Ok, I am paying 1.25% on a house I've just put on the market. How is it so cheap? Simple, I live in a country which does not require realtor licensing. Realtor licensing drives property agent fees up to *insane* levels. Realtor licensing costs the public billions of dollars a year in totally unnecessary extra fees.
Some interesting tidbits - the difference between the lowest agent valuation and the highest one for this house was 31%. The highest two valuations were 11% above the median. If half a dozen agents can have a 30% spread, this should show you how dangerous it is to try and value a property yourself for sale.
The two with the highest valuations are the two who have the most local knowledge and presence. They are valuing it higher because they know the latest sales in the last 3-4 weeks, whereas I could see most of the competition were out of date and valuing it based on 3-6 months ago (which is where the land registry starts showing recent sales prices).
A realtor's value comes from access to the biggest pool of potential buyers, along with knowing how to get those buyers to pay the maximum possible, which requires good buyer contacts and good up to date knowledge of local sales prices. All you need is *one* buyer to desperately want your property and have the cash ready, and you can get a huge markup over what the typical agent (or yourself) would sell for.
I honestly don't understand how the US public does not freak out over realtor commissions, it really is scandalous what you guys have to put up with. It's a classic case of over-zealous regulation being counterproductive. Property selling does not require much in qualifications. Qualifications don't help the buyer or seller to get better service. US brokers were licensed in 2005 and gave the worst advice of all time.
Another thing I should mention is I was impressed by the professionalism and knowledge of several of the brokers. Since real estate agents are often listed as one of the most loathed professions which the public considers incompetent at their jobs, I thought this was interesting. Yet again, the general public reveal themselves to be ignorant and unpleasant people, as a group. Many realtors are good and provide an excellent service which more than pays for itself.
All countries should abolish licensing requirements for real estate agents.
I will update this thread with further findings as I progress to sale.
Some interesting tidbits - the difference between the lowest agent valuation and the highest one for this house was 31%. The highest two valuations were 11% above the median. If half a dozen agents can have a 30% spread, this should show you how dangerous it is to try and value a property yourself for sale.
The two with the highest valuations are the two who have the most local knowledge and presence. They are valuing it higher because they know the latest sales in the last 3-4 weeks, whereas I could see most of the competition were out of date and valuing it based on 3-6 months ago (which is where the land registry starts showing recent sales prices).
A realtor's value comes from access to the biggest pool of potential buyers, along with knowing how to get those buyers to pay the maximum possible, which requires good buyer contacts and good up to date knowledge of local sales prices. All you need is *one* buyer to desperately want your property and have the cash ready, and you can get a huge markup over what the typical agent (or yourself) would sell for.
I honestly don't understand how the US public does not freak out over realtor commissions, it really is scandalous what you guys have to put up with. It's a classic case of over-zealous regulation being counterproductive. Property selling does not require much in qualifications. Qualifications don't help the buyer or seller to get better service. US brokers were licensed in 2005 and gave the worst advice of all time.
Another thing I should mention is I was impressed by the professionalism and knowledge of several of the brokers. Since real estate agents are often listed as one of the most loathed professions which the public considers incompetent at their jobs, I thought this was interesting. Yet again, the general public reveal themselves to be ignorant and unpleasant people, as a group. Many realtors are good and provide an excellent service which more than pays for itself.
All countries should abolish licensing requirements for real estate agents.
I will update this thread with further findings as I progress to sale.
