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Comment by blindriver | Hacker News Reader

Some realtors are worth it.

We sold and bought our house in 2021. We bought for $1 million and sold for almost $3 million over 8 years. When it came time to selling the house, my realtor was able to extract an extra $100k from the buyers as well as make it an all-cash offer with no contingencies.

When we bought our new house later that year, the house we were looking at was on the market for about a month. We were going to give an offer at list price, but she could tell the selling agent was a bit desperate, so she was able to get it $100k below list price, something that is unheard of in the SF Bay Area.

Overall she netted us $200k over both transactions, and she was singlehandedly the reason for this. That's what you get when you have a really good agent.

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"Extract" is the key word here

Assuming 6% (3% * 2) and assuming you bought again at $3M, the agent made $180,000 off you, saving you only $20k.

Now you may have been able to do this with a discount broker or not, nobody will know. But they didn't net you $200k.

The flip side, if we had listened to our agent's advice we'd not have (1) landed the house we love (2) sold our prior house.

Particularly, on the sale, we kept hearing "wait, you'll get more offers. wait, you'll get more offers. AirBnB investors are going to love this". No other offers turned up.

Sure, there are great realtors and there are a lot of terrible realtors. A great realtor is worth it.

And the qualification for becoming one is largely liking money, not any sort of training and functional education.

Smart, observant, motivated people generally improve outcomes regardless of what they are involved in. There are amazingly good thieves, con artists and pimps, but is that something we want people pursuing professionally?

The realtor we got was fantastic. She took care of everything, and we had through her a great loan company, and everything was just taken care of. Would not dream of buying or selling without an agent. It's just too much hassle, and I don't have the expertise

3% of a $1M house is $60,000. That's bonkers almost any way you slice it: effort, expertise, or value-add. And that's just one side of the usual commission!

The process _could_ be streamlined and made less of a hassle, but since so many take a cut, there are perverse incentives.

I skew progressive/liberal on many policy issues, but on this one, I'm fiercely in favor of the libertarian argumentation. Realtors have an eff-ing insane monopoly / cartel. Sorry, it makes me crazy.

If you go back in time and/or to some markets, 3% of a $100,000 house = $6,000. That makes a bit more sense in terms of hourly compensation.

It's 30k and 3k respectively if you're talking about one side.

3% of 1 million is $30,000 not $60,000. Similarly, 3% of 100,000 is $3000 and not $6000.

But I agree with your overall sentiment that the real estate market is a cartel.

That’s why you get when you have low interest rates

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