The reply was a bit harsh, but let's not act like the real estate industry isn't riddled with skeezy practices.
1) Home inspections that aren't really "inspections" and are just there to grease the skids
2) Buyer's agents don't have a fiduciary duty to protect the buyers.
3) Pricing "knowledge" that is typically public info, just locked behind access restrictions
4) predatory lending practices
It's a very incestuous market where the agents are friends with mortgage loan officers at banks, handymen, inspectors, and law offices that handle closing.
The fact that it costs somewhere between 10-15% of the value of a home to actually transfer ownership is highway robbery.
>Home inspections that aren't really "inspections" and are just there to grease the skids
I hear this a lot on here and I wonder what state people are in or if the laws are somehow different elsewhere. In the states where I do business, there are state mandated checklists of systems and inspectors could be held liable if they don’t show reasonable care and professionalism in gathering the data for their report. The inspectors I use pride themselves on the adoption of technology (drones for checking out roofs, thermal imaging for heat loss and insulation, etc) and often take the better part of a day on even small houses. So, I dunno man - I hear this stuff about inspectors a lot, but it doesn’t jive with what I expect the ones I refer to people to actually do.
The seller is paying the buyer's agent so I'm not sure why they'd have a fiduciary duty to the buyer. Agents aren't about representation at all. That's what your lawyer and lender are for (the lender acts in your best interest in their own self interest). The purpose of the agents are to make the transaction happen. The seller's agent handles this on the seller side, e.g. showing the house, making it available for inspections, etc. The buyer's agent makes this happen on the buyer's side, e.g. makes sure the buyer schedules the inspections, has their lender lined up, etc. The agents are there to make the deal happen. That's their only purpose.
Totally agree on the inspection. They're next to useless - a friend bought a home a few years ago, super-weird water heater/HVAC system (co-mingled, WTF), never mentioned by the inspector. When it broke a year later, it was a VERY expensive fix, and I think they might have recovered a few hundred $$ from the inspector (on a many thousands repair).
An agent is only getting 5-6% of the home value (assuming no split with a second agent). And a big chunk of that goes to the brokerage.
The estate agent percentage in the U.K. is typically around 2% of property value in total, paid by the seller, with virtually nobody using a buyers agent. I have never understood why fees are so crazy in the USA.
Weird, having bought/sold a number of houses in the last ten years (our family moved several times), I can't say I've ever run into a real estate agent that seemed like a "high pressure" salesman. Perhaps its just the market so they don't really need to try, but IME the best real estate agents -- on the buyers side, at least -- were the ones that listened carefully and did a good job of finding houses that matched our needs. Definitely requires soft skills/empathy, but not really a sales role.
Do such things exist? Are there real estate agents who are like "and if you buy today, we'll throw in this grill!"? Genuinely curious.
On the general utility of real estate agents...
Really knowing a market and understanding construction/houses/permitting, etc... is a pretty important knowledge/skill set. I had one excellent agent figuratively drag me away from a condo that she understood to have serious foundation/construction defects. The good ones will help you understand what's good/bad about a house, problems to be alert for, etc...
Like a lot of middle men, I think they do provide some service of value. Now, is that worth 3%/6% of a houses value? In many cases, undoubtedly not. We sold a house in Austin when the market was so hot that we got an eye popping offer the day after the agent put a "pending" sign in the yard. I think he did like 4 hrs total work. So afaict, the profession as a whole acts as sort of a rentier over the MLS listings.
A year ago when our market was much hotter, I listed a property that I knew would sell quickly. Where I added value though was in knowing exactly when to list it, the price to list it, how to build pre-market interest, how to bring it to market in a way that would force buyers to compete only on price, and ultimately, I got the price up another $200k (and other concessions) for my sellers because of how I negotiated once offers were on the table. So even in a hot market, your agent’s skill does matter in yielding an optimal rather than just a “good” outcome.
Yes, they have much more skills than just wearing a suit and opening doors.
It's also a job which accomodates way more scum type people than you'd see in typical office jobs. As you note the incentives are very different, the pressure as well, and the recipes for success can involve screwing people over a lot of money.
The profession doesn't seem to have much interest in dealing with moral hazards.
Yes, and even if you are a “top performer” doing gods work… that does not give you any right to belittle others. I wholeheartedly agree with this sentiment and would pay money to see us as a collective (me included) try our hand at something like real estate. I for one know I would fail, but that’s me.
Hard disagree. For people taking 6% of purchase price in fees, real estate agents need to be vastly better than they are. They were insufferable in Austin over the past few years, the silver lining of a serious housing crash would be watching them try to join the ranks of the productive.
It reminds me of IT recruiters in the UK a few years back: [1] sums up the situation very well and applies just as much.
In my experience, there are people with a talent for talking, and have a natural attraction. People just want to talk to them. But that's not most people in sales (even if they are often top).
The key skills to be successful in sales are similar. Dedication, problems solving, and an interest in what you're doing. Many here could pick it up.
> I think you highly under-estimate the sales skills and other life competencies required to be in a high pressure sales job like being a real estate agent.
Right. "opening doors" can euphemistically describe any capable salesperson. Gotta open doors to sell that $100m fighter jet. For that matter, it can describe a dealmaker in any tech company.
rplst8|2 years ago
1) Home inspections that aren't really "inspections" and are just there to grease the skids 2) Buyer's agents don't have a fiduciary duty to protect the buyers. 3) Pricing "knowledge" that is typically public info, just locked behind access restrictions 4) predatory lending practices
It's a very incestuous market where the agents are friends with mortgage loan officers at banks, handymen, inspectors, and law offices that handle closing.
The fact that it costs somewhere between 10-15% of the value of a home to actually transfer ownership is highway robbery.
poulsbohemian|2 years ago
I hear this a lot on here and I wonder what state people are in or if the laws are somehow different elsewhere. In the states where I do business, there are state mandated checklists of systems and inspectors could be held liable if they don’t show reasonable care and professionalism in gathering the data for their report. The inspectors I use pride themselves on the adoption of technology (drones for checking out roofs, thermal imaging for heat loss and insulation, etc) and often take the better part of a day on even small houses. So, I dunno man - I hear this stuff about inspectors a lot, but it doesn’t jive with what I expect the ones I refer to people to actually do.
rcme|2 years ago
alistairSH|2 years ago
An agent is only getting 5-6% of the home value (assuming no split with a second agent). And a big chunk of that goes to the brokerage.
jon_adler|2 years ago
onlyrealcuzzo|2 years ago
Let's not pretend like this doesn't apply to almost every industry either...
deelowe|2 years ago
msluyter|2 years ago
Do such things exist? Are there real estate agents who are like "and if you buy today, we'll throw in this grill!"? Genuinely curious.
On the general utility of real estate agents... Really knowing a market and understanding construction/houses/permitting, etc... is a pretty important knowledge/skill set. I had one excellent agent figuratively drag me away from a condo that she understood to have serious foundation/construction defects. The good ones will help you understand what's good/bad about a house, problems to be alert for, etc...
Like a lot of middle men, I think they do provide some service of value. Now, is that worth 3%/6% of a houses value? In many cases, undoubtedly not. We sold a house in Austin when the market was so hot that we got an eye popping offer the day after the agent put a "pending" sign in the yard. I think he did like 4 hrs total work. So afaict, the profession as a whole acts as sort of a rentier over the MLS listings.
poulsbohemian|2 years ago
JumpCrisscross|2 years ago
High-pressure job, not high-pressure sales. Real estate sales is not a business that's kind to underperformers (in the long run).
makeitdouble|2 years ago
It's also a job which accomodates way more scum type people than you'd see in typical office jobs. As you note the incentives are very different, the pressure as well, and the recipes for success can involve screwing people over a lot of money.
The profession doesn't seem to have much interest in dealing with moral hazards.
goolz|2 years ago
jen20|2 years ago
It reminds me of IT recruiters in the UK a few years back: [1] sums up the situation very well and applies just as much.
[1]: https://gist.github.com/CumpsD/696599d1bd4cd472a056586967293...
cj|2 years ago
https://news.ycombinator.com/item?id=29087479
the6thwonder|2 years ago
I don't agree.
In my experience, there are people with a talent for talking, and have a natural attraction. People just want to talk to them. But that's not most people in sales (even if they are often top).
The key skills to be successful in sales are similar. Dedication, problems solving, and an interest in what you're doing. Many here could pick it up.
zikduruqe|2 years ago
Also, be really good looking.
robertlagrant|2 years ago
intrasight|2 years ago
go_discover|2 years ago
Definition: A person who criticizes the group they are in, without realizing that they are also implicating themselves in the criticism.