Isn't it about time to adjust real-estate sales fees.

Question

On a 250,000.00 house the real-estate people will be paid some 15,000.00. This seems to be a little out of balance in that you can hire an inspector to crawl under the house and through the attic and walk the roof and then look at everything in the house and then write a report for a some about 200.00. One could also hire an attorney for most likley for under 500.00 to write the contract. So why do people pay those large fees.

Answer 1

I can't believe how ignorant some people are.

That 15k is divided between 4 people.   2 people carry all of the legal responsibilty that no scams are according and pay through the nose for insurance because of this, the selling and buying brokers.   The other 2 are the agents, who spend countless hours working on the deal and getting everything finished in time for closing.   They also pay board fees, the MLS fees (which is private and will never be made public) and big money on newspaper ads.

After paying all of the fees and income tax an agent walks with less then 2k.    The average person, earning 90k makes twice that for about the same amount of work.

They are not earning high fees, they are just making a decent living.   You really should think about the bottom line before you draw these weird conclusions.

Answer 2

Isn't it insane? Should your listing agent "double dip" the deal they will have been paid the whole amount - if another agent is involved for the buyer then they split this amount. The sad thing is, some agents just aren't worth their commission amount because of lack of experience or expertise. True there are business expenses involved that your realtor has to pay out of pocket but they can write these off when they file taxes. You can try to negotiate your commission  when you list but that's a whole other subject in itself and subject for debate. Realtors can get self righteous about their commission because of how they were trained and by the backing/support they receive from their Broker.  

Answer 3

Because real estate agents do more than inspect and write papers.  They also market the house, show the house, provide with an expert (hopefully) value appraisal and a host of other things.  Also, don't forget that half that fee goes to the buyer's agent.  In a normal arrangement, the real estate agent will actually only see about $3,750 of that commission, from which he/she will list the house in the area real estate journals, spend time running open houses, etc.

Given the ubiquity of the Internet, there have been estimates that commissions will come down some as more people use the Net to buy and sell...however, the pressure for a commission rate adjustment has not built to levels where we are seeing them.

Answer 4

You get what you pay for.  Do you want your house shown on REALTOR.com?  Do you want your house listed in the area MLS ?  Do you want a yard sign ?  Do you want newspaper advertising, as well as advertising in assorted other media ?  Do you want guidance concerning asking price?

After you've thought about this, do you think all this comes for FREE ?  It's apparent to me that you have NO idea what a real estate brokerage firm goes through to successfully find a buyer and close a deal.

Answer 5

You could always try sell by owner. Contrary to what many people think, most real estate agents have to do tons of work just to get a property sold. It goes far beyond what regular people see.

Answer 6

I couldn't agree more!  I also blame the realtors for a large contribution to the current housing situation.  They convince sellers they can get a fortune for their houses and buyers become forced to accept the prices as they increase.  Buyers tollerated it because rates were low so ended up overpaying for homes.  Realtors should be a thing of the past and simply have people post their homes directly on the MLS on-line.  Show your own properties and let a lawyer close the deal.