[tathougies]

I mean, the risk a realtor takes on 2million/100k times the risk in selling a $2mil house versus a 100k house. If the realtor makes false statements on accident, etc, they can be sued up to the total amount in consideration -- which is the price of the house.

Moreover, it is likely more work to sell a $2mil home, because there are proportionately fewer buyers, which means more work in sourcing buyers, more work in retaining interest, etc.

This comment is written by someone who's never sold a home. In general, it's very easy to look at someone else's job and say 'that person basically does nothing!'. I mean, half the time I look at software engineers sitting their typing and I think to myself "I could do that!".

Plus, if you're selling a $2million home, you can afford $120k.

[windexh8er]

The reality is realtors are well protected in the sale of the home for many reasons that are defined in the legal documentation required and not in the closing process.

Given the point I'm curious now of how many individual realtors take the blame in a sale after the fact? It is generally the seller who's on the hook and is directly sued from what I've seen. Maybe this is incorrect but it's rarely the middle man stepping in to take the bullet.

In fact I have a personal example where an agency did not do due diligence on behalf of me and shifted the blame to me leaving me holding the bag of potentially being out 5 figures in a botched purchase. Not until I threatened to take legal action against both agencies (never sign arbitration BTW) did both of then come to the plate to decide on how to avoid that as both agencies had points of blame.

Regardless, even though the realtors were to blame neither of them seemed concerned and ultimately the claim was handled by the agencies at a higher level than the individuals to blame.

There is an argument of diminishing return on the value of realtors however I wouldn't paint it with such a broad stroke. That being said I do believe it's s scam that realtors in a legacy mindset are offended when negotiating their rate comes up - regardless of their work put into the sale of the home. Many flat out will not even hear the argument and seem entitled to it while being unable to defend the rationalization of.

[Gibbon1]

My impression buying a house was the entity holding the bag is the title company. Everyone else involved is just holding out their hand.

[shostack]

Can you elaborate please?

[tathougies]

> Maybe this is incorrect but it's rarely the middle man stepping in to take the bullet.

Yes, the seller is the party responsible. However, if he hired an agent and was relying on the agent's advice, the seller can sue the agent. That is the difference between hiring an agent and doing it yourself. You are basically paying the brokerage to insure you against sticking your foot in your mouth, and the brokerage -- to limit their liability in the first place -- gives you an agent who tells you how not to screw yourself.

As you yourself said, once you threatened to sue, the agencies started getting stuff done. That's the point. If you didn't use them, you would have no one to shift the blame to.

> That being said I do believe it's s scam that realtors in a legacy mindset are offended when negotiating their rate comes up - regardless of their work put into the sale of the home

As someone who believes in the free market, I of course do not object to wanting to negotiate rates, but if no agent is willing to do it, well then, they're just charging what the market will bear. You are, of course, free to sell your home and take on the liability yourself.

[windexh8er]

> As someone who believes in the free market, I of course do not object to wanting to negotiate rates, but if no agent is willing to do it, well then, they're just charging what the market will bear. You are, of course, free to sell your home and take on the liability yourself.

This is exactly why I've sold my homes FSBO with an actual real estate lawyer. Real estate agents are rarely lawyers and their training sometimes seems to give them the idea they are legal experts - they are not. The point I was making was that the agents both made mistakes and neither were held accountable. The reason the agencies stepped in was to fix the mistakes (legal mistakes) that were made. There are other ways to sell a house that do not require an agent that do protect you as a seller (or a buyer). I don't use agents anymore because of this and I've had nothing but a more positive experience given that the information from the buy side is much more accessible, and cheaper. I know what I'm looking for and I'm well capable of setting up searches to find that. Realty agencies know this and are trying to protect their vested interest by playing new games like "premarket" opportunities. I don't see how they're progressing the experience, but are only making moves to protect a legacy model. Very similar to how ridesharing has been, overall, positive disruption.

[coredog64]

Some states actually require a lawyer in the process as well. So not only is the RE agent holding out their hand for their 3%, there’s a lawyer that wants a couple grand for what is usually filling out boilerplate. Not only that, but you can also find states where the agents aren’t legally allowed to tell you what is a “good” neighborhood or school district.

I would rather pay an RE agent by the hour to show me houses than this percentage nonsense. Zillow/Google street view helps to drop most of the false positives, and the agent can help me focus on real candidates.

[ericmcer]

I have never had someone who has not done programming before, watch me typing into a terminal and say it looks easy. I don't think its hard or requires a huge amount of intelligence, but I think it is crazy to compare the barrier of entry for real estate to that of software engineer.

The average person would take minimum a year to go from no-skills to an actually useful independent engineer. I could literally take a crack at selling a house after a week of training and probably do alright.

[tathougies]

> I could literally take a crack at selling a house after a week of training and probably do alright.

My father was an agent, so I'm obviously biased. However, thinking that 'selling a home' is all there is to being an agent is incredibly naive. It is a professional certification, where you have to be knowledgeable about the laws of the state you operate in, because they control your business.

Compared to the regulatory environment of real estate, software is a dream. You pay the realtor for having passed a test saying that he/she is capable of representing you in accordance with the law.

Also, you probably would not be able to sell a home. Sales is a skill unto itself. Only non-salespeople think it's easy. Having seen what my dad would have to do, I noped out of sales real quick. Engineering is way easier.

> I have never had someone who has not done programming before, watch me typing into a terminal and say it looks easy

I should introduce you to my mother.

[matthewowen]

It's two weeks of classes and a test.

85% of realtors drop out of the industry within 18 months. My impression is that this is because "becoming a realtor" is very easy.

A counterpoint might be that it's because being a _good_ realtor is hard, and I believe that that is true to some extent. But that means you aren't _really_ paying someone "for having passed a test saying that he/she is capable of representing you in accordance with the law", because the licensing burden is really small. For instance, it's much smaller than the licensing burden you need to start cutting peoples hair.

[dustindiamond]

You still need a broker to work under, you then need to pay desk fees, real estate board membership fee, MLS fee, and then actually advertise.

[matthewowen]

But the barriers to entry for these things are also small. It's money for the fees, and given that these people are 100% commission finding a broker is not a big challenge.

Do you honestly disagree that the barrier to entry to being a practicing real estate agent is low? Doesn't mean it isn't hard to be a _successful_ one, but the basic barrier to entry just doesn't seem that high.

[dustindiamond]

I thing the barrier to entry is not that low, otherwise we would have a ton of HN folks getting their license to make leadgen sites and collect 25% referral fees (from the 3%) for having to really not deal with the customer.

[ericmcer]

Barrier to entry is what makes some jobs pay more than others. I think programming is easier than working in fast food, but you could literally take almost anyone with an elementary school education and turn them into a productive fast food worker in a matter of days.

I might not be good at real estate, but I bet in a weeks time I could do a passable job filling out necessary documents and doing open houses.

There is no reality where someone who has no programming experience is anything other than a huge liability if you give them a week of training and then assign a feature to them and tell them to start coding, testing, and making pull requests for it.