Is there a significant difference between what an "estate agent" (UK) and a "realtor" (US) do?
Are they more involved in the actual legal side of things (the sort of thing a conveyancing solicitor would do in the UK), or are they still just there to advertise the property and show people round?
If they were doing a lot more of the legal side of things I could understand the difference, but a four or five percentage-point difference seems ludicrous if they are basically doing the same job.
For context for those outside the UK, an estate agent here just works for the seller, and normally gets a 1 to 1.5% fee (paid by the seller) for advertising the property and showing people round (and good ones will give you advice on tarting the house up etc). Once you make an offer on a house it's pretty much all in the hands of the solicitors and mortgage company from then on.
Depends on the state. For instance, in PA yes, they cover the legal side of things (at least to the extent that there isn't usually another lawyer involved in the process).
The other piece to this is that this 6% is split between the buyers agent and sellers agent. Typically, as a buyer, the person showing the house to you is _your_ agent (versus the UK where it is the seller's agent). Put another way, there's effectively a whole extra person involved who (at least legally) has a specific fiduciary responsibility to the buyer, and who takes on _some_ of the tasks that otherwise might fall to a selling agent.
It's also worth noting that there _do_ exist "discount agents". For instance, Redfin will charge sellers 1-1.5%, and if you use them as a buyer's agent, they will still charge 3% (since it is effectively baked into all prices) but then rebate you 1.5%. But this is less common.
So yes, overall, realtors here are doing more overall, but honestly it's largely (I think) just that they make more here because they've been effective at establishing norms, and also because small percentage point differences are easy to discount away. For instance, I'm currently buying using a traditional agent, because honestly the 1.5% fee difference is outweighed by the savings you can get with someone who can work better on offer price and post-inspection negotiations, and who is going to be someone the listing agent _wants_ to work with (which they will pitch to their clients as "this person is reliable and will ensure we close, whereas Redfin are useless and the deal might fall apart").
Not saying it's good, just giving more of the landscape.
Thanks, that was really helpful. I find it interesting how differently countries around the world do essentially the same thing.
I quite like the idea of having someone find houses for me, although with most houses in the UK being on either RightMove or Zoopla (the two main listing sites) it probably wouldn't be worth the fee.
In most US areas everything is on the MLS (a central listing source that all brokers use), so it's actually even easier: Zillow and Redfin both hook into it and make it easy.
Mostly I think the house finding part of it is kinda easy: I think the bigger value is having someone "on your team" who can help you understand value / issues to watch for / etc.
Especially as the agency work and cost required, both sides of the Atlantic, is far less than twenty years ago before sites like Right Move and easy production of details via DTP and colour printing.
Are they more involved in the actual legal side of things (the sort of thing a conveyancing solicitor would do in the UK), or are they still just there to advertise the property and show people round?
If they were doing a lot more of the legal side of things I could understand the difference, but a four or five percentage-point difference seems ludicrous if they are basically doing the same job.
For context for those outside the UK, an estate agent here just works for the seller, and normally gets a 1 to 1.5% fee (paid by the seller) for advertising the property and showing people round (and good ones will give you advice on tarting the house up etc). Once you make an offer on a house it's pretty much all in the hands of the solicitors and mortgage company from then on.