OT: For sale by owner ?

[anon_0k9zlfz6lz9oy]

So the wifey and I went to a new construction open house in Chatham. The listing agent was there and said their listing fee is 1% instead of 2.5% and he said if we purchased the house we saw and listed our current home with his agency they would give $5,000 towards our closing.

So fee compression is coming!

I know the company you’re speaking of and the agent in fact. They are the only brokerage in NJ that I know of that offers buyers rebates and yes they do in fact list homes for 3% total. They pay out 2% and they only take 1%. I think youd be interested in seeing what their sales to list price ratios are as looking at the data now in brokermetrics that “saving” of 2% equates to a loss of at least 5% net overall and in some towns (granted small sample size for them in these towns im looking at) upwards of 20% for comparable (im comparing a home they sold vs one that is 4 house down and sold within 6 weeks of one another)

the issue is, the data i have access via broker metrics, the public doesnt so people like you (and not saying youre stupid just rather that you dont have the data) are easily mislead to think theyre “saving” 2% when reality is youre losing money

 

[yesrutgers01]

So the wifey and I went to a new construction open house in Chatham. The listing agent was there and said their listing fee is 1% instead of 2.5% and he said if we purchased the house we saw and listed our current home with his agency they would give $5,000 towards our closing.

So fee compression is coming!

My understanding is that some of these new construction listing are also a "relationship" between the builder and the agent. I would bet that majority of their other listings are the normal fee.

 

[anon_0k9zlfz6lz9oy]

My understanding is that some of these new construction listing are also a "relationship" between the builder and the agent. I would bet that majority of their other listings are the normal fee.

This particular company they actually arent. I know the company and agent hes talking about.

 

[yesrutgers01]

This particular company they actually arent. I know the company and agent hes talking about.

Thanks for the insight you provided. Good info. As they often say- you get what you pay for. So, for these guys on here that think your industry is full of uneducated, lazy crooks that earn too much money for something anyone can do- I say, let them do FSBO as they would be such a PIA to work with anyway.

 

[jmc11201]

Being a successful real estate agent takes work and hustle.... no doubt. But the work and hustle is in getting the listings, managing the seller's expectations, walking nervous buyers and sellers through the closing process, negotiating the price, etc. It isn't in turning a house with 800k into a house with 900k. Assuming a buyer and seller both work with an agent, the buyers agent should add value to their client by making sure they pay the fair price just as a sellers agent should make sure the seller gets a fair price. If a sellers agent can turn an 800k house into a 900k house then the buyers agent is negligent.

The issue isn't whether agents add value or bring something to the table, but whether that is worth 5% of my largest asset. I've bought and sold enough to think the answer in my case has been no. I'd love to pay a listing fee to cover my agents costs (pictures listing, etc) them some fee on top of that as compensation. I don't know, $15,000 strikes me as reasonable.

Nevertheless, I may be in the market for a house in NJ next year so maybe @kyk1827 or @RUskoolie can demonstrate their value.

You keep thinking the job is done once a contract is signed. I am seriously starting to wonder if you ever actually bought/sold a house yourself. Like I call you once, we speak for 5 minutes and you say sure, you can sell my house. Then I open the door, people walk in and hand me a signed contract and I leave. That's basically your interpretation lol

 

[RUAldo]

I'd love to pay a listing fee to cover my agents costs (pictures listing, etc) them some fee on top of that as compensation. I don't know, $15,000 strikes me as reasonable.

This space is sooooo ripe for disruption. At this point, 5% is completely arbitrary and has no bearing on the value an agent may or may not bring to the table. But I’ll be the first to admit attempts by the likes of YHD, Foxtons, etc. have not been successful. I also do believe agents CAN play a vital role. I just don’t like the “standard” 5%, which I’ve come to learn is primarily driven by umbrella brokers like Weichert, KW, etc. As someone mentioned, it’s clearly price fixing because the few agents I asked said none of the “big guys” will let agents drop commissions unless it comes from the agent’s share. So, if the agent wants to take a haircut that’s fine as long as Weichert gets its full share.

 

[anon_0k9zlfz6lz9oy]

This space is sooooo ripe for disruption. At this point, 5% is completely arbitrary and has no bearing on the value an agent may or may not bring to the table. But I’ll be the first to admit attempts by the likes of YHD, Foxtons, etc. have not been successful. I also do believe agents CAN play a vital role. I just don’t like the “standard” 5%, which I’ve come to learn is primarily driven by umbrella brokers like Weichert, KW, etc. As someone mentioned, it’s clearly price fixing because the few agents I asked said none of the “big guys” will let agents drop commissions unless it comes from the agent’s share. So, if the agent wants to take a haircut that’s fine as long as Weichert gets its full share.

Youre totally wrong haha. I work for one of the “big guys”, keller williams (largest brokerage by agent count in the world) and we can literally charge any commission we want to. You keep repeating this falsehood that big box shops keep it high lol. It’s 5% and now in some cases 4% which is lower than what used to be the standard 6%. Its hard to go lower without going broke. Again, if it was easy these companies spending 9 figures trying to disrupt wouldnt keep going out of business

 

[RUAldo]

Youre totally wrong haha. I work for one of the “big guys”, keller williams (largest brokerage by agent count in the world) and we can literally charge any commission we want to. You keep repeating this falsehood that big box shops keep it high lol. It’s 5% and now in some cases 4% which is lower than what used to be the standard 6%. Its hard to go lower without going broke. Again, if it was easy these companies spending 9 figures trying to disrupt wouldnt keep going out of business

So, the guy I spoke to also works for KW and said he could do 4% but seemed to indicate that it would come from his share and not KW’s, although he did say he would need KW’s sign off on the commission reduction. When I asked about going below 4%, he said KW would NEVER approve it.

 

[anon_0k9zlfz6lz9oy]

So, the guy I spoke to also works for KW and said he could do 4% but seemed to indicate that it would come from his share and not KW’s, although he did say he would need KW’s sign off on the commission reduction. When I asked about going below 4%, he said KW would NEVER approve it.

i cant think of a scenario where it'd make any sense for the client to go lower than 4% on a listing (5% tbh), let alone an agent. ive charged as lower as 2.5% when bringing a buyer direct to a seller off market tho so youre wrong

 

[RUAldo]

i cant think of a scenario where it'd make any sense for the client to go lower than 4% on a listing (5% tbh), let alone an agent. ive charged as lower as 2.5% when bringing a buyer direct to a seller off market tho so youre wrong

I’m just relaying what he told me, whether true or not. And I wasn’t offended by the 4%, but was merely assessing my options. My main point was that he said KW wouldn’t approve anything lower - was not his call ultimately. I was also discussing the buy/sell scenario if I used him for both the sale of my house and purchase of the new house to see if that creates flexibility. The answer was yes, but again he kept blaming KW for tying his hands.

 

[anon_0k9zlfz6lz9oy]

I’m just relaying what he told me, whether true or not. And I wasn’t offended by the 4%, but was merely assessing my options. My main point was that he said KW wouldn’t approve anything lower - was not his call ultimately. I was also discussing the buy/sell scenario if I used him for both the sale of my house and purchase of the new house to see if that creates flexibility. The answer was yes, but again he kept blaming KW for tying his hands.

the buy side is free for you. but again youre not comprehending the stats i keep sharing lol. the lower commissions you pay, ironically the less you net

 

[RUAldo]

the buy side is free for you. but again youre not comprehending the stats i keep sharing lol. the lower commissions you pay, ironically the less you net

I hear your sales pitch loud and clear. I’ve always used a broker and have zero complaints. Yes, the buy-side is technically “free for me” but an agent representing a client on both the buy AND sell sides net two commissions in connection with servicing one client. Right? I’m not saying that’s a problem - but I asked about commission flexibility on that basis. And, in my experience, all of the commission discussions with my KW agent always came back to the fact that KW would not approve anything below 4%. Unless the agent was simply using KW as the bad cop.

 

[anon_0k9zlfz6lz9oy]

I hear your sales pitch loud and clear. I’ve always used a broker and have zero complaints. Yes, the buy-side is technically “free for me” but an agent representing a client on both the buy AND sell sides net two commissions in connection with servicing one client. Right? I’m not saying that’s a problem - but I asked about commission flexibility on that basis. And, in my experience, all of the commission discussions with my KW agent always came back to the fact that KW would not approve anything below 4%. Unless the agent was simply using KW as the bad cop.

Maybe their particular broker manager has an intra office policy on that but like with any sales job, bad cop is the preferred route to run haha. Just as I'm sure in your sales job you'd do the same, "this is the lowest our company will allow us to go on X".

 

[RUAldo]

Maybe their particular broker manager has an intra office policy on that but like with any sales job, bad cop is the preferred route to run haha. Just as I'm sure in your sales job you'd do the same, "this is the lowest our company will allow us to go on X".

If true I’m totally willing to accept that explanation.

 

[yesrutgers01]

Being a successful real estate agent takes work and hustle.... no doubt. But the work and hustle is in getting the listings, managing the seller's expectations, walking nervous buyers and sellers through the closing process, negotiating the price, etc. It isn't in turning a house with 800k into a house with 900k. Assuming a buyer and seller both work with an agent, the buyers agent should add value to their client by making sure they pay the fair price just as a sellers agent should make sure the seller gets a fair price. If a sellers agent can turn an 800k house into a 900k house then the buyers agent is negligent.

The issue isn't whether agents add value or bring something to the table, but whether that is worth 5% of my largest asset. I've bought and sold enough to think the answer in my case has been no. I'd love to pay a listing fee to cover my agents costs (pictures listing, etc) them some fee on top of that as compensation. I don't know, $15,000 strikes me as reasonable.

Nevertheless, I may be in the market for a house in NJ next year so maybe @kyk1827 or @RUskoolie can demonstrate their value.

Fvg Duh...that IS the damn job. Turning crap into gold isnt...

Anyway...can't help you with the house next year but my wife is a Mortgage Advisor...Which is a high step above a mortgage loan officer. And licensed in 11 states.

 

[jmc11201]

the buy side is free for you. but again youre not comprehending the stats i keep sharing lol. the lower commissions you pay, ironically the less you net

Buy side isn't free for me since the seller has to pay it and will want to get a high enough price to get his target net price.

 

[jmc11201]

Fvg Duh...that IS the damn job. Turning crap into gold isnt...

Anyway...can't help you with the house next year but my wife is a Mortgage Advisor...Which is a high step above a mortgage loan officer. And licensed in 11 states.

People work hard in any business. Real estate agents add value but is 5% the right number? How about a sliding fee schedule. 6% on the first $300k, 5% on the next 700k, 4% in the next million, 3% after that. Is that an outrageous proposition?

 

[anon_0k9zlfz6lz9oy]

Buy side isn't free for me since the seller has to pay it and will want to get a high enough price to get his target net price.

The brokers service is free to the buyer. The house will sell for what the market is willing to pay, not the sellers target net. This is like saying “I own apple stock and i know the market is willing to pay $169 but my target net is, $185”.

 

[anon_0k9zlfz6lz9oy]

People work hard in any business. Real estate agents add value but is 5% the right number? How about a sliding fee schedule. 6% on the first $300k, 5% on the next 700k, 4% in the next million, 3% after that. Is that an outrageous proposition?

Why dont you or anyone do it? Theres companies spending 9 figures trying to do things like this and they keep posting losses and then ultimately filing for bankruptcy

 

[jtung230]

Why dont you or anyone do it? Theres companies spending 9 figures trying to do things like this and they keep posting losses and then ultimately filing for bankruptcy

Uber realtor? Taxi/food deliver/home sales all in one app.

 

[NewJerseyHawk]

I used to think this way...until I became a realtor. I am now a broker in New Brunswick and we cover all of Central NJ FWIW (shameless plug). The amount of babysitting that must be done alone, absolutely earns the commission. Having the skills to negotiate earns the commission (I saved one client 50k on 1 deal recently). Getting the CO taken care of because people drop the ball. Marketing is extremely important. The realtors database helps tremendously (I sold one property this year because of other realtors I know on Instagram). Sometimes you run into attorneys who are useless. It's so far from just turning a key, such an ignorant statement.

85% of FSBO end up being sold by a realtor BTW.

Also one of my best real estate investments ever was buying from a FSBO. They didn't want to pay a 5% commission so they sold the house to me for 100k under asking price instead to save 20k on commission.

Union County is so hot. He would be foolish to do FSBO. Feel free to DM me and I can help him (or not) but if it's listed and marketed properly he will be happy.

Skoolie is very solid and I know a few people who speak confidently about him.....I obviously work on the mortgage end of these transactions all over the region and I can certainly tell you that for every qualified buyer, there's another 4 to 5 time-wasters, who just want information and time.

With the stock market and inflation fears, buying real estate is always a sound long term (and short term) investment. I enjoy this type of thread and enjoy helping the RU fan base here the most over the years....plenty of great friends developed.....always open for a mortgage conversation and 2022 should be another good year to finance (buy or refinance), rates are still great!!!......gginn@1stconstitution.com

Go RU.....!!

 

[jtung230]

Rates are crazy low right now. Get your refi done. I wasn’t looking but my bank made me an offer I couldn’t refuse.

 

[jtung230]

Article on Bloomberg talking about the commissions. Have to get through the political stuff to find the commission talk. Highlights:

NAR nothing more central to its mission than protecting the commission of 4 - 6%.

There are class action lawsuits on antitrust based on NAR’s control of MLS.

 

[RUAldo]

Article on Bloomberg talking about the commissions. Have to get through the political stuff to find the commission talk. Highlights:

NAR nothing more central to its mission than protecting the commission of 4 - 6%.

There are class action lawsuits on antitrust based on NAR’s control of MLS.

Yup - just as suspected, the NAR is very powerful and their actions are consistent with anecdotal evidence many shared on this thread. The NAR, umbrella brokers, and agents at large, are why the 4%-6% commission remains the “standard”. The real estate industry is basically operating the same way today as it did 50+ years ago. Simply doesn’t make sense in the digital age unless anti-competitive behaviors are behind it. For the brokers on this thread, I’m not one of the folks that don’t think you are needed. My only issue is the standard commission has no clear/direct correlation the value provided and work performed, and should be negotiable.

NAR Asks Court to Block Department of Justice Investigation

The Realtor group and the agency agreed to an antitrust settlement in November, only for the DOJ to pull out ahead of a broader investigation

therealdeal.com

 

[RUAldo]

Interesting stuff:

“The complaint was filed last November, alongside a proposed settlement that would require NAR to repeal and modify certain “anti-competitive” practices, such as withholding information about broker fees or enabling buyers’ brokers to filter MLS listings based on commissions offered.”

 

[Plum Street]

So … since the debate on this board whether it’s a bubble , or the bubble is gonna burst …if you are selling do you use a realtor?

 

[RUskoolie]

So … since the debate on this board whether it’s a bubble , or the bubble is gonna burst …if you are selling do you use a realtor?

must be a slow day for you Plum. It's almost always better to use a realtor in any market. There is data backing this up everywhere. Especially in the current market that is very soft with an advantage to the buyer.

 

[Plum Street]

must be a slow day for you Plum. It's almost always better to use a realtor in any market. There is data backing this up everywhere. Especially in the current market that is very soft with an advantage to the buyer.

There is data . Sure. But not in this thread

 

[WhichReligionIsRight]

So … since the debate on this board whether it’s a bubble , or the bubble is gonna burst …if you are selling do you use a realtor?

Yes. Use a realtor.

 

[Plum Street]

must be a slow day for you Plum. It's almost always better to use a realtor in any market. There is data backing this up everywhere. Especially in the current market that is very soft with an advantage to the buyer.

Yes. Use a realtor.

I think another good question ….and this could be another thread …. Do you need a realtor to buy ? Assuming you know where you want to be . You can work out something with seller agent , who will then get full commission with no split

 

[Rutgers Chris]

I think another good question ….and this could be another thread …. Do you need a realtor to buy ? Assuming you know where you want to be . You can work out something with seller agent , who will then get full commission with no split

I’ve bought two houses without a realtor. Definitely don’t see the purpose if you know the area and what you are looking for. I’d feel much more comfortable selling with a realtor. They’ve been helpful with things that I wouldn’t otherwise be aware of (paying for a home warranty while selling being one).

 

[jtung230]

I think another good question ….and this could be another thread …. Do you need a realtor to buy ? Assuming you know where you want to be . You can work out something with seller agent , who will then get full commission with no split

Why not? It doesn’t cost you anything.

 

[Knight Shift]

I’ve bought two houses without a realtor. Definitely don’t see the purpose if you know the area and what you are looking for. I’d feel much more comfortable selling with a realtor. They’ve been helpful with things that I wouldn’t otherwise be aware of (paying for a home warranty while selling being one).

Good point if you know the area. But if you don't know the area, a truly local realtor in the same town or adjacent town may have all sorts of useful info about neighborhoods and blocks. We learned this the hard way when we used a realtor from the opposite end of the county to buy a home. Things were missed that a local realtor would not have missed.

 

[Plum Street]

Good point if you know the area. But if you don't know the area, a truly local realtor in the same town or adjacent town may have all sorts of useful info about neighborhoods and blocks. We learned this the hard way when we used a realtor from the opposite end of the county to buy a home. Things were missed that a local realtor would not have missed.

Right . That’s why I asked if you “know the area”. Obviously , if you don’t know the area it’s a different story. That’s why I phrased the question that way

 

[Plum Street]

Why not? It doesn’t cost you anything.

Because you can “work” a deal with the seller agent, who now would get the full commission

 

[Knight Shift]

Right . That’s why I asked if you “know the area”. Obviously , if you don’t know the area it’s a different story. That’s why I phrased the question that way

Area needs to be highly local by town. Not the entire county. Not sure I would use a Piscataway realtor to buy in Metuchen or Woodbridge.

 

[RUPete]

Yes. Use a realtor.

Just make sure the realtor is bubble wrapped. You’re welcome @Plum Street

 

[jtung230]

Because you can “work” a deal with the seller agent, who now would get the full commission

So, you like working with dishonest people?

 

[Plum Street]

So, you like working with dishonest people?

Huh ? Didn’t say anyone was dishonest

 

[jtung230]

Huh ? Didn’t say anyone was dishonest

Seller’s agent works for the seller. Shouldn’t be cutting “deals” with the buyer.