OT: Adios 6% Realtor Commission
- Thread starter PooPopsBaldHead
- Start date
A buyer accepts the terms by going under contract. I agree, the seller does get to dictate the terms. But any buyer can simply say they don't want their agent to get paid and the agent has the option to not work with them. Everything is mutually agreed upon. Whether all parties like the terms is a different discussion.
Yeah but if you can't actually collect a check from the insurer, it's useless.
When those unforeseen events happen with title insurance, do they actually pay? Legit asking, I don't know. Or do they point the finger at one of those multiple other parties that should have caught it and say not our fault per some obscure part of the contract?
they pay but the insurance policy excludes the most likely issues. Not going to pay on any issue that could have been discovered by a survey is the biggest one.
The attorneys that write the policies also don’t actually advise most buyers that I can tell. their job seems to be to identify things that need to be excepted from coverage. I don’t know if they have to tell the banks when there is a problem but they apparently don’t have to tell buyers.
Somebody I k ow bought a property that I knew had some potential issues, and I asked them about it being resolved and they said they got title insurance so they were fine with the risk. Told them to look at their policy and sure enough, the known issues were excluded from coverage. Which is fine. That’s not really something insurable because it’s a known issue and the risk is big enough that a reasonable premium would be uneconomic. But they apparently thought the attorney was representing them just because they were paying for title insurance. Which doesn’t seem like a crazy thing to think but that’s apparently not how it works.
Why would a buyer ever say that he does not want his agent to get paid? Especially when the buyer does not directly pay his agent? (Don't come back at me with the rationale that the buyer ultimately pays for everything, because he's the buyer. I don't agree to that.)
Also, hypothetically, the buyer and the buyer's agent could have previously negotiated a side deal where the buyer's agent agrees to pay the buyer 50% of his commision after closing, since the buyer's agent doesn't really do much work anyway and is there just to collect his 3% commission.
I’ve seen title insurance pay out numerous of times. And it’s not the type of insurance that cuts you a check. They pay someone to resolve the title issue.
As for exceptions, just like every insurance policy title insurance doesnt cover some risks like survey risks. But why would it? Otherwise, instead of getting surveys, people would just get title insurance and say I don’t need survey since title policy covers it. The exceptions in title policies are not unreasonable.
What are the answers to this: "Why would a buyer ever say that he does not want his agent to get paid?"
As long as you have asked for survey coverage so the agent can underwrite the risk. The surveys must meet certain criteria (class B or better I believe) to be insurable.
Huh? Which agent? Are you saying title insurance only covers it if the buyers agent already insured it? That's not really selling the need for it.
So the title insurer is only insuring what others insure for them already (underwrite)? Kinda typical for insurance agents tbh, but it doesn't sound all that necessary. We could have buyers agents or closing attorneys do it.
Take this with a grain of salt, but I think of title insurance as essentially another warranty in addition to the one provided by the Seller. The seller may or may not have the wherewithal to fix things if the title is screwed up, but the title insurer should. But their model is not to assess risk and underwrite it. Their model is to pay attorneys to make sure everything is in order and to exclude coverage from any questionable issue. In my very limited experience, the title insurance company's attitude when they have to pay is not "we're in the insurance business and that's a risk we charged for", it's "who screwed up and why?" and if they don't get acceptable answers, the attorney doesn't get to keep writing policies.
Where do you get this BS that a buyers agent doesn't do much? Good grief! Get your license and give it a go since you think all RE agents are rich. As great as 2020 and 2021 was because the government sucked at managing expectations and decided to give **** away for damn votes, 2023 was devastating for average RE agents. I suspect people like you are overpaid for your job too.
I've bought 5 houses. For each of those purchases (other than the first one), I had a buyer's agent that didn't do much of anything, except what I asked him/her to do.
And there's nothing wrong with that. I didn't need my RE agent to do much. I can search for houses to buy and determine what to offer all by myself.
If you think I'm wrong, then educate me. Tell me about all of the hard work a buyer's agent does.
You may not need one, but others do. I don't need to pay someone to mow my yard, install my blinds, clean my grill, scoop up the dog shìt in the backyard every week, wash out the trash cans, or hang my Christmas lights... But those have become full blown cottage industries in millennial and boomer suburban America.
Same with realtors. Lots of people are clueless about the home buying process. Realtors can help people understand their budget, schools, zoning, HOA/covenants/bylaws, and of course negotiations.
And where you really want one is in a competitive bidding situation. I have gotten I to 2 bidding wars on houses in the last 8 years...
We walked away from one when my realtor, who new the builder, said the bidding was approaching the cost of building the same house new... A dozen others kept bidding and went $150k over asking price. We built new for $100k less.
The other house we got for $20k over asking. My realtor structured the offer with a short time frame and the buyer accepted when the other bidder failed to respond. I later found out after moving into the house I was bidding against my backyard neighbor who was making a cash offer and he didn't respond in time because he was in OTA's in Kansas City for the Chiefs. Guy played O-Line and just signed a $30 million contract and wanted to buy the house for his mom. I definitely lose that battle if he had a realtor.
That said, I pick when I use them. The other 3 houses I have bought, I got for significantly under asking by using the listing agent as a dual agent. I don't care what the ethics are supposed to be... It's human nature to try to snag that bag of cash hanging out there and my offers while under asking, did have the benefit of an extra $7-18k in commissions for the seller's agent.
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Kinda what I was thinking. They think of their business as free money. They take payments, they don't give them out. Which means if there's an issue, they will fight tooth and nail to avoid writing the check. If changing the process to where it's handled by another party with an attitude of "that's the cost of doing business" when a covered issue comes up, then I'm for it.
To clarify, that's not my experience. The only time I've been involved with an issue that was covered, the title company paid. And another issue I was peripherally involved with the attorney wrote a check to fix the issue. I don't know how often that happens. I think he was in a position where if the title company had had to pay, they probably wouldn't have let him write policies anymore and it was cheaper to cut a high five-figure check than to lose the ability to write policies for that company.
I just mean it's my impression that their business model doesn't seem to be insurance. Their business model seems to be that they are essentially saying you can trust this attorney's opinion on title, and if we're wrong, we'll pay and you can be sure there are enough assets to pay, whereas if you just hire an attorney to provide a title opinion and they 17 it up, you don't know if they'll be able to pay to fix it. When an attorney misses a risk and fails to exclude it from the policy, they view that as the attorney screwing up. Not to say they won't pay, just that they don't view it as a risk they are intending to assume, except to the extent attorneys are human and you know they will 17 up at some point.
Good info. Thanks for sharing.
I don't quite understand that last situation though. If I'm the seller, then I'm not going to accept any offer that is under my asking price. Of course, I understand that different sellers might have different ideas about what they are willing to accept.
Also, before I accept any offer, then I will be sure to ask my RE agent who is the RE agent of the buyer. If my agent tells me that he/she is also the agent of the buyer, then we'll have some more negotiating to do before I accept any offer from that buyer.
Lot of truth in this. One thing a lot of people don’t understand is title insurance covers a lot of risks that an attorneys title opinion doesn’t cover. You can google it for examples. But you are correct that if an attorney misses a lien and issues a policy, the title insurance company is on the hook. However, the title insurance company can also go back on the attorneys or the attorneys E&O to recoup their loss. But there are situations where the title issue could not be discovered by a search of public records (not attorneys fault) and the title insurance company is solely on the hook.
It’s insurance. Insurance companies are much more financially able to resolve issues than attorneys. Title opinions have more exceptions than title policies. When you are already having to pay lenders title insurance, owners policies are cheap. It’s a peace of mind. Hope you never need it, but you will be glad you have it if you do.
Also, some titles are riskier than others: foreclosures, estates, and heir property are some examples. I wouldn’t hesitate to get those insured.
If you're not willing to accept an offer a little below your price, you probably priced it too low.
Outside of a handful of periods like 2021-2022, the average home sells for less than asking.
That makes sense. Good info.
We have a secondary home that we bought for my in-laws in 2021. We no longer need it, so we've decided to put it up for sale soon.
Currently, we are finishing the basement and putting in another BR and full BA. It should go on the market in late April or early May, so we'll see what happens.
Local investors are not the issue. Ask anyone that works in real estate, it’s been an issue all over America for the last couple years and it’s the main reason Prices have been driven up and shortage of homes for first time home buyers. I don’t care what stats you find. I deal with it daily and maybe you work for one.. Local investors didn’t over bid by 30,000 grand a house, they can’t even afford to do that. It’s far from ridiculous and a guarantee you those stats have been manipulated but believe what you want.
So Progress Rentals own over 85,000 rentals in 30 metro areas, that’s just one company backed by a hedge fund. That’s not a “little area”. Hedge funds were on pace to own 40% of all rentals in this country by 2030 or over 7.6 million homes. Im not saying it’s the only reason but it’s one of the major reason why our kids will not be able to find a home or afford one. If you don’t think that’s a problem, I can’t help you.
Man, just checked in on this dumpster fire of a thread.
Even the thread title is wrong.
I don't think my company has ever taken a 6% listing. I may have been involved in one or two 6% listings out of hundreds of deals in the last few years.
Broker commissions are negotiable. Always have been to my knowledge.
Keller Williams used to have a rule where they would not accept less than 2.5% being paid to the buyer broker. They are the only one I'm aware of who had a hard and fast rule. They were sued first, settled quickly, and changed their rule.
Even the thread title is wrong.
I don't think my company has ever taken a 6% listing. I may have been involved in one or two 6% listings out of hundreds of deals in the last few years.
Broker commissions are negotiable. Always have been to my knowledge.
Keller Williams used to have a rule where they would not accept less than 2.5% being paid to the buyer broker. They are the only one I'm aware of who had a hard and fast rule. They were sued first, settled quickly, and changed their rule.
Commissions have always been negotiable. But the MSM has been running with contrary headlines. Even some misinformation out of the White House about this.
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