On the sell side, an experienced agent can be much more of a help. Even there, we used Redfin the last time we sold, and the difference in commission was a full 2% when compared to a more conventional broker.
I didn't think anything of it since I didn't know anything about furnaces but my realtor put an extra contingency in to get another inspection of it paid for by the seller. The closing was within 30 days and they never got around to it in the week or two left after the first inspection, once I signed it was just forgotten. Maybe it was my job to get them on top of it, but he should have at the least brought it up near the signing to postpone it a day and enforce the contingency.
I ended up replacing it the next year. It wasn't terrible for me since I moved in with extra cash ready for such things, but could have been very bad for someone else who put everything into the down payment.
There were other things he was on top of though. He got the seller to come back and fix some wiring that the inspection had missed free of charge on my part which was fantastic. Not a safety issue, just usability. I didn't like what some of the switches controlled so I know they had no obligation to do it. The company who remodeled my house sells a lot of houses around here, so I suspect he has a rapport with them.
I don't expect their realtor to act in my best interest if so. Our goals aren't aligned. I almost fell into a situation where the realtor I was choosing was the buyers representative as well, which a family member who is a realtor as well as my bank advised was a terrible idea.
If you're proposing that realtors are just half price then I don't have a problem with paying less for things :)
What if you could just buy the house for $282k and never had to have an agent? Perhaps you would have missed these issues. Or more likely you would have Googled for a robust checklist of things to look for in an inspection, and discovered them yourself.
This is a structural reimagining of things could be.
For example my house had a situation with taxes where I had to pay investor rated taxes for a year since it was held by an investor previously. That's the tax rate I see when I look at the MLS. I would have said no to the house if my realtor had not told me the way it worked, and that they would fall off the next year. I don't know that a generic list can capture that since its specific to my locale (or not, I don't know how it works in other places and that's great since I don't have to be an expert on it).
So I too am in the bucket of people who think's the 3% is well worth it. Not to mention the time spent showing houses and the research he did. I get some peoples issue with it being a percentage of the house, but for the house I bought at least, I see no problem with the amount of money he made. If I was buying a million dollar house, I'd probably think differently.
I was just commenting on that even buying a home I would want a realtor, which many people here believe they don't need.
Besides, if you can afford a $2MM house, please don't tell me you'd also be crying about paying a percentage.
At least I think we can agree that buyers and sellers should have choices! Today it is difficult to find anyone who doesn't play by the 6% rule, and realtors like keeping it that way.
I personally think the whole real estate agent thing is a huge scam that will be solved with tech pretty soon. There are already options here for selling your house yourself through a DIY agency that just provides the boiler plate legal papers needed for 1/10th the cost. The only thing a conventional real estate agent does extra on that is pretty much host the showings.
There's nothing stopping you from hiring a real estate lawyer instead of an agent. I'm sure he'll be happy to charge you by the hour.
And also as the buyer, you don't typically pay anything to the agent.
Yes, also that's what the attorney keeps track of.
>Are you going to keep on top of all the other people involved to make sure they're doing their jobs?
Yes, that's what I had to do anyway, even with an agent around.
>Are you going to go through 4000 pages of legal paperwork?
No, and neither does anyone else.
>Are you going to ride the sellers' asses to make sure the sale closes, so you aren't stuck homeless after moving out of your old place?
Sure, if I have to.
>There's nothing stopping you from hiring a real estate lawyer instead of an agent. I'm sure he'll be happy to charge you by the hour.
Depending on the state, you're required to hire an attorney in any case.
The best bang for your buck buying/selling is choosing a great closing office. Even boutique ones tend to be within a margin of cheap ones and their the people making sure everything will be smooth, from loan closing to property transfer.
I'll take 0.25% overhead any day over 6%.
Yeah, but if you use an agent, you can sue them when things go bad. You have to eat your own losses. People often pay others to take on risk.
"Tech Bros" have a stereotype of thinking they can do everything themselves. Sometimes they should maybe step back and acknowledge that someone's profession is a bit more than what they can pick up in the course of reading blogs for a few weeks.
Now, it's understandable that there's plenty of bad real estate agents -- finding a good one can be difficult. And I'm not saying that the industry is perfect, there's certainly room for improvement. I just think that it's unfair to say they don't have value.
Calling a group of people "tech bros" is itself a stereotype.
I'll never understand how anyone can think someone who get's paid only if you agree to a deal could have their best interests in mind.
Even the seller's agent generally have perverse incentives as pushing to close a deal for $N,000 more only get's them $N,000 x %C vs. losing 100% of it if the deal does not close.
You should build a rapport with one you trust. Then they don't get paid until you are happy, since you aren't going to buy something you aren't happy with and they know that. It took 2 or 3 to find one that I felt was working for me. Dragged him to all 20 properties I wanted to see in a day and told him no on everything and that was that, until the one I wanted popped up. Then I let him argue with the seller about things that I wouldn't have any idea how to approach.