Comment by k2xl | Hacker News Reader

Comment by k2xl | Hacker News Reader

Ever since I bought my first house I have always hated the concept of realtors. Maybe before the internet it made sense because it wasn't easy finding houses. But what value does a realtor actually bring in the age of Zillow, Redfin, etc...

Also - the percent structure has never made sense to me. Why should a realtor make more money just because the house is more expensive? Does a realtor really deserve to make 60k on a 2 million dollar home sale? Did they really bring twice as much value as a 1 million dollar home sale?

I'm not saying that realtors don't have _any_ value. Yes if you are unfamiliar with an area it is nice to have someone who is familiar with the area help you look for a home. But with the internet this is nowhere near worth points of a sale of a home.

And yes, they can negotiate for you - this has value too... But is the delta of their negotiation skills worth 6% of the home value??

When I sold my home I was also frustrated. I remember when I looked for a realtor to sell my home they tried to convince me they have additional avenues they would sell beyond what me listing myself could do. "We will get your home on our LinkedIn page! On our monthly magazine!" Really? Have you ever heard of anyone buying a home from a LinkedIn page?

The percentage structure - while I want to agree with you, we can then look to things like ... the struggle now of delivery food percentages and tipping. If I order a $15 pizza and tip $3, I'm tipping 20%, but that is seen as "cheap" for a tip in 2023... yet if I order a $4,000 bottle of wine at dinner, and tip 20%, the staff will enjoy an $800+ tip for that meal. Worth 20% to pop the cork, really?

what are you talking about. 20% is still standard, and of course you don't tip 20% if for some reason you order a 4,000 bottle of wine, except also, if you do that, tip whatever you want, what do you care, you have 4,000$ to burn.

My parents recently sold their place in the Netherlands. They talked to several agents about representing them. Agents take a cut of the sales price. Buyers also need to use agents and since housing is scarce in the Netherlands, you pretty much have to rely on agents to find a place.

Where it gets sketchy is when those agents are friends with each other. A lot of deals get made before the property is even listed online. So, what my parents experienced was that they were quoted valuations of their property that had about a 20% bandwidth. 20% is a lot. Nearly 100K euros in this case They went with the highest valuation in the end. It sold within a week slightly above what they asked. This is normal in the Dutch market currently. Prices briefly dipped last year and then continued growing. Even the increased interest of mortgages has so far not changed that.

So, what was going on with those other agents deliberately low balling the price?

The interests of agents are not always aligned with their clients. They are either working for the buyer or seller. And they do each other favors. Like letting each other know when something hot (i.e. priced below market value) comes up for sale or convincing a seller to agree to a lower valuation. So, there are conflicts of interest. And sometimes they just need the money and getting the property sold quickly is worth more to them than having to put in work to sell at a higher price. Another factor is that when property comes back on the market, the same agents are often involved. So, there's a bit of double dipping happening there. Help a client buy cheap, and a few years later help them sell expensive. In a market with ever growing real estate prices that's the game.

I bought on short sale and my realtor made it happen. Made $180,000 when I sold that place.

Used the same realtor buying the next place, it was down to 8 people that put offers in on the only day showing. We got it because she knew a couple of tricks, one not exactly ethical.

She is a family friend and normal people would have got 1/2 the work from her.

A hardworking realtor can absolutely make a difference. Good luck finding one!

Of course it is very zero sum and sharky. If you get a place below market value or sell it above that is great for you but someone else has to lose. So all these commissions are taken from all and the mean average person has no advantage. Bad value for money on average.

Ah, but you didn't get a hardworking realtor, you got a family friend to break the rules just for you. You even admit that no one else would have gotten the same deal that you did.

There doesn't seem to be any luck available.

Isn’t some gotcha. You’re just rewording what I wrote as if it was. If you got a hard-working realtor, they could do the same things that our realtor did, because they were friendly.

It isn't a gotcha at all.

They save you maybe like 2-5000 worth of time sometimes if you have a good, knowledgeable realtor who has done their homework.

Beyond that, 6% is obviously asinine.

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