6 Reasons Why Real Estate Agents Are Terrible For Your Net Worth

www.thelattefactor.com
$40 dollars on coffee a day for 750 days straight is equal to Realtor fees on a $500k house.

#1: A five or six percent fee against the entire sales price consumes a much-much-much higher percentage of your equity.

Only when your home is totally paid off is a 6% commission just 6% of your equity.

#2: Realtors are sales people, not asset managers.

“Nevo and his colleagues found that their raw data confirmed that owner sellers achieved higher prices for their homes. The average premium was 11 percent, or $14,800.”

“We find no evidence that the use of a broker leads to higher average selling prices.”

# 3: We’ve become romantic about real estate, which undermines how serious of an investment it is.

#4: Fixed, percentage fees cause commissions to fluctuate wildly, while effort stays about the same. This leads to “social waste”.

Real estate agents typically charge a 6 percent commission, regardless of the price of the house sold. As a consequence, the commission fee from selling a house will differ dramatically across cities depending on the average price of housing, although the effort necessary to match buyers and sellers may not be that different.

#5: Why should sellers have to pay their buyer’s agent’s fee?

#6: Traditional real estate brokerages operate just like Blockbuster.

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I used to add miracle grow to data-analytics firms, now Im a proptech founder bringing offline consumer experiences online.

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John Fulton

John Fulton

I used to add miracle grow to data-analytics firms, now Im a proptech founder bringing offline consumer experiences online.

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