I go on MLS and look at houses I want to purchase, and comparable to my current one for sale.
Haven't talked to my agent in weeks.

I'm not necessarily objecting to the pay, its the %. Its like the ridiculous AUM that most advisors want to manage your money. Just say up front that your rate is $3000/hour, or $10k/hour, or whatever, if youre worth it youre worth it. What I disagree with is the soft give/take that rewards the agents without any actual accounted work. As far as I can tell most of the successful agent's work is to market themselves, same as the investment advisor's job is to sow fear and uncertainty.

I've had furnace replacement quotes for $12500 where the parts were < $2k and install is 2 guys for <3 hours, so to be clear these two 25 year olds want >$1000/hour to replace a furnace? How about $250/hour?

I've purchased two properties using a lawyer and title company and it was < $2000 each time. I just haven't personally experienced value from agents. In most cases the only thing keeping the overpriced racket afloat is marketing and their unethical collusion.

If you know what you're doing, you can handle the purchase on your own. I sure did not when I got my first house. I later went into the mortgage biz, so I learned a ton about the whole process then. Back in the late 90s, 50 bps on the loan amount was the typical commission. So I'd make $1000 on a $200k loan. How motivated do you think I was to deal with a $50k condo? You could buy them for that back then and they were every bit as much work as a big mcmansion, but paid a fraction of the commission.

Just another step towards the "Amazon type" big companies ruling the markets. Like HD/Lowes killed the small lumberyards, lighting, and hardware stores, Amazon will rule retail deliveries, and a company like Zillow will own RE sales and marketing.

Exactly as I pointed out.
The country that made a big deal out of killing monopolies when they were controlled by the only ones who knew how to run the actual business or even created the business and the market, is now going against the small businesses and literally creating a new monopoly. When is the Last time we saw a honest to God Gas Price war, no reason, the same few companies own all the gas stations, same with media and several other fields of business. There is literally no reason to compete. :mad:

I will answer your question but I would like you to answer mine from above examples instead of ignoring them.

The up front rate is 6% how much more do you want, or sell or buy it yourself. I don't like paying anything just like everyone else, but I see the importance of using an agent so I can take my time with everything else that's going on in my life. Something I realized I must pay to gain.

Tell us about their unethical collusion. I am sure they are out there and happens often but I like to hear it from you.

Your furnace is a pretty poor example. You can hire someone without a lic, insurance and fly by night installers out there at 250 / hour. Anyone with little experience are asking 300+ here. For example no concrete finisher will work for under 350 a day and they speak not a word of English. If you factor in comp insurance, travel time, tools and fuel cost and the time to come out and get you an estimate is the cost of running a business that earn absolutely no money. I know that service industry's numbers very well because I am knee deep in it. Those 25 year olds work for themselves or a company? Keeping the lights on, rent also cost money but 250 / hour aint gonna to cover anything.

I have been down that road before at 25. It was a job to replace all the broken hinges in a kitchen for an art dealer. I quote him 300 bucks and the job was finished within 3 hours and he refuse to pay in full and btiched that it took only a few hours and wrote a check for 150 bucks and through it at my face. I wanted to burn that place down because I droce across town to bid the job, drive more to get the hinges and finally the next day went off to install them. He never accounted for the amount of running time spent on HIM, just like you never realized the extra time needed to get that done for YOU. You sound like someone who work for an hourly wage and have no experience running a small or large business,Most people who complain about such things seems to be none business owners but hourly wage earners.

If he only pays half thebill, remove half the hinges, simple

This is nicely put

Unethical collusion? How many people have you spoken to who tried to sell their own house? In my experience, the real estate industry is rife with incompetence and shady behavior.

That doesn't mean no more 6% relator fees. It simply means the seller doesn't necessarily pay all the fees. Now there are buyers and sellers' brokers not all in one.

That being said there never were 6% fees, fees have always been negotiable. There have been flat rate companies like Help-you-Sell and recently in my market there were many companies at 4%. Many years ago, when I was active in Real Estate, I had a company that had a tiered program including a flat 2%. Of course, the Realtors and the local MLS threw a fit, but the market loved it. I had one deal that spun into four transactions as a result of my program. Ultimately the local MLS and Realtors boycotted me and any publication that agreed to take my advertising.

The fees wouldn't be such a kick in the gonads if it wasn't for the explosion in house prices that raised the fee amounts.

^ This is the root cause of everyone's hate for realtors. Why is their pay tied to the asset price? It's a brilliant scam that everyone buys into. It's a service, the price should have always been fixed and negotiable.

Don't want to pay the fee? Try selling a house without MLS and without an agent. Who will bring customers to you? No one....MLS gives you millions of potential buyers. On your own? Very few buyers want to go that route, they need someone to hold their hand.

I'm sorry I didn't flush out my point which is that folks should feel free to evaluate the value of the labor and be free to walk. Current re agent pricing is trying to force everyone to pay huge dollars without regard for the services offered. If you are a super star feel free to charge your customers what you are worth as a buyer's agent, but don't expect to get that from the seller, that contract is with your customer and your money comes from their wallet. With the old system we had the absurd situation where the buyer's agent was motivated to have their customer buy so they could get paid, essentially the 'buyer's agent' was working for the seller.

With the furnace not only was that highball bidder asking what I consider to be absurd money but in my opinion they were doofuses and weren't capable of delivering that value. I knew the time it would take, pointed out their absurd $ per hour, they wouldn't budge so I simply didn't hire them. I found someone else that I actually liked and trusted who was licensed/bonded and he did the work for approx $300/hour. (What was especially frustrating in that case was that it was a control board issue that normal furnace installers can't diagnose, and I later traced it to a single blown impeller startup capacitor that was underspecified from the factory. So now I am storing a spare 2 stage furnace.)

Real estate agent analogy: suppose the furnace install people charged a % of home value for the install? And suppose furnace companies would only sell to licensed installers, and suppose all the installers insisted on the % of house labor model. Its a world were everyone's forced to pay stupid money for a furnace install, without regard for the actual value of the service. Thats the cost of a vertical integration and the illegal MLS monopoly.

As I said above you are free to charge whatever rate youd like, problem is with current % model every agent feels entitled to a bajillion $ per hour.

Real estate has a lot of moving parts and a lot to go wrong and even I admit that I need to spend money on experts but i think the common agent today is massively overpaid for what they deliver.

I mean, it's not like Porsche mechanics charge more to work on an expensive car, right?

A better analogy would be mechanics getting hourly rates based on a percentage of the cars value...

Surely, you guys know about shops charging book rate, say, per the Chilton's Manual, and then making a lot of profit by doing the job in far less time than the book says it takes. Works the same in any other service industry. I'm having a lot of work done at the house now. We agreed on a final price for a complete bathroom retile and kitchen cabinets refinishing. I couldn't care less how many man hours the contractor requires. I mean, I want it all done in two weeks or less. But whether he has his son do it all or a crew of hourly day laborers from the local Home Depot parking lot, I don't care. The price was acceptable to me and his cost/profit is not my problem.

Of course. In my furnace example if someone had offered to debug and try to repair the control board id have been happy to get out paying $1k for an hour of voodoo and a $4 part.

$12k for a furnace swap doesnt compute for ne, and neither does paying two agents 1/4 million dollars to facilitate the sale of a house. Great work if you can get it i guess, but really its a giant rip off.

If buyers are now going to have to put a percentage of the realtors fees, what is that going to do to The real estate market? Seems like a lot of folks have a hard time coming up with 20%, tack on 2 to 3% more, and it might be fewer homes sold?

Seriously?

Used to be buyer paid x for a house, from which the buyer and seller agents skimmed their cut (call it 2y)

If someone can afford x they can still afford to peel y greenbacks off and feed them to their agent. Seller gets (x-y), then pays another y to their agent (if any.)

The doll hairs are the same just now the money is explicit.

“Gosh buyers agent, it was nice riding in your new bentley but jeese you were spensive!”

I'm not convinced this new model changes anything. A $200k house is a $200k house. How the commission gets paid is immaterial. The seller keeps a higher percentage of the price, so in theory has a lower final selling price. The buyer knows they have an agent to pay, so they also have a reduced max price they can pay.

It's like buying a car at auction, you know there's a buyers premium, it's calculated into your bid.

I expect how, not who, gets paid to change. Sellers will now need to specify a buying agent's incentive in their listing; otherwise, agents won't show the property.

Perhaps buying agents will end up making more now than before. They can charge buyers a fee, and earn the incentive.

Alternatively the buyers agent is now incentivized to find a house for their customer, they’re getting paid by the buyer whether or not the seller kicks some greenbacks down to them.

If anything if I was a buyer I’d expect to get to keep that buyers agent premium, my agent is already getting paid so I don’t need to pay them again.

Buyer agents job is to help their customer score a house.

Gotcha; however, I think I wasn't clear. I believe the fees will continue to fall on the sellers. A lot of buyers can't, or won't, pay a 2 to 3% fee. So it's the seller that'll end up paying.

It's like my second divorce. I was like, "I'll be damned if I'm paying his attorney fees!" My lawyer pointed out, my SO couldn't pay. He was unemployed, had burned through an azz load of money, was going to rehab, and so on. My lawyer ended by saying, "You don't have to think it's fair, but if you want to get divorced, you'll pay it." I paid it.

So if you want to sell your house, you don't have to think it's fair, but you'll end up paying.