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The case for ditching your real-estate agent when buying a home is gaining momentum

Dan DeFrancesco   

The case for ditching your real-estate agent when buying a home is gaining momentum
  • This post originally appeared in the Insider Today newsletter.

Almost Friday! The complicated relationship between professional sports and legal gambling just took another twist. The NBA issued a lifetime ban to Jontay Porter for leaking info to known sports bettors. But it might ultimately be a good thing for the NBA.

In today's big story, we're looking at one person's argument for why you don't need a real-estate agent when buying a home.

What's on deck:

But first, no agent, no problem.


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The big story

DIY homebuying

Buying a house is the biggest purchase most people make, so it makes sense to hire an expert to help with the process.

So, about that…

One recent homebuyer's brief experience working with a real-estate agent left him feeling way better off doing it himself. And he doesn't see why everyone else can't do the same.

"If you're thinking about buying a home, ask yourself the following three questions: Do you have an internet connection? Do you have at least a seventh-grade reading level? Do you like saving money? If you answer yes to all three, you're in fantastic shape to be your own agent," writes Albert Fox Cahn.

Albert details how much of what his real-estate agent told him was what he'd already figured out. Most of the listings his agent "found" were homes Albert had already seen online, sometimes weeks earlier. The agent also tried to push him into a bidding war that got uncomfortably high.

He eventually found a place without a real-estate agent. Better yet: he saved $50,000 since the seller had baked his agent's commission into the price.

Now, before you fire up the hate mail, I understand Albert's experience isn't representative of all real-estate agents.

But there's a legitimate case for more people to follow in Albert's footsteps. That's thanks to a recent settlement focused on agent commissions.

In short, buyers and sellers could be responsible for paying their agents separately. Previously, sellers typically paid out both agents with a chunk of the final sale price, usually around 5-6%.

(Business Insider's James Rodriquez has done a fantastic job covering this whole saga, including how the settlement could upend the future of homebuying.)

So, with real estate where it is — expensive and mind-numbingly frustrating — you could see why buyers might be willing to cut ties with agents to save some cash.

It all speaks to a broader DIY debate that plays out in industries. Take personal finance. Financial advisors are a market worth trillions of dollars. Yet some say you're better off avoiding advisors and their fees and sticking your money in low-fee index funds.

Sometimes, though, people are willing to "pay for peace."

Airbnb upended the hotel industry when it entered the scene. Why pay for a pricey, small hotel room when you could rent an entire house or apartment, often at a lower price?

But it wasn't long before annoying checkout chores and exorbitant fees sent some people running back to hotels.


3 things in markets

  1. What's holding off a recession? Economist David Rosenberg, who has a pessimistic view on the market's future, has some ideas for what's stopping a downturn. Government spending has boosted manufacturing facility construction and debt was refinanced when rates were still historically low.

  2. Seth Klarman sounds off. The billionaire founder of the hedge fund Baupost shared his perspective on the impact of AI on society while speaking at a Harvard Business School event. He also sees credit and real-estate opportunities due to interest-rate increases and pandemic knock-on effects.

  3. The US freight recession seems to be getting worse. Shares in J.B. Hunt, which is seen as a bellwether for the industry, tumbled 8% Wednesday after a first-quarter earnings report that fell short of Wall Street's expectations. The broader freight market has been toiling through an extensive slowdown since the pandemic years, driven by weak sales and an overload of trucks.


3 things in tech

  1. Reddit is taking over Google Search results. If you've noticed way more Reddit posts when you search on Google, you're not alone: Google's shift to promoting more human sites has led to a surge in traffic to Reddit. The change, however, is already being exploited by spammers.

  2. TikTok Shop is better at keeping customers than Temu and Shein. You might be annoyed by all those TikTok Shop videos on your feed, but it appears they're working. New data shows TikTok outpaced its rivals regarding repeat purchases, and was only beaten by Amazon.

  3. More layoffs at Google. The tech giant is cutting some jobs in its finance and real estate teams, two current employees told BI. Some roles are also being relocated to other offices in the US and abroad where Google is putting more investment, including India, Dublin, and Atlanta.


3 things in business

  1. Harry and Meghan's mega-deals have been mega-busts. In the last four years, companies have thrown millions of dollars into Prince Harry and Meghan Markle's projects only to be met with mixed results. Sure, the couple is really famous — but it's clear they're terrible at business.

  2. Laid-off Tesla workers are starting to receive severance. Tesla appeared to be offering two months' pay and health insurance, five former workers told BI. However, CEO Elon Musk has apologized because some of the severance packages were "incorrectly low," per CNBC. Meanwhile, as the problems pile up at Tesla, perhaps Musk shouldn't have so many jobs.

  3. Tech giants are building new data centers — and you might end up paying for it. Amazon and Ohio's largest utility company have asked the state for a huge electricity discount as it ramps up its construction of data centers there. Consumer advocates and energy experts worry that home and business ratepayers may end up bearing the brunt of the rise in costs.


In other news


What's happening today


The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. George Glover, reporter, in London. Grace Lett, associate editor, in Chicago. Laine Napoli, associate audience producer, in New York.



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