The 6% Real Estate Commission is Doomed

[_19disnA]

I also think open houses are a waste of time for everyone invovled. Nowadays every house listed for sale is on one of those 3 major realtor sites (perhaps there are more). Someone down the street has their home up for sale and you can see the price history as well as pictures of the interior rooms online. This provides a general sense of if you might be interested before bothering a realtor and/or the time to travel to see the house. In a relatively short period of time, you can see every home currently for sale in the area you are interested in and quickly narrow down those worth seeing in person. This is particularly valuable if you are moving from a distance away.

 

[tvguy]

Semi/mostly retired these days, but even back then I weeded a lot out. It didn't take long to realize that the illusion of being busy doesn't pay the bills. Closed transactions do. I fortunately have a nice referral base by now, so even if I don't take the client I can refer them to another agent.

While each Realtor is different, there was the same pattern with different Realtors when I sold my parents house in 2013, when my daughter bought her house in 2019, and when she sold it this year.
You call a Realtor and meet with them. Their name is on the sign as the selling agent, and all the paperwork. But basically everything else is handled by an "associate". Getting the house staged, getting it photographed, getting the inspections scheduled, staffing the open houses, opening the escrow, etc.

 

[tvguy]

I also think open houses are a waste of time for everyone invovled. Nowadays every house listed for sale is on one of those 3 major realtor sites (perhaps there are more). Someone down the street has their home up for sale and you can see the price history as well as pictures of the interior rooms online. This provides a general sense of if you might be interested before bothering a realtor and/or the time to travel to see the house. In a relatively short period of time, you can see every home currently for sale in the area you are interested in and quickly narrow down those worth seeing in person. This is particularly valuable if you are moving from a distance away.

When I sold my mom's house, the agent said she doesn't do Open Houses because all they are is an opportunity for the agent to meet future clients. She felt they rarely sell the house that is open.
I think covid also has changed things. Prior to covid every Wednesday was "Realtor" day when car loads of Realtors would tour the homes that had gone on the MLS in the past week. The Realtor that sold my daughters house said that ended with covid. And the Realtor that sold my daughter's house did do one open house and it was a waste of time. One couple toured the house. It seemed that, even though there was a lock box on the house, and the non-public portion of the MLS listing noted the burglar alarm was off from 9 am to 7 pm, EVERY viewing the potential clients Realtor called and essentially made an appointment. My daughter's Realtor would text her and let her know. That generated over 50 viewings.

 

[gmi3804]

what kind of 'looky-lous' are you speaking of? are these people that can't be satisfied with anything you show them or are truly just looking with no real intent to purchase? i ask b/c it's been almost 20 years since we purchased a home but back then and in the prior two home purchases we did we could not even get a realtor to start showing us anything until we provided proof of prequalification for a mortgage which intailed enough gathering of verifications and doing paperwork on our part with financial institutions that we would not have undertaken it without a genuine desire to locate a house.

i remember with the last home we sold that the experienced realtors did NOT want to do open houses b/c of looky-lous which largly consisted of neighboring homeowners (from the same developer/builder) to scope out upgrades and renovations others had done.

I give "customers" one or two freebies, that is, I'll show them what they're typically going to see. After that, if they still want to look, and work with me, I have the agency and compensation discussions, and make them get a pre-approval (not pre-qualified) letter. With that letter, we're able to write strong offer on the fly if/when they see the perfect place and time is an issue. I won't work with anyone who doesn't do those things. I've known too many brokers who've shown dozens of properties to those who never pull the trigger. Again, my time is too valuable to me to work with those who can't decide.

While each Realtor is different, there was the same pattern with different Realtors when I sold my parents house in 2013, when my daughter bought her house in 2019, and when she sold it this year.
You call a Realtor and meet with them. Their name is on the sign as the selling agent, and all the paperwork. But basically everything else is handled by an "associate". Getting the house staged, getting it photographed, getting the inspections scheduled, staffing the open houses, opening the escrow, etc.

Some Brokers who have lots of clients form "teams," with the team members doing a lot of the ministerial acts (things that don't need a license), as well as things that require a license (hosting public Opens, for example). Not everyone works like that, and those Brokers do everything.

When I sold my mom's house, the agent said she doesn't do Open Houses because all they are is an opportunity for the agent to meet future clients. She felt they rarely sell the house that is open.
I think covid also has changed things. Prior to covid every Wednesday was "Realtor" day when car loads of Realtors would tour the homes that had gone on the MLS in the past week. The Realtor that sold my daughters house said that ended with covid. And the Realtor that sold my daughter's house did do one open house and it was a waste of time. One couple toured the house. It seemed that, even though there was a lock box on the house, and the non-public portion of the MLS listing noted the burglar alarm was off from 9 am to 7 pm, EVERY viewing the potential clients Realtor called and essentially made an appointment. My daughter's Realtor would text her and let her know. That generated over 50 viewings.

I never do public Opens. They are vehicles for Brokers to find new buyer clients, and I don't work with people I don't know or who weren't referred to me. The NAR publishes an annual study of where the buyers came from over the past year, and public Opens are always way down the list, even after yard signs! The numbers don't lie. I don't believe my clients need unaccompanied, unqualified, and unvetted strangers roaming through their homes, and I certainly am not going to take responsibility for assuring that these strangers are up to no good.

What I DO do are Broker Opens, especially for new listings, where the property is open for Brokers to tour the listing. Only brokers and broker-accompanied buyers are allowed during those. Buyers DO come from these special Opens. Broker Opens are big in my market, but that varies by market.

 

[Bullman]

A lot of buyers and sellers are already pushing for lower commissions, and with more tech options, it’s getting harder to justify the traditional rates agents have charged for years.

 

[AnnaS]

We had a buyer for my mil's house before we put it on the market (he was a bit low). As soon as we were ready for the Open House, we had three buyers that day.

Pictures and information is great on the realtor sites. If one is really interested and local, a showing I think is a must - for me anyway. I have seen things that are not noticeable in the pictures or the street, etc.