Will will real estate agents become obsolete?

Hell no!

It's just a matter of time.

The market will still need agents to open the houses, do showings, handle paperwork, and all the other flunky stuff, but the money won't be there.

Real estate will be destroyed from the top down. Companies like Zillow will break the hold the Realtor's Association has on the marketplace with their ownership of the MLS. Once that's gone the real estate brokers will lose their hold on the agents, and more importantly, their ability to control pricing. The Zillows will offer heavily discounted services, and agents will be working for a fraction of what they make.

They'll try to respond by going vertical and instead of making their money on commissions they'll try to control the whole transaction and make smaller fees on things like mortgages and title insurance, but that won't add up to anything close to what they're making now.

I talk about this in the future tense, but it's already well underway.

Have RE commission rates fallen? They used to be a solid 6% now I hear that rates are closer to 4-5%. Will they continue to fall?

I just sold a piece of property. I wrote the copy and took the photos. The agent earned his money by handling the paperwork and the buyers. Worth every penny. 5%

I do not understand the hate for realtors. Yes, I know they can be douches (and worse), but that's true of any profession. A good real estate agent is worth every penny, and the funny part is that since they work on commission, if they don't perform, they don't eat; if they perform well, they make good money. It's not a profession I would choose, mostly because I don't like sales, I enjoy having my weekends, and dealing directly with the public is tedious and distasteful.

The biggest real estate mistake I ever made was buying a condo without an agent. It was supposed to be a fairly simple transaction, and the price was good, the property was in good condition, and the seller was motivated. The seller's bank got involved and it turned into a fricking nightmare. I know, in retrospect, that if I'd had an agent to deal with the mess, it would have gone much better/quickly/less bullshit, but because the bank knew I didn't know all of the intricate details, and tried to take advantage and it turned into a fiasco that had I not put down substantial earnest money, I would have walked. It finally ended when I cornered the selling agent in his bank's office, and said if the deal didn't close within a week, I would file suit against the agent and delve into his close transactions with the bank handling the transaction. Funny how he responded to the threat by suddenly clearing all of the paperwork necessary to close in a matter of hours.

Yes they are falling R4, and if their client finds them via one of the real estate websites, they have to give a chunk to them. I found my agent via Redfin, and a portion of his commission for but the purchase and sale (and I got $500 dollar rebates from Refin a few weeks after each closing).

They really don’t provide value commensurate with what they do vs the gobs of money they sometimes make. Yes, there is sometimes value in experience, but the “paperwork” is standard (and will be reviewed by your attorney anyway. Do they really deserve 5% for opening and closing doors?

How did so many stupid people make so much money doing so little for so long? Time to disrupt.

There will always be a need for house/dog sitters, shop bottoms, bar tenders, escorts, masseurs, pool boys and other gay careers to choose from.

What will all the gay agents do in Palm Springs? There are already enough house sitters.

I agree R8 if I sold my condo now at 5% I would have to pay $40K+ as a RE fee. I think it is an obscene amount for what they do.

[quote] R4: Have RE commission rates fallen? They used to be a solid 6% now I hear that rates are closer to 4-5%. Will they continue to fall?

With housing prices so inflated in some places, it’s ridiculous to pay 6% on a sale. They’re doing the same work that they might have earned $10,000 before property inflation, and now on the same sale might earn $70,000. That’s ridiculous.

I live in a city. In my neighborhood, a realtor can walk you to six places in 2 hours. This, verses the suburbs where a realtor might drive you to two places in 2 hours. But - the realtors here seem to all have dropped their commissions to 3%, which seems more reasonable.

I call realtors “professional liars”.

I called to ask about the price of a home with an upcoming open house. I told the realtor that I was just curious about the price and wasn’t buying, but he insisted that I come and that he was there anyway, and I wouldn’t waste his time and so forth. I finally said “ok”. My sister, brother, and I went to the open house.

We didn’t mention that we grew up in that home. The realtor lied and lied about the place. It was obscene. I ignored all that, so I don’t know if the seller told the realtor the lies, or if the realtor made it all up. So, don’t believe ANYTHING you hear when buying a house.

One way that the realtor does add value, I think, is to put a layer between the seller and buyer. I’m not encouraging a seller to lie, but if you later discover that you have a crazy, litigious buyer, it might be good to have a realtor who closes the sale. You can’t be accused of lying to the buyer if you’ve never spoken to him.

I have a crazy, litigious, neighbor who wants to buy my place, but I think I’d hire a realtor and lawyer to manage the sale so as to have buffer. Does that make sense? What do you all think? He says I can save money by not having a realtor (his wife is one, incidentially), but I think a buffer would be wise.

I would like advice on this as I don’t care to throw money away or a realtor unless useful. TY.

OP the problem with selling your house yourself to save paying the commission is that the buyer expects the price they pay to be 5-7% lower since you aren't going to have to pay a commission of 5-7%. They expect they get the savings, not you.

So unless you are in an overheated market where people are already paying over asking price, you might as well go ahead and get a realtor and save yourself the hassle.

R14 You have to disclose material defects regardless if you are using a REALTOR or not. You didn't know is not an excuse. One small mistake can cost you thousands and in some cases hundreds of thousands of dollars. Zillow is a joke. Their estimates are basic, square footage, bedrooms, bathrooms, etc. They don't take into account any upgrades you may have made, the neighborhood, schools, etc. The big problem, which you guys are ignoring, is appraisers. They have too much power to determine what the value of your home or the home you are buying.

Agree r8.

Real estate agent always struck me as a silly trade involving no real skills. That some people make a mint doing it is absurd, though good for them I suppose. Won't be surprised or sad to see it go the way of travel agents.

They’re like used car dealers. All talk. Especially the ones who pronounce themselves real -i-tors. They want you to spend all this money on your fixing up your house so they don’t have to work to sell it, and still walk away with a commission. The worst reality shows on Bravo are the RE ones.

I think a good one is nothing like a used car salesman. The agent we used this summer to both buy and sell properties earned every penny he got. He was truthful and blunt on both transactions and did not hesitate to steer us away from unsuitable properties for our purchase, worked with the listing agent on our new place to make sure we were the winner in a 6 offer bidding war without overpaying, and went balls to the wall marketing our sale: with professional looking videos, killer photography and thorough marketing. We could have taken our time to sell because we had enough tucked away to pay cash for the new place (for the short term anyway), but we had an above list offer (with a contingency he negotiated away within hours) a few days after the first open house. Plus - he was hot as fuck (although married with 2 lovely young daughters).

LA real estate agent here and it seems like lots of folks commenting have never bought or sold real estate. In LA, the average price of a home/condo right now is $550k, and in Hollywood / West Hollywood, that's more like $780k, so to make a big purchase (or sale) like this without the help of an experienced professional is just dumb. There are so many places in a transaction where shit can go sideways if you're not experienced and not careful and that can cost either side thousands and thousands of dollars, not to mention lawsuits, time, a lot of anxiety and the sale falling through at the last minute.

For the seller, you need to be priced appropriately right out of the gate, and that's not a number you can likely get yourself or on Zillow. Zillow is in fact so bad that the CEO of Zillow sold at 40% less than their Zestimate said. And when he bought again in Brentwood, he paid more than the Zestimate said, so it holds no real value. They do have listings, but they are not as current as a real estate agent's would be (same with RedFin). Might not be a big deal in a smaller area, but in a hot market like LA, being updated by the hour about a home's status is vital, if you want to get it/want your client to get it. (It is not unusual for a house to hit the market on a Friday, have an open house on Sunday and then have 20 offers by Monday afternoon!). Also, if you come up with a price by yourself, and then you're able to get a buyer, this would still have to be approved by the bank / mortgage company, and if THEY don't agree with the value YOU'VE set for the house, they won't let the buyer finance it, and then the deal is dead. And while all of this is going on, your house is sitting on the market and becoming stale. Serious buyers have already seen it and passed, and new buyers are wary because it's been on the market for so long. And once you start dropping the price, you're just attracting the bargain shoppers who aren't serious and won't come in anywhere near your new asking price. And of course, I have an ENORMOUS contact list of both agents and past clients, so when a house is listed with me, thousands of people learn about it. When a person lists a house to sell by themselves, they don't have anywhere near the reach they'll need.

For the buyer, a good agent will have to navigate this tricky part of the transaction too. And in a market like LA's, it is not unusual for a home to sell at $100k over asking price. If someone calls me about a house, if they don't have an agent, I don't think they're serious so I'm not even going to spend my time talking to them. And most agents feel this way too. When I rep buyers, I'm able to usually find out what their buyers want. Usually it's money, but sometimes they want more time in the house because their other deal hasn't closed yet (where they sell the house but then rent it from the new owners for another two or three months), sometimes they want to sell to nice people who won't make any changes, sometimes they want all cash (and 20% of the deals in Los Angeles right now are done as cash only). That's another added value the real estate agents bring - is that we know the other agents, or try to. So if *I* call an agent that I know on behalf of a client, vs someone out of the blue calling, who do you think is going to get a better response? And then once you start negotiating about inspection reports, title, insurance, termite damage (and in a condo - what the HOA will allow, what the assessments are, whether you can have hardwood floors or not, whether your dog is too big for the building, etc) it is a landmine of things that can go wrong at any second.

The shows on HGTV make things look very easy but trust me, a good agent is worth every penny of their 2.5-3% commission. Not sure what it's like in other markets, but I've had 3 separate occasions where people were trying to sell their homes by themselves as FOR SALE BY OWNER and called me to do it for them instead.

R-13: I'm the LA real estate agent (R-20).

You said it yourself, your neighbor is crazy and litigious. If he gets worked up over little things, imagine what a dick he's going to be about buying a f*cking house. He doesnt' want you having representation because he's hoping to steam roll you in the sale. And like I said earlier, there are a million things that can go sideways, especially if his wife is a realtor. Basically HE'LL have representation here but YOU won't. I would run as fast as I can to get an agent to, as you said, act as a buffer.

The scenario I see is that without an agent, he'll be stopping by unannounced, checking our your yard, kicking the tires so to speak, and then wanting to haggle with you about the price at every turn - when you pull into you driveway, when you leave for work. People like this know that eventually normal people get worn down and give in, so this is why you MUST get an agent to represent you. So when your neighbor knocks on your door, emails you, calls your at work, bugs you on the weekend, etc, etc, you can just tell him, he has to speak with your agent.

And you would tell your agent that the guy is really crazy and that you're looking for the agent to shield you from him. The peace of mind you'll get by having someone on your side in this scenario is almost priceless, but certainly worth the few thousand you'll be paying when the house is finally sold. I would also suggest that when you are ready to sell, that you get a home inspection. Buyers do this (unless they decide not to) when they're buying a house to see what's potentially wrong with it, but I often have sellers do one too, so that there won't be any surprises. Since your neighbor is an asshole, it would be really good to know as much as you can - your roof, plumbing, electrical, code stuff, etc - before you even let him see it.

One way that the realtor does add value, I think, is to put a layer between the seller and buyer. I’m not encouraging a seller to lie, but if you later discover that you have a crazy, litigious buyer, it might be good to have a realtor who closes the sale. You can’t be accused of lying to the buyer if you’ve never spoken to him.

I have a crazy, litigious, neighbor who wants to buy my place, but I think I’d hire a realtor and lawyer to manage the sale so as to have buffer. Does that make sense? What do you all think? He says I can save money by not having a realtor (his wife is one, incidentially), but I think a buffer would be wise.

I would like advice on this as I don’t care to throw money away or a realtor unless useful. TY.

LA RE agent at R20 is correct-- Zillow is accurate in recently built sunbelt subdivisions where the Normandy models in the Estates At Pheasant Run all sell for around the same price.

But in a place like LA or NY or any older neighborhood, Zillow can't distinguish between a small house with 3 bedrooms and 3 baths and a giant house on the same block with 3 bedrooms and 3 baths. Similarly, it can't distinguish between a house that hadn't been updated since the owners bought it in 1965 and one that was completely remodeled three years ago.

R20 meet R16.

Thanks, R16 & R21.

I don't think I would buy without a realtor.

Real estate transaction costs are going to plummet. Only a moron would pay 10k to list a house.

R20, have you ever posed naked? Done actual porn?

So many of those hot men who posed naked in Advocate Men are realtors. Porn actors too.

Everyone will be obsolete shortly.

[quote] If someone calls me about a house, if they don't have an agent, I don't think they're serious so I'm not even going to spend my time talking to them. And most agents feel this way too

Interesting to know. I would have thought a buyer without an agent would be more attractive, because then the listing agent didn't have to share his commission.

I hate that it’s so much. I wish I could make $50,000 for what is maybe 5-10 full days of work. The 6% needs to come down - but so far I see it holding in most cases. Maybe 5% but that is considered a huge concession.

It drives me CRAZY on HBTV when they calculate the flip “profit”without deducting the realtor fee, transfer taxes and fees- which can be 9-10% in some places. So if you buy a place for $500,000 and sell for $500,000: you just lost $50,000. You basically have to increase the house value by 8-10% just to break even.

How can we get rid of RE agents when we can't even get rid of car dealers?

I'm thinking of investing in real estate, so I've spent a lot on time on sites like realtor.com, Zillow and Trulia.

I am amazed at the number of poorly lit, out-of-focus, lopped off pictures that realtors put up on these sights. If I had a realtor marketing my property with shitty photos, not only would I give them the boot, I'd stick my boot right up their lazy asses. If you can't do something as basic as posting decent, in focus photos, WTF are you capable of?

I have a sister who worked for a private law office. There was a real estate office next door to the law office. They were going over to the lawyers ALL THE TIME for last-minute help with things the agents screwed up. She came to the conclusion that the majority of agents don't know what the hell they're doing, and as a result, she used an attorney instead of an agent when she bought her house. I did the same thing. It cost a fraction of what using an agent would've cost, and when the title company raised hell over a document, I phoned the lawyer, we had a four-way convo between myself, the lawyer, the title company, and the county's property records office. The lawyer got the title company straightened out while the rest of us listened and snickered. Great entertainment.

Also - I regularly check out listings in my area on Zillow, and I cannot believe the lazy, horseshit job so many agents do in writing up the property description and most of all, with the dreadful photos they upload of the property. It's obvious they're making a quick dash through while shooting photos. Blurred photos, partial photos (lots of thumb shots), only three or four shots of the interior with two shots of the park or a shopping center blocks away. WTF? They don't deserve anything for such shoddy work.

No, people want someone to hold their hand when they sell or buy a house. Lawyers won't fill that gap, though being a lawyer/real estate agent is a good combination.