Real Estate Crash thread

**4matic** · 03-08-2021, 01:04 PM

Buyer agent can help a lot in a buyers market. In a hot sellers market the need for "agents" is minimized.

**AdironRider** · 03-08-2021, 01:12 PM

Originally Posted by Conundrum

I refuse to do work that would pay me less than the work I'm currently doing. I think most people are like that. Not sure why realtors should be any different. Now, I agree, 6% of what houses are going for these days seems excessive. But, if realtors can justify that money to their customers, they'll probably keep doing what they're doing. Maybe the market won't bear that forever...who knows?

The point is they aren't justifying it, they just steer buyers away from anything that isn't in their best interest. Sure human nature is going to lead towards making the most money, but this isn't just a simple choice people make on value, they are actively being colluded against, notably when better options are available.

I am struggling to figure out a situation where a realtor is providing any value currently that couldn't be done for 1/5 the cost, their hourly rate is astronomical and they aren't exactly saving lives here. The real value is actually done by title and escrow, aka where the real problems financially can arise, which you pay for separately anyways.

**Toadman** · 03-08-2021, 01:14 PM

Originally Posted by 4matic

Agent and I requested a "Property Characteristics" record from the county and it shows the bonus 550 sf added in the 60's so they gave me a bathroom and 550 additional.

A county agent called me to discuss the request. She said Google Earth was showing 350 additional which I said was low but I would accept it. She gave me the full request. Pays to be nice?

We had a similar situation, where the original builder had listed the house with what turned out to be a round up on the Sq footage of the house. So, it actually was about 78 sq. feet less than was on the original MLS listing. Our agent advised us to go with what was on the actual architectural drawings.

She ended up negotiating between two parties that got us full asking. We were ready to settle for about $10k less. Was it worth that 3% commission? We thought so.

But I get that it feels like a monopoly most of the time in the RE agency fee world. It is amazing that Amazon isn't doing their own listings. Maybe when they have milked all other revenue streams they will get into the housing listing biz....

**Conundrum** · 03-08-2021, 01:20 PM

Originally Posted by AdironRider

The point is they aren't justifying it, they just steer buyers away from anything that isn't in their best interest. Sure human nature is going to lead towards making the most money, but this isn't just a simple choice people make on value, they are actively being colluded against, notably when better options are available. .

If this is true, wouldn't the bad realtors stop getting clients due to reputation and if there's notably better options available, the market would correct? Seems like you solve this problem, there's a bunch of money to be made. And if people continue to pay realtor fees, it seems they may find value in the realtors' work. Or why would be people continue to pay it?

I think we all get that you think it's BS. You probably won't use a realtor. There's plenty of people posting who didn't use a realtor and were able to buy and sell. There's also a bunch of people posting that like to use realtors. I've done one house purchase and used a realtor. I'm glad I did and I'm glad the guy got paid. If I were to ever buy and sell again, I'd probably use one but not 100% sure. I guess it depends on what I was trying to do.

**Toadman** · 03-08-2021, 01:25 PM

Some entrepreneur is going to come along and flip the whole RE industry on its head. It will be like Carmax or something. People will start buying houses like cars. Sight unseen. (Not that this isn't happening a lot already) Maybe live in them, maybe rent them. Maybe sit on them like a commodity. Like a luxury commodity...

People will talk about the days of COVID, coup attempts, and 6% RE fees and have a good laugh.

**4matic** · 03-08-2021, 01:39 PM

I think I the revolution starts with title insurance. Make that easier and you have a game changer. It seems like a lot of bureaucracy and cost for such a rarely contested liability.

**4matic** · 03-08-2021, 01:48 PM

Dup....

**schuss** · 03-08-2021, 02:05 PM

Originally Posted by Conundrum

If this is true, wouldn't the bad realtors stop getting clients due to reputation and if there's notably better options available, the market would correct? Seems like you solve this problem, there's a bunch of money to be made. And if people continue to pay realtor fees, it seems they may find value in the realtors' work. Or why would be people continue to pay it?

I think we all get that you think it's BS. You probably won't use a realtor. There's plenty of people posting who didn't use a realtor and were able to buy and sell. There's also a bunch of people posting that like to use realtors. I've done one house purchase and used a realtor. I'm glad I did and I'm glad the guy got paid. If I were to ever buy and sell again, I'd probably use one but not 100% sure. I guess it depends on what I was trying to do.

The challenge is experience. A given person doesn't buy/sell many houses, so they don't have many data points to go on in terms of good vs. bad, so there's no consistent market pressure that chases the bad ones out. In our market, realistically 90% of the listings are 2 realtors that know the local market best. Most stuff is borderline sold on listing day because they have nearly the whole inventory of buyers and sellers interested.
There's a lot wrong with the current process, but it won't be changed without broad-based action to rectify, which means a significant inventory needs to go non-MLS with a different model. Only people that could do that are the banks or a major investing group. The banks don't care as long as they get their loans and their interest. So it continues.

@Toadman - those are called landlords/property holding companies. Also, it's not like Carmax has eliminated dealers. Turns out you cut a bunch of expense out with commission-base as there's no long termed fixed overhead costs.

**AdironRider** · 03-08-2021, 02:21 PM

Originally Posted by Conundrum

If this is true, wouldn't the bad realtors stop getting clients due to reputation and if there's notably better options available, the market would correct? Seems like you solve this problem, there's a bunch of money to be made. And if people continue to pay realtor fees, it seems they may find value in the realtors' work. Or why would be people continue to pay it?

I think we all get that you think it's BS. You probably won't use a realtor. There's plenty of people posting who didn't use a realtor and were able to buy and sell. There's also a bunch of people posting that like to use realtors. I've done one house purchase and used a realtor. I'm glad I did and I'm glad the guy got paid. If I were to ever buy and sell again, I'd probably use one but not 100% sure. I guess it depends on what I was trying to do.

The problem is how many times do you actually use a realtor? This isn't even like buying a car which many people do every couple years. People buy houses a handful of times, at most, in their lifetimes, and most don't even know they are getting hustled.

Edit: Looks like Schuss beat me to it.

**RootSkier** · 03-08-2021, 02:25 PM

Originally Posted by 4matic

I think I the revolution starts with title insurance. Make that easier and you have a game changer. It seems like a lot of bureaucracy and cost for such a rarely contested liability.

It's really not that rarely contested. Title insurance fucks up a lot. I have had this conversation many times and I understand that some states (e.g. Iowa) don't have traditional title insurance, but that requires setting up quite the government bureaucracy to essentially clear up title defects before a conveyance, rather than insuring over those potential defects.

**Kinnikinnick** · 03-08-2021, 02:30 PM

Adiron is right, it IS impossible to negotiate the terms of a listing contract...

If you’re a dumbass

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**Tips^Up** · 03-08-2021, 03:37 PM

Why do we still pay realtors silly high fees? The NRA (guns) spent $1,2M lobbying politicians in DC last year. The NAR (6% cut out of your largest asset) spent $41,2M. Ask not what your lobbyist can do for you, but what you can do for your lobbyist.

https://www.statista.com/chart/22518...8.47%20million.

**Art Shirk** · 03-08-2021, 10:12 PM

To generalize that agents arent worth it is a gross simplification of so many factors, not the least of which is a convenience factor. To generalize that agents are always worth their commission is a gross simplification. Each example of exorbitant ROI for an agent is based on only those instances when the transaction closes and neglects sunk time costs, hard expenses for marketing and unconsummated deals.

I used to be the General Counsel for a Real Estate Investment and Construction company and I still used Oftpiste for a previous listing and gladly paid his fee. I bought another house out of foreclosure last year with an agent and gladly paid her fee. I listed a home for rent recently and used a Property Management company and gladly paid their fee. Too many reasons to list for why that made sense, but I'm not the only one nd I went in with my eyes wide open.

I do think in many instances, alternatives make sense. My buddy has his own Real Estate law firm and does great business helping Seattle Seahawks buy multi-million dollar homes without an agent, and they pay less than if they got stuck with the usual agent fee with the added assurance of a legal eagle in case shit goes sideways with a ton of earnest money on the table.

Another friend founded this joint, which solves a lot of access issues: https://www.mls4owners.com/

Agent bashing is pretty funny to me in a world of easy money ventures to pick from. Yeah, the 23 year old rich kid who never worked a real job before and taps into their parents' network (see: every kid on those reality tv real estate shows) didnt make their bones, but its such a small group and happens in every industry.

**concretejungle** · 03-08-2021, 10:19 PM

Originally Posted by Art Shirk

To generalize that agents arent worth it is a gross simplification of so many factors, not the least of which is a convenience factor. To generalize that agents are always worth their commission is a gross simplification. Each example of exorbitant ROI for an agent is based on only those instances when the transaction closes and neglects sunk time costs, hard expenses for marketing and unconsummated deals.

I used to be the General Counsel for a Real Estate Investment and Construction company and I still used Oftpiste for a previous listing and gladly paid his fee. I bought another house out of foreclosure last year with an agent and gladly paid her fee. I listed a home for rent recently and used a Property Management company and gladly paid their fee. Too many reasons to list for why that made sense, but I'm not the only one nd I went in with my eyes wide open.

I do think in many instances, alternatives make sense. My buddy has his own Real Estate law firm and does great business helping Seattle Seahawks buy multi-million dollar homes without an agent, and they pay less than if they got stuck with the usual agent fee with the added assurance of a legal eagle in case shit goes sideways with a ton of earnest money on the table.

Another friend founded this joint, which solves a lot of access issues: https://www.mls4owners.com/

Agent bashing is pretty funny to me in a world of easy money ventures to pick from. Yeah, the 23 year old rich kid who never worked a real job before and taps into their parents' network (see: every kid on those reality tv real estate shows) didnt make their bones, but its such a small group and happens in every industry.

Did you use an agent on your Mexican time share?

**Art Shirk** · 03-08-2021, 10:34 PM

That was fueled entirely by margaritas

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**Danno** · 03-08-2021, 10:47 PM

So, your agent was named Jose? Last name something like Muervo?

**neufox47** · 03-08-2021, 11:19 PM

Originally Posted by Self Jupiter

FSBO’s have been able to list on MLS for ~10y in MA

I did my own listing in Mass and paid a 2.5% buyers agent fee. Was stupid easy in Mass because you still need an attorney. I’d never use a sellers agent in Mass. Just sold in CA and definitely needed the agent to navigate the bureaucracy. As mentioned using Redfin for the purchase and sale put me at total seller commissions of 3.4%. In Mass I had commissions of 2.5%, $400 in listing fees and sign costs, and $2k to an attorney so about 3.5%.

Redfin is trying to flip the Realtor market on its head. Why anyone would pay 6% or even 5% is beyond me. They did excellent photos, a Matterport (3D image of house), great advertising, etc. We had a dozen showings the first weekend on market.

**easyrdr** · 03-09-2021, 06:31 AM

I've been a broker for 15 years. Not every transaction requires a realtor, but man you better know what you are doing. I have bought and sold many properties and have done a handful of transactions without any realtor at all, which I am comfortable with given my background. What scares me is all the clients I have worked with through the purchase process that don't even know what questions to ask. Many many times I have been the reason my clients did not purchase something they otherwise would have simply because I recommended they ask the seller a few key things. As for commissions, some deals are easy, some are hard, over the long run the commissions balance out. My fee is always negotiable and I am open to all sorts of deals.

My advice to all of you is this. If you are a buyer, get a realtor, you don't pay the fees anyway the seller does. A good realtor is worth every penny. As for sellers negotiate the fee, if a realtor tells you they can't then you found a bad realtor, everything is negotiable. If you want to move forward without one, go for it, there are tons of other platforms to pull it off without a realtor. Just remember if you want to attract the widest range of buyers I would offer a fee to the buyers agent in the listing. If you are in a crazy hot market with tons of buyers then go for it without the fee, you'll probably do okay.

**AdironRider** · 03-09-2021, 09:07 AM

Originally Posted by easyrdr

Just remember if you want to attract the widest range of buyers I would offer a fee to the buyers agent in the listing.

There it is, saying the quiet part out loud.

**RootSkier** · 03-09-2021, 10:25 AM

A house on my street in Missoula listed for $665k this week and had 11 offers, is now under contract for $745k. Fucking $80k over asking and probably all cash, and on a weird triangular lot that is half the size of most. This is not good for anybody.

**anotherVTskibum** · 03-09-2021, 11:08 AM

Originally Posted by RootSkier

A house on my street in Missoula listed for $665k this week and had 11 offers, is now under contract for $745k. Fucking $80k over asking and probably all cash, and on a weird triangular lot that is half the size of most. This is not good for anybody.

Except whomever just sold their weird triangular lot for 3/4 of a million, and probably a realtor or two.

Just saw a classic 80s ski area construction condo, 1 bedroom, under 600 sq ft, listed at $325k. I get supply and demand, but when the building has every corner possible cut during construction (and probably a few more) and every heavy step in the common hallway shakes the place, I kinda wonder about the ability of the building to appreciate indefinitely. There are a few more local listings at the "new normal" prices for condos of similar vintage, I'm wondering if they'll go as quick as the ones listed earlier this year or sit for a while as the lift season is winding down.

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**Conundrum** · 03-09-2021, 11:31 AM

Assessments are a bitch.

**4matic** · 03-09-2021, 11:41 AM

Originally Posted by AdironRider

There it is, saying the quiet part out loud.

REX supposedly eliminates the buyer commission to the seller but it still gets paid. The REX listings I have seen are way under priced and don’t sell quickly.

**RootSkier** · 03-09-2021, 11:56 AM

Originally Posted by anotherVTskibum

Except whomever just sold their weird triangular lot for 3/4 of a million, and probably a realtor or two.

Massively high prices are not necessarily great for sellers who are staying in the same area. I am sure the two realtors are happy but the 10 whose offers were rejected can't find houses for their clients, so even they are pissed off.

**Whiteroom_Guardian** · 03-09-2021, 11:58 AM

Originally Posted by anotherVTskibum

Except whomever just sold their weird triangular lot for 3/4 of a million, and probably a realtor or two.

Just saw a classic 80s ski area construction condo, 1 bedroom, under 600 sq ft, listed at $325k. I get supply and demand, but when the building has every corner possible cut during construction (and probably a few more) and every heavy step in the common hallway shakes the place, I kinda wonder about the ability of the building to appreciate indefinitely. There are a few more local listings at the "new normal" prices for condos of similar vintage, I'm wondering if they'll go as quick as the ones listed earlier this year or sit for a while as the lift season is winding down.

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440sf 1970s construction walk to the base area condos at Big Sky are about to break the $300k mark.

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