Reduction of the 6% commission on RE transactions in the US

[lnofeisone]

New settlement hot of the press. Sellers no longer have to pay the buyer's agent fee. I know most here would agree that transaction costs in RE are due for a change but I'm thinking through the winners (FSBO, Redfin? for sure) and the losers (Compass) and neutral (Zillow?).

[rogermunibond]

Commissions have been coming down for a while now already.  1.5% to 2%  (3-4%) is pretty standard in my area for seller and buyer agent commissions.

 

If sellers no longer pay the buyer agent, that'd be another huge drop though.

[bizaro86]

Yeah. Buyers will be way more price sensitive than sellers, imo, on offering their agents commissions. Sellers feel they need to offer the full amount to attract buyers, while buyers paying their own way will want a deal.

 

Sellers also have a big influx of funds at closing so never really see the commission, while buyers will have to either add to their mortgage or pay cash.

[Gregmal]

Yea I’ve always laughed at this aspect. I’m a buyer…I’m not a retard. I have a lawyer. I’ve always wondered why my agent would get 2-3% because the lawyer I’m paying $1200 for the transaction does significantly more work.
 

In my life buying properties, I’ve never had a scenario where an agent earned even a fraction of the commission in relation to helping me find the property. And only on one of the transactions would I say it’s been deserved for other reasons….mainly providing info and support in and area I’m new to….so generally speaking….can’t help but think the buy side agent ends up offering shit like $499 representation deals and whatnot. Even that…it’s like ok we spent 20 minutes seeing the property and you texted my offer over…not bad pay for the work.

[rkbabang]

I’ve owned 5 houses since the mid-90’s (4 were existing houses, 1 I bought the lot and built) and I’ve never had a buyer’s agent. I’ve always contacted the agent who listed the house (or land) to show it to me. I’ve never understood the necessity for a buyers agent even in 1995 when doing your own leg work to find a property wasn’t as easy as it is now, now you should easily be able to find the houses which you want to look at and be able to contact the realtor who is listing it to show it to you. What is the point of hiring an agent?

[dwy000]

I've used buyers agents when changing cities or if we didn't have time to do a proper search.  But there is absolutely zero chance they are earning anywhere near the 2-3% that they end up getting.  I get it for sellers who can actually put in a lot of work.  But even then, in a hot market the agent can earn a massive commission for a listing that might last a week or two.

 

What I'd really love is a commission schedule that goes up as the price goes up.  For a $1m property, a trained chimp could sell it for $750k whereas a really good agent is the one who gets you $1.1m.  I'd give 1-1.5% on the easy part and then increasing to pay them like 5% above a certain threshold.  

[bizaro86]

6 hours ago, dwy000 said:

I've used buyers agents when changing cities or if we didn't have time to do a proper search.  But there is absolutely zero chance they are earning anywhere near the 2-3% that they end up getting.  I get it for sellers who can actually put in a lot of work.  But even then, in a hot market the agent can earn a massive commission for a listing that might last a week or two.

 

What I'd really love is a commission schedule that goes up as the price goes up.  For a $1m property, a trained chimp could sell it for $750k whereas a really good agent is the one who gets you $1.1m.  I'd give 1-1.5% on the easy part and then increasing to pay them like 5% above a certain threshold.  

 

I think this is likely to end up happening at some point, especially if buyers commission is removed.

 

On a $1MM house $500 + 15% over 900k provides more incentive to get a good price than 1.5% of total, even though the expected commission is the same.

[bargainman]

thank goodness!  6% is ridiculous!