Where does buying a house require 10 hours of paperwork? (It seems endless while you're doing it, but it's way less than 10 hours and almost all of the paperwork is canned.)
Do you really think that a lawyer has 10 hours of expertise that's relevant to buying the typical house? (How many houses have you bought?)
I've bought two houses, one in my original hometown, and another for a cross-country move in a city I'd never lived in.
In both cases I viewed dozens of homes before putting in any offers. Because I had a realtor, it was as simple as finding a home I wanted to see and emailing him about it. We'd group a few together and he'd take us through them. In cases where there was a lockbox, he'd call the sellers agent and get the code. Others, when it was still occupied, he'd call the sellers agent and let them know there would be a showing.
I only remember a couple times when the sellers agent was there.
Now, try doing it on your own.
No sellers agent is going to give you a lockbox code. If its occupied, no owner is going to let some couple walk thru their home unescorted.
You're going to have to call the sellers agents and make appointments. They're not really working for you so they're not going to be nearly as responsive as your agent is. With your agent he'll setup an appt with you, a few hour block, to drive around and see the homes. On your own, you're not going to have these clustered appointments. Even if you get some scheduled back-to-back, you're at the mercy of the sellers agents keeping themselves on time.
This would've been hard enough in hometown the first time around. My second time, when I moved 1000 miles away, it would've been a positive nightmare. Our agent then blocked off whole days on a few separate occasions where we flew into town to see as many homes as possible in a weekend.
I think you get my point. Buying a home is hectic. There are so many variables to keep track of. Even more so when you're also coordinating a cross-country move.
The buyers agent was like combining all the best qualities of a tour guide, a personal assistant and a paralegal. They abstracted a lot of complexity. They were an expert we could rely on for advice and guidance. They knew things about neighborhoods I had no clue about despite living in the city most my life at that point.
Now, 3% is a bit high, though it's not the near-criminal-ripoff you make it out to be.
And to condemn the whole practice based largely on the fact that you are choosing to buy into one of the most expensive and inflated markets in the country seems a little over the top to me. Even in California the median sale is half the $800k you mentioned.
We're also doing this in a buyers market - which gives us a lot of leverage and we also know the area. My wife has lived here for 8 years, I've lived here my whole life, so we don't benefit from getting a locals input from an agent as we would moving to a town where we are not familiar, this would be a benefit to many.
In the first months, working with a realtor, we never saw a house not listed on MLS, (which we used via Redfin).
Second we we're always able to call a sellers agent and get a showing. If you tell them you are not currently working with an agent we found we got a very responsive agent who see's the opportunity to get both sides of the commission. Again its a buyers market so this may be easier now then in the past.
If you found the worth in using an agent by all means use one, its your prerogative. But the point is that the amount of work required of an agent doesn't really change with the price of the house. A commission basis for a buyer's agent is a piss poor model, and I'm at the end where its ridiculous.
It was that a lawyer could do the work of a buyer's agent, and even at $500/hr, would be cheaper when buying an $800k house. (That hourly rate would buy you 48 hours of lawyer time before you got up to the 3% commission of $24k.)
