it's not complicated on agent fee's in U.S., you have well over 100k different brokers COMPETING against each other. If there was a radically cheaper way that consumer WANTED in mass, it would happen. When you have over 100k service providers fighting against each other for the same business, it drives things to the best offering potential.
You want to argue "medians" well how about this, if cheaper is so much better WHY are people in the U.S. NOT using the readily available CHEAPER alternatives in mass?
Nobody seems to be asking this, just ignoring the obvious. Why DON'T people use it in large part?
So duh, what will happen when force the services of choice, to be more like the ones people DON'T choose? Surprise-surprise, people are going to complain it suck's, that they don't like it, they want something different.......
It's stupidity-squared. It just is. Entitlement ran wild.
Did you know most things you buy in life at any store have no less than a 40% margin on them? From your bread too your auto. So how is 2.5% GROSS margin something "big" and crazy?
Again, put things in CONTEXT. 5% is NOT 5% to "a" agent, that's for BOTH sides Brokers AND underlying agent's. 2.5% per side. 1.25% per person if want to view that way. 1.25% GROSS margin that business then has to pay all expenses of operations, to HOPEFULLY net as much a 0.7%, LESS than 1% net!
No other industry in existence in U.S. operates with such a tiny margin that isn't gargantuan in it's corporate size and volume. I bet Walmart isn't even at less than 1% net, why isn't everyone flipping out that Walmart is "colluding" for higher prices on product's in it's stores. Because they are, Walmart directs what those prices will be don't they.
Your gas, more than 1% net. The food you eat WAY more than 1% net.
Why are you not comparing the price of a burger and chips vs that in Thailand? I can get a great burger and chip's in Thailand for $1.40 U.S.. Why aren't we on that comparison?
