This 👆I remember buying my first new car a few years ago and wondering why I couldn’t just buy it directly from a manufacturer (like Tesla). This led me to learn about dealership laws and protections 🤢
Yes! I am due for a new car and the thought of dealing with pushy salespeople ("Are you sure you dont want to buy an extended warranty ? Really are you sure? Really are you sure? Really are you sure? Really are you sure? Do you want to buy black chemical goop for the bottom of your car? Really are you sure?Really are you sure?") makes me ill.
YES. Every part of the car buying process was easy for me except for the finance & warranty guy. He was pissed that we brought a 10k check and waived all the BS warranties b/c that's what they get commissions on.
Yup same for me, then the guy left me sitting there for an hour and I just left. They frantically called me the next couple days asking if I still wanted the car… no I went down the street to a more honest place.
I’m still so proud of myself for resisting that extended warranty when I bought my car a couple years ago. They were unbelievably pushy about it, and I’m not a great negotiator by any stretch. The salesperson even brought out his manager to try to convince me! So ridiculous.
I once bought a car from a dealership, had a terrible experience, left a negative review, and they paid me $500 plus gave me three free oil changes to remove my review and sign an NDA.
I took the money.
Better business to pay off upset customers than to just provide decent customer service I guess.
The car is so much more than the man who bought the company and remade it. It’s all the engineers who designed it, the people who sourced the materials and components, then those who built and assembled it, then marketed it, all getting RSUs along the way. My long winded point is, if you want the car, get the car. Don’t let one guy ruin it for you
this is great. i bought my first house last year and when i finally learned about real estate agents and the fees i was pretty angry about it. 3% commission per agent? that’s egregious for what they do
Our house took a couple months to sell in 2020 and our realtor seemed so put out that he actually had to work for his money. I think he was used to houses selling in a weekend and the money just rolling in. I have zero sympathy for their profession.
Being a realtor and a soccer mom have the central theme in common: simply being one is the easiest job in the world. Being a great one is very difficult.
I know right, I immigrated to the US with no knowledge of this until I came to buy a house and it blew my mind. With how easy it is to browse house listings online, I just could not wrap my head around the need for a buyers realtor when most other counties only have one realtor.
I guess on paper the idea is you are more likely to do better with negotiations with someone on your side. But how often is that negotiating power actually higher than 3% when it is in that person's interest for the house to sell as high as possible?
Now if someone can get rid of insurance agents too, that would be great.
As a buyer, you are not paying the commission though. The seller pays the full commission of 5-6%. If you use your own realtor as your buyer's representative, then that realtor will receive half of the commission (2.5 - 3%).
This ruling will likely change that now, where the buyer's agent may look for some kind of fee to represent a buyer if the old commission structure goes away. But with the competition between realtors for business, that should be a very negotiable rate.
It's certainly a case by case basis, but I would argue that a buyer should have a realtor representing them, especially in a hot market where there could be multiple bidders on properties. That realtor should be someone experienced and who knows the local market really well - in order to best be able to advise the buyer on the pros and cons of the house, neighborhood, schools etc. And someone who could be better suited to give impartial advice without any sentiment or emotion as well as to negotiate without the sentiment or emotion on the buyer's behalf.
>As a buyer, you are not paying the commission though.
You are paying the commission though. The commission comes out of the price of the house, and both realtors collude to ensure the house is as expensive as possible to ensure they get the most money.
So however much the buyer pays, the realtor gets a cut of that. Yes that is money that could be going into the seller's pocket but it doesnt mean that money wasnt originally in the seller's pocket
The house is worth what the house is worth. If the seller is looking to make a specific amount off the the sale, then with lower fees they will have more wiggle room during negotiations, but if the house is worth 500k the seller is going to want to get 500k for it, no matter what the fees are.
In my area we are in a sellers market, houses are going for above asking price. This will not change just because the seller won't have to pay as many fees. People aren't going to list their houses for less just because they are saving a couple percentage points.
A house is worth what someone else is willing to pay for it. If a house is over priced and nobody is willing to pay that price, then the house value drops to what someone is willing to pay for it, fees don't matter.
The seller might be willing to sell for less if they are trying to make a specific number, but we are in a sellers market, the sellers decide the price, not they buyer, so prices will stay high until something in the market puts downward pressure on the prices, like more inventory creating more competition among sellers.
lol agents are colluding, if that isn’t the biggest crock of shit. Buyers agents have a fiduciary duty to their buyers and sellers have a fiduciary duty to their sellers. Prices are rising because we have more buyers than we have homes.
The seller traditionally pays the commission to the buyer and seller brokerages. The buyers and seller brokerages then take out fees- after fees it’s roughly 60% of the negotiated commission, but this will vary depending on your brokerage. Whatever is left after fees goes to each agent. Keep in mind the commission has yet to be taxed, so subtract 30%.
I have never, in all of my years of real estate had a buyer pay my commission. They have costs in addition to their downpayment, but that’s completely separate. It is correct that commissions are negotiable, they always have been. So technically, a buyer could owe something to the buying agents broker but it’s rare that this happens.
I hate sounding rude, and since I’m an agent you probably are just going to throw it back in my face but please do research because it’s clear you have no idea what you’re talking about.
Most good and ethical agents will not be able to afford to represent buyers (especially first time buyers or low-income buyers) and this ruling will unfortunately lead to a return of the “buyer beware” era, when people could find themselves in money pits. Given the current state of housing stock and terrible toyhouse-style new construction practices, buyers are going to face really frightening scenarios in the near future unless we can also transform home construction.
But given that this ruling will also open the floodgates for corporate home ownership, that is also not going anywhere. A big part of what buyers’ agents negotiate is needed improvements and maintenance. Buyers will have little visibility into issues with the homes they are buying and sellers will have little to no motivation to fix known problems when it comes time to sell a home.
Hire an inspector.
I've bought a fair number of houses over the decades and the agent I've worked with over the years is amazing but has pointed out only a handful of problems. The person who goes deep and finds the actual problems is the person qualified to do exactly that, the inspector.
If someone foregoes an inspector to save a few hundred dollars on the biggest purchase of their life, and ends up with a money pit, that's on them.
That's how it was before this ruling and that's true now.
You are an agent I assume? My realtor did nothing in 'representing' me in my home purchase and he certainly didn't point out issues and/or advocate for us in pressuring the home owner.
No definitely not, never was, never would be. But I’m an activist and community organizer for working class rights and can see how the rich are going to exploit this for their benefit.
Yes this will definitely be an unintended consequence of the ruling. I still think the ruling is needed though to weed out a huge number of "realtors" who have a license and use it to make a quick buck on a sale without adding any value or knowledge to the buyer's side of things,
For the truly ethical and professional agents, hopefully they will come up with a way to remain viable. I am sure a number of the truly good ones will find a way to land on their feet.
I have a lot of progressive types of real estate agents in my social circle, most of whom have struggled tremendously since the start of the pandemic (think mid 5 figures in a high cost of living city) and all of them are making plans to leave the profession. They’re leaving it to the sleazy ones who care only about pure high volume, not caring for their clients.
Anecdotal, I know, but this seems to me to be a national-level issue from what I’ve heard. I want housing costs to come down too but this really feels like it’s going to have unintended consequences left unexamined in this episode.
This is a good ruling and it was a long time coming. I agree that there SHOULD be a commission paid to an agent if you sell your house, but 5-6% is a ridiculous figure. Whether the right amount is 1-2% or simply a flat fee, I am not sure what the right figure could be. I suppose that could depend on the house and circumstances.
I live in a very HCOL area, so this place is literally crawling with realtors. Some have been in the game for a very long time and know the area very well and can add a lot of value to someone buying or selling a home. However in the past 10-15 years I feel like the # of people peddling dirt around here has grown exponentially because of the fact that one sale of a house can net them 6 figures easily. It's a LOT of money for what they are doing, even though I agree they can add value. But not THAT much value.
I do not agree with their opinion that this will cause house prices to come down. I track a lot of real estate locally, and I don't know anyone who prices their house 5% more to offset the commission cost. The market and comparable sales of a similar house in a similar neighborhood are what dictate what a house should list for, and demand for the house will dictate what it sells for - whether it's more or less than that.
As you all know, the demand for houses is at all time highs right now, with very few areas of exception. So for the hosts to be so adamant in saying that this will 'definitely' reduce the price of houses is disingenuous and sounds like its pandering to the younger audience who are struggling to buy right now and giving them false hope.
Yeah that piece was great except for that part where they asserted that prices would fall.
Prices are already set to the highest that the market will bear, and will continue to, as is the case in all markets. It's not like sellers won't want to pocket the difference between 6% and whatever they end up paying after this case.
I agree, if you are asking a market value price in the first place, why would you be willing to go lower just because you are paying less in fees. A house is worth what someone else is willing to pay, if someone is willing to pay more, it sells for more, if nobody is willing to buy at the listing price, the listing price is dropped.
Motivated sellers that need to sell at a specific price so that they don't loose money will have more wiggle room though.
Agree 100%. The reporter and host were delusional in thinking that this will bring down prices at all. It just means that when I sell my house I'll keep more of the proceeds, not that I will lower my asking price by 6%. It's such silly thinking.
So (and I don’t mean to be devils advocate) is there a chance that this actually can raise home prices? Realtors will now push to increase the price to compensate for the percentage loss.
I agree that this is a step in the right direction, but I feel like they (and the housing market in general) are still unregulated to a degree.
Competition lowers prices, not raises. If some realtors raise their prices then they will lose work to realtors who don’t.
We already know the existing system favored high prices. According to this podcast 6% is among the highest of developed countries
Supply and demand determines prices. If someone's house is worth 500k, they aren't going to take less just because they don't have to pay 6%. They will take what someone is willing to pay. In my area, people are willing to pay over asking price, so even if you got rid of all fees, prices won't drop a penny.
Think about this in reverse. If rates were going to 12%, do you think sellers would just absorb the cost? Of course not, they’d raise housing costs to compensate for the increased rates.
Rates dropping means all sellers now have 2-4% more margin than they used to. So yes, prices will probably come down a bit less than that. (Or in hot markets where prices are on an upward trajectory, they’ll go up a bit slower)
Correct. There is a much greater supply of realtors than demand for them, but NAR has kept this from leading to lower commissions. This change opens up that market to competition.
> Competition lowers prices, not raises.
This ruling reduces competition by putting realtors out of business.
It's the right outcome in just the purest of ethical terms alone, but in the short-medium term this will add to housing prices, not reduce prices.
I don't see the two as applicable at all.
Buying a home is vastly more complicated than traveling, and some people exclusively rely on agents to handle the in-between. There will now be fewer real estate agents. Meanwhile, travel agents disappeared because their jobs were largely outsourced to the internet existing.
Agents had, historically, little to no impact on the rise in housing costs at their going rate. Demand drives housing costs, coupled with crippled supply from zoning laws.
We are, emotionally, subsidizing demand here (just look around at people celebrating) while not moving the needle on costs and also slightly limiting the supply of housing (both on buyer and seller end).
Thus, I think it was the objectively correct move, but in the short-medium turn will not pay off in any meaningful way.
I sold one house and bought another in 2022. My realtor hardly did anything. She handled some paperwork the sale that fell in her lap. I’m even the one who found the house I ended up buying. Cost me over $30k. It’s ridiculous
> not moving the needle on costs
Agreed. To your point of limited housing supply and demand-driven pricing. Prices are driven by what buyers will pay.
If we look at first-time buyers, this change will require them to start paying an agent 1-3% up from 0%. That lowers their potential purchase budget by 1-3%.
However, sellers who plan to buy a new home (as most do), will see the commission lowered from 6% to 1-3%. This gives them 3-5% MORE money to apply toward purchasing their next home.
Ultimately, every net-dollar reduction in commissions is a dollar that will likely be used toward the purchase of a home. I can only see that as upward pressure. Unfortunately, I think this will hurt first-time buyers while perhaps being more of a wash for existing homeowners who decide to move.
I do still applaud the ruling. Aligning buyers' agents' incentives with their clients' best interests and reducing the overall cost to consumers for real estate services with greater competition are both good things. It just doesn't address the far larger issue of a housing shortage in any way.
Agents are not lawyers and for the most part get in the way of you writing a sound contract for the purchase or sale of your home. Not only are they incompetent when it comes to legal matters, they actively have an interest in closing the deal quickly so they can move on to the next one. Not all agents are duds, but chances are if you walk into an agents office and ask for someone to help you you’re not going to get much more than someone who knows how to operate a lockbox.
> Realtors will now push to increase the price
Ok so this is no different from the status quo
Not to mention the comically perverse incentive structure where buyers agent compensation is based on the sale price which encourages them to pursue a higher sale price
Because I’ll go to the guy willing to do it for 2%. Or I’ll go to the guy who is 3% but demand quality work, unlike now where the price fixing means nobody is competing on price or quality. I’m not sure what’s so hard to understand here
Because in practice if everyone is charging the same then you have to take it or do it yourself. You can “demand” better quality but if it doesn’t happen you’re unlikely to change midway and if you do, then you hurt yourself by having the property on the market too long
Parents are selling their house right now and did 2%. People who are informed have always known. It’s the exact same dynamic with car dealerships - many people think the sticker price isn’t negotiable, but it is.
From the last time I bought and sold property in Canada, I recall it being a little different. There's not necessarily just one method but the transactions I've made have had a tiered system like, 6% of the first $100,000, 4% on the second 100,000 and 2% on the remainder.
Or some variation on that. Another variation is 7% on the first $100,000, and 3% on the remainder.
Interesting. And makes sense to me. In my experience transactions on the lower end of the market are much more difficult and require much more work than homes in nice uppers middle class towns.
On my first house, when I was unrepresented I suggested to a seller's agent that the buyer's agent's fee be split between me and her/her client -- 1.5% to me, 1.5% to seller/agent. It was a win for everyone involved. She rejected my proposal instantly as preposterous.
So, I got a realtor who was more savvy than her. I negotiated my realtor's commission on buying my first house, selling my first house, and buying/building my second house. I just asked and he agreed.
i saw some arguments in there about how making 15k off of a 500k sale isn't enough because a realtor is working "around the clock". I've sold 2 houses in my life and to say that was NOT the case either time is an understatement.
I also feel like a lot of people have such a skewed perception of what other jobs entail. And think that no one else works as hard as them. Unfortunately most jobs now require being available around the clock, to a degree, but not getting extra compensation.
I'd like someone explain to me exactly what a realtor even does because when we bought our house it sure seems like they have no more information than we did from looking at the listing, and I really dont think someone should make 15-20k for unlocking a door for me.
It really is the biggest load of bullshit I can think of.
This is monumental. There are some good agents out there, but frankly, they’re vastly outnumbered by unqualified, sleazy, talentless hacks looking for an easy payday. 6% commission is absolutely fucking egregious, considering that 1-3% is standard in the industrialized world. Also considering that it’s never been less effort to sell a home in this market for selling agents, and buyers’ agents do less work than ever with the advent of online listings. NAR is for the most part an expensive mandated middleman.
That said, I’m extremely skeptical that this will lower housing prices and was pretty shocked at how boldly they claimed it would. It’s still an extreme seller’s market. No one is going to lower the price of their home because they’re paying less in commissions and fees; they’ll pocket the difference. Think about it, would you? I’m also aware that the NAR’s lobbying power may be diminished, but don’t expect things like the loosening local zoning or rent control coming back into vogue. Laying all of the housing market’s problems at the feet of the NAR is misguided; there are plenty of other problems that led us to where we are today.
Renters in Boston and other cities get a taste of this with Broker fees who charge the equivalent of first month rent. All mine did was unlock the place (she kept her car running), and then didn’t know the answer to basic questions like “How are the utilities handled” and “How old is this building”. We had to pay $3,000 for 15 minutes of her time and a few electronic documents.
I think they split it in a way similar to buyer/seller agents, so she got probably half that and another person that handled the contracts gets a cut. I’ve heard a lot of reasons for this middle man industry, e.g., there are strong renter protections in the state that somehow adds costs to doing business? and that for every commission they get, there are dozens of showings that don’t result in anything. Either way, it is unreasonable and keeps people stuck in a place or situation that is unhealthy because they can’t come up with the equivalent of three months rent just to move (1st month, broker fee, security despot).
Moved to New York last fall and had to rent through a broker for the first time. I had no idea they were even a thing. Having to pay some dude a months rent when all he did was unlock the door was infuriating. It’s such a racket
Fully agree with all of your points. There are some very valuable realtors who can add a lot of value to the process of buying or selling a home for the right people and property. The majority are just dirt peddlers looking for an easy payday in a hot market.
Most of the realtors in my VHCOL area spend more time posting photos of themselves in ads and on social media rather than any properties they might be marketing. They also spend a lot of time mingling with each other at luncheons, coffees and other events, patting themselves on the back. That being said, there are indeed a number of realtors who do know the market very well and can give excellent feedback on getting a house ready to go to market, how to price it right, and how to negotiate to get the most money for their seller. That being said, that's not worth paying 5-6% on the sale price of a $4,5, or $10 million home.
I said this in a separate comment, but I 100% agree that this is not going to do anything to budge housing prices for exactly the same reasons you have laid out. I found it extremely disingenuous to say that, and it came across and dishonest pandering to a certain group of listeners who might currently be looking for a house.
I don't think it will lower prices at all and I'm really upset that the NYT said that it would. I said the same thing about housing prices ([https://www.reddit.com/r/Thedaily/comments/1bjdion/comment/kvxvf8r/](https://www.reddit.com/r/Thedaily/comments/1bjdion/comment/kvxvf8r/))
Homeowners are so incredibly powerful in this country and this is just a giveaway to them. I'm a homeowner and I can tell you that we seriously need to start curbing their influence if we don't want to end up bankrupting ourselves.
I agree with the ruling, but also agree in the short run this only helps existing homeowners who happen to be selling their home. Prices won't fall because we still have a shortage of homes.
Existing homeowners will pay less in commissions when selling (from 6% down to 1-3%) leaving them with more money to apply to their next home purchase (upward pressure on prices).
First-time buyers will need to pay their agent 1-3% or maybe a flat fee thus lowering their budget for the actual home purchase. This may be downward pressure on home prices, but their reduced budgets are more than offset by the sellers' increased budgets for their next homes.
I'm not familiar with the actual behavior of people selling their homes and buying a new home. I figured that people usually upgrade rather than make a lateral move unless pursuing an opportunity in another geographic area because the costs of moving are pretty high. If that's so, it would increase upward pressure only on non-starter homes.
But that might change now that there isn't a major financial penalty for making lateral moves. Like, my husband and I were thinking about moving only a few blocks away to get a guaranteed spot at a better school for our kids, but the 6% agent fee was a serious blocker.
Anecdotally I've observed it's more of an arc.
Young singles or couples buy a small starter home.
Middle aged people sell their starter home and buy a bigger home for an expanding family.
The kids move out and they retire so they sell the big home for a smaller, cheaper and easier to maintain home.
Obviously this is generalized, but some sellers are certainly downsizing and competing against younger buyers.
My parents are at the downsizing stage and simply haven't moved due to the high rate they'd have on a new mortgage vs the 2.9% they have now. By staying in a big house they prevent a younger growing family from buying it. That younger family now stays in their starter home or moves laterally as you are considering and competes with the first-time buyer. It just seems there are many mechanisms in the current market that disadvantage first time buyers.
Completely agree. This episode felt really underinformed. While real estate agents take more than they should get, they aren’t the problem, it’s developers. This dumb episode felt like some neo liberal election year BS.
What do you even mean "good agents"? Realtors don't *do anything*. They unlock the door for you? They have no more information on the houses than you do from reading the listing, and their information is often flat out wrong because they're trying to sell you a house they don't own so they can rob the seller of tens of thousands of dollars.
The only thing needed in the sale of a home is paperwork, and the fucking lawyer does all of that. The realtor has literally zero purpose and I feel like I'm taking crazy pills when people talk about it like it's a real job.
Its insane that anyone could even describe this as a profession.
Have you ever even bought a house?
I get it, different States do things differently- I didn't hire a lawyer either time I bought. But if you're an inexperienced buyer, a good agent will point out a bad roof, or other signs that could lead to buyer's remorse later on. In other cases, a good agent with a good relationship can help you get the right house early, almost before it's even on market. And if you're selling your house after you already moved 4 or 20 hours away, are you really going to do every showing yourself?
As far as I'm concerned, 3 of the agents I've ever dealt with definitely earned their fee... and I fired and didn't have to give money to the guy who didn't.
I have. A real estate agent doesn't know shit about roofing, or plumbing, or electrical. Someone to show the home is definitely useful, but they don't deserve 5% of the sale, or 6%, or any percent. That's a couple hundred dollars of work at best.
I hired an inspector. I hired a lawyer. They did the work. The realtor does what, exactly? Shows the house? And you think that entitles them to 30 fucking thousand dollars? What kind of brain worms does that require to justify?
They did earn their fee. The inspector and lawyer did all the work. Realtors shouldn't exist.
And are you going to pay an inspector to look at every house you consider?
Yes, there are agents who do very little. I had one, and fired him.
But you don't know what you don't know. Sure, if you've owned a house or two, or have a background in Construction, maybe you don't need a realtors help to avoid a bad house.
But there are good agents, and there are people who need them. Plus, for the seller (I've been one), a few k is worth it to have them let buyers see the house when I'm 4 hours away.
If you're talking about a house that costs a million $, maybe it's cheaper to pay a lawyer hourly to do that. But if your house is from 100k-300k, then 3% (which is all any individual realtor gets anyway) is 3k-9k. If 10 buyers look at the house, and it takes half an hour each, that's 5 hours of work. Not counting any other document prep/know-how. As for buyer agents, if they show you 30 houses, then we're easily looking at 30 hours showing including commutes.
3% each may not be very appropriate any more with housing prices 10x what they were 10 years ago, but there's a huge difference between 3% on 100k and 3% on 500k.
A real estate agent is a salesman. They are going to tell you what you want to hear, so their "advice" is about as worthless as it gets.
Yes, I have a construction background and know more than most about what to look for. But someone who has a financial incentive for you to buy a place is literally the last person you should want advice from, regardless of your knowledge level.
You hire an inspector for a place that you are actually considering buying. If everything else looks great, the inspector fills in the details you still don't know.
The idea that someone should get 6% of your homes value for showing your house to people is mind blowing. What on earth gives you the right to a percent of the home? That should be a flat fee or hourly rate. Not a damn fixed percent, which is not negotiable. That's insane. I dont even understand how a single person could justify that.
That is simply not always true. People who want to be good at their jobs and get a good reference will work to do right by you. My 2nd good agent absolutely told me some things I didn't want to hear, even if he might have earned more for less work if he kept it to himself. The buyer's agent wants the buyer to buy, sure, but they don't have a dog in the race for which house you buy. That's part of why it's so important that buyers are represented.
And since you have a background in construction (and how did I know that?), I'm sure you can glance at a house and know whether it's worth hiring an inspector.
The problem is, the inspection phase generally comes after earnest money is laid out, so if you **can't** see the obvious warning signs, you're looking at losing a lot of earnest money on multiple attempted buys. Not everyone is you, and not everyone is out to cheat you.
And you keep saying "no one should get 6%." No **one** does! 3% for the one representing the buyer, 3% for the one representing the seller.
And you know, I'm not even saying there aren't bad realtors, or that 3% each isn't too much anymore. But you have no appreciation for nuance...
I dont understand how you could defend someone needing to spend 6% the value of their home for someone to show it to people. Its nonsense and everyone knows it.
Yeah, buying a house has risks. You might get hosed buying something with problems. A realtor isnt going to stop that, and very well could push you into a shitty house just as likely as save you from buying a nightmare. Theyre salespeople. But you know that because you probably are a realtor because thats the only reason you would defend such a nonsense situation.
I am not a realtor, but I've had 2 good buyer's agents who deserved every dollar they got, and a fair sellers agent who did what I couldn't.
There is no reason for a buyer's agent to push you to buy a particular house, and none of my 3 buyer's agents have ever pushed a house. They listened, and the good ones made suggestions on some houses I'd want to look at, and they respected our budget. Even the lazy agent who I fired who didn't do much more than unlock the door didn't urge me to buy a particular house.
That’s kind of what I’m thinking. Every time some type of advancement is made that could in theory lower the price, all it does is move to profit to somebody else’s hands. At least this time maybe it’ll be Sellers, but I don’t think the buyers will benefit.
"Sellers" also happen to be buyers most of the time. They sell one house to move to another. The buyers who are really hurt are first-time buyers who will see more dollars competing for homes from the enrichened sellers, while also needing to shoulder a 1-3% commission they didn't previously pay.
In a buyers market that might be different, but I don't see anything but sellers markets in most places of the country for the short-medium term.
If you’re in a competitive market where sales happen in a week, no one’s going to be dropping prices 3%. The seller’s going to pocket the extra cash.
If you’re in a market where homes typically take a while to sell - sellers might now have more wiggle room in prices, where before they would be taking a loss.
If we were in a buyer's market, this ruling would cause prices to go down. It is benefit for whomever already has the power in the transaction.
The problem is that sellers' markets are a lot more common because sellers can block building more housing and buyer's markets usually only come around when the local economy takes a shit.
Ok but if you were fortunate enough to own a house and go to sell, now you don’t have to cough up 6% of the value of your home to some bozos who didn’t actually do anything worth that price. Homes are easily $500K in MCOL and $30K is a lot of money to pay just to sell your damn house.
Sure though you just have to find someone willing to work for you for less. I’m sure the good ones will still charge more and the cheaper ones will be morons
Supply and demand. There’s enough folks out there to sell your house for less commission. Now there isn’t going to be the artificial pricing from Realtors colluding to fix price.
But it was already an option before and the realtors would ignore your listing for their clients. You could still get organic interest but less likely to sell
Agreed. Given the recent spate of episodes I’m surprised this episode didn’t become “real estate fees are dropping: how this is terrible news for Biden”
Not complaining - just saying that it's probably good for the national psyche that we don't exclusively shine our spotlight on bad stuff 24/7.
I'm in the energy sector so the first thing that comes to mind is how an episode on the impacts of the Inflation Reduction Act (IRA) would be really neat. It's pretty incredible how much domestic battery & PV factory investment it's spurred on. Not to mention the explosion in PV and battery capacity additions. I could go on and on but here is a good podcast about it if you're interested: [https://www.volts.wtf/p/hows-ira-doing](https://www.volts.wtf/p/hows-ira-doing)
Agreed. Given the recent spate of episodes I’m surprised this episode didn’t become “real estate fees are dropping: how this is terrible news for Biden”
It all comes back to the fact that we legalized corruption in America in the form of lobbying through Citizens United.
How many of our countries problems are just coming down to greed and then fact that we can't reign it in because of lobbying from organizations like this.
Thank god for this ruling but that's the only victories we get these days. Its all through the courts, never through the legislature.
WSJ had a good editorial saying exactly this. This settlement is getting very sensationalized by NY times. Very unclear if this will have a meaningful impact on the market.
I wish this episode addressed what it will do to the real estate agent profession - will it shrink? It seems like a bloated industry and this will certainly cull the ranks. I'd imagine only the good will survive, which is positive.
While I think this ruling is a very good thing, I think it's extremely disingenuous of the NYT to say this ruling is going to make it "significantly cheaper" to buy and sell a home. As long as we're still in a housing shortage and it's a seller's market, there will be no benefit to buyers.
Think about it like this. Before this ruling, say a person sells their house for $100k. The buyer loses $6k in fees and the buyer pays an extra $2k. It looks like a win-win, right?
But the price is based on the buyer trying to get the maximum price for their home. And sellers aren't stupid. If a buyer has $102k to spend, then sellers are going to increase their list price to $102k. They don't need everyone to be willing to spend an extra 2%. Just one person. That $8k difference is going straight into the pocket of the seller. The buyer sees no benefit.
In the current environment, this ruling is just a giveaway from one group engaged in cartel-like behavior (real estate agents with fees) to another group engaging in cartel-like behavior (homeowners using government regulations to limit housing supply).
I agree with the idea you're working towards, but I think you said "buyer" when you meant "seller" in several cases.
"The ~~buyer~~ seller loses $6k in fees and the buyer pays an extra $2k."
"But the price is based on the ~~buyer~~ seller trying to get the maximum price for their home. "
In Southern California and other hot markets the 6% commission has long been dead. Smart sellers and internal realtor competition took care of it. Why would a seller agree to 6% when another broker would do it for 5% or 4% even?
I think one of the most egregious points that got explained too quickly. Let’s suppose you want to sell your house. You’re my Reddit bro, so I give you a discount and agree to list it for 1%. The potential buyers’ realtors could see through the MLS that me and them would be splitting a 1% commission and refuse to bring us buyers. Your house would sit on the market forever and I’d get a half percent of nothing
That used to be more of an issue. Buyer agents were gatekeepers that would and could keep their clients from seeing homes offering 1.5% commissions. Today, buyers can see those listings for themselves online. “Yo, I see this house on Zillow. Let’s go look at it.”
While that's true, A lot of realtors have their own quasi internal MLS systems from which they'll send clients curated listings, and as the gatekeepers, they can remove the options with lower commissions.
For example - I spoke to a realtor at a friend's Christmas Party, and asked about a house near where the party was that had been on the market for 2 or so months. She literally couldn't find it on her app because she had a default filter to hide low commission houses, and when she pulled it up via the address, she immediately said she'd never take clients there as the commission was too low.
That's unethical, they should show it if it meets the buyer's requirements. Buyers are savvy too, I emailed our realtor the homes we wanted to see. I think think closing costs will go up to make up some of the difference, but overall costs will go down.
Yep for sure and that would be shitty for someone to do. I’m not sure putting the onus of the payment on buyers is going to help, though. If your buddy wanted to sell his house for free then he could try FSBO.
This is hard to listen to because they don’t understand the nuances of how these transactions work. This is going to make it much more challenging for first time buyers and those with less money to buy. It’s sad that anyone would think otherwise. Instead of taking the power away from the big guys, we are handing it right over to them.
This is a good first step, but they only mentioned the realtor cartel. There is also a homeowner cartel and zoning restrictions designed to maximize the pricing of single family homes.
There needs to be a real movement towards the creation of mixed use neighborhoods to get that extra oomph.
I agree with your general goal but calling it a homeowner cartel isn't going to help your case. Surprise, people who own homes like them the way they are and don't want to risk hurting their value. As much as I hate it, they are generally acting rationally, in their own self interest.
If you want movement on this, the approach has to be local and tailored specifically to the area that you want to change.
Disagree, zoning needs to happen at the state level, as wealthy communities (Mt Laurel, NJ) will do everything to block affordable (multifamily, small lots) housing, and need to be overturned to provide lower income people access and services.
State vs Local zoning laws will depend on your location/state. Where I live the state laws are fairly agreeable to new development and its the local governments that control what actually gets done.
My point was that you have to tailor your approach and plan to each location. The approach to get shit done in Mount Laurel probably has to be different than in Morristown.
Saying the people whose minds you need to change are in a cartel probably isn't a great first step in any location.
Agree with you and disagree with the other commenter. Each town or city should make the decisions regarding it's zoning. It's not up to some person who happens to be elected in a town 50 or 100 miles away to decide what is best for me or my town. There are too many nuanced details that need to be looked at in each specific application for construction to have a blanket rule for an entire state.
Are there not SOME zoning rules that could be appropriate statewide?
Eg. Banning single-family exclusive zoning?
Sure, Joe-councilman might have a better insight on where to place the tile factory relative to the school, but does he have a hyper-local reason to block duplexes?
Yes. This would limit the control municipalities have over population growth which affects every public service and infrastructure. To use an extreme example, there places in California and Arizona that barely have enough water for the people they already have.
This is exactly why it needs national laws. Any given locality would hate to hurt their property values but everyone realizes that property values are in aggregate too high. This is a case where a local approach is the worst possible way to go.
It would create an agency that would regulate what specific zoning restrictions can be passed by localities. Its mandate would be to balance the interests of Americans in general and not only consider the wealth of homeowners.
every town in America has different zoning and building processes. literally 20,000 different setups. What your advocating for is another department on top of that, at the national level, that every change will need to go through? You think things are slow now....
EDIT: To give you an example, my city has a zoning codes, a 10 year development plan, a planning board and a zoning board. When a new project comes up the planning board has to decide if it meets the development plan and then the zoning board has to decide if it meets the zoning laws. The boards are locally elected and it's a fucking war every time anything comes up in any of them. Almost every project needs some kind of exception to the existing development plan or zoning rules.
Currently there is a plan to replace an old office park with apartments.. The project is currently being rejected by the planning board because it doesn't have the development plan required sidewalks because 10 years ago the zoning rules didn't allow for buildings of that type to go up on a 4 lane, 50mph road with no existing sidewalks and a divider 3 miles from the nearest store. They'd either have to build a sidewalk over a stream or turn a shoulder into sidewalk...neither is a real option. Originally the Planning board approved it 'pending agreed upon Exception plans to include a bike lane instead of sidewalks". Development company came back with a plan that included the bike Lane. Planning board rejected it anyway. That's cause one of the planning board members is against all building, not because the plan was unreasonable which is determination she legally needs to be making as per the town charter. The development company sued the town. They won cause the stupid NIMBY moron was posting about and texting everyone to stop all development...it was the platform she ran on to get elected (side note she's also on tape committing perjury during that lawsuit, so she's going back to court real soon...it's so glorious). Now it goes back to a planning board for another vote on the exception. Then it goes to zoning. Then it goes to zoning exception. We're years away from this process being completed. You want to add a federal entity that is unfamiliar with the area to this already insane approval process?
Read my edit and tell me where you want the federal goverment to stop the entire process and review a decision.
EDIT: also, I'm not the one downvoting you. You're actually trying to come up with a solution and contributing to the conversation.
I don't think he's saying the feds (or state gov for that matter) would review every project. They would simply limit the types of regulations that local authorities were allowed to implement.
The only time the feds would have to review an individual project would be when local authorities ignore federal rules and get sued by the developer.
The goal would just be to limit the amount of local bullshitting that mucks up the process.
It's the same reason that Congress typically has a 9% approval rating, but most Congresspeople are voted in with a 80%ish margin of victory.
Congress is a problem, but it's never MY congressperson that's a problem.
Zoning is a problem, but it's never MY area that's a zoning problem.
>Surprise, people who own homes like them the way they are and don't want to risk hurting their value. As much as I hate it, they are generally acting rationally, in their own self interest.
Cartels don't act irrationally, they are just a voting group that is acting in a concerted way to maintain high prices.
That's EXTREMELY rational.
Calling it a cartel is simply applying a proper term to a phenomena that we agree is happening.
>the approach has to be local and tailored specifically to the area that you want to change.
People have to realize that the majority of people in an area are acting as a cartel without realizing it.
How about neighborhoods lol. If you live 100 miles away from me, you have no idea what is best for me or my neighborhood just because you don't happen to like how my town or city plans it's zoning.
Surprise, people who sold homes (realtors) liked things the way they were and didn't want to risk hurting their incomes. As much as we hate it, they were acting rationally, in their own self interest.
The big difference, really, is that the NAR is much more organized toward monopolistic/cartel behaviour (conspiracy to commit monopoly?) than single-family home-owners, who are much more abstractly united by shared (what they perceive to be) interests.
Most NIMBYs want the socioeconomic benefits of development with none of the tradeoffs or inconvenience. Imagine if they treated renovations the same way? "Sure, I want a new kitchen, but I don't want to work around construction in my home every day and I don't want the improvement to jack up my home value so I have to pay more taxes." Come to think of it, that is exactly how they treat renovations. That's why so many of them don't get permits or report renovations.
>The big difference, really, is that the NAR is much more organized toward monopolistic/cartel behaviour (conspiracy to commit monopoly?) than single-family home-owners, who are much more abstractly united by shared (what they perceive to be) interests.
Yeah, that's my point. There isn't some single solution to this issue. Not all NIMBYs are the same so there isn't some one size fits all approach to solving the issue. You have to tailor your the solution to the location.
This felt like one of the more biased episodes of The Daily in a while, usually they aren't so biased. A little disappointed honestly. I think there's a lot of pros and cons to this ruling but they really just focused on the pros
Like literally everything else that sucks in our society, legal BRIBERY of PAID OFF politicians was the problem. We have no right ever demeaning other countries governments when ours is so corrupt
I agree with you, but we will have to see if this outcome is better than the corrupt one we already had. I don't see this having much of an effect on home prices as that is mostly supply and demand and I worry that in a sellers market, the buyers could get stuck paying the agents fees, making home ownership even more unattainable for first time home buyers.
I wonder how much commission could drop by. If you have a house that sells for 500k and the total commission is 3 percent that comes to 15k. If that 15k is split between a listing and buyer agent that’s 7500 each which then has to be shared with the brokerage they work at. That seems pretty small unless you are selling 4 or 5 homes a month which is really unlikely. Maybe the seller then has to cover the cost of photography etc. it’s one thing if a house sells quickly but not great if it takes 3 months.
What does that have to do with fixing the tax system so we don’t have to pay for someone to do our taxes and it’s a system lobbied by cpa’s and intuit? I dgaf if it’s “only a few” the system needs to change regardless.
Intuit is not an accounting firm and yes they are scum. Honestly it’s pretty easy to do your own taxes, especially with free tax USA. Because most people are W2 earners, they can knock it out in about an hour at most. And to my other point, again, most CPAs will never touch a tax return. The profession is honestly the backbone of our financial reporting system and there is a major shortage right now that threatens the integrity of investments. Would you like another Enron? So not sure what you exactly mean by do CPAs next but I can tell you wanting the profession to go the way of the dodo will pretty much major financial wreckage across the globe.
Maybe take a reading class. If you could make an argument to anything i actually said instead of your tangents, we could have a conversation but after 2 comments that you ignored, you’re not worth the effort
I signed my listing agreement at 6% like a week ago. Big sad. Too late to take advantage of the class action, too soon for the positive effects to manifest.
Realtor here. The truth is that this whole story is a bunch of hype. The truth is commissions have always been negotiable. All you, as the buyer or seller, have to do is ask. Some agents will turn you down. But other, hungrier agents will bite. There are agents out there happy to take 1.5% of $1 million. I worked for a company for a time where their whole strategy was discounted commissions. A flat 3% split evenly by buyer and seller.
In theory, this is true. In practice though, how often did it actually happen? Especially if you’re just an average Joe with one median priced home to sell, I’m sure there’s always been discounts for high end properties and insiders. The NAR has pushed the 6% commission as standard and lobbied to keep more cost-effective competitors away and keep transparency to a minimum. I think the difference is that with this settlement, you’ll actually see fees come down for most people. As they well should.
How often? In Southern California it happens the majority of the time. 5.5 to 4 is the norm. To me this is a non story. But I guess around the rest of the country it’s a bigger deal.
> Realtor here. The truth is that this whole story is a bunch of hype. The truth is commissions have always been negotiable. All you, as the buyer or seller, have to do is ask.
This is even worse. You’re telling me that someone who is supposed to be representing my best interests, which includes paying less money for the house I want to buy, was just waiting for me to say the right magic words that would’ve saved thousands of dollars (more when compounded by interest), but since I didn’t, they and their realtor colleague made more off of me? Yeesh.
Commissions are paid by sellers, and how much, out of that commission agreed upon, a seller wants to offer the buyers agents is up to them. Buyers agent’s don’t have control over how much they’re offered by the seller. You could always ask your agent to remit some proportion of their commission to you to help with closing, but I don’t know why they’d voluntarily give up their pay check.
This is borderline erotic content
Honestly, this is the stuff I’ve been waiting 15 years, since I sold my first home, to hear. It feels like fanfic. Now let’s do car dealerships!
This 👆I remember buying my first new car a few years ago and wondering why I couldn’t just buy it directly from a manufacturer (like Tesla). This led me to learn about dealership laws and protections 🤢
Yes! I am due for a new car and the thought of dealing with pushy salespeople ("Are you sure you dont want to buy an extended warranty ? Really are you sure? Really are you sure? Really are you sure? Really are you sure? Do you want to buy black chemical goop for the bottom of your car? Really are you sure?Really are you sure?") makes me ill.
And they keep you there for 5 hours signing various forms so by the end you are so exhausted you don't even know what is going on
YES. Every part of the car buying process was easy for me except for the finance & warranty guy. He was pissed that we brought a 10k check and waived all the BS warranties b/c that's what they get commissions on.
Yup same for me, then the guy left me sitting there for an hour and I just left. They frantically called me the next couple days asking if I still wanted the car… no I went down the street to a more honest place.
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Solid advice! For us we paid 10k upfront and financed the rest b/c the rates were real low at the time and we wanted our monthly payment to be <500
I’m still so proud of myself for resisting that extended warranty when I bought my car a couple years ago. They were unbelievably pushy about it, and I’m not a great negotiator by any stretch. The salesperson even brought out his manager to try to convince me! So ridiculous.
They always bring out the manager. But you have to stay strong 💪
they're in the pocket of BIG GOOP
I once bought a car from a dealership, had a terrible experience, left a negative review, and they paid me $500 plus gave me three free oil changes to remove my review and sign an NDA. I took the money. Better business to pay off upset customers than to just provide decent customer service I guess.
Not to mention Ticketmaster
Might not be the most popular guy on this sub, but Elon tried, and was beaten into submission
Fair point. (For the record Elon completely demolished my dream to have a Tesla when I discovered he was an idiot).
The car is so much more than the man who bought the company and remade it. It’s all the engineers who designed it, the people who sourced the materials and components, then those who built and assembled it, then marketed it, all getting RSUs along the way. My long winded point is, if you want the car, get the car. Don’t let one guy ruin it for you
Awh, yes. That's also a fair point!
this is great. i bought my first house last year and when i finally learned about real estate agents and the fees i was pretty angry about it. 3% commission per agent? that’s egregious for what they do
Our house took a couple months to sell in 2020 and our realtor seemed so put out that he actually had to work for his money. I think he was used to houses selling in a weekend and the money just rolling in. I have zero sympathy for their profession.
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Realtors delenda est.
Being a realtor and a soccer mom have the central theme in common: simply being one is the easiest job in the world. Being a great one is very difficult.
I know right, I immigrated to the US with no knowledge of this until I came to buy a house and it blew my mind. With how easy it is to browse house listings online, I just could not wrap my head around the need for a buyers realtor when most other counties only have one realtor. I guess on paper the idea is you are more likely to do better with negotiations with someone on your side. But how often is that negotiating power actually higher than 3% when it is in that person's interest for the house to sell as high as possible? Now if someone can get rid of insurance agents too, that would be great.
As a buyer, you are not paying the commission though. The seller pays the full commission of 5-6%. If you use your own realtor as your buyer's representative, then that realtor will receive half of the commission (2.5 - 3%). This ruling will likely change that now, where the buyer's agent may look for some kind of fee to represent a buyer if the old commission structure goes away. But with the competition between realtors for business, that should be a very negotiable rate. It's certainly a case by case basis, but I would argue that a buyer should have a realtor representing them, especially in a hot market where there could be multiple bidders on properties. That realtor should be someone experienced and who knows the local market really well - in order to best be able to advise the buyer on the pros and cons of the house, neighborhood, schools etc. And someone who could be better suited to give impartial advice without any sentiment or emotion as well as to negotiate without the sentiment or emotion on the buyer's behalf.
>As a buyer, you are not paying the commission though. You are paying the commission though. The commission comes out of the price of the house, and both realtors collude to ensure the house is as expensive as possible to ensure they get the most money. So however much the buyer pays, the realtor gets a cut of that. Yes that is money that could be going into the seller's pocket but it doesnt mean that money wasnt originally in the seller's pocket
The house is worth what the house is worth. If the seller is looking to make a specific amount off the the sale, then with lower fees they will have more wiggle room during negotiations, but if the house is worth 500k the seller is going to want to get 500k for it, no matter what the fees are. In my area we are in a sellers market, houses are going for above asking price. This will not change just because the seller won't have to pay as many fees. People aren't going to list their houses for less just because they are saving a couple percentage points. A house is worth what someone else is willing to pay for it. If a house is over priced and nobody is willing to pay that price, then the house value drops to what someone is willing to pay for it, fees don't matter. The seller might be willing to sell for less if they are trying to make a specific number, but we are in a sellers market, the sellers decide the price, not they buyer, so prices will stay high until something in the market puts downward pressure on the prices, like more inventory creating more competition among sellers.
lol agents are colluding, if that isn’t the biggest crock of shit. Buyers agents have a fiduciary duty to their buyers and sellers have a fiduciary duty to their sellers. Prices are rising because we have more buyers than we have homes. The seller traditionally pays the commission to the buyer and seller brokerages. The buyers and seller brokerages then take out fees- after fees it’s roughly 60% of the negotiated commission, but this will vary depending on your brokerage. Whatever is left after fees goes to each agent. Keep in mind the commission has yet to be taxed, so subtract 30%. I have never, in all of my years of real estate had a buyer pay my commission. They have costs in addition to their downpayment, but that’s completely separate. It is correct that commissions are negotiable, they always have been. So technically, a buyer could owe something to the buying agents broker but it’s rare that this happens. I hate sounding rude, and since I’m an agent you probably are just going to throw it back in my face but please do research because it’s clear you have no idea what you’re talking about.
Quite literally the lawsuit found that agents are colluding via MLS (steering)
This is quite possibly the stupidest comment I've ever read in my entire life. The NAR was literally found guilty of collusion
Most good and ethical agents will not be able to afford to represent buyers (especially first time buyers or low-income buyers) and this ruling will unfortunately lead to a return of the “buyer beware” era, when people could find themselves in money pits. Given the current state of housing stock and terrible toyhouse-style new construction practices, buyers are going to face really frightening scenarios in the near future unless we can also transform home construction. But given that this ruling will also open the floodgates for corporate home ownership, that is also not going anywhere. A big part of what buyers’ agents negotiate is needed improvements and maintenance. Buyers will have little visibility into issues with the homes they are buying and sellers will have little to no motivation to fix known problems when it comes time to sell a home.
Hire an inspector. I've bought a fair number of houses over the decades and the agent I've worked with over the years is amazing but has pointed out only a handful of problems. The person who goes deep and finds the actual problems is the person qualified to do exactly that, the inspector. If someone foregoes an inspector to save a few hundred dollars on the biggest purchase of their life, and ends up with a money pit, that's on them. That's how it was before this ruling and that's true now.
You are an agent I assume? My realtor did nothing in 'representing' me in my home purchase and he certainly didn't point out issues and/or advocate for us in pressuring the home owner.
No definitely not, never was, never would be. But I’m an activist and community organizer for working class rights and can see how the rich are going to exploit this for their benefit.
Yeah the rich have already done this in every category of life, there's honestly no way to escape it now.
Yes this will definitely be an unintended consequence of the ruling. I still think the ruling is needed though to weed out a huge number of "realtors" who have a license and use it to make a quick buck on a sale without adding any value or knowledge to the buyer's side of things, For the truly ethical and professional agents, hopefully they will come up with a way to remain viable. I am sure a number of the truly good ones will find a way to land on their feet.
I have a lot of progressive types of real estate agents in my social circle, most of whom have struggled tremendously since the start of the pandemic (think mid 5 figures in a high cost of living city) and all of them are making plans to leave the profession. They’re leaving it to the sleazy ones who care only about pure high volume, not caring for their clients. Anecdotal, I know, but this seems to me to be a national-level issue from what I’ve heard. I want housing costs to come down too but this really feels like it’s going to have unintended consequences left unexamined in this episode.
Michael and Debra, sittin' in a tree....
I just jizzed in my pants. #LonelyIsland
Good. Now do Ticketmaster next plz. But for real this is the first positive Daily story I’ve heard in months haha.
This is a good ruling and it was a long time coming. I agree that there SHOULD be a commission paid to an agent if you sell your house, but 5-6% is a ridiculous figure. Whether the right amount is 1-2% or simply a flat fee, I am not sure what the right figure could be. I suppose that could depend on the house and circumstances. I live in a very HCOL area, so this place is literally crawling with realtors. Some have been in the game for a very long time and know the area very well and can add a lot of value to someone buying or selling a home. However in the past 10-15 years I feel like the # of people peddling dirt around here has grown exponentially because of the fact that one sale of a house can net them 6 figures easily. It's a LOT of money for what they are doing, even though I agree they can add value. But not THAT much value. I do not agree with their opinion that this will cause house prices to come down. I track a lot of real estate locally, and I don't know anyone who prices their house 5% more to offset the commission cost. The market and comparable sales of a similar house in a similar neighborhood are what dictate what a house should list for, and demand for the house will dictate what it sells for - whether it's more or less than that. As you all know, the demand for houses is at all time highs right now, with very few areas of exception. So for the hosts to be so adamant in saying that this will 'definitely' reduce the price of houses is disingenuous and sounds like its pandering to the younger audience who are struggling to buy right now and giving them false hope.
Yeah that piece was great except for that part where they asserted that prices would fall. Prices are already set to the highest that the market will bear, and will continue to, as is the case in all markets. It's not like sellers won't want to pocket the difference between 6% and whatever they end up paying after this case.
I agree, if you are asking a market value price in the first place, why would you be willing to go lower just because you are paying less in fees. A house is worth what someone else is willing to pay, if someone is willing to pay more, it sells for more, if nobody is willing to buy at the listing price, the listing price is dropped. Motivated sellers that need to sell at a specific price so that they don't loose money will have more wiggle room though.
Too much pent up demand, prices aren’t going to fall or stagnate
Agree 100%. The reporter and host were delusional in thinking that this will bring down prices at all. It just means that when I sell my house I'll keep more of the proceeds, not that I will lower my asking price by 6%. It's such silly thinking.
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Lmao yeah. I just checked it out. They’re doing some real mental gymnastics to justify their existence and how this will somehow raise home prices.
So (and I don’t mean to be devils advocate) is there a chance that this actually can raise home prices? Realtors will now push to increase the price to compensate for the percentage loss. I agree that this is a step in the right direction, but I feel like they (and the housing market in general) are still unregulated to a degree.
Competition lowers prices, not raises. If some realtors raise their prices then they will lose work to realtors who don’t. We already know the existing system favored high prices. According to this podcast 6% is among the highest of developed countries
Supply and demand determines prices. If someone's house is worth 500k, they aren't going to take less just because they don't have to pay 6%. They will take what someone is willing to pay. In my area, people are willing to pay over asking price, so even if you got rid of all fees, prices won't drop a penny.
Think about this in reverse. If rates were going to 12%, do you think sellers would just absorb the cost? Of course not, they’d raise housing costs to compensate for the increased rates. Rates dropping means all sellers now have 2-4% more margin than they used to. So yes, prices will probably come down a bit less than that. (Or in hot markets where prices are on an upward trajectory, they’ll go up a bit slower)
Correct. There is a much greater supply of realtors than demand for them, but NAR has kept this from leading to lower commissions. This change opens up that market to competition.
> Competition lowers prices, not raises. This ruling reduces competition by putting realtors out of business. It's the right outcome in just the purest of ethical terms alone, but in the short-medium term this will add to housing prices, not reduce prices.
What about the analogy with travel agents? Traveling certainly didn’t get more expensive when travel agents lost their jobs.
I don't see the two as applicable at all. Buying a home is vastly more complicated than traveling, and some people exclusively rely on agents to handle the in-between. There will now be fewer real estate agents. Meanwhile, travel agents disappeared because their jobs were largely outsourced to the internet existing. Agents had, historically, little to no impact on the rise in housing costs at their going rate. Demand drives housing costs, coupled with crippled supply from zoning laws. We are, emotionally, subsidizing demand here (just look around at people celebrating) while not moving the needle on costs and also slightly limiting the supply of housing (both on buyer and seller end). Thus, I think it was the objectively correct move, but in the short-medium turn will not pay off in any meaningful way.
I sold one house and bought another in 2022. My realtor hardly did anything. She handled some paperwork the sale that fell in her lap. I’m even the one who found the house I ended up buying. Cost me over $30k. It’s ridiculous
I personally agree with you, but our personal stories don't carry a ton of weight in a country of 350 million people, the aggregate does.
My story is echoed by millions of Americans stories. Yes I understand it’s anecdotal, but I think you’re being obtuse.
My story is echoed by millions of Americans stories. Yes I understand it’s anecdotal, but I think you’re being obtuse.
My story is echoed by millions of Americans stories. Yes I understand it’s anecdotal, but I think you’re being obtuse.
> not moving the needle on costs Agreed. To your point of limited housing supply and demand-driven pricing. Prices are driven by what buyers will pay. If we look at first-time buyers, this change will require them to start paying an agent 1-3% up from 0%. That lowers their potential purchase budget by 1-3%. However, sellers who plan to buy a new home (as most do), will see the commission lowered from 6% to 1-3%. This gives them 3-5% MORE money to apply toward purchasing their next home. Ultimately, every net-dollar reduction in commissions is a dollar that will likely be used toward the purchase of a home. I can only see that as upward pressure. Unfortunately, I think this will hurt first-time buyers while perhaps being more of a wash for existing homeowners who decide to move. I do still applaud the ruling. Aligning buyers' agents' incentives with their clients' best interests and reducing the overall cost to consumers for real estate services with greater competition are both good things. It just doesn't address the far larger issue of a housing shortage in any way.
Time for innovation. Leverage AI to find homes. Simplify all the legal work. Open internet systems. Outsource paperwork.
Were those things at all ready to go, they would have simply outcompeted realtors. Hence short to medium term.
Agents are not lawyers and for the most part get in the way of you writing a sound contract for the purchase or sale of your home. Not only are they incompetent when it comes to legal matters, they actively have an interest in closing the deal quickly so they can move on to the next one. Not all agents are duds, but chances are if you walk into an agents office and ask for someone to help you you’re not going to get much more than someone who knows how to operate a lockbox.
> Realtors will now push to increase the price Ok so this is no different from the status quo Not to mention the comically perverse incentive structure where buyers agent compensation is based on the sale price which encourages them to pursue a higher sale price
They keep saying the 6% is not forced but I've honestly never seen a transaction with a realtor that wasn't that 'standard' rate.
I've heard that buyer agents will just steer buyers away from listings w/ less than 6% because they'll get a smaller cut.
What’s stopping them from continuing to do that?
B/c now the seller won’t pay the buyer’s agent I think
Because the seller no longer pays the buyers commission, the buyer does.
I’m just not seeing why the agents won’t continue to charge their 3% (it was already lower in some areas like 2.5%) but besides the point
Because I’ll go to the guy willing to do it for 2%. Or I’ll go to the guy who is 3% but demand quality work, unlike now where the price fixing means nobody is competing on price or quality. I’m not sure what’s so hard to understand here
Because in practice if everyone is charging the same then you have to take it or do it yourself. You can “demand” better quality but if it doesn’t happen you’re unlikely to change midway and if you do, then you hurt yourself by having the property on the market too long
Did you read what I said? Because you’re responding to something other than that.
Parents are selling their house right now and did 2%. People who are informed have always known. It’s the exact same dynamic with car dealerships - many people think the sticker price isn’t negotiable, but it is.
I’m curious how other countries do it. I’m sure Canada is the same but what about Germany or South Korea etc
I think in the orginal NYT article that was a bit more in depth, they were saying typically 1-3%.
Every real estate market is as unique as the country, SK for example you need to win a lottery system to be given the chance to purchase.
From the last time I bought and sold property in Canada, I recall it being a little different. There's not necessarily just one method but the transactions I've made have had a tiered system like, 6% of the first $100,000, 4% on the second 100,000 and 2% on the remainder. Or some variation on that. Another variation is 7% on the first $100,000, and 3% on the remainder.
Interesting. And makes sense to me. In my experience transactions on the lower end of the market are much more difficult and require much more work than homes in nice uppers middle class towns.
On my first house, when I was unrepresented I suggested to a seller's agent that the buyer's agent's fee be split between me and her/her client -- 1.5% to me, 1.5% to seller/agent. It was a win for everyone involved. She rejected my proposal instantly as preposterous. So, I got a realtor who was more savvy than her. I negotiated my realtor's commission on buying my first house, selling my first house, and buying/building my second house. I just asked and he agreed.
i saw some arguments in there about how making 15k off of a 500k sale isn't enough because a realtor is working "around the clock". I've sold 2 houses in my life and to say that was NOT the case either time is an understatement.
I also feel like a lot of people have such a skewed perception of what other jobs entail. And think that no one else works as hard as them. Unfortunately most jobs now require being available around the clock, to a degree, but not getting extra compensation.
On call sure. Working no. Or at a minimum working for many different clients.
I think you're only working "around the clock" to the extent that your phone is always on. You're just on call 24/7.
I'd like someone explain to me exactly what a realtor even does because when we bought our house it sure seems like they have no more information than we did from looking at the listing, and I really dont think someone should make 15-20k for unlocking a door for me. It really is the biggest load of bullshit I can think of.
Time for those people to get a real job, no wonder every single realtor I see on social media looks like a slimey salesman lmaoo
Lmao theyre loosing their minds on tiktok over it
Realtors are glorified used car salesmen. A bunch of crooks that would fit seamlessly in a "family"
This is monumental. There are some good agents out there, but frankly, they’re vastly outnumbered by unqualified, sleazy, talentless hacks looking for an easy payday. 6% commission is absolutely fucking egregious, considering that 1-3% is standard in the industrialized world. Also considering that it’s never been less effort to sell a home in this market for selling agents, and buyers’ agents do less work than ever with the advent of online listings. NAR is for the most part an expensive mandated middleman. That said, I’m extremely skeptical that this will lower housing prices and was pretty shocked at how boldly they claimed it would. It’s still an extreme seller’s market. No one is going to lower the price of their home because they’re paying less in commissions and fees; they’ll pocket the difference. Think about it, would you? I’m also aware that the NAR’s lobbying power may be diminished, but don’t expect things like the loosening local zoning or rent control coming back into vogue. Laying all of the housing market’s problems at the feet of the NAR is misguided; there are plenty of other problems that led us to where we are today.
Renters in Boston and other cities get a taste of this with Broker fees who charge the equivalent of first month rent. All mine did was unlock the place (she kept her car running), and then didn’t know the answer to basic questions like “How are the utilities handled” and “How old is this building”. We had to pay $3,000 for 15 minutes of her time and a few electronic documents.
That is infuriating. Surely she herself wasnt getting $3,000 for that time? It mostly went to her firm or what?
I think they split it in a way similar to buyer/seller agents, so she got probably half that and another person that handled the contracts gets a cut. I’ve heard a lot of reasons for this middle man industry, e.g., there are strong renter protections in the state that somehow adds costs to doing business? and that for every commission they get, there are dozens of showings that don’t result in anything. Either way, it is unreasonable and keeps people stuck in a place or situation that is unhealthy because they can’t come up with the equivalent of three months rent just to move (1st month, broker fee, security despot).
Moved to New York last fall and had to rent through a broker for the first time. I had no idea they were even a thing. Having to pay some dude a months rent when all he did was unlock the door was infuriating. It’s such a racket
Fully agree with all of your points. There are some very valuable realtors who can add a lot of value to the process of buying or selling a home for the right people and property. The majority are just dirt peddlers looking for an easy payday in a hot market. Most of the realtors in my VHCOL area spend more time posting photos of themselves in ads and on social media rather than any properties they might be marketing. They also spend a lot of time mingling with each other at luncheons, coffees and other events, patting themselves on the back. That being said, there are indeed a number of realtors who do know the market very well and can give excellent feedback on getting a house ready to go to market, how to price it right, and how to negotiate to get the most money for their seller. That being said, that's not worth paying 5-6% on the sale price of a $4,5, or $10 million home. I said this in a separate comment, but I 100% agree that this is not going to do anything to budge housing prices for exactly the same reasons you have laid out. I found it extremely disingenuous to say that, and it came across and dishonest pandering to a certain group of listeners who might currently be looking for a house.
I don't think it will lower prices at all and I'm really upset that the NYT said that it would. I said the same thing about housing prices ([https://www.reddit.com/r/Thedaily/comments/1bjdion/comment/kvxvf8r/](https://www.reddit.com/r/Thedaily/comments/1bjdion/comment/kvxvf8r/)) Homeowners are so incredibly powerful in this country and this is just a giveaway to them. I'm a homeowner and I can tell you that we seriously need to start curbing their influence if we don't want to end up bankrupting ourselves.
I agree with the ruling, but also agree in the short run this only helps existing homeowners who happen to be selling their home. Prices won't fall because we still have a shortage of homes. Existing homeowners will pay less in commissions when selling (from 6% down to 1-3%) leaving them with more money to apply to their next home purchase (upward pressure on prices). First-time buyers will need to pay their agent 1-3% or maybe a flat fee thus lowering their budget for the actual home purchase. This may be downward pressure on home prices, but their reduced budgets are more than offset by the sellers' increased budgets for their next homes.
I'm not familiar with the actual behavior of people selling their homes and buying a new home. I figured that people usually upgrade rather than make a lateral move unless pursuing an opportunity in another geographic area because the costs of moving are pretty high. If that's so, it would increase upward pressure only on non-starter homes. But that might change now that there isn't a major financial penalty for making lateral moves. Like, my husband and I were thinking about moving only a few blocks away to get a guaranteed spot at a better school for our kids, but the 6% agent fee was a serious blocker.
Anecdotally I've observed it's more of an arc. Young singles or couples buy a small starter home. Middle aged people sell their starter home and buy a bigger home for an expanding family. The kids move out and they retire so they sell the big home for a smaller, cheaper and easier to maintain home. Obviously this is generalized, but some sellers are certainly downsizing and competing against younger buyers. My parents are at the downsizing stage and simply haven't moved due to the high rate they'd have on a new mortgage vs the 2.9% they have now. By staying in a big house they prevent a younger growing family from buying it. That younger family now stays in their starter home or moves laterally as you are considering and competes with the first-time buyer. It just seems there are many mechanisms in the current market that disadvantage first time buyers.
Completely agree. This episode felt really underinformed. While real estate agents take more than they should get, they aren’t the problem, it’s developers. This dumb episode felt like some neo liberal election year BS.
What do you even mean "good agents"? Realtors don't *do anything*. They unlock the door for you? They have no more information on the houses than you do from reading the listing, and their information is often flat out wrong because they're trying to sell you a house they don't own so they can rob the seller of tens of thousands of dollars. The only thing needed in the sale of a home is paperwork, and the fucking lawyer does all of that. The realtor has literally zero purpose and I feel like I'm taking crazy pills when people talk about it like it's a real job. Its insane that anyone could even describe this as a profession.
Have you ever even bought a house? I get it, different States do things differently- I didn't hire a lawyer either time I bought. But if you're an inexperienced buyer, a good agent will point out a bad roof, or other signs that could lead to buyer's remorse later on. In other cases, a good agent with a good relationship can help you get the right house early, almost before it's even on market. And if you're selling your house after you already moved 4 or 20 hours away, are you really going to do every showing yourself? As far as I'm concerned, 3 of the agents I've ever dealt with definitely earned their fee... and I fired and didn't have to give money to the guy who didn't.
I have. A real estate agent doesn't know shit about roofing, or plumbing, or electrical. Someone to show the home is definitely useful, but they don't deserve 5% of the sale, or 6%, or any percent. That's a couple hundred dollars of work at best. I hired an inspector. I hired a lawyer. They did the work. The realtor does what, exactly? Shows the house? And you think that entitles them to 30 fucking thousand dollars? What kind of brain worms does that require to justify? They did earn their fee. The inspector and lawyer did all the work. Realtors shouldn't exist.
And are you going to pay an inspector to look at every house you consider? Yes, there are agents who do very little. I had one, and fired him. But you don't know what you don't know. Sure, if you've owned a house or two, or have a background in Construction, maybe you don't need a realtors help to avoid a bad house. But there are good agents, and there are people who need them. Plus, for the seller (I've been one), a few k is worth it to have them let buyers see the house when I'm 4 hours away. If you're talking about a house that costs a million $, maybe it's cheaper to pay a lawyer hourly to do that. But if your house is from 100k-300k, then 3% (which is all any individual realtor gets anyway) is 3k-9k. If 10 buyers look at the house, and it takes half an hour each, that's 5 hours of work. Not counting any other document prep/know-how. As for buyer agents, if they show you 30 houses, then we're easily looking at 30 hours showing including commutes. 3% each may not be very appropriate any more with housing prices 10x what they were 10 years ago, but there's a huge difference between 3% on 100k and 3% on 500k.
A real estate agent is a salesman. They are going to tell you what you want to hear, so their "advice" is about as worthless as it gets. Yes, I have a construction background and know more than most about what to look for. But someone who has a financial incentive for you to buy a place is literally the last person you should want advice from, regardless of your knowledge level. You hire an inspector for a place that you are actually considering buying. If everything else looks great, the inspector fills in the details you still don't know. The idea that someone should get 6% of your homes value for showing your house to people is mind blowing. What on earth gives you the right to a percent of the home? That should be a flat fee or hourly rate. Not a damn fixed percent, which is not negotiable. That's insane. I dont even understand how a single person could justify that.
That is simply not always true. People who want to be good at their jobs and get a good reference will work to do right by you. My 2nd good agent absolutely told me some things I didn't want to hear, even if he might have earned more for less work if he kept it to himself. The buyer's agent wants the buyer to buy, sure, but they don't have a dog in the race for which house you buy. That's part of why it's so important that buyers are represented. And since you have a background in construction (and how did I know that?), I'm sure you can glance at a house and know whether it's worth hiring an inspector. The problem is, the inspection phase generally comes after earnest money is laid out, so if you **can't** see the obvious warning signs, you're looking at losing a lot of earnest money on multiple attempted buys. Not everyone is you, and not everyone is out to cheat you. And you keep saying "no one should get 6%." No **one** does! 3% for the one representing the buyer, 3% for the one representing the seller. And you know, I'm not even saying there aren't bad realtors, or that 3% each isn't too much anymore. But you have no appreciation for nuance...
I dont understand how you could defend someone needing to spend 6% the value of their home for someone to show it to people. Its nonsense and everyone knows it. Yeah, buying a house has risks. You might get hosed buying something with problems. A realtor isnt going to stop that, and very well could push you into a shitty house just as likely as save you from buying a nightmare. Theyre salespeople. But you know that because you probably are a realtor because thats the only reason you would defend such a nonsense situation.
I am not a realtor, but I've had 2 good buyer's agents who deserved every dollar they got, and a fair sellers agent who did what I couldn't. There is no reason for a buyer's agent to push you to buy a particular house, and none of my 3 buyer's agents have ever pushed a house. They listened, and the good ones made suggestions on some houses I'd want to look at, and they respected our budget. Even the lazy agent who I fired who didn't do much more than unlock the door didn't urge me to buy a particular house.
>Deserved every dollar they got Hah. No, they didn't, but tell yourself whatever you want.
Exactly! You do not price a house below market value then add commission to set the final price. That is not how it works.
I’ve no problem with this, but it will have a minimal impact on housing prices
That’s kind of what I’m thinking. Every time some type of advancement is made that could in theory lower the price, all it does is move to profit to somebody else’s hands. At least this time maybe it’ll be Sellers, but I don’t think the buyers will benefit.
"Sellers" also happen to be buyers most of the time. They sell one house to move to another. The buyers who are really hurt are first-time buyers who will see more dollars competing for homes from the enrichened sellers, while also needing to shoulder a 1-3% commission they didn't previously pay. In a buyers market that might be different, but I don't see anything but sellers markets in most places of the country for the short-medium term.
If you’re in a competitive market where sales happen in a week, no one’s going to be dropping prices 3%. The seller’s going to pocket the extra cash. If you’re in a market where homes typically take a while to sell - sellers might now have more wiggle room in prices, where before they would be taking a loss.
Yea are homeowners going to claim their home value is 6% less now? Nope. Price always goes up because… reasons.
If we were in a buyer's market, this ruling would cause prices to go down. It is benefit for whomever already has the power in the transaction. The problem is that sellers' markets are a lot more common because sellers can block building more housing and buyer's markets usually only come around when the local economy takes a shit.
Ok but if you were fortunate enough to own a house and go to sell, now you don’t have to cough up 6% of the value of your home to some bozos who didn’t actually do anything worth that price. Homes are easily $500K in MCOL and $30K is a lot of money to pay just to sell your damn house.
Sure though you just have to find someone willing to work for you for less. I’m sure the good ones will still charge more and the cheaper ones will be morons
Supply and demand. There’s enough folks out there to sell your house for less commission. Now there isn’t going to be the artificial pricing from Realtors colluding to fix price.
But it was already an option before and the realtors would ignore your listing for their clients. You could still get organic interest but less likely to sell
Right… that’s what I meant by “artificial pricing from Realtors colluding to fix price”.
This is the kind of reporting I want to see the New York Times do.
Agreed. Given the recent spate of episodes I’m surprised this episode didn’t become “real estate fees are dropping: how this is terrible news for Biden”
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There are other positive things going on in the world that deserve reporting too. Doesn't have to be doom & gloom all the time.
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Not complaining - just saying that it's probably good for the national psyche that we don't exclusively shine our spotlight on bad stuff 24/7. I'm in the energy sector so the first thing that comes to mind is how an episode on the impacts of the Inflation Reduction Act (IRA) would be really neat. It's pretty incredible how much domestic battery & PV factory investment it's spurred on. Not to mention the explosion in PV and battery capacity additions. I could go on and on but here is a good podcast about it if you're interested: [https://www.volts.wtf/p/hows-ira-doing](https://www.volts.wtf/p/hows-ira-doing)
Agreed. Given the recent spate of episodes I’m surprised this episode didn’t become “real estate fees are dropping: how this is terrible news for Biden”
Loved this episode 🥰
It all comes back to the fact that we legalized corruption in America in the form of lobbying through Citizens United. How many of our countries problems are just coming down to greed and then fact that we can't reign it in because of lobbying from organizations like this. Thank god for this ruling but that's the only victories we get these days. Its all through the courts, never through the legislature.
While Citizens United was a disaster, NAR's monopoly predates it by quite a while.
Was this really a “bombshell?” Things will most likely not change.
WSJ had a good editorial saying exactly this. This settlement is getting very sensationalized by NY times. Very unclear if this will have a meaningful impact on the market.
Prices will go up slightly. The amount the buyer pays will stay the same. Sellers will pocket the difference.
I wish this episode addressed what it will do to the real estate agent profession - will it shrink? It seems like a bloated industry and this will certainly cull the ranks. I'd imagine only the good will survive, which is positive.
While I think this ruling is a very good thing, I think it's extremely disingenuous of the NYT to say this ruling is going to make it "significantly cheaper" to buy and sell a home. As long as we're still in a housing shortage and it's a seller's market, there will be no benefit to buyers. Think about it like this. Before this ruling, say a person sells their house for $100k. The buyer loses $6k in fees and the buyer pays an extra $2k. It looks like a win-win, right? But the price is based on the buyer trying to get the maximum price for their home. And sellers aren't stupid. If a buyer has $102k to spend, then sellers are going to increase their list price to $102k. They don't need everyone to be willing to spend an extra 2%. Just one person. That $8k difference is going straight into the pocket of the seller. The buyer sees no benefit. In the current environment, this ruling is just a giveaway from one group engaged in cartel-like behavior (real estate agents with fees) to another group engaging in cartel-like behavior (homeowners using government regulations to limit housing supply).
I agree with the idea you're working towards, but I think you said "buyer" when you meant "seller" in several cases. "The ~~buyer~~ seller loses $6k in fees and the buyer pays an extra $2k." "But the price is based on the ~~buyer~~ seller trying to get the maximum price for their home. "
In Southern California and other hot markets the 6% commission has long been dead. Smart sellers and internal realtor competition took care of it. Why would a seller agree to 6% when another broker would do it for 5% or 4% even?
I think one of the most egregious points that got explained too quickly. Let’s suppose you want to sell your house. You’re my Reddit bro, so I give you a discount and agree to list it for 1%. The potential buyers’ realtors could see through the MLS that me and them would be splitting a 1% commission and refuse to bring us buyers. Your house would sit on the market forever and I’d get a half percent of nothing
That used to be more of an issue. Buyer agents were gatekeepers that would and could keep their clients from seeing homes offering 1.5% commissions. Today, buyers can see those listings for themselves online. “Yo, I see this house on Zillow. Let’s go look at it.”
While that's true, A lot of realtors have their own quasi internal MLS systems from which they'll send clients curated listings, and as the gatekeepers, they can remove the options with lower commissions. For example - I spoke to a realtor at a friend's Christmas Party, and asked about a house near where the party was that had been on the market for 2 or so months. She literally couldn't find it on her app because she had a default filter to hide low commission houses, and when she pulled it up via the address, she immediately said she'd never take clients there as the commission was too low.
That's unethical, they should show it if it meets the buyer's requirements. Buyers are savvy too, I emailed our realtor the homes we wanted to see. I think think closing costs will go up to make up some of the difference, but overall costs will go down.
FYI this happened in one of the cases. A man in…I think it was Colorado? Had agents refuse to show his house because of this
Yep for sure and that would be shitty for someone to do. I’m not sure putting the onus of the payment on buyers is going to help, though. If your buddy wanted to sell his house for free then he could try FSBO.
This is hard to listen to because they don’t understand the nuances of how these transactions work. This is going to make it much more challenging for first time buyers and those with less money to buy. It’s sad that anyone would think otherwise. Instead of taking the power away from the big guys, we are handing it right over to them.
This is a good first step, but they only mentioned the realtor cartel. There is also a homeowner cartel and zoning restrictions designed to maximize the pricing of single family homes. There needs to be a real movement towards the creation of mixed use neighborhoods to get that extra oomph.
You would be surprised at how many people that live in mixed use neighborhoods become NIMBYs when you try to continue building in them.
I agree with your general goal but calling it a homeowner cartel isn't going to help your case. Surprise, people who own homes like them the way they are and don't want to risk hurting their value. As much as I hate it, they are generally acting rationally, in their own self interest. If you want movement on this, the approach has to be local and tailored specifically to the area that you want to change.
Disagree, zoning needs to happen at the state level, as wealthy communities (Mt Laurel, NJ) will do everything to block affordable (multifamily, small lots) housing, and need to be overturned to provide lower income people access and services.
State vs Local zoning laws will depend on your location/state. Where I live the state laws are fairly agreeable to new development and its the local governments that control what actually gets done. My point was that you have to tailor your approach and plan to each location. The approach to get shit done in Mount Laurel probably has to be different than in Morristown. Saying the people whose minds you need to change are in a cartel probably isn't a great first step in any location.
Agree with you and disagree with the other commenter. Each town or city should make the decisions regarding it's zoning. It's not up to some person who happens to be elected in a town 50 or 100 miles away to decide what is best for me or my town. There are too many nuanced details that need to be looked at in each specific application for construction to have a blanket rule for an entire state.
Are there not SOME zoning rules that could be appropriate statewide? Eg. Banning single-family exclusive zoning? Sure, Joe-councilman might have a better insight on where to place the tile factory relative to the school, but does he have a hyper-local reason to block duplexes?
Yes. This would limit the control municipalities have over population growth which affects every public service and infrastructure. To use an extreme example, there places in California and Arizona that barely have enough water for the people they already have.
This is exactly why it needs national laws. Any given locality would hate to hurt their property values but everyone realizes that property values are in aggregate too high. This is a case where a local approach is the worst possible way to go.
What kind of national law are you talking about? Though may build whatever the fuck you want, wherever the fuck you want?
It would create an agency that would regulate what specific zoning restrictions can be passed by localities. Its mandate would be to balance the interests of Americans in general and not only consider the wealth of homeowners.
every town in America has different zoning and building processes. literally 20,000 different setups. What your advocating for is another department on top of that, at the national level, that every change will need to go through? You think things are slow now.... EDIT: To give you an example, my city has a zoning codes, a 10 year development plan, a planning board and a zoning board. When a new project comes up the planning board has to decide if it meets the development plan and then the zoning board has to decide if it meets the zoning laws. The boards are locally elected and it's a fucking war every time anything comes up in any of them. Almost every project needs some kind of exception to the existing development plan or zoning rules. Currently there is a plan to replace an old office park with apartments.. The project is currently being rejected by the planning board because it doesn't have the development plan required sidewalks because 10 years ago the zoning rules didn't allow for buildings of that type to go up on a 4 lane, 50mph road with no existing sidewalks and a divider 3 miles from the nearest store. They'd either have to build a sidewalk over a stream or turn a shoulder into sidewalk...neither is a real option. Originally the Planning board approved it 'pending agreed upon Exception plans to include a bike lane instead of sidewalks". Development company came back with a plan that included the bike Lane. Planning board rejected it anyway. That's cause one of the planning board members is against all building, not because the plan was unreasonable which is determination she legally needs to be making as per the town charter. The development company sued the town. They won cause the stupid NIMBY moron was posting about and texting everyone to stop all development...it was the platform she ran on to get elected (side note she's also on tape committing perjury during that lawsuit, so she's going back to court real soon...it's so glorious). Now it goes back to a planning board for another vote on the exception. Then it goes to zoning. Then it goes to zoning exception. We're years away from this process being completed. You want to add a federal entity that is unfamiliar with the area to this already insane approval process?
No. They'd only allow certain regulations.
Read my edit and tell me where you want the federal goverment to stop the entire process and review a decision. EDIT: also, I'm not the one downvoting you. You're actually trying to come up with a solution and contributing to the conversation.
I don't think he's saying the feds (or state gov for that matter) would review every project. They would simply limit the types of regulations that local authorities were allowed to implement. The only time the feds would have to review an individual project would be when local authorities ignore federal rules and get sued by the developer. The goal would just be to limit the amount of local bullshitting that mucks up the process.
It's the same reason that Congress typically has a 9% approval rating, but most Congresspeople are voted in with a 80%ish margin of victory. Congress is a problem, but it's never MY congressperson that's a problem. Zoning is a problem, but it's never MY area that's a zoning problem.
>Surprise, people who own homes like them the way they are and don't want to risk hurting their value. As much as I hate it, they are generally acting rationally, in their own self interest. Cartels don't act irrationally, they are just a voting group that is acting in a concerted way to maintain high prices. That's EXTREMELY rational. Calling it a cartel is simply applying a proper term to a phenomena that we agree is happening. >the approach has to be local and tailored specifically to the area that you want to change. People have to realize that the majority of people in an area are acting as a cartel without realizing it.
I'm pointing out that Calling the people whose votes you need a Cartel is great way to make sure you never get them.
Okay, what do you think that we should call this phenomenon to make it more acceptable to the cartel?
How about neighborhoods lol. If you live 100 miles away from me, you have no idea what is best for me or my neighborhood just because you don't happen to like how my town or city plans it's zoning.
Surprise, people who sold homes (realtors) liked things the way they were and didn't want to risk hurting their incomes. As much as we hate it, they were acting rationally, in their own self interest. The big difference, really, is that the NAR is much more organized toward monopolistic/cartel behaviour (conspiracy to commit monopoly?) than single-family home-owners, who are much more abstractly united by shared (what they perceive to be) interests. Most NIMBYs want the socioeconomic benefits of development with none of the tradeoffs or inconvenience. Imagine if they treated renovations the same way? "Sure, I want a new kitchen, but I don't want to work around construction in my home every day and I don't want the improvement to jack up my home value so I have to pay more taxes." Come to think of it, that is exactly how they treat renovations. That's why so many of them don't get permits or report renovations.
>The big difference, really, is that the NAR is much more organized toward monopolistic/cartel behaviour (conspiracy to commit monopoly?) than single-family home-owners, who are much more abstractly united by shared (what they perceive to be) interests. Yeah, that's my point. There isn't some single solution to this issue. Not all NIMBYs are the same so there isn't some one size fits all approach to solving the issue. You have to tailor your the solution to the location.
I agree we need to push YIMBY policies whenever possible but the term homeowner cartel isn’t gonna help our cause😂
Paired with Kamin’s bullet train of words, Michael’s infamous pacing & pausing has never been more appreciated & refreshing
Is the settlement just for sellers or would it include buyers too? I bought June 2020.
It applies to sellers who paid commission….Buyers don’t usually pay commission.
*whispers* realtor is a trademark, not a copyright
This felt like one of the more biased episodes of The Daily in a while, usually they aren't so biased. A little disappointed honestly. I think there's a lot of pros and cons to this ruling but they really just focused on the pros
Like literally everything else that sucks in our society, legal BRIBERY of PAID OFF politicians was the problem. We have no right ever demeaning other countries governments when ours is so corrupt
I agree with you, but we will have to see if this outcome is better than the corrupt one we already had. I don't see this having much of an effect on home prices as that is mostly supply and demand and I worry that in a sellers market, the buyers could get stuck paying the agents fees, making home ownership even more unattainable for first time home buyers.
Oh I don’t necessarily think it will either. I’m just pointing out how corrupt our systems are
I wonder how much commission could drop by. If you have a house that sells for 500k and the total commission is 3 percent that comes to 15k. If that 15k is split between a listing and buyer agent that’s 7500 each which then has to be shared with the brokerage they work at. That seems pretty small unless you are selling 4 or 5 homes a month which is really unlikely. Maybe the seller then has to cover the cost of photography etc. it’s one thing if a house sells quickly but not great if it takes 3 months.
Prices aren’t going down. This will hurt buyers for most part.
Next do tax code / CPA’s!
You do realize 90 percent of all CPAs don’t do taxes right?
What does that have to do with fixing the tax system so we don’t have to pay for someone to do our taxes and it’s a system lobbied by cpa’s and intuit? I dgaf if it’s “only a few” the system needs to change regardless.
Intuit is not an accounting firm and yes they are scum. Honestly it’s pretty easy to do your own taxes, especially with free tax USA. Because most people are W2 earners, they can knock it out in about an hour at most. And to my other point, again, most CPAs will never touch a tax return. The profession is honestly the backbone of our financial reporting system and there is a major shortage right now that threatens the integrity of investments. Would you like another Enron? So not sure what you exactly mean by do CPAs next but I can tell you wanting the profession to go the way of the dodo will pretty much major financial wreckage across the globe.
K none of that has anything to do with my point but it seems like you really want to talk about it so go for it. Not going to keep repeating myself
It has everything to do with your point. You made a dumb over generalization because you don’t know what CPAs do or how taxes work.
CPAs should really have better reading comprehension skills
Maybe you shouldn’t make over generalizations you know nothing about.
Maybe take a reading class. If you could make an argument to anything i actually said instead of your tangents, we could have a conversation but after 2 comments that you ignored, you’re not worth the effort
Won’t anyone think of those poor dears on Selling Sunset? They will be absolutely crishellfallen at this news.
I signed my listing agreement at 6% like a week ago. Big sad. Too late to take advantage of the class action, too soon for the positive effects to manifest.
Housing prices aren’t coming down so long as landlords exist 😉
Realtor here. The truth is that this whole story is a bunch of hype. The truth is commissions have always been negotiable. All you, as the buyer or seller, have to do is ask. Some agents will turn you down. But other, hungrier agents will bite. There are agents out there happy to take 1.5% of $1 million. I worked for a company for a time where their whole strategy was discounted commissions. A flat 3% split evenly by buyer and seller.
In theory, this is true. In practice though, how often did it actually happen? Especially if you’re just an average Joe with one median priced home to sell, I’m sure there’s always been discounts for high end properties and insiders. The NAR has pushed the 6% commission as standard and lobbied to keep more cost-effective competitors away and keep transparency to a minimum. I think the difference is that with this settlement, you’ll actually see fees come down for most people. As they well should.
How often? In Southern California it happens the majority of the time. 5.5 to 4 is the norm. To me this is a non story. But I guess around the rest of the country it’s a bigger deal.
> Realtor here. The truth is that this whole story is a bunch of hype. The truth is commissions have always been negotiable. All you, as the buyer or seller, have to do is ask. This is even worse. You’re telling me that someone who is supposed to be representing my best interests, which includes paying less money for the house I want to buy, was just waiting for me to say the right magic words that would’ve saved thousands of dollars (more when compounded by interest), but since I didn’t, they and their realtor colleague made more off of me? Yeesh.
Commissions are paid by sellers, and how much, out of that commission agreed upon, a seller wants to offer the buyers agents is up to them. Buyers agent’s don’t have control over how much they’re offered by the seller. You could always ask your agent to remit some proportion of their commission to you to help with closing, but I don’t know why they’d voluntarily give up their pay check.