From the rise of the iBuyers, Zillow looking to flip houses, and now Amazon partnering with a behemoth brokerage, is this the beginning of the end?
https://www.wsoctv.com/news/local/amazon-real-estate-giant-look-to-disrupt-homebuying-in-charlotte-elsewhere/969773302
If all buyers and sellers were fluent in the practice of real estate, perhaps agents and brokers will end up like buggy whip manufacturers. But most buyers and sellers are not experienced with the process and market values as a full-time professional and experienced agent. Most real estate clients and customers need help to close a property. Let's revisit this topic in the middle of the next market downturn to see who is left standing when all the SHTF.
Analytics are great, but real estate has always been and still remains a local business, margins and commission rates notwithstanding.
My wife is a top producing resi agent with many first time home buyers.. I listen to her on the phone sometimes and the amount of handholding that goes on.. not just from technical aspects IE the general public has very little working knowledge how real estate works.. but just the emotional hand holding.. IE dealing with inspections.. you leave it to people with no intermediary and transactions volume will plummet..
I tried to get @Casey Powers to list one of my properties for 1% to no luck. Could have saved me like $5k. Darn.
Agents will always be needed. I listen to too many coworkers talk about buying and selling houses and I know they absolutely need an agent to help them with the transaction. Agents provide a lot of value to the first time home buyers.
For investors, they're seen as a necessary evil. We take on all the risk, dealing with tenants, dealing with repairs, paying bills, etc and they just enter in the picture at the last minute. They make 3% of OUR PROFIT! Which is why we all go and get our license and keep the money. And then end up as a statistic in Casey's post haha.
@Greg Kapourellos
If anything it would be the end of Zillow, Trulia, or any of those real estate websites. If I was those companies, I would be shaking in my boots knowing Amazon is the new player in town.
I tried to get @Casey Powers to list one of my properties for 1% to no luck. Could have saved me like $5k. Darn.
Agents will always be needed. I listen to too many coworkers talk about buying and selling houses and I know they absolutely need an agent to help them with the transaction. Agents provide a lot of value to the first time home buyers.
For investors, they're seen as a necessary evil. We take on all the risk, dealing with tenants, dealing with repairs, paying bills, etc and they just enter in the picture at the last minute. They make 3% of OUR PROFIT! Which is why we all go and get our license and keep the money. And then end up as a statistic in Casey's post haha.
Ummm, agents aren't "entering at the last minute to take your profit". That's the completely wrong way to look at it. Agents provide value to investors as well. You wouldn't have sold your POS 4plex at a profit if you hadn't used an agent to get a buyer willing to pay retail price, AND help you close the deal correctly. If you had tried selling it yourself, you would've ended up with a lowball offer from one of the many vultures looking to take advantage of your need to offload a bad property.
Sorry, I am not the least bit interested in devaluing my service. You said you paid pretty much the "customary" rate to your realtor buddy, after I pointed out you could take advantage of the vacant unit to market to FHA buyers for potentially more money. Sooo, that was at least the second time I gave value to you and you haven't paid me a penny.
Not sure why you want to insist good agents are anything but valuable, whether to investors or first time buyers ;-)
Perhaps you should throw me a bone and send me a referral or something, just for giggles. HAHAHAHA
When I was house shopping we found 2 homes in the subdivision we wanted to live in. Both were FSBO. I was renting in the neighborhood and befriended my next door neighbor, who was an agent. The first place we fell in love with but the owner would not agree to work with an agent. She didn't want to pay the 3% commission(half for buyer's agent). My agent asked her office if she could discount the commission but they denied the request. At the end of the day, it came down to me deciding as a buy that I was the one assuming all the risk and I wanted representation. My wife found our current home that happened to be on the same street our agent and us both lived on. The seller had the buyers agent commission figured in his asking price and the whole process went smooth.
The home next to my in-laws just went pending. Looked like parents built it (2012) to get their kids out of the house. for 7 years the place looked like crap. Next thing I knew, the place was listed and the staging looked incredible! The agent may get 3% of the 300k it went for but without the marketing and prep, that place was 280k tops.
No idea why you’re conflating title fees with real estate agents.
I'm not conflating anything. I'm pointing out an antiquated industry ripe for disruption. Do buyers/sellers have the right to choose their own title company/escrow agent? Sure. Do they EVER? No. They go with whoever the listing broker gets a kickback from. Then you have to pay for a bunch of old-school albeit currently necessary "services". Don't get me wrong, they provide a valuable and necessary service, but it's far from without fault. For instance, it's almost malpractice that 9/10 the buyer or seller (usually never both) show up at closing and have to sign a stack of papers they have never read nor will ever see again. Is this really the best for the consumer? Tech will make this process cheaper, faster, and hopefully more empowering to the consumer. Blockchain title registries are the future. There are already entire countries using blockchain for title registry. Good news: its going to be much simpler and cheaper to buy/sell property.
The first place we fell in love with but the owner would not agree to work with an agent. She didn't want to pay the 3% commission(half for buyer's agent). At the end of the day, I wanted representation. My wife found our current home. The seller had the buyers agent commission figured in his asking price and the whole process went smooth.
The agent may get 3% of the 300k it went for but without the marketing and prep, that place was 280k tops.
I don't often see retail home buyers here so I wanted to ask you, Benjamin. Buyers agents always say their services to their buyer are 'free.' When the FSBO didn't want to pay your agent, did you consider adding 3% to your offer? Did you consider your buyers agent was 'free'? I assume not, realizing your current home was purchased 'with the buyers agent commission figured in.'
Was the FSBO equivalent or similar to the $280k FSBO vs $300k listed and staged house? Yes of course the listing agent added $2-$6k of net value to the seller, but wouldn't you rather have captured that $20k in equity as the buyer? The marketing and staging are obviously no value to you as the buyer either way.
I always price what I'd net FSBO, letting the buyer add their agent and closing costs to their offer if they want them. They have the choice to capture equity or go with the status quo. Thank you for any insight here.
No idea why you’re conflating title fees with real estate agents.
I'm not conflating anything. I'm pointing out an antiquated industry ripe for disruption. Do buyers/sellers have the right to choose their own title company/escrow agent? Sure. Do they EVER? No. They go with whoever the listing broker gets a kickback from. Then you have to pay for a bunch of old-school albeit currently necessary "services". Don't get me wrong, they provide a valuable and necessary service, but it's far from without fault. For instance, it's almost malpractice that 9/10 the buyer or seller (usually never both) show up at closing and have to sign a stack of papers they have never read nor will ever see again. Is this really the best for the consumer? Tech will make this process cheaper, faster, and hopefully more empowering to the consumer. Blockchain title registries are the future. There are already entire countries using blockchain for title registry. Good news: its going to be much simpler and cheaper to buy/sell property.
DUDE you have no clue how all this real estate brokerage works.. there are no kick backs from title companies.. who told you that ? its totally illegal for them to do that.. they can however have robust customer service departments and do things for top producers and not charge its totally customary in our market you can call customer service and get a trio on any property in 60 seconds for free.. its a copy of the last recorded deed plat map and tax page from the assessor.. and further more for developers like us we can get a developers package that is free.. but we don't get any kind of kick backs.. that just silly and just gossip.
I personally close between 5 and 20 transactions a month as seller or buyer or both.. I NEVER go to the title company.. and many are using DocuSign and can record scanned Deeds don't even need originals.. now East coast is a little different or let me say Attorney closing states.
In those states buyer has their own attorney and seller has their own attorney no one is steering.. out here in the west on the listings there is escrow preference and it goes that way most of the time.. Like when I am selling one of our communities I have master files set up at my title company I pre sign all the deeds etc.. so I can DocuSign everything else.. But the buyer can run through their own and coordinate with ours if they like but its on their dime.
Also title insurance is regulated by the insurance commission.. ALL insurance is the same price.. what you can negotiate though is on escrow functions.. And I do negotiate on those.. we read the settlement statements there Is no question they try to pop in little charges and I get them removed. LOL..
but for your average I buy one or two houses or properties in a year.. maybe they don't know better. Like you thoughts that title companies get kick backs your just regurgitating something you heard and what you heard is BS.. LOL.
I didn't mean they were literally dropping off a suitcase of cash. Just because a relationship is disclosed, still doesn't mean the consumer is getting the best deal. I'm also sure everyone always acts in good faith, right? LOL
I didn't mean they were literally dropping off a suitcase of cash. Just because a relationship is disclosed, still doesn't mean the consumer is getting the best deal. I'm also sure everyone always acts in good faith, right? LOL
Greg title co and title insurers are heavily regulated.. you think they are going to risk their licenses to get a 50 dollar kick back..
Title insurance is regulated escrow functions are negotiated.. some will some wont .. but it not as you describe.. your running on rumor an gossip and just repeating it.. I have bought property in foreign countries.. this was before block chain but its the same basic process other than a notary is more like an attorney than our versions.
Buyers and sellers are behaving completely rationally working with the full price brokers...once you are off this sight how many houses does a typical person buy/sell in a lifetime? 2? 3?
It’s simply not worth learning the ins and outs of the transaction process, one that heavily favors local knowledge, for that few number of transactions that are years or decades apart. Add to that the emotional component and the fact this is typically the largest purchase someone will make and it’s easy to see why people aren’t that price sensitive and why outside/expert help is considered useful.
I didn't mean they were literally dropping off a suitcase of cash. Just because a relationship is disclosed, still doesn't mean the consumer is getting the best deal. I'm also sure everyone always acts in good faith, right? LOL
Greg title co and title insurers are heavily regulated.. you think they are going to risk their licenses to get a 50 dollar kick back..
Title insurance is regulated escrow functions are negotiated.. some will some wont .. but it not as you describe.. your running on rumor an gossip and just repeating it.. I have bought property in foreign countries.. this was before block chain but its the same basic process other than a notary is more like an attorney than our versions.
Im not trying to be mean, but with every post in this thread Greg illustrates a huge lack of knowledge of how the industry works. Zillow will replace agents..yeah thats how they make money, they literally would not exist without agents giving them money....title company kickbacks, yeah you end up in federal prison for that. Thats perhaps one of the most regulated things in real eatate is them looking for respa violations.
Buyers and sellers are behaving completely rationally working with the full price brokers...once you are off this sight how many houses does a typical person buy/sell in a lifetime? 2? 3?
It’s simply not worth learning the ins and outs of the transaction process, one that heavily favors local knowledge, for that few number of transactions that are years or decades apart. Add to that the emotional component and the fact this is typically the largest purchase someone will make and it’s easy to see why people aren’t that price sensitive and why outside/expert help is considered useful.
EXACTLY BP is an investor site with investor bias its not the other 80% of all transactions.. so as investors get more savvy they can represent themselves no problem.. and many get their license to have access to MLS list their own deals.. save on commish.. your average home buyer is not going to get a license just to buy an SFR to live in.. with the exception of the SF bay area I bet people do do that there.. all those smart tech guys/gals.
I didn't mean they were literally dropping off a suitcase of cash. Just because a relationship is disclosed, still doesn't mean the consumer is getting the best deal. I'm also sure everyone always acts in good faith, right? LOL
Greg title co and title insurers are heavily regulated.. you think they are going to risk their licenses to get a 50 dollar kick back..
Title insurance is regulated escrow functions are negotiated.. some will some wont .. but it not as you describe.. your running on rumor an gossip and just repeating it.. I have bought property in foreign countries.. this was before block chain but its the same basic process other than a notary is more like an attorney than our versions.
Im not trying to be mean, but with every post in this thread Greg illustrates a huge lack of knowledge of how the industry works. Zillow will replace agents..yeah thats how they make money, they literally would not exist without agents giving them money....title company kickbacks, yeah you end up in federal prison for that. Thats perhaps one of the most regulated things in real eatate is them looking for respa violations.
Totally Dude... general public has no clue LOL..
@Russell Brazil
Hey Russ, not trying to be mean, but you show a huge lack of knowledge how technology disruption works. For one, you completely miss the boat on why Amazon is entering the space. Don’t believe me? Talk in two years. You keep talking about Zillow and Amazon needing agents. Is that why Opendoor is buying 3k houses per month? Zillow is expanding direct offers to like 20 markets next year. I’m not saying agents will go extinct, but if you don’t think things are changing, keep your head in the sand.
The first place we fell in love with but the owner would not agree to work with an agent. She didn't want to pay the 3% commission(half for buyer's agent). At the end of the day, I wanted representation. My wife found our current home. The seller had the buyers agent commission figured in his asking price and the whole process went smooth.
The agent may get 3% of the 300k it went for but without the marketing and prep, that place was 280k tops.
I don't often see retail home buyers here so I wanted to ask you, Benjamin. Buyers agents always say their services to their buyer are 'free.' When the FSBO didn't want to pay your agent, did you consider adding 3% to your offer? Did you consider your buyers agent was 'free'? I assume not, realizing your current home was purchased 'with the buyers agent commission figured in.'
Was the FSBO equivalent or similar to the $280k FSBO vs $300k listed and staged house? Yes of course the listing agent added $2-$6k of net value to the seller, but wouldn't you rather have captured that $20k in equity as the buyer? The marketing and staging are obviously no value to you as the buyer either way.
I always price what I'd net FSBO, letting the buyer add their agent and closing costs to their offer if they want them. They have the choice to capture equity or go with the status quo. Thank you for any insight here.
In my case, the seller was fine with me offering above asking price to cover my agent's commission. Unfortunately that put the house out of my budget. Looking back, I wish I would have done the deal as the home was better for us that where we are now. That said, I bought my current home when the market was just starting to get competitive again. Our offer was full asking plus half of closing costs, with the seller paying all closing so no one had to write checks in the deal. We were aggressive but the house is great and appreciation has taken care of us. My point is that as someone who had been through a short sale and just starting to rebuild, I didn't want to put my name on the largest commitment of my life without a fiduciary. Because I have a relationship with my agent, I felt better about the transaction. Now that I am looking to invest, my strategy will change based on my desired outcome.
The first place we fell in love with but the owner would not agree to work with an agent. She didn't want to pay the 3% commission(half for buyer's agent). At the end of the day, I wanted representation. My wife found our current home. The seller had the buyers agent commission figured in his asking price and the whole process went smooth.
The agent may get 3% of the 300k it went for but without the marketing and prep, that place was 280k tops.
I don't often see retail home buyers here so I wanted to ask you, Benjamin. Buyers agents always say their services to their buyer are 'free.' When the FSBO didn't want to pay your agent, did you consider adding 3% to your offer? Did you consider your buyers agent was 'free'? I assume not, realizing your current home was purchased 'with the buyers agent commission figured in.'
Was the FSBO equivalent or similar to the $280k FSBO vs $300k listed and staged house? Yes of course the listing agent added $2-$6k of net value to the seller, but wouldn't you rather have captured that $20k in equity as the buyer? The marketing and staging are obviously no value to you as the buyer either way.
I always price what I'd net FSBO, letting the buyer add their agent and closing costs to their offer if they want them. They have the choice to capture equity or go with the status quo. Thank you for any insight here.
In my case, the seller was fine with me offering above asking price to cover my agent's commission. Unfortunately that put the house out of my budget. Looking back, I wish I would have done the deal as the home was better for us that where we are now. That said, I bought my current home when the market was just starting to get competitive again. Our offer was full asking plus half of closing costs, with the seller paying all closing so no one had to write checks in the deal. We were aggressive but the house is great and appreciation has taken care of us. My point is that as someone who had been through a short sale and just starting to rebuild, I didn't want to put my name on the largest commitment of my life without a fiduciary. Because I have a relationship with my agent, I felt better about the transaction. Now that I am looking to invest, my strategy will change based on my desired outcome.
Gotcha. Thank you.
More than half of my buyers choose to offer higher and pay for their own agent. Some don't but really should. It is much smoother and easier on me if they do.
So anybody that thinks having a buyer's agent is free can ask Ben or I if that is so. The buyer pays, but it's financed over 30 years and hidden.
My home was not purchased with an investor's mindset. It came down to how bad do we want it. The market was in favor of the seller and I wanted it bad enough so we were aggressive. Thinking back, I may have been able to save 3-5 grand but I wanted the seller to look at my deal and pull the listing that day. He did and we got the place. In the long term, we're talking a few bucks a month extra to buy happiness. like I mentioned before, I wish I had done this with the other property as it offered more but it was 20k higher in price and I didn't think I could cover it.
My home was not purchased with an investor's mindset. It came down to how bad do we want it. The market was in favor of the seller and I wanted it bad enough so we were aggressive. Thinking back, I may have been able to save 3-5 grand but I wanted the seller to look at my deal and pull the listing that day. He did and we got the place. In the long term, we're talking a few bucks a month extra to buy happiness. like I mentioned before, I wish I had done this with the other property as it offered more but it was 20k higher in price and I didn't think I could cover it.
Yep. I wanted to ask you because you were a retail home buyer.
The true cost to me was the house you should have bought, but glad market appreciation covered your later purchase.
The next time you hear an agent say 'no harm in getting an agent, it's free/No cost to you' you know better. I'll be the one hunched over dry heaving :)
No idea why you’re conflating title fees with real estate agents.
I'm not conflating anything. I'm pointing out an antiquated industry ripe for disruption. Do buyers/sellers have the right to choose their own title company/escrow agent? Sure. Do they EVER? No. They go with whoever the listing broker gets a kickback from. Then you have to pay for a bunch of old-school albeit currently necessary "services". Don't get me wrong, they provide a valuable and necessary service, but it's far from without fault. For instance, it's almost malpractice that 9/10 the buyer or seller (usually never both) show up at closing and have to sign a stack of papers they have never read nor will ever see again. Is this really the best for the consumer? Tech will make this process cheaper, faster, and hopefully more empowering to the consumer. Blockchain title registries are the future. There are already entire countries using blockchain for title registry. Good news: its going to be much simpler and cheaper to buy/sell property.
Sweety, we do not get kickbacks from title companies. We cannot. You are definitely conflating title fees with real estate agent commissions. These are completely separate with zero relation to each other.
Most half decent agents do have a favorite title rep that they have used on multiple transactions and trust them to do a good job in a timely manner. However, OF COURSE buyers and sellers can choose their own title company/rep and some do. I have represented some clients who did that, and seen some folks on the other side do it too. I’ve had a couple deals where the buyer insisted on changing title companies mid-transaction to use the title company and rep their hard money lender required. In THAT specific case, I am sure the private lender is getting a kickback by requiring their reps be used or they won’t fund. But once again, REAL ESTATE AGENTS ARE NOT GETTING KICKBACKS FROM TITLE. They cannot. I always tell people they can choose whoever they want.
I also ALWAYS encourage clients to read before signing, and I show up at the signing to help explain things, go over the HUD and verify that etc. The title rep ALWAYS provides a copy of the entire signed document package to the client, so if they never see it again, that is THEIR fault. I have no idea why you're claiming they don't get to read documents or never see them after signing.
All this tells me you have probably never done a deal in your life and are just making wild accusations based on fear and negative propaganda.
It is not hidden. It most often comes out of seller proceeds so the buyer usually doesn't gave to pay for it out of pocket. It is fully disclosed on the HUD for everyone and any half decent buyer's agent gets a buyer brokerage agreement up front in which the buyer agrees to pay a certain rate or fee, where they make up the difference if the MLS coop is too low or if the FSBO won't pay anything.
Why do so many people insist on spreading such lies?
It is not hidden. It most often comes out of seller proceeds so the buyer usually doesn’t gave to pay for it out of pocket.
Why do so many people insist on spreading such lies?
I was done and ready to let this lame horse die. Doesn't affect me anyway. But spreading such lies? Surely then you are accusing every agent that says to "Get a buyer's agent. Why not? Our services are free / No cost to you!" Whose lying there? I wouldn't care if I hadn't seen it on these forums so often.
At least you mention the buyer doesn't have to pay out of pocket. That's key and much different than the buyer doesn't have to pay at all.
And how is it not hidden when commissions only show as coming out of the seller proceeds on the Hud1 or settlement sheet? Who funded the purchase so the seller has proceeds to begin with? Oh yeah. The buyer. In the 1% or whatever of transactions that aren't standard I suppose there is an item for buyer- paid commissions filled out. Immaterial.
I'm sure you're great at what you do, Casey, but taking one sentence out of my post and calling me a liar here when your entire industry says buyers agents are free to the buyer is a joke.
I don't think the Real Estate Commission is going anywhere anytime soon (the ones that protect the public from brokers and agents).
Maybe the REC will require all individuals that close more than a couple of RE transactions a year be licensed and they can hire on the out of business agents to monitor real estate e-commerce for violations and unethical practices.
@Greg Kapourellos
@Greg Kapourellos
I've said it for years. The only thing that is keeping Realtors alive is the MLS. We control the MLS, once we lose that, the need for a realtor will be non-existent. Is that a bad thing? Yes. The majority of the consumers have no knowledge of real estate regardless of thier experience. Time will tell.
I skipped to the end of the thread, sorry...
I think the internet will continue to change how we all do business, and real estate will not be spared. What will that look like exactly? I dunno. That said, at the very least, buyers are still going to want to actually see a property on-site before they buy, so I don't see how agents will ever go extinct. I say that because there is value in having a person who knows about real estate there for you to take you around and help you navigate negotiations and contracts. I think that goes for sellers too, but maybe to a smaller degree? We shall see.
Don't bother me a bit to hire a realtor to sell my property for me. It's a lot of work. I also like the idea of having someone coordinate multiple showings for me when I want to buy, and be there as a second set of eyes and opinion, and draw all the paperwork up for me to sign.