You're overstating the ease of a transaction. Based on what you've posted, you are an attorney of some sort so it may be easier for you to understand and negotiate a transaction than it is for others.
My wife works with high net worth clients who don't have the time to look at Zillow much less traipse around on weekends looking at a dozen houses. Then you have those in academia that are particularly clueless when it comes to negotiating transactions. It's soup to nuts.....
Yes, I know a buyer would not use a mass market firm for the buy side. The seller's agent often needs to be onsite before and after the inspection and for other visits. Doesn't work well when they are a hundred miles away and not motivated by their low commission.... This has happened more than once with my wife on transactions. In the end, the sellers felt bad for my wife because she shouldered most of the load to get the deal closed.
A good seller's agent is great at putting lipstick on a pig and staging. It takes a good buyer's agent to see through the makeup. I love previewing houses with my wife and picking out all the stuff that is lipstick and what will be called out in the inspection if it gets that far. What shakes out from the inspection is the real meat and potatoes and often dictates how the deal will go, if at all. Additionally, a good buyer's agent is also most likely a good seller's agent and has contacts for the trades so they know how much it will really cost to repair those items called out on the report. Is the cut rate seller's agent going to be through on the final walk through to make sure all repairs were done correctly? Does the cut rate agent have trades people on call should something seem off and need to be verified? Once those contingencies are removed, it's game over to get anything fixed or back out without losing your deposit.
lol, your high net worth transactions are a tiny percentage of total volume. They’re irrelevant to the larger discussion.
But really? CAR forms have like 15 lines to fill in and the rest is almost never negotiated. Address, price, 17 day inspection, FATCO for title and escrow, loan contingency or no, closing date. Done.
Im most curious about your theory on cut rate agents. With this change, EVERY agent will need to compete on fees. It happens in land brokerage, and in commercial brokerage, so why not residential? Your wife may elect to keep her fee at 3% and maybe people will still pay it. It may signal she’s a star, worthy of a higher fee. But if everyone else cuts to 1%, she’s going to lose a lot of clients.
I know of a very successful agent out of RSF who just took a beach-front listing in Carlsbad for 1.5%. It got her the deal. Thats how it’s going to go on the buy side now too. Really, it’s the buyer agents who are going to see the biggest cut if buyers end up paying the fee.
It’s no longer about Redfin and Zillow. The whole structure is about to change and it’s going to spell trouble for anyone who can’t produce volume or establish themselves as an agent worth the extra scratch.
All that talk about what agents do is nice, but we both know the hardest part of being a broker is landing the listing/buyer in the first place, not the transaction itself. I’m not saying they don’t deserve compensation, but I am saying 3% is way too much. But we’ll see - maybe I’m wrong and agents will be able to negotiate even higher fees now, but I doubt it.
If residential real estate brokerage required any sort of intelligence it wouldn’t be filled with high-school educated surfers. No offense.
