No fluff. No sales pitch. Just how the market really works and how to keep more of your money when you buy.
There is a scam being run on California home buyers. It is a racket that extracts hundreds of millions, if not billions, of dollars from everyday Californians. And it is completely legal.
This is not a loophole anyone is sneaking through; it is how the system was designed to work. Even the Department of Justice has raised concerns about the rules behind it.
As a California Realtor, I am here to expose the con and show buyers how to avoid it.
Watch my full video on this topic below, or watch it on my channel instead.
In 1985, if you wanted to buy a home in Modesto, you had two options.
You could drive around looking for "For Sale" signs, or you could use the confidential Multiple Listing Service book. That book was not public.
The only way to see organized listings was to hire a Realtor, and that is exactly where their value came from. They held the keys to the data.
Back then, charging for access to that information was a legitimate business model.
Then everything shifted. Platforms like Zillow, Redfin, and Realtor.com put virtually every listing in America online for free, and the experience is far better than the old books.
Instead of cryptic abbreviations that needed a professional to translate them, you get photos, videos, and 3D tours. You can draw a circle on a map and have curated listings emailed to you instantly. Compared to the old system, it is practically magic.
So if the information is now free, how are Realtors still charging a 2.5% or 3% commission? They justify it with lists of 111 tasks, padded out with items like "taking notes" or "virtually previewing properties." Yet the Realtors Code of Ethics actually bars them from advising you on construction, law, or inspections.
Unless an agent has significant personal experience with homeownership and renovations, the professional value on offer is often quite thin.
In August 2024, following an antitrust lawsuit, Realtors changed their own rules.
Now buyers have to sign a contract agreeing to pay a commission before they can even view a property. It is a massive new layer of gatekeeping. Agents will reassure you that the seller pays the commission, but that is a trick.
Say you offer $1,000,000 on a home and build in a 2.5% commission. You are really only offering the seller $975,000, and you will lose to the buyer who offers the full $1,000,000.
So how do you avoid the grift?
Start by visiting open houses on your own. They are always free, and you do not need a representation agreement to walk through one.
Do not sign anything with a Realtor until you genuinely like and trust the person in front of you.
And most importantly, never sign an exclusive representation agreement.
That kind of contract can obligate you to pay a commission even if that agent has nothing to do with the home you eventually buy.
The real estate industry has evolved, but many of its practices are still built to protect high fees rather than the people paying them.
Stay informed, refuse to sign early contracts, and you keep control of both your home buying process and your money.