LendingTree.com does give such rebates, effectively lowering the price.
Yep, they give rebates, which come to them in the form of referrals from lenders, who jack up their mortgage products to compensate for the amount. That's why online lenders typically cost 2-3 times as much as a local, non-jickylender.com affiliated lender. So the $1000 you got back as a "rebate" will almost cover the extra $1200-1300 that you paid for the loan in the first place. You haven't saved anything. You've paid more.
Traditional realtors dont like this so have lobbied to outlaw the practice.
That's right, they have. And for good reason. It's call "under the table practices" and it's patently unethical. Call it what you want - rebate, referral, whatever - it's still a bribe to get someone in the door so they can hit them with inflated fees and misc charges buried in an undecipherable sea of numbers.
But the Realtors' association doesnt want people to be able to choose who can sell their house for them. They only want licensed, dues-paying Realtors to be able to do that.
Again, last time I checked, you always have the option of going For Sale By Owner. And the seperation of realtor and lender is a good thing. You think you have a problem with real estate agents being greedy and underhanded, wait until the agent and lender are the same person....
As far as stock commissions:let me 'splain this to you. In the '70s commissions were set on a universal schedule. You could not charge less than the schedule and stay in business. But somewhere someone got the idea that competition would benefit the consumer (sound familiar?) and they did away with the schedule. With the internet, people did not need high-priced "professionals" advising them and executing trades, which are done mostly via computer anyway. The actual cost for a transaction is miniscule, not unlike real estate btw. So market forces have driven down stock broker commissions. And you are right,Brad, that's great for everyone except stock brokers. So why shouldnt Realtors be included in the information revolution?
Realtors have been. You should check around. There is no set commission on real estate. In fact, brokers who talk about commissions among themselves are in direct violation the RICO act. It's called "price-fixing" and it's a federal crime. Are commission structures often similar? Yes. But it's not a "grand conspiracy" of the real estate profession, it's a simple market supply/demand issue. Around here we see commissions from under 4% to in excess of 8%, with listings in all commission brackets. Some brokers have even gone from a percentage commission to a flat fee. Again, market driven. The consumer chooses what they feel is the best option.
And you're right, by the way, the transaction costs nothing. Your commission is buying time and marketing. It's the same as buying an ad in the paper, only on a more grand scale and in anticipation of a faster sale and a greater net return.
Why is it that if I find a buyer for my neighbor's house I cannot get paid a commission for it?
The very reason that agency exists in most states is because there
was a time when every Tom, Dick and Harry could call themselves a broker. Because there was no standard of professional behavior, or canons of professional ethics, people were getting screwed left and right. Don't blame the realtors for a situaion the general public created.
If you want to get a commission, get licenced. It's not hard. The Tennessee licensing procedures are not far removed from those in Texas. The classes are available on-line, the license costs very little ($100 every two years here) and you can hook up with a sponsoring broker who will let you hang your shingle under his name and still work from home.
Why is it mortgage companies and banks cannot sell real estate without getting a license?
Like I said above... if you think you have a problem with sleazy agents now, wait until the agent is also your mortgage broker. If you have an issue with the power of the real estate lobby, think what will happen when the real estate lobby and banking lobby combine!
So dont confuse the issue by saying I can sell my own house or buy my own house. It is true, but irrelevant. I cannot buy or sell my neighbor's house or friend's house and get a commission. That is the issue.
Now we see the crux of the issue. Money, and easy access to it. Okay, go sell your neighbor's house. Are you prepared to foot the bill for all the marketing, or take any liability for informational discrepancies? Are you willing to present, in writing, your behavioral guidelines? Are you going to carry E&O insurance that will cover problems that arise from your involvement in the transaction. Or do you just want to dig a couple of bucks out of your friend's pockets just because you happened to overhear a guy at the barbershop say that he wanted to buy a house? (intentional satire).
Look, sounds like you've had some bad dealings with real estate agents. Sorry to hear it, and sorry I can't convince you that there are some good eggs out there. Guess we'll just have to agree to disagree on this one...
Brad