Nuking the buy/sell a home model...

[purplefaithful]

Well, this is going to change things up....

The 6% commission, a standard in home purchase transactions, is no more.In a sweeping move expected to dramatically reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commissions.
The NAR, which represents more than 1 million Realtors, also agreed to put in place a set of new rules. One prohibits agents’ compensation from being included on listings placed on local centralized listing portals known as multiple listing services, which critics say led brokers to push more expensive properties on customers. Another ends requirements that brokers subscribe to multiple listing services — many of which are owned by NAR subsidiaries — where homes are given a wide viewing in a local market. Another new rule will require buyers’ brokers to enter into written agreements with their buyers.
The agreement effectively will destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer’s broker, which critics say have driven housing prices artificially higher.
By some estimates, real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights. This will open up opportunities for alternative models of selling real estate that already exist but don’t have much market share, including flat-fee and discount brokerages.
Shares of real estate firms Zillow and Compass both fell by more than 13% Friday as investors feared that lower commission rates for agents could lead to less business for real estate platforms.
In a 10-K filing last month, Zillow warned that, “if agent commissions are meaningfully impacted, it could reduce the marketing budgets of real estate partners or reduce the number of real estate partners participating in the industry, which could adversely affect our financial condition and results of operations.”
Shares of real estate brokerage Redfin also fell nearly 5%.
Meanwhile, homebuilder stocks rose on the news: Lennar shares gained 2.4%, PulteGroup shares added 1.1% and Toll Brothers shares added 1.8%.
For the average-priced American home for sale — $417,000 — sellers are paying more than $25,000 in brokerage fees. Those costs are passed on to the buyer, boosting the price of homes in America. That fee could fall by between $6,000 and $12,000, according to TD Cowen Insights’ analysis.
“While the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost,” said Kevin Sears, president of the NAR, in a statement.
https://www.cnn.com/2024/03/15/economy/nar-realtor-commissions-settlement/index.html

[Guest]

It should be changed. Potential buyers can do SO much due diligence online before seeing a home today that where is the value they USED to provide before the Internet? The buying/selling paperwork is boilerplate and if you are borrowing money, the bank takes care of most of it. Paying commission for both buying AND selling? Screw that. Homeowners are legally required to disclose issues, if they don't, then they can be easily sued and will lose. Buyer's remorse? Just wait for the inspection, they will find at a minimum some things wrong and you just say at that point that you aren't comfortable with those and want out of the contract. Done and done. Seriously: if during inspection the inspector says the toilet is running because of a faulty tank valve, you can get out of a home contract.

Trust me on this: I've bought and sold 6 houses and built another one in the last 21 years in several states. Realtors provide minimum value today. 

[Guest]

@StickyBun said:
It should be changed. Potential buyers can do SO much due diligence online before seeing a home today that where is the value they USED to provide before the Internet? The buying/selling paperwork is boilerplate and if you are borrowing money, the bank takes care of most of it. Paying commission for both buying AND selling? Screw that. Homeowners are legally required to disclose issues, if they don't, then they can be easily sued and will lose. Buyer's remorse? Just wait for the inspection, they will find at a minimum some things wrong and you just say at that point that you aren't comfortable with those and want out of the contract. Done and done. Seriously: if during inspection the inspector says the toilet is running because of a faulty tank valve, you can get out of a home contract.

Trust me on this: I've bought and sold 6 houses and built another one in the last 21 years in several states. Realtors provide minimum value today. 

Yup. We check houses for sale all the time.  we are currently looking at a home with a detatched ohana (we currently own a home where the ohana is attached).  Ohana means “family” and it is a self contained structure for a family member that includes a separate bedroom, kitchen, bath, family room, laundry.  Midwest called a “granny flat” I think?

Anyway, we found a nice place, but to sell our home currently, the selling agent (and whoever else has to get greased) would cost us $100k.  Given THOSE costs, it puts us out of buying the house we wanted.

.....a lot of money to post a listing on the internet, and hammer a sign on the front lawn, and hold a couple open houses.

glad changes are forthcoming, now, lets do something about those interest rates

[Guest]

@Vanguard83 said:

@StickyBun said:
It should be changed. Potential buyers can do SO much due diligence online before seeing a home today that where is the value they USED to provide before the Internet? The buying/selling paperwork is boilerplate and if you are borrowing money, the bank takes care of most of it. Paying commission for both buying AND selling? Screw that. Homeowners are legally required to disclose issues, if they don't, then they can be easily sued and will lose. Buyer's remorse? Just wait for the inspection, they will find at a minimum some things wrong and you just say at that point that you aren't comfortable with those and want out of the contract. Done and done. Seriously: if during inspection the inspector says the toilet is running because of a faulty tank valve, you can get out of a home contract.

Trust me on this: I've bought and sold 6 houses and built another one in the last 21 years in several states. Realtors provide minimum value today. 

Yup. We check houses for sale all the time.  we are currently looking at a home with a detatched ohana (we currently own a home where the ohana is attached).  Ohana means “family” and it is a self contained structure for a family member that includes a separate bedroom, kitchen, bath, family room, laundry.  Midwest called a “granny flat” I think?

Anyway, we found a nice place, but to sell our home currently, the selling agent (and whoever else has to get greased) would cost us $100k.  Given THOSE costs, it puts us out of buying the house we wanted.

.....a lot of money to post a listing on the internet, and hammer a sign on the front lawn, and hold a couple open houses.

glad changes are forthcoming, now, lets do something about those interest rates

All politics aside, my hope is that inflation cools to the point where the Fed will start to cut rates in 24.

If I was a betting man? That wont happen till Q3. 

[Guest]

@purplefaithful said:

@Vanguard83 said:

@StickyBun said:
It should be changed. Potential buyers can do SO much due diligence online before seeing a home today that where is the value they USED to provide before the Internet? The buying/selling paperwork is boilerplate and if you are borrowing money, the bank takes care of most of it. Paying commission for both buying AND selling? Screw that. Homeowners are legally required to disclose issues, if they don't, then they can be easily sued and will lose. Buyer's remorse? Just wait for the inspection, they will find at a minimum some things wrong and you just say at that point that you aren't comfortable with those and want out of the contract. Done and done. Seriously: if during inspection the inspector says the toilet is running because of a faulty tank valve, you can get out of a home contract.

Trust me on this: I've bought and sold 6 houses and built another one in the last 21 years in several states. Realtors provide minimum value today. 

Yup. We check houses for sale all the time.  we are currently looking at a home with a detatched ohana (we currently own a home where the ohana is attached).  Ohana means “family” and it is a self contained structure for a family member that includes a separate bedroom, kitchen, bath, family room, laundry.  Midwest called a “granny flat” I think?

Anyway, we found a nice place, but to sell our home currently, the selling agent (and whoever else has to get greased) would cost us $100k.  Given THOSE costs, it puts us out of buying the house we wanted.

.....a lot of money to post a listing on the internet, and hammer a sign on the front lawn, and hold a couple open houses.

glad changes are forthcoming, now, lets do something about those interest rates

All politics aside, my hope is that inflation cools to the point where the Fed will start to cut rates in 24.

If I was a betting man? That wont happen till Q3. 

All politics aside, who could have imagined consumers would continue to spend money as the Fed continued to make it so expensive to do so? People have lost their minds with travel the last year or two....they don't care what it costs and its probably never cost more to do so. Personal debt is way up. People under like 35 years old are like 'fuck it'....I'm traveling, you only live once. It's nuts. Revenge travel since COVID continues, but I think might be finally slowing a bit just very recently.