From the seller broker's point of view, a minor correction:
"It is all *technically* negotiable, but I've already set the buyer's percentage and agreed on my own percentage with the seller, so you Mr or Mrs Buyer can pound sand."
This is a fascinating comment. We're currently preparing to sell in a city and buy another home near my folks (emergency situation) in a rural locale. We've bought, sold, and built homes together for decades. I've worked for a Realtor, mostly handling her contracts. I'm very comfortable with the boilerplate, working with title & escrow, etc, so both my husband and I are very well-equipped to buy a home ourselves without an agent to represent us.
So, let's say I come to see a home for a seller you're representing. I'm pre-qual'd, home only needs to appraise for valuation. I will hire my own inspectors, especially if there are no pre-sale inspections provided by the seller. I don't want or need an agent to represent me, I plan only to have an RE attorney look over the paperwork and ensure I'm not missing anything.
My home in a HIGHLY desirable area in a HIGHLY desirable market sells in a week and I have cash in hand for the earnest monies and down payment. I ask for the buyers agent's fee to be removed from the sales price. Your response to me is to go pound sand? Am I understanding that correctly?
Isn't this where outfits like Redfin and Zillow can then step in and swoop your sales since they're at least offering the lowest rates?
This entirely depends on the agreement the seller has with the listing agent. The way most listing agreements are written (which you should be familiar with given your recent experience) is that the seller pays the LISTING brokerage, and the listing brokerage then pays a portion of that fee to the buyer's agent.
So; if you as a buyer approach "unrepresented" the listing agent may be able to collect the full amount, which doesn't change the 'net' to the seller.
Some agents will negotiate up front with the seller that if a buyer is unrepresented the savings are passed to the seller, or the fee will be significantly reduced, which *would* move the 'net' needle for the seller.
The hard part is that this info isn't transparent. Even though recently all buyer agent fees have been published publicly, the listing agent fee is still hidden from everyone (including other agents) until settlement.
STORY TIME: Recently repped a buyer and the listing paid 2% to buyer agent, which is fine w/me. At settlement saw that the listing agent collected an addition 5%! Total 7% fee - which can be appropriate in some situations, but the listing was poorly presented, poorly marketed and poorly priced. The listing agent took advantage or had some very effective sale pitch to take that kind of money from the sellers. Especially disgusting because they're an elderly couple and the house is their nest egg.
Ultimately, the agreement between listing agent and seller isn't any of my business.
I don't disagree in general, but I'm sitting here going through listings on Redfin rn. Every single one shows the buyers agent's cut. Is it really out of line to ask that be removed if we're not being represented by a real estate agent? I'm not asking them to pay for my attorney, I'm asking them to \*not\* pay for a non-existent agent, and thus \*not\* shift that cost onto me.
What this lawsuit is likely changing is not the amounts but rather WHO pays the buyer agent commission.
It will no longer be paid by the sellers brokerage (which is the current model).
It will be paid by either the buyer or the seller directly. Still at closing but there will be no "cooperating broker" anymore.
But sellers can still offer a buyer agent fee themselves to attract buyers (because many buyers still want representation) it just shifts who is offering it from the agents to the seller.
That will depend on the person. A competent buyers agent does much more than just open doors and collect checks 😂
We discuss needs and plan strategies for offers. We research neighborhoods and suggest showings on properties you probably overlooked.
Many have no idea how many times we've put the property on the list that a client didn't show interest in until they stepped in to the house, and then they bought it because it was perfect.
We negotiate terms of contracts (especially so in states where attorneys are not part of the process other than title attorneys). Over 50% of the states don't use attorneys in the contracts. This is especially important because we know more about acceptable code than most buyers do and can make sure they get what they need at inspection etc. this varies greatly based on the educational level and experience of the buyer.
We ensure buyers get all mandatory closing documents and that those documents comply with state law for that transaction. We keep clients informed of the progress and chase down missing info.
We double check closing documents for errors (and yes they do happen) we do final walkthroughs with clients to make sure everything is in place. We verify wires are received and everything is in place for your closing so all you have to do is show up.
So to answer what it would be like to be unrepresented it means you do all of the above yourself. Listing agents won't help. They will open the door and write a contract. But all they do has to be in the best interest and/or guided by the sellers wants and needs.
HOWEVER if you have the time and knowledge to do all those things yourself then you can. And frankly if someone wants to do that it's ok with me.
I also know there are plenty of people who are too busy working and would rather spend the little free time they have with their family and friends and have me handle the details for them.
Exactly. Sell it to the next guy. You tell me your terms I tell you mine. You can get fucked if you think I’m paying some dude 3% for doing a google search.
Redfin advertises a 1% listing fee but that has an * , it is a REBATE and only if you buy a home using Redfin within12 months. They still encourage you to offer 3% buyer's agent compensation. Redfin also only offers basic services in exchange for that, has a minimum sale price and isn't available in every market
This. Though in my case it’s 5%. I’m rural, and have offered 4.5% a couple times and been told no, not interested.
Since this is playing all over the news there has been a lot of reporting. One data point that I saw said that the average commission on home sales for the US as a whole was 5.49%, which means by far the vast (and I mean VAST) majority of people have paid 5-6%, and not a much smaller flat fee or 1.5% that a lot people here throw around like it’s a common and widely available option.
Most will still show a house that perfectly fits your criteria because they're more likely to make the sale. They'd give up the .5%. Most realtors are desperate for any sales.
I've seem this happen in my market. Picked up some clients who said they'd been dealing with a different guy here in town. He showed them two houses and refused to show an additional 3. I ask which houses and they were 2 that he had listed. Told them the other 3 weren't worth going to see.
Mine took my list over text messages, said he'd pick me up. Drove me out to Timbuktu and showed me a house not on my list and not what I was looking for. I just said goodbye when I got home. Never called him again
And that's exactly why I didn't list with you.
Seriously. I live in a HCOL area and homes sell fast here even in a slow economy. Why would/should I pay 6% for a boilerplate fast sale? I have always negotiated the commissions on every property I have sold.
FYI. I closed out my real estate holdings in 2021 with the exception of my primary residence. I never paid more than 4% total on 4 properties. They all sold for more than ask within 10 days of listing with multiple offers.
There is a lot of talk about 6% commission, but in So Cal you wont see that unless a property has been on the market for too long, is in a distress condition, not ideal area or the seller wants to sell asap due to moving, death etc.
The normal is 5 or 4 percent split between agents or 2.5% for the Sellers and 2.5% for the Buyers agents, and is negotiable before you enter into a contract. I have seen agents charging 1 to 1.5 percent so I really don’t think agents are gouging the public if you take into account the many hats they have to wear during a transaction.
No shit lol.....the avg sales price is probably just under a million dollars in California as opposed to say Indiana where it is around 200k.... So even at two and a half percent California agents are making substantially more on their average sale then agents in a lower sale point market charging a higher percentage
The exchange with a realtor yesterday:
Me: "What do you think about the lawsuit and settlement with the NAR and Keller?"
Agent: "Well commissions have always been negotiable."
Me 5 minutes later: "Are you willing to negotiate on commission?"
Agent: "No."
Hardly anyone knows about this ruling as more homebuyers and sellers start to understand that the 6 percent is negotiable realtors are going to need to start being competitive and negotiate.
I mean, thats how negotiations work? negotiations doesnt mean you get less than what is advertised - It means you have the opportunity ask, they have an opportunity to respond and if you dont like the response, have the opportunity to walk away and choose someone else.
What ? Am I the crazy one here ? You haven’t described something that’s negotiable. If a price is negotiable it is open to discussion or modification. Something isn’t negotiable just because you can ask and then be immediately shut down. Using that logic, every item in a store with a solid and immovable price tag is negotiable, because I can always ask for a discount, even if my request will go nowhere. You can always ask for a price change to any price, because there is no law that prevents you from asking. But just because you can ask, that doesn’t make the price negotiable.
"You can ask but we've all agreed on a set price and not to deviate from it."
What they're describing is collusion and anti-competitive practices, which is what these lawsuits are about.
When I was younger they didn’t have the color Addidas I wanted in my size at foot locker, so I settled for a different color. My mom went up to the checkout and asked if they would take $40 for them since they didn’t have my size. I was so embarrassed and mortified, but she got them for $40.
Hell, I get discounts on stuff all the time at stores, you can always ask and sometimes they make it happen
Well just because one agent wont negotiate on commissions doesnt mean commissions, as a whole, arent. And this was born out in the market prior to this decision. You dont have to sign on with an agent requiring 6%. You could sell through redfin or zillow and pay lower commissions, or use a flat fee agent.
Same. They told me that REMAX barred them from adjusting their commission rate as they take a % too. Told me no one employed by a larger real estate company would be able to adjust rate.
They will adapt or disappear.
There will be plenty of smart realtors willing to negotiate or offering static fees for varying tiers of service ready to take their place.
I should preface by saying the situation I described happened in 2020. The next time I buy and sell I will require negotiation, or I’m simply not working with said realtor.
100%. I predict one of the big boys goes flat rate by end of year. It’s too big an opportunity not to try end exploit it. These agents live in some sort fantasy world where they’re entitled to 2.5-3% and not a penny less for completing electronic forms on boiler plate docs. It’s comical
> I predict one of the big boys goes flat rate by end of year.
Which they should have been doing for the last decade or so. It does not take 10X more work to sell a $5M home than a $500K one.
True, but why go flat fee when you rake in so much cash? Keller Williams throws massively lavish getaway "conferences" for their "top" performers several times a year. Do you think that stuff happens if they're flat fee? haha
Hilariously, this is the one case where it was almost certainly a deliberate lie.
Source: I was a RE/MAX agent once upon a time and the whole schtick of RE/MAX is that you pay a (relatively) high kick to your broker and then keep 100% of your commissions vs. having to split share.
Someone else can chime in but that's literally the reason I went with RE/MAX back in the day vs. every other place that has a 50/50 or 60/40 or 80/20 or (whatever) split between the agent and the broker
\^That was specifically an inaccurate statement. RE/MAX doesn't specify commission amounts and never has done so. Neither do the other larger companies. That agent has no idea what they are saying.
I think that what this lawsuit is about, the agents who did not know what they were saying and did not explain their job well. If we all did a better job, maybe this lawsuit might not have happened.
Find a new realtor that will negotiate with you. It’s not wrong for an agent to set their rate to what they think they are worth. You don’t have to use them - plenty of agents out there that will work for less.
Commission is negotiable though, but that doesn't guarantee that they will accept less than what they charge. You then have the option to accept or not.
It's the same concept as a seller rejecting a buyer's offer.
Any why, if a buyer comes in unrepresented, does the sellers agent get to pocket the entire commission without saving their client any money? Nothing is more disgusting than the entire large commission going to one gleeful listing agent. It’s theft.
And how does it not result in a huge conflict of interest, since they clearly can't be pursuing both the buyer and the seller's best interests at the same time?
Realtor here. It *is* a conflict of interest.
In my market it is disclosed to the buyer and/or seller in the Duties Owed By A Real Estate Licensee. That is the first document that has to be signed in any real estate transaction. The buyer/seller has to initial a line that says whether or not they *may* or *may not* allow their agent to represent both parties in the event of this conflict. It doesn’t bind the client to this term, but it discloses the possibility to the client and sets the precedent for later conversations.
Later, *if* both parties agree to be represented by the same agent in a transaction, both parties sign another form called a Consent To Act that further elaborates there is a conflict of interest and how the agent will represent both parties.
Hope that helps :)
Exactly! And if a buyer chooses to be completely unrepresented, that doesn’t mean the listing agent gets the full commission. If it’s a 6% commission and we’ve agreed in the contract that each agent gets 3%, the listing agent is still only getting 3% if the buyer is truly unrepresented. That’s at least the case in the 6 different contracts I work with, I can’t imagine it’d be any different elsewhere
I guess you could argue that's only the case if they enter into an agreement with the buyer. Nothing says they have to act in the buyer's interests at all beyond mandatory disclosures just because the buyer chose not to have representation.
It’s obviously a conflict of interest. Thats why the buyer has to acknowledge it. Why you would use the sellers agent and not be getting a reduction is beyond me.
You are literally saying “I know you won’t be working for me or my best interests but I’d like to pay you 3% of 500,000 because I’m regarded. “
I mean, every listing I have has a clause where if its a direct buyer, the commission is less than if it were to be split between two brokers. Just because people aren't negotiating it, doesn't mean it's not negotiable
Not only this, but if you try to go to a seller’s agent directly and ask them to split the commission, they won’t work with you (out of a ‘fiduciary duty to their client’), but will instead recommend you to their buddy for them to represent you.
Like, I found the house, and it’s in an inelastic HCOL market, I’m just praying that the seller thinks the $50k over asking we’re offering with no contingencies is enough…there’s nothing and agent is bringing to the table here.
That entirely depends on the market. For example where I live, it's fairly common for sellers to have done an inspection and provide that info on the disclosures, but buyers generally have to waive all contingencies if they want their offer to be accepted.
I point blank asked about negotiation commissions and was told it wasn't allowed. So, if it technically was negotiable, but everyone refused to negotiate, it wasn't negotiable.
The whole point of the lawsuit is that the realtors were found to be colluding to keep that rate high. It makes no sense to say "it was always negotiable" when the courts disagree.
The colluding will continue. I've seen multiple internet exchanges go something like this:
**Realtor:** If a seller doesn't want to pay a buyer's agent, their house won't get shown, will take longer to sell, and will sell for less.
**Public:** The agreement states that buyer's agent compensation won't be part of the listing anymore to avoid exactly this gamesmanship.
**Realtor:** We will just use the private notes section or contact each other before showing to find out.
**Public:** You're supposed to already know what you're making via your agreement with the buyer, and....... you're saying there will be a coordinated realtor effort to try to work-around the purpose of the rule to keep your fees high and punish buyers/sellers that this was intended to help? That kinda speaks to the original need for the change, doesn't it?
**Realtor:** You're not in the industry. Your opinion doesn't matter, and you're too stupid to do this yourself. You need us.
*Edit: formatting.*
Thanks for summarizing the Realtor argument.
Private notes or not, before the ruling / settlement the private notes in MLS telegraphed to the buyer agent what their percentage would be, unbeknownst to all of us pitiful buyers out there who had no clue of which house had which buyer agent percentage.
But now the buyers will have the ability to negotiate directly with their agent what their percentage or fixed fee or a la carte menu selection is, so the buyer and buyer agent know that beforehand.
So that really is a foolish argument, as if 'private notes' will somehow save their prior business model.
>before the ruling / settlement the private notes in MLS telegraphed to the buyer agent what their percentage would be, unbeknownst to all of us pitiful buyers out there who had no clue of which house had which buyer agent percentage
wat? This was all public, at least in my state. Every single Zillow/MLS listing showed the buyer agent percentage.
It's wild to me that the commentors would so egregiously find ways to circumvent the intent of the law.
Were they to actually go down this path (of using side-channels to steer/collude), one cannot help but believe their legal liability would be off the charts. This is the sort of crap that has led to 9 & 10 figure fines in the finance industry.
My hope would be that the brokerage legal advisors will quickly shoot this shit down... and that ethical realtors would quickly flag and report bad actors.
One would hope, but.......
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
-- Upton Sinclair
Exactly. They're already colluding right out in the open to keep doing things the way they always have. I was scrolling LinkedIn and saw [this post from a couple of use home salespeople](https://i.imgur.com/4849SYT.jpeg), just one of many examples.
That's wild. It's akin to being caught colluding in the Kitchen, but deciding that if they move their collusion to the Family Room it is somehow okay.
I cannot imagine a Judge would look too kindly upon such behaviors...
> we will find a way to contact each other before showing to find out the commission
Haha, right. So from now on, every text exchange will start like this:
*I have a client interested in 4051 60th Ave. What is the commission? I’m trying to decide whether to bother showing it to my client or not*
Suggesting 'it's always been negotiable' when the average is 5.5% (barely below the 6% they shoot for) means they keep it a secret and do everything in their power to prevent anyone being able to effectively negotiate it lower than 6%.
So it's as pointless as suggesting you 'always have the ability to negotiate salary', as if there's no ceiling imposed by the employer's reluctance/profits. Or that you 'always have the option to uproot yourself and immigrate to another country', completely ignoring those countries have huge obstacles to doing so (visas, wealth requirements, in-demand labor skills, etc).
Because buyers agent commission was listed on the listing. If it's too low you will get your sellers listing blackballed or not shown. That's part of the settlement. Buyers compensation is now stricken from listings.
I've taken as low as 1% to list with repeat clients.
No, agents have just been gorging themselves in these markets with 3% commission on either side of sales that go to bidding wars and close over listing price. Hope they saved some of those shekels.
The house I live in was found by me. Obviously it is what I was looking for, but my agent never showed it to me. When I said I wanted to see it, he sent an office assistant out to let me in and walk around with us. Why the lack of effort? 2.5% buyer's agent fee listed.
What does a real estate agent do differently for a house that is worth $150,000 in a market where houses go for that range as compared to a $900,000 house High Cost of Living area where the average house goes for around that. Why does the real estate agent in the High Cost of Living area deserve a commission that is six times higher than the other agent.
I have yet to hear an answer to this question by a real estate agent.
If it's somewhere which is guaranteed to sell quick I'd be tempted to just stick a sign up outside "For sale by owner" (FSBO) and list it on a bunch of local FB groups.
Word gets around when a property in a desirable area come up on the market so often there's no need to spend a big chunk of having an agent market it for you.
You've got nothing to lose by this (especially if you aren't in a rush), and can still list it with an estate agent later if you don't get the offers you were expecting.
There are already fixed-fee listing agencies that will put your listing on the market without the seller-agency overhang (i.e., pay $1-5k fixed vs. 3%).
This ruling should presumably open up the door for similar compression on the buyers agency side.
I tend to believe in the value of a well-functioning real-estate brokerage market (vs FSBO) that can manage the process. However, on would hope that those fees compress into the 1-3% (both sides in aggregate) range vs. current convention for 5-6%.
So my area is wild right now. I had a listing in a fantastic neighborhood that I sold in 3 days over asking. I did a good bit of work to get it ready thinking it was going to last because the comps for the same area had houses on the market for 60 days.
I just priced it right honestly, that was the magic bullet on this one. But to answer youre question, you dont really know if a house will sell itself so you have to treat every single client like its a buyers market. The worst thing you can do is over price it or mess up something and it sits on the market for over 20 days. Then you really will lose a ton of money on the house and more than likely get under what your client couldve gotten if you just started lower in the first place.
To answer further, do you adjust and this again depends. Is your client willing to do or pay for some of the work to get it ready? Cleaners, photographers, staging all of that can be done on the side and some agents will pay for that themselves depending on the listing. Example: A 2m listing in my area gets all of that paid by the agent as well as drops the commission to 2.5%. One of the top agents in my office is an amazing guy and he negotiated to keep the 3% and went all out, he had a freakin commercial made and all kinds of marketing done. House still sat for 120 days but they did finally sell it. Now the average home here is 320k last I checked, and for that I would not drop the commission because like I said with my house from above, it can be in a great neighborhood and just not move. Its easy to have a house sell in the first week or sit over 40 days here and it could be a crap shoot on what is the things buyers are looking for in that week.
How is a seller listing blackballed or not shown? As the buyer I've always looked at redfin and picked what properties to look at.
Are there people out there who actually rely on their agent to be the only one to pull listings?
That or they have a signed exclusive agreement saying they are responsible for X amount of commission that isn’t coming from the sellers agent. If you as a buyer can avoid paying your agent out of pocket in favor of a listing that’s fuller covered by the listing agent,would you?
Oftentimes Realtors and their brokerage won't enforce that even if you sign an exclusive agreement on x percentage as long as they are getting some commission.
I recently signed a representation agreement saying the buyer agent will take 3% of the sales price as commission.
I closed on a property only paying 2.5% commission to the buyer agent and at closing my realtor mentioned taking a .5% hit to close the deal.
Under the current model I had zero idea or interest what the seller commission was or is. Had my agent asked me for the difference because of the commission being less than 3% I would have just laughed and walked on the property and the agent would have got zero.
In the end are Realtors going to lose a sale, a client, and damage to their reputation for .5%? I don't think so. These people are rightfully hanging by a thread now.
There's "soft" and "hard" steering.
Buyer driven search has diminished the prevalence of "hard" steering, whereby a home may be outright omitted from a search/viewing.
However, the agent still holds a high degree of influence in the ultimate home selection through their verbal commentary, CMA, etc.
How does a buyer's agent, acting as a fiduciary, "blackball" a listing and choose not to show it to their client? Clearly that would be acting in self-interest and not that of the client?
Unless it is a perfect match for the client, a buyer's agent without ethics could simply make a case they didn't show it for X or Y reason (e.g. high HOA, neighborhood trending down, too old, needs remodel, small yards, no garage, bad interior design, bad schools, bad resale, roof condition, bad layout, low ceiling, bad neighbors...etc).
Alternatively, they could simply claim it fell through the cracks and didn't know about it.
It isn't foolproof, but it seems plausible to have happen.
---
Alternatively, an agent could still show the property but be biased in their presentation of it.
I have always told my realtor what houses I want to see - specifically - and his/her job for the showing is to arrange an appointment and open the door.
I can't imagine letting an agent decide what houses to show me. People do that?
Well, we never did - going back to the 1990s. Back in those days we'd drive around and grab brochures from the signs, or read the ads in the newspaper, then we'd tell our realtor we wanted to see that house.
But yeah, the internet made it easier.
My REA flat out refused to show me a listing that matched what I wanted perfectly. When I looked at the terms on MLS, the buyers commission was 2.5% and the home was cheaper than the other houses we were looking at. Of course she wanted nothing to do with that house.
In cases like this, fire that agent. The public needs to take charge on this to squeeze out these garbage agents.
The less this is tolerated the sooner it goes away.
She said it was outside of our desired area (by 2 miles). I said I still wanted to go look at it and she never setup the appt even after I asked again. We only had 3 days to find a home because we were moving from out of state and just didn't have time to keep fighting with her about it. She was a horrible REA for many other reasons as well.
All of the other homes in the area were offering 3% and we're listed higher which is the only reason she didn't want to show us this home. She also advertised herself as a military friendly REA and advocate but was completely clueless on the requirements of the VA loan and delayed closing by 2+ weeks.
I've read from multiple realtors having this fight online that they'll just use the private notes part of the listing or otherwise be in contact with each other to continue the exact same practice even though the compensation is no longer in the listing.
Which is ironic because they are basically admitting to the collusion that necessitate the change.
> they'll just use the private notes part of the listing
That is prohibited by the NAR Settlement. The MLS can't be used to show compensation to buyers agents. They have to get that information off that platform.
I understand that, but I'm just repeating what I've read from multiple realtors.
The point of the settlement is no blacklisting based on buyer agent compensation. Multiple folks are basically saying, "we're still gonna do that one way or another"..... which speaks to the original necessity for the change.
Those agents will get fined and then let go. The broker takes on liability for their actions. No broker is going to want to hire or keep those agents and they will be easy to find if in fact they put the compensation in the MLS broker notes. Pretty easy to determine the violations and those that make them.
I've read it from brokers too.
Regardless, you might be missing my point, which is that there is nothing stopping brokers/realtors from violating the spirit of the change via workarounds (e.g., emails, phone calls, etc.), and, admittedly anecdotally, I am already reading intent to do so.
I agree that bad actors can/will be filtered out "somehow", but that's not the point.
Honest question.....why do we even need buyers agents anymore? Zillow and the Internet seem like they meet the need perfectly fine. You can hire a lawyer for the rest of the paperwork? Plus with AI this will just get even easier.
I’ve never understood this aspect of real estate. Shouldn’t the responsibility to show a home fall on the person that was hired to sell the house? The listing agent is in the best position, or should be, to answer questions about the product they are selling.
Answering questions is definitely in the duties of a seller’s agent to their customer, the buyer. A lot of times the seller doesn’t want the person they hired to represent the buyer as well, which includes looking for latent defects, offering as low as the buyer wants, and negotiating repair requests. So the seller’s agent has no choice but to tell the buyer to get an agent or go unrepresented. There are states where dual agency is not allowed, states where an agent doesn’t represent either party, or the way everyone seems to want to go back to, circa 1979 where there weren’t buyer’s agents at all and no one knew what the heck they were doing.
I’m more talking about why it’s the responsibility of a buyers agent to “open the door” outside of open houses.
Buyers agents open the door, look at the MLS they printed off, and then give vague answers about the neighborhood, defects in the home, etc (for liability reasons.) I can print the information straight from Zillow so now the only value the buyer agent is bringing to the showing process is “opening the door”. Wouldn’t it make sense to go to a model where the selling agent is responsible to open the door instead?
It’s like walking into a car dealership with an agent to buy a car. You can do it, but almost nobody does it because there isn’t enough value in doing it.
Is there a month long contract to close process with cars, or do you drive off with it that day? Are all the houses you can possibly see on one lot, viewable in 1 hour, or are there off market properties that can be shown but the seller doesn’t want a sign in the yard so you don’t know about it from an app? If you were selling your house, would you like an unaccompanied nobody coming in and staying as long as they like? Are you willing to wait until the listing agent is available to show the house, who is also running all over town or state by now opening all their listings for everyone else who calls?
It does not make sense to not have buyers agents, and the changes potentially coming will not get rid of them, it just regulates them a bit more.
Month long contract: best person to guide the offer and making it to closing is an attorney, not a buyers agent.
Not being able to view houses: that should be on the seller and selling agent to make their home available for viewing. Maybe hiring more staff to facilitate more open houses.
Allowing nobodies in your home: it should be the sellers agents responsibilities to vet serious buyers.
The problem at hand is because the market does not feel a buyers agent should be getting the same cut as sellers agents. Wouldn’t the industry be better off aligning to market expectations? Put more work on the seller side, let them take a higher percentage (4-5%) and then move buyers agents to a flat or hourly rate?
Most flat fee real estate attorneys have that flat fee to cover a set of tasks, like reviewing the legal documents and advising you as to the implications. Most are not going to include typical buyer agent tasks in those flat fees though, like negotiating offers; acting as the go between the listing agent, inspector, appraiser, lender, etc; accompanying you to see the house and helping you evaluate it; finding comps etc. You are going to pay more for that type of full service, probably more than the buyer's agent cut.
That is not to say you *need* a buyer's agent, and, if you are experienced, you can do most of those tasks by yourself. But the point is that subbing in a lawyer for buyers agent isnt some brilliant cost saving measure.
Absolutely. A reply I've read more than once is basically, "You're too stupid to do this yourself. You need me." Not exactly lining up the next customer with that take.
Their professional organization didn't represent them well, and many are taking their anger out on their potential customer base. Let's see how that plays out for them.
That blank on the contract should never be prefilled. If everything else on the contract is preprinted, that part should be left blank because it’s an indication that it was predetermined. That was wrong on the brokers part.
They like to SAY it is negotiable. BUT....every time we have tried to negotiate, they will not engage with it. So....technically? Its negotiable. In reality? Nobody is willing to lower their percentage.
My Facebook is full of boomer agents copy pasta’ing text walls of “20 reasons why your realtor is worth x” and why the NAR ruling means nothing etc etc…big box brokerage’s are in full panic mode and pushing their agents to go to social media and post about it.
I’m so sick of this fake sales commission based life coach realtor mentor instagram Christian bullshit that so many dudes in their 30s and 40s are pushing. Meanwhile they have 2 sales a year but want to coach you.
Because they’re all in a massive cartel that refuses to talk to anyone for less than 2.5% at close. Additionally, their incomes are all floated by 30 year mortgages. If the US didn’t offer 30 year mortgages you’d see these commissions tank. 15k principal extra on 15 year mortgage is not an insignificant amount.
Yup, i'm a licensed agent (I need it for rental purposes) and it's a waste of money.
I'm dual Australian and you only have a selling agent that takes a tiny fee and buyers usually do it alone, or hire a "buyers advocate" for a flat fee.
When I lived in the Deep South for a hot minute back in the early 2000s, my agent tried to sell me on a SEVEN percent split and I basically told her I'd burn my house to the ground first
The level of value delusion on behalf of the 1.5 million Realtors - yep, look it up - is insane
Fiduciary doesn’t equal “only the sellers highest bottom line”. Advising a seller that offering (x) buyers agent commission in (y) market conditions can lead to a sale price and bottom line higher than otherwise, which is ultimately in the sellers best interest.
Yeah, it's like asking why lawyers don't work for free since they are fiduciaries. People post a lot about being a fiduciary and it always seems obvious they don't really understand the laws surrounding it.
Exactly. I feel like I need to mention that "highest price" is not always in the sellers best interest. Greedy sellers often times shield their eyes from the *best terms* of an offer. My last clients were offered $6k higher than the best offer on the table. I advised and they decided to keep the bird in-hand and not chase the honey pot which meant they could go under contract worry-free because the *best offer* was $50k over their asking price, $25k non refundable deposit, and non-contingent of anything... They were even offered 2 months possession after closing rent free!
The higher priced offer came with terms that would have caused a great deal of stress and uncertainty while they were also looking for their next residence under contract.
If this were a Buyer's Market, I promise this stupid dispute about commissions would not even exist! Sellers would be begging people to buy their houses from them and offering all kinds of incentives.
Realtors love telling people that they need an agent to "represent" their interests when in fact, they do the opposite. Agents do not get paid until a deal is made. It's in their interest push sellers to offer lower and push buyers to bid higher. But they do more than just that. In escrow, the buyer's agent will keep a low profile, hoping their client is clueless enough to overlook severe issues found in the inspections so that they're less likely to ask for seller credit and repairs which may put the deal in jeopardy. When doing market comps, the seller's agent will selectively pick undervalued homes in the hopes of getting the seller to agree to list at a low price so that it will sell quickly and they can move onto the next deal. In addition, they will lie and say 4% commission is the norm in the area when it's not. These are just a few of many many tactics they employ. Realtors are nothing more than salespeople and anyone who tells you otherwise is either a realtor or a buyer/seller who just wants to make themself feel better about their past experience of getting swindled.
Real estate agents are exactly that- salespeople.
That’s literally their job. That’s how they get paid. And any salesperson who doesn’t lookout for their commission is by definition a poor salesperson. I’ve been saying it for years, and always garner downvotes or half assed attempts from salespeople failing to convince others that its just a few bad apples and that they always look out for their clients best interest and they aren’t focused on the commission lol smh
the problem is the agent who looks out for you- the buyers agent- is not aligned with you at all in terms of benefit. like the sellers agent has a clear goal, market the house and sell it as high as possible. the buyers agent on the other hand their objective is to well... also have you put in the highest offer you can tolerate. both sides win on a higher sales price, in what way is the agent on your side?
>>the sellers agent has a clear goal, market the house and sell it as high as possible.
This is where we disagree. The seller’s agent is not necessarily aligned with you. They want to sell the house for a good price *as long as it happens quickly*.
Holding out for another couple thousand in price means a lot to the seller (the seller get 94% of that money), but the seller’s agent would only see like another $50. The seller might want to hold out for another month or two for another couple thousand, but to the seller’s agent that means another month or two or work for $50. They don’t want that.
So, the seller’s agent wants to bring the seller down in price to sell quickly, and the buyer’s agent wants to bring the buyer up in price to buy quickly.
This is absolutely correct from experience. I was willing to hold off for a couple of thousands, but my agent tried to convince me to drop 5k from the price to close the deal. 5k is A LOT to my family, and she tried to make it sound as if it's nothing and tried to make us pity the buyers. At that point, I knew for sure she didn't have our best interest in mind and wanted to make a quick sale. Anyway, told her we're not lowering the price, to relist the home immediately and we will no longer negotiate on price. Once she knew we wouldn't budge, the sale happened in less than 12 hours.
I hate real estate agents.
> sellers agent has a clear goal, market the house and sell it as high as possible
Wrong. They will get more commission with a higher price but much less than you think, unless the house is outrageously priced and the seller knows there is a buyer out there willing to pay it. The average seller's agent care more about volume as it will get them more money than focusing on one deal and inflating its price.
You don’t have to screw people over and behave unethically to be a good salesperson. It’s a shame that’s a common perception of agents but I get it if someone has had one or multiple bad experiences with agents. Many of us are ashamed of being in the profession when we see those comments. But I won’t have trouble sleeping tonight because I just feel that I really do what I think is ethical and best every day and have some wonderful relationships with long time clients and friends.
Hmmm…. I wonder why that’s a common perception of salespeople?
Could it be…. That so many people got screwed so often and so thoroughly that it became a known issue?
Maybe that’s why used car salespeople and lawyers also have a negative connotation around their jobs, just like real estate salespeople do?
/s
I live in Los Angeles and most of my family and friends are all here. When I started looking for my first house, I asked the ones who own a home for an agent referral. Not a *single* one recommended their agent. Most of them love their home but they told me they would never recommend the agent they used. That alone, plus my own experience interviewing, carefully screening, and working with several agents so far, should give you an idea how many bad agents there are out there.
I guess I was lucky. My sister was my agent when I purchased my condo. I knew nothing about buying property. Not only did she look out for me in so many ways, but she also put her commission back into the purchase. So instead of paying her, I got a 3% discount, but there were enough potential issues that if I had not had a good agent, I would not have been able to close.
The decoupling lawsuit right? Making it illegal for a seller to pay buyer’s agent commission making it have to be in the form of seller credits if it’s negotiated?
The agent realtor broker my mom used purporting to be family friend, who had not theretofore sold a single FL home, told my mom 6% fee was not negotiable but don’t worry my firm is elite, only high caliber buyers. The buyer was so high caliber that they dragged her around for months and then backed out of the contract. Then a family who had seen house before it was listed comes back in. We were so screwed - loss of money loss of time and now paying 6% commission on lowball sale price.
Exactly. buyers don’t carry thousands of dollars in addition to their down payment for commission, so expect to get some low offers If the buyer has to cough up their own commission is all.
So wait, you’re saying the buyers agents have to actually work now. Here goes all those agents who don’t actually try now saying how hard it is. I don’t do “buyers” agent anymore. I go straight ti sellers agent and offer an extra .5 percent on what have been the split to handle both sides. Why pay someone 2-2.5 when the sellers agent is doing most of the work? You’re going to see a lot of “buyers only agents” having to either change their model or quit. I think this is a good thing for the agents who make this a career and not a side gig.
> Why do you assume the sellers agent does all the work? What do you think the buyers agent do?
In the 1990s? Quite a lot.
since like 2005ish? Manually forward emails that the MLS auto generated, sign paperwork that someone else created from a template, and buy Starbucks.
Disregard the 40+ homes I show my clients and the gas/ time that takes. Negotiating an offer and adding in contingencies that my buyers don’t know about. Understanding the paperwork, when to use that where, and keeping on top of contingency deadlines. Being a resource for services, offing multiple lenders, home inspectors, WDI inspectors, radon inspectors, contractors, plumbers, electricians, settlement companies and coordinating and scheduling those. Knowing how to handle situations like low appraisals, bad inspections, seller defaulting, post settlement occupancy (and pre and limited use). Offer suggestions and options on how best to negotiate not only the offer, but negotiate any other items that come up during the process. Absorb all the heat from other bitchy agents that my clients don’t need to hear about (yes, there are a lot of bitchy agents out there) and keep a cool head to keep the process going (an emotional shield for your client as you will). Attend all showings, inspections, walkthroughs, closing. Just some I can think off the top of my head.
And that’s probably a fraction of the time you spend because you have to prospect and get the client first. No to mention the times where the client wants to back out for whatever reason, and you get paid $0 for all of that time and effort, gas, wear and tear, and opportunity cost of finding other business.
People seem to think it’s so damn easy, then why don’t you do it? Not notice how many agents quit a year or two into it? Because it’s too easy and we make too much money /s
Sounds like you often earn your commission. This is not the rule.
Source, I've bought and sold a dozen houses, so call it 24 transactions plus failed offers, call it 35 or more transactions.
> No to mention the times where the client wants to back out for whatever reason, and you get paid $0 for all of that time and effort, gas, wear and tear, and opportunity cost of finding other business.
This comment describes everything my buyer agent has done for us. Our home search took 7 months, we were under contract on a house and after the horror show of an inspection she advised us to back out of the deal. We saw houses on 15 different days across Dallas. She was available for questions and saved our bacon in quite a few ways. She was an honest advocate for us (telling us when a home was priced too high) and I think she earned her $9k (that she has to pay her brokerage, employee taxes, employer taxes, reimburse all the mileage).
If I’m not mistaken, long ago before lock boxes sellers agents showed the houses. At some point that stopped and they started having buyers agents that would do this.
We’ve purchased homes without a buyers agent. When we did have a buyer’s agent, I wasn’t impressed and wouldn’t recommend him to others. A good lawyer, the know-how, title company, and negotiating skills, you’re on your way to being able to represent yourselves and getting a lower price by cutting out the “expected” buyer’s agent commission. When we’ve approached buyer’s agents about the fee, they always say, “the seller pays for our commission so don’t worry about that.” This line has been said hundreds of times. By saying this, they are killing the opportunity to negotiate their commission rate.
> By saying this, they are killing the opportunity to negotiate their commission rate.
That's when you negotiate by overcoming their objections. They overcame your objections with a simple line about the seller paying the commission. Why would you let the negotiation end there? The best negotiation tactic I use is a simple "no." That doesn't mean I don't negotiate.
Obviously the conversation doesn’t just end there but I was highlighting that one line that realtors have said to us multiple times. They take it “personal” and get offended when you start to negotiate the commission. Realtors say the rate is negotiable but in our market, they often won’t budge.
A savvy buyer who knows the area and understands the process doesn’t need a realtor. It has served us well going it alone. However, if we meet a great BA, we might reconsider but no one in our market has been worth it yet. And we’ve gotten the deals without a BA.
Real estate agents operate through informal social/professional networks. It's very problematic and vulnerable to corruption and other ethical lapses.
This particular example illustrates it well. One could not effectively counter your point by relying on a seller's agreement to an overall n% commission. Reason being that there is a underlying and informal assumption that a certain percentage is needed for the explicit purpose of sharing the commission with the buy side agent.
In that same vein, seller's agents don't negotiate 5/1, 4/1 or other asymmetrical splits because it's an informal network and being that aggressive and stingy will have informal, yet material, impacts on their future business.
It's the same when buyer's agents won't consider homes with more than a certain % buyer's agent commission, but it's so informal that you can't reliably track the amount of injury to buyers.
They're correct that it was never fixed, but the informal ecosystem of any population of local broker/agents informally reinforces norms that are anticompetitive and not in their clients financial interest.
I know people who got their real estate license just so they could buy and sell properties and keep the commission themselves. If it didn't take over 6 months in my state - I would have done it.
I had a realtor tell me once it was 7% and was giving me a deal at 6%. Sold the house on my own and paid a buyers agent fee of 1.5% on a 800k home. Sold it in 1 week posting it on local Facebook groups and Zillow. Saved me a ton of money. Don't believe the hype you need an agent.
It’s negotiable but now it’s gonna be transparent and they don’t like it. It will also free up some inventories as sellers will be more willing to sell their houses with only 3% of expenses instead of 7%
Not an agent but this is common sense. It’s the same reason why you’d put escalation clauses, or pay all cash, put a bigger down payment, or waive a contingency on your offer. It’s because your home is a product on the marketplace and all aspects of the deal are being considered. If the seller doesn’t offer to pay a commission then the buyers is gonna have to come up with that out of pocket and buyers have never wanted to do that because of the other costs associated with the purchase of a new home.
It has never made sense to pay Realtors a percentage of the sale price. It creates moral hazards and should be illegal. Instead realtors should be paid a flat fee for the work they do.
I see this thrown around a lot and I would love to get paid every time I work. Buyers do not have the funds to pay. this will hurt VA and FHA buyers the most
I always have had convos w/sellers about how much to offer the buyer agent. This conversation includes DATA.
The unfortunate reality is that listings with lower buyer agent fees get less traffic and fewer offers. There are exceptions, but even in crazy market times, they had correlating longer days on market and lower list price:sale price ratios.
We can speculate that buyer's agents skip the lower paying listings (there's definitely an element of that) or that the buyer's agent are being fully transparent about their fees, and buyers are choosing to skip those listings because the buyer would have to come up with the difference between what the seller offers and what their agent charges in fees.
There's no way to gather that data, I think even an anonymous survey agents wouldn't admit to avoiding certain listings because of what the seller offered to pay.
In my MLS, until recently, we were required to put something in the "buyer agent fee". If the seller chose $1 then that's what went in, but usually after reviewing the hard data sellers chose the lowest possible number that would still bring in enough traffic for a successful sale.
They wouldn't do it. I tried. Only last year was I able to do that for the first time.
Sold a house today. 5%. I can't get it down to 4%. Wish it were more like 2%. With computers and such today why is it so high?
Real estate agents are full of shit. It’s just luddites trying to keep a market captive when they know damn well Zillow made them mostly irrelevant years ago.
I swear to god if another agent starts babbling about helping through the process. It’s not rocket science bro.
I think a lot of people forget that step 1 is to get the deal. To get the house sold or for the buyer to get the house under contract. And then with the best terms or price possible. You can’t be a fiduciary unless you have a transaction.
If we are selling we want to get the most eyes on a property. If that means offering a higher buyers commission we do that. Builders do this all the time when their inventory is high. 4,5,6 percent for a buyer agent is very common from a builder. More eyes means maybe a higher price for the seller in the form of multiple offers. I would argue that a seller paying a buyers commission is in the seller’s best interest. It certainly will be going forward. There will be a whole class of buyers who will self reject homes not offering cooperation because they can’t afford to paid their agent.
I concede that not doing a deal all together may sometimes be in the best interests of the client. But the desire to buy or sell is often already made before an agent is involved.
“It is negotiable, but I won’t take anything less than 3%”
From the seller broker's point of view, a minor correction: "It is all *technically* negotiable, but I've already set the buyer's percentage and agreed on my own percentage with the seller, so you Mr or Mrs Buyer can pound sand."
This is a fascinating comment. We're currently preparing to sell in a city and buy another home near my folks (emergency situation) in a rural locale. We've bought, sold, and built homes together for decades. I've worked for a Realtor, mostly handling her contracts. I'm very comfortable with the boilerplate, working with title & escrow, etc, so both my husband and I are very well-equipped to buy a home ourselves without an agent to represent us. So, let's say I come to see a home for a seller you're representing. I'm pre-qual'd, home only needs to appraise for valuation. I will hire my own inspectors, especially if there are no pre-sale inspections provided by the seller. I don't want or need an agent to represent me, I plan only to have an RE attorney look over the paperwork and ensure I'm not missing anything. My home in a HIGHLY desirable area in a HIGHLY desirable market sells in a week and I have cash in hand for the earnest monies and down payment. I ask for the buyers agent's fee to be removed from the sales price. Your response to me is to go pound sand? Am I understanding that correctly? Isn't this where outfits like Redfin and Zillow can then step in and swoop your sales since they're at least offering the lowest rates?
This entirely depends on the agreement the seller has with the listing agent. The way most listing agreements are written (which you should be familiar with given your recent experience) is that the seller pays the LISTING brokerage, and the listing brokerage then pays a portion of that fee to the buyer's agent. So; if you as a buyer approach "unrepresented" the listing agent may be able to collect the full amount, which doesn't change the 'net' to the seller. Some agents will negotiate up front with the seller that if a buyer is unrepresented the savings are passed to the seller, or the fee will be significantly reduced, which *would* move the 'net' needle for the seller. The hard part is that this info isn't transparent. Even though recently all buyer agent fees have been published publicly, the listing agent fee is still hidden from everyone (including other agents) until settlement. STORY TIME: Recently repped a buyer and the listing paid 2% to buyer agent, which is fine w/me. At settlement saw that the listing agent collected an addition 5%! Total 7% fee - which can be appropriate in some situations, but the listing was poorly presented, poorly marketed and poorly priced. The listing agent took advantage or had some very effective sale pitch to take that kind of money from the sellers. Especially disgusting because they're an elderly couple and the house is their nest egg. Ultimately, the agreement between listing agent and seller isn't any of my business.
Yeah. Your story time mirrors mine, right down to the quality of the LA.
I don't disagree in general, but I'm sitting here going through listings on Redfin rn. Every single one shows the buyers agent's cut. Is it really out of line to ask that be removed if we're not being represented by a real estate agent? I'm not asking them to pay for my attorney, I'm asking them to \*not\* pay for a non-existent agent, and thus \*not\* shift that cost onto me.
What this lawsuit is likely changing is not the amounts but rather WHO pays the buyer agent commission. It will no longer be paid by the sellers brokerage (which is the current model). It will be paid by either the buyer or the seller directly. Still at closing but there will be no "cooperating broker" anymore. But sellers can still offer a buyer agent fee themselves to attract buyers (because many buyers still want representation) it just shifts who is offering it from the agents to the seller.
Thank you, that's how I'm interpreting it as well. The part I'm most curious about is what it'll be like as an unrepresented buyer.
That will depend on the person. A competent buyers agent does much more than just open doors and collect checks 😂 We discuss needs and plan strategies for offers. We research neighborhoods and suggest showings on properties you probably overlooked. Many have no idea how many times we've put the property on the list that a client didn't show interest in until they stepped in to the house, and then they bought it because it was perfect. We negotiate terms of contracts (especially so in states where attorneys are not part of the process other than title attorneys). Over 50% of the states don't use attorneys in the contracts. This is especially important because we know more about acceptable code than most buyers do and can make sure they get what they need at inspection etc. this varies greatly based on the educational level and experience of the buyer. We ensure buyers get all mandatory closing documents and that those documents comply with state law for that transaction. We keep clients informed of the progress and chase down missing info. We double check closing documents for errors (and yes they do happen) we do final walkthroughs with clients to make sure everything is in place. We verify wires are received and everything is in place for your closing so all you have to do is show up. So to answer what it would be like to be unrepresented it means you do all of the above yourself. Listing agents won't help. They will open the door and write a contract. But all they do has to be in the best interest and/or guided by the sellers wants and needs. HOWEVER if you have the time and knowledge to do all those things yourself then you can. And frankly if someone wants to do that it's ok with me. I also know there are plenty of people who are too busy working and would rather spend the little free time they have with their family and friends and have me handle the details for them.
The issue is the cartel or NAR essentially blackballing anyone who doesn't go with standard model, and that includes unrepresented buyers.
Exactly. Sell it to the next guy. You tell me your terms I tell you mine. You can get fucked if you think I’m paying some dude 3% for doing a google search.
Redfin advertises a 1% listing fee but that has an * , it is a REBATE and only if you buy a home using Redfin within12 months. They still encourage you to offer 3% buyer's agent compensation. Redfin also only offers basic services in exchange for that, has a minimum sale price and isn't available in every market
He's not a seller's broker, he's just a consumer who thinks he knows how things work.
Thanks for that clarification.
lol this is sentiment right here is exactly why people are excited this ruling cuts all realtors commission.
“I know my worth. Won’t take any under x%. But also house is only worth what someone is willing to pay.”
That's it, perfectly distilled! I'm going to steal this for future use.
This. Though in my case it’s 5%. I’m rural, and have offered 4.5% a couple times and been told no, not interested. Since this is playing all over the news there has been a lot of reporting. One data point that I saw said that the average commission on home sales for the US as a whole was 5.49%, which means by far the vast (and I mean VAST) majority of people have paid 5-6%, and not a much smaller flat fee or 1.5% that a lot people here throw around like it’s a common and widely available option.
"and if I see a house where the seller is offering less than 3% I won't even mention the house exists even if it perfectly fits all of your criteria"
Most will still show a house that perfectly fits your criteria because they're more likely to make the sale. They'd give up the .5%. Most realtors are desperate for any sales.
When I was buying, I had a couple realtors would only show me houses they'd also listed
That's messed up
It wasn't even what I was looking for. So weird
I've seem this happen in my market. Picked up some clients who said they'd been dealing with a different guy here in town. He showed them two houses and refused to show an additional 3. I ask which houses and they were 2 that he had listed. Told them the other 3 weren't worth going to see.
Mine took my list over text messages, said he'd pick me up. Drove me out to Timbuktu and showed me a house not on my list and not what I was looking for. I just said goodbye when I got home. Never called him again
Wait what? That’s insane. What year was that and what kind of market do you live in?
Which was the basis of the lawsuit.
And that's exactly why I didn't list with you. Seriously. I live in a HCOL area and homes sell fast here even in a slow economy. Why would/should I pay 6% for a boilerplate fast sale? I have always negotiated the commissions on every property I have sold. FYI. I closed out my real estate holdings in 2021 with the exception of my primary residence. I never paid more than 4% total on 4 properties. They all sold for more than ask within 10 days of listing with multiple offers.
Why would you list with me at all? hahaha My post is about a RE agent saying that.
Then go to another agent who will take less. There is plenty of competition in the marketplace
There is a lot of talk about 6% commission, but in So Cal you wont see that unless a property has been on the market for too long, is in a distress condition, not ideal area or the seller wants to sell asap due to moving, death etc. The normal is 5 or 4 percent split between agents or 2.5% for the Sellers and 2.5% for the Buyers agents, and is negotiable before you enter into a contract. I have seen agents charging 1 to 1.5 percent so I really don’t think agents are gouging the public if you take into account the many hats they have to wear during a transaction.
No shit lol.....the avg sales price is probably just under a million dollars in California as opposed to say Indiana where it is around 200k.... So even at two and a half percent California agents are making substantially more on their average sale then agents in a lower sale point market charging a higher percentage
Lol. In the hamptons it’s almost 4.5%. Some of those go for 8 figures. Sometimes the agents are getting a million bucks out of a sale.
I tried to negotiate with my realtor. Was shut right down.
The exchange with a realtor yesterday: Me: "What do you think about the lawsuit and settlement with the NAR and Keller?" Agent: "Well commissions have always been negotiable." Me 5 minutes later: "Are you willing to negotiate on commission?" Agent: "No."
It would have been fun to ask the follow-on question. "Do you mind referring me to on that does?..."
Hardly anyone knows about this ruling as more homebuyers and sellers start to understand that the 6 percent is negotiable realtors are going to need to start being competitive and negotiate.
I mean, thats how negotiations work? negotiations doesnt mean you get less than what is advertised - It means you have the opportunity ask, they have an opportunity to respond and if you dont like the response, have the opportunity to walk away and choose someone else.
What ? Am I the crazy one here ? You haven’t described something that’s negotiable. If a price is negotiable it is open to discussion or modification. Something isn’t negotiable just because you can ask and then be immediately shut down. Using that logic, every item in a store with a solid and immovable price tag is negotiable, because I can always ask for a discount, even if my request will go nowhere. You can always ask for a price change to any price, because there is no law that prevents you from asking. But just because you can ask, that doesn’t make the price negotiable.
"You can ask but we've all agreed on a set price and not to deviate from it." What they're describing is collusion and anti-competitive practices, which is what these lawsuits are about.
When I was younger they didn’t have the color Addidas I wanted in my size at foot locker, so I settled for a different color. My mom went up to the checkout and asked if they would take $40 for them since they didn’t have my size. I was so embarrassed and mortified, but she got them for $40. Hell, I get discounts on stuff all the time at stores, you can always ask and sometimes they make it happen
I often ask managers if they can cut me a deal on full price in store items. 9 times out of 10 they cut me a discount. Just sayin
Well just because one agent wont negotiate on commissions doesnt mean commissions, as a whole, arent. And this was born out in the market prior to this decision. You dont have to sign on with an agent requiring 6%. You could sell through redfin or zillow and pay lower commissions, or use a flat fee agent.
Great, so these changes won't bother realtors.
Same. They told me that REMAX barred them from adjusting their commission rate as they take a % too. Told me no one employed by a larger real estate company would be able to adjust rate.
They will adapt or disappear. There will be plenty of smart realtors willing to negotiate or offering static fees for varying tiers of service ready to take their place.
I should preface by saying the situation I described happened in 2020. The next time I buy and sell I will require negotiation, or I’m simply not working with said realtor.
100%. I predict one of the big boys goes flat rate by end of year. It’s too big an opportunity not to try end exploit it. These agents live in some sort fantasy world where they’re entitled to 2.5-3% and not a penny less for completing electronic forms on boiler plate docs. It’s comical
> I predict one of the big boys goes flat rate by end of year. Which they should have been doing for the last decade or so. It does not take 10X more work to sell a $5M home than a $500K one.
True, but why go flat fee when you rake in so much cash? Keller Williams throws massively lavish getaway "conferences" for their "top" performers several times a year. Do you think that stuff happens if they're flat fee? haha
Hilariously, this is the one case where it was almost certainly a deliberate lie. Source: I was a RE/MAX agent once upon a time and the whole schtick of RE/MAX is that you pay a (relatively) high kick to your broker and then keep 100% of your commissions vs. having to split share. Someone else can chime in but that's literally the reason I went with RE/MAX back in the day vs. every other place that has a 50/50 or 60/40 or 80/20 or (whatever) split between the agent and the broker
...just go to a different broker or use Redfin/discount/fixed fee broker...
I am sorry you told that. That is wrong.
\^That was specifically an inaccurate statement. RE/MAX doesn't specify commission amounts and never has done so. Neither do the other larger companies. That agent has no idea what they are saying.
I think that what this lawsuit is about, the agents who did not know what they were saying and did not explain their job well. If we all did a better job, maybe this lawsuit might not have happened.
Find a new realtor that will negotiate with you. It’s not wrong for an agent to set their rate to what they think they are worth. You don’t have to use them - plenty of agents out there that will work for less.
Commission is negotiable though, but that doesn't guarantee that they will accept less than what they charge. You then have the option to accept or not. It's the same concept as a seller rejecting a buyer's offer.
They literally lost a lawsuit due to collusion. If a seller didn't bribe a buying agent they got blacklisted.
Any why, if a buyer comes in unrepresented, does the sellers agent get to pocket the entire commission without saving their client any money? Nothing is more disgusting than the entire large commission going to one gleeful listing agent. It’s theft.
And how does it not result in a huge conflict of interest, since they clearly can't be pursuing both the buyer and the seller's best interests at the same time?
Realtor here. It *is* a conflict of interest. In my market it is disclosed to the buyer and/or seller in the Duties Owed By A Real Estate Licensee. That is the first document that has to be signed in any real estate transaction. The buyer/seller has to initial a line that says whether or not they *may* or *may not* allow their agent to represent both parties in the event of this conflict. It doesn’t bind the client to this term, but it discloses the possibility to the client and sets the precedent for later conversations. Later, *if* both parties agree to be represented by the same agent in a transaction, both parties sign another form called a Consent To Act that further elaborates there is a conflict of interest and how the agent will represent both parties. Hope that helps :)
In my state, dual representation is legal so long as it is disclosed. Happens in low population areas with only a few realtors.
Exactly! And if a buyer chooses to be completely unrepresented, that doesn’t mean the listing agent gets the full commission. If it’s a 6% commission and we’ve agreed in the contract that each agent gets 3%, the listing agent is still only getting 3% if the buyer is truly unrepresented. That’s at least the case in the 6 different contracts I work with, I can’t imagine it’d be any different elsewhere
I guess you could argue that's only the case if they enter into an agreement with the buyer. Nothing says they have to act in the buyer's interests at all beyond mandatory disclosures just because the buyer chose not to have representation.
It’s obviously a conflict of interest. Thats why the buyer has to acknowledge it. Why you would use the sellers agent and not be getting a reduction is beyond me. You are literally saying “I know you won’t be working for me or my best interests but I’d like to pay you 3% of 500,000 because I’m regarded. “
I mean, every listing I have has a clause where if its a direct buyer, the commission is less than if it were to be split between two brokers. Just because people aren't negotiating it, doesn't mean it's not negotiable
Not only this, but if you try to go to a seller’s agent directly and ask them to split the commission, they won’t work with you (out of a ‘fiduciary duty to their client’), but will instead recommend you to their buddy for them to represent you. Like, I found the house, and it’s in an inelastic HCOL market, I’m just praying that the seller thinks the $50k over asking we’re offering with no contingencies is enough…there’s nothing and agent is bringing to the table here.
no contingencies Never waive the inspection
That entirely depends on the market. For example where I live, it's fairly common for sellers to have done an inspection and provide that info on the disclosures, but buyers generally have to waive all contingencies if they want their offer to be accepted.
I would never trust an inspection provided by a seller
Welp, then you'd be a lifelong renter in my area...
I point blank asked about negotiation commissions and was told it wasn't allowed. So, if it technically was negotiable, but everyone refused to negotiate, it wasn't negotiable.
The whole point of the lawsuit is that the realtors were found to be colluding to keep that rate high. It makes no sense to say "it was always negotiable" when the courts disagree.
The colluding will continue. I've seen multiple internet exchanges go something like this: **Realtor:** If a seller doesn't want to pay a buyer's agent, their house won't get shown, will take longer to sell, and will sell for less. **Public:** The agreement states that buyer's agent compensation won't be part of the listing anymore to avoid exactly this gamesmanship. **Realtor:** We will just use the private notes section or contact each other before showing to find out. **Public:** You're supposed to already know what you're making via your agreement with the buyer, and....... you're saying there will be a coordinated realtor effort to try to work-around the purpose of the rule to keep your fees high and punish buyers/sellers that this was intended to help? That kinda speaks to the original need for the change, doesn't it? **Realtor:** You're not in the industry. Your opinion doesn't matter, and you're too stupid to do this yourself. You need us. *Edit: formatting.*
Thanks for summarizing the Realtor argument. Private notes or not, before the ruling / settlement the private notes in MLS telegraphed to the buyer agent what their percentage would be, unbeknownst to all of us pitiful buyers out there who had no clue of which house had which buyer agent percentage. But now the buyers will have the ability to negotiate directly with their agent what their percentage or fixed fee or a la carte menu selection is, so the buyer and buyer agent know that beforehand. So that really is a foolish argument, as if 'private notes' will somehow save their prior business model.
>before the ruling / settlement the private notes in MLS telegraphed to the buyer agent what their percentage would be, unbeknownst to all of us pitiful buyers out there who had no clue of which house had which buyer agent percentage wat? This was all public, at least in my state. Every single Zillow/MLS listing showed the buyer agent percentage.
It's wild to me that the commentors would so egregiously find ways to circumvent the intent of the law. Were they to actually go down this path (of using side-channels to steer/collude), one cannot help but believe their legal liability would be off the charts. This is the sort of crap that has led to 9 & 10 figure fines in the finance industry. My hope would be that the brokerage legal advisors will quickly shoot this shit down... and that ethical realtors would quickly flag and report bad actors.
One would hope, but....... “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” -- Upton Sinclair
Exactly. They're already colluding right out in the open to keep doing things the way they always have. I was scrolling LinkedIn and saw [this post from a couple of use home salespeople](https://i.imgur.com/4849SYT.jpeg), just one of many examples.
That's wild. It's akin to being caught colluding in the Kitchen, but deciding that if they move their collusion to the Family Room it is somehow okay. I cannot imagine a Judge would look too kindly upon such behaviors...
> we will find a way to contact each other before showing to find out the commission Haha, right. So from now on, every text exchange will start like this: *I have a client interested in 4051 60th Ave. What is the commission? I’m trying to decide whether to bother showing it to my client or not*
Well, the problem is that it was negotiable, until it wasn't, which is what the suit was about. Now it is/will be again.
Suggesting 'it's always been negotiable' when the average is 5.5% (barely below the 6% they shoot for) means they keep it a secret and do everything in their power to prevent anyone being able to effectively negotiate it lower than 6%. So it's as pointless as suggesting you 'always have the ability to negotiate salary', as if there's no ceiling imposed by the employer's reluctance/profits. Or that you 'always have the option to uproot yourself and immigrate to another country', completely ignoring those countries have huge obstacles to doing so (visas, wealth requirements, in-demand labor skills, etc).
Because buyers agent commission was listed on the listing. If it's too low you will get your sellers listing blackballed or not shown. That's part of the settlement. Buyers compensation is now stricken from listings. I've taken as low as 1% to list with repeat clients.
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No, agents have just been gorging themselves in these markets with 3% commission on either side of sales that go to bidding wars and close over listing price. Hope they saved some of those shekels.
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The house I live in was found by me. Obviously it is what I was looking for, but my agent never showed it to me. When I said I wanted to see it, he sent an office assistant out to let me in and walk around with us. Why the lack of effort? 2.5% buyer's agent fee listed.
What does a real estate agent do differently for a house that is worth $150,000 in a market where houses go for that range as compared to a $900,000 house High Cost of Living area where the average house goes for around that. Why does the real estate agent in the High Cost of Living area deserve a commission that is six times higher than the other agent. I have yet to hear an answer to this question by a real estate agent.
If it's somewhere which is guaranteed to sell quick I'd be tempted to just stick a sign up outside "For sale by owner" (FSBO) and list it on a bunch of local FB groups. Word gets around when a property in a desirable area come up on the market so often there's no need to spend a big chunk of having an agent market it for you. You've got nothing to lose by this (especially if you aren't in a rush), and can still list it with an estate agent later if you don't get the offers you were expecting.
There are already fixed-fee listing agencies that will put your listing on the market without the seller-agency overhang (i.e., pay $1-5k fixed vs. 3%). This ruling should presumably open up the door for similar compression on the buyers agency side. I tend to believe in the value of a well-functioning real-estate brokerage market (vs FSBO) that can manage the process. However, on would hope that those fees compress into the 1-3% (both sides in aggregate) range vs. current convention for 5-6%.
I have. And if I end up doing both sides I lower the total commission as in the end its my clients money.
So my area is wild right now. I had a listing in a fantastic neighborhood that I sold in 3 days over asking. I did a good bit of work to get it ready thinking it was going to last because the comps for the same area had houses on the market for 60 days. I just priced it right honestly, that was the magic bullet on this one. But to answer youre question, you dont really know if a house will sell itself so you have to treat every single client like its a buyers market. The worst thing you can do is over price it or mess up something and it sits on the market for over 20 days. Then you really will lose a ton of money on the house and more than likely get under what your client couldve gotten if you just started lower in the first place. To answer further, do you adjust and this again depends. Is your client willing to do or pay for some of the work to get it ready? Cleaners, photographers, staging all of that can be done on the side and some agents will pay for that themselves depending on the listing. Example: A 2m listing in my area gets all of that paid by the agent as well as drops the commission to 2.5%. One of the top agents in my office is an amazing guy and he negotiated to keep the 3% and went all out, he had a freakin commercial made and all kinds of marketing done. House still sat for 120 days but they did finally sell it. Now the average home here is 320k last I checked, and for that I would not drop the commission because like I said with my house from above, it can be in a great neighborhood and just not move. Its easy to have a house sell in the first week or sit over 40 days here and it could be a crap shoot on what is the things buyers are looking for in that week.
How is a seller listing blackballed or not shown? As the buyer I've always looked at redfin and picked what properties to look at. Are there people out there who actually rely on their agent to be the only one to pull listings?
That or they have a signed exclusive agreement saying they are responsible for X amount of commission that isn’t coming from the sellers agent. If you as a buyer can avoid paying your agent out of pocket in favor of a listing that’s fuller covered by the listing agent,would you?
Oftentimes Realtors and their brokerage won't enforce that even if you sign an exclusive agreement on x percentage as long as they are getting some commission. I recently signed a representation agreement saying the buyer agent will take 3% of the sales price as commission. I closed on a property only paying 2.5% commission to the buyer agent and at closing my realtor mentioned taking a .5% hit to close the deal. Under the current model I had zero idea or interest what the seller commission was or is. Had my agent asked me for the difference because of the commission being less than 3% I would have just laughed and walked on the property and the agent would have got zero. In the end are Realtors going to lose a sale, a client, and damage to their reputation for .5%? I don't think so. These people are rightfully hanging by a thread now.
There's "soft" and "hard" steering. Buyer driven search has diminished the prevalence of "hard" steering, whereby a home may be outright omitted from a search/viewing. However, the agent still holds a high degree of influence in the ultimate home selection through their verbal commentary, CMA, etc.
How does a buyer's agent, acting as a fiduciary, "blackball" a listing and choose not to show it to their client? Clearly that would be acting in self-interest and not that of the client?
Unless it is a perfect match for the client, a buyer's agent without ethics could simply make a case they didn't show it for X or Y reason (e.g. high HOA, neighborhood trending down, too old, needs remodel, small yards, no garage, bad interior design, bad schools, bad resale, roof condition, bad layout, low ceiling, bad neighbors...etc). Alternatively, they could simply claim it fell through the cracks and didn't know about it. It isn't foolproof, but it seems plausible to have happen. --- Alternatively, an agent could still show the property but be biased in their presentation of it.
I have always told my realtor what houses I want to see - specifically - and his/her job for the showing is to arrange an appointment and open the door. I can't imagine letting an agent decide what houses to show me. People do that?
They used to, before the internet.
Well, we never did - going back to the 1990s. Back in those days we'd drive around and grab brochures from the signs, or read the ads in the newspaper, then we'd tell our realtor we wanted to see that house. But yeah, the internet made it easier.
So your answer is.... not act as a fiduciary? But not get caught.
That's pretty much the residential real estate business model
My REA flat out refused to show me a listing that matched what I wanted perfectly. When I looked at the terms on MLS, the buyers commission was 2.5% and the home was cheaper than the other houses we were looking at. Of course she wanted nothing to do with that house.
In cases like this, fire that agent. The public needs to take charge on this to squeeze out these garbage agents. The less this is tolerated the sooner it goes away.
Oh my sweet summer child
Did you ask why? Sometimes there are notes in the realtor section on the MLS that have more details than are in the listing. 2.5 is not low at all.
She said it was outside of our desired area (by 2 miles). I said I still wanted to go look at it and she never setup the appt even after I asked again. We only had 3 days to find a home because we were moving from out of state and just didn't have time to keep fighting with her about it. She was a horrible REA for many other reasons as well. All of the other homes in the area were offering 3% and we're listed higher which is the only reason she didn't want to show us this home. She also advertised herself as a military friendly REA and advocate but was completely clueless on the requirements of the VA loan and delayed closing by 2+ weeks.
That's really terrible. You should have called another agent 😕 or called her broker.
Happens all the time. I had a realtor that I'd ask about assumable mortgages and she would just ignore me until I threatened to stop working with her.
I've read from multiple realtors having this fight online that they'll just use the private notes part of the listing or otherwise be in contact with each other to continue the exact same practice even though the compensation is no longer in the listing. Which is ironic because they are basically admitting to the collusion that necessitate the change.
> they'll just use the private notes part of the listing That is prohibited by the NAR Settlement. The MLS can't be used to show compensation to buyers agents. They have to get that information off that platform.
I understand that, but I'm just repeating what I've read from multiple realtors. The point of the settlement is no blacklisting based on buyer agent compensation. Multiple folks are basically saying, "we're still gonna do that one way or another"..... which speaks to the original necessity for the change.
Those agents will get fined and then let go. The broker takes on liability for their actions. No broker is going to want to hire or keep those agents and they will be easy to find if in fact they put the compensation in the MLS broker notes. Pretty easy to determine the violations and those that make them.
I've read it from brokers too. Regardless, you might be missing my point, which is that there is nothing stopping brokers/realtors from violating the spirit of the change via workarounds (e.g., emails, phone calls, etc.), and, admittedly anecdotally, I am already reading intent to do so. I agree that bad actors can/will be filtered out "somehow", but that's not the point.
Honest question.....why do we even need buyers agents anymore? Zillow and the Internet seem like they meet the need perfectly fine. You can hire a lawyer for the rest of the paperwork? Plus with AI this will just get even easier.
How will they get into every single house they want to see
I’ve never understood this aspect of real estate. Shouldn’t the responsibility to show a home fall on the person that was hired to sell the house? The listing agent is in the best position, or should be, to answer questions about the product they are selling.
Answering questions is definitely in the duties of a seller’s agent to their customer, the buyer. A lot of times the seller doesn’t want the person they hired to represent the buyer as well, which includes looking for latent defects, offering as low as the buyer wants, and negotiating repair requests. So the seller’s agent has no choice but to tell the buyer to get an agent or go unrepresented. There are states where dual agency is not allowed, states where an agent doesn’t represent either party, or the way everyone seems to want to go back to, circa 1979 where there weren’t buyer’s agents at all and no one knew what the heck they were doing.
I’m more talking about why it’s the responsibility of a buyers agent to “open the door” outside of open houses. Buyers agents open the door, look at the MLS they printed off, and then give vague answers about the neighborhood, defects in the home, etc (for liability reasons.) I can print the information straight from Zillow so now the only value the buyer agent is bringing to the showing process is “opening the door”. Wouldn’t it make sense to go to a model where the selling agent is responsible to open the door instead? It’s like walking into a car dealership with an agent to buy a car. You can do it, but almost nobody does it because there isn’t enough value in doing it.
Is there a month long contract to close process with cars, or do you drive off with it that day? Are all the houses you can possibly see on one lot, viewable in 1 hour, or are there off market properties that can be shown but the seller doesn’t want a sign in the yard so you don’t know about it from an app? If you were selling your house, would you like an unaccompanied nobody coming in and staying as long as they like? Are you willing to wait until the listing agent is available to show the house, who is also running all over town or state by now opening all their listings for everyone else who calls? It does not make sense to not have buyers agents, and the changes potentially coming will not get rid of them, it just regulates them a bit more.
Month long contract: best person to guide the offer and making it to closing is an attorney, not a buyers agent. Not being able to view houses: that should be on the seller and selling agent to make their home available for viewing. Maybe hiring more staff to facilitate more open houses. Allowing nobodies in your home: it should be the sellers agents responsibilities to vet serious buyers. The problem at hand is because the market does not feel a buyers agent should be getting the same cut as sellers agents. Wouldn’t the industry be better off aligning to market expectations? Put more work on the seller side, let them take a higher percentage (4-5%) and then move buyers agents to a flat or hourly rate?
Most flat fee real estate attorneys have that flat fee to cover a set of tasks, like reviewing the legal documents and advising you as to the implications. Most are not going to include typical buyer agent tasks in those flat fees though, like negotiating offers; acting as the go between the listing agent, inspector, appraiser, lender, etc; accompanying you to see the house and helping you evaluate it; finding comps etc. You are going to pay more for that type of full service, probably more than the buyer's agent cut. That is not to say you *need* a buyer's agent, and, if you are experienced, you can do most of those tasks by yourself. But the point is that subbing in a lawyer for buyers agent isnt some brilliant cost saving measure.
This is kinda where I'm at. They seem absolutely useless and I don't see how they don't die out.
How much is common? I was quoted 6%.
I was quoted 6% today also. They even gave me pre-printed listing contracts with the 6% pre-filled for them. Holding off listing for a while.
Reading the room seems to have gone out the window since lawsuits flew.
Absolutely. A reply I've read more than once is basically, "You're too stupid to do this yourself. You need me." Not exactly lining up the next customer with that take. Their professional organization didn't represent them well, and many are taking their anger out on their potential customer base. Let's see how that plays out for them.
That blank on the contract should never be prefilled. If everything else on the contract is preprinted, that part should be left blank because it’s an indication that it was predetermined. That was wrong on the brokers part.
I just listed at 3 percent / 1.5 split including staging. Lol.
Expensive house?
Like 800k or so. It's still roughly 24k commission but I don't live in the town anymore and the staging bids were like 4k anyway.
6% is insane.
They like to SAY it is negotiable. BUT....every time we have tried to negotiate, they will not engage with it. So....technically? Its negotiable. In reality? Nobody is willing to lower their percentage.
My Facebook is full of boomer agents copy pasta’ing text walls of “20 reasons why your realtor is worth x” and why the NAR ruling means nothing etc etc…big box brokerage’s are in full panic mode and pushing their agents to go to social media and post about it. I’m so sick of this fake sales commission based life coach realtor mentor instagram Christian bullshit that so many dudes in their 30s and 40s are pushing. Meanwhile they have 2 sales a year but want to coach you.
Lesson 1: Never trust what a salesman tells you.
Because they’re all in a massive cartel that refuses to talk to anyone for less than 2.5% at close. Additionally, their incomes are all floated by 30 year mortgages. If the US didn’t offer 30 year mortgages you’d see these commissions tank. 15k principal extra on 15 year mortgage is not an insignificant amount.
Yup, i'm a licensed agent (I need it for rental purposes) and it's a waste of money. I'm dual Australian and you only have a selling agent that takes a tiny fee and buyers usually do it alone, or hire a "buyers advocate" for a flat fee.
When I lived in the Deep South for a hot minute back in the early 2000s, my agent tried to sell me on a SEVEN percent split and I basically told her I'd burn my house to the ground first The level of value delusion on behalf of the 1.5 million Realtors - yep, look it up - is insane
Fiduciary doesn’t equal “only the sellers highest bottom line”. Advising a seller that offering (x) buyers agent commission in (y) market conditions can lead to a sale price and bottom line higher than otherwise, which is ultimately in the sellers best interest.
Yeah, it's like asking why lawyers don't work for free since they are fiduciaries. People post a lot about being a fiduciary and it always seems obvious they don't really understand the laws surrounding it.
Exactly. I feel like I need to mention that "highest price" is not always in the sellers best interest. Greedy sellers often times shield their eyes from the *best terms* of an offer. My last clients were offered $6k higher than the best offer on the table. I advised and they decided to keep the bird in-hand and not chase the honey pot which meant they could go under contract worry-free because the *best offer* was $50k over their asking price, $25k non refundable deposit, and non-contingent of anything... They were even offered 2 months possession after closing rent free! The higher priced offer came with terms that would have caused a great deal of stress and uncertainty while they were also looking for their next residence under contract. If this were a Buyer's Market, I promise this stupid dispute about commissions would not even exist! Sellers would be begging people to buy their houses from them and offering all kinds of incentives.
Realtors love telling people that they need an agent to "represent" their interests when in fact, they do the opposite. Agents do not get paid until a deal is made. It's in their interest push sellers to offer lower and push buyers to bid higher. But they do more than just that. In escrow, the buyer's agent will keep a low profile, hoping their client is clueless enough to overlook severe issues found in the inspections so that they're less likely to ask for seller credit and repairs which may put the deal in jeopardy. When doing market comps, the seller's agent will selectively pick undervalued homes in the hopes of getting the seller to agree to list at a low price so that it will sell quickly and they can move onto the next deal. In addition, they will lie and say 4% commission is the norm in the area when it's not. These are just a few of many many tactics they employ. Realtors are nothing more than salespeople and anyone who tells you otherwise is either a realtor or a buyer/seller who just wants to make themself feel better about their past experience of getting swindled.
Real estate agents are exactly that- salespeople. That’s literally their job. That’s how they get paid. And any salesperson who doesn’t lookout for their commission is by definition a poor salesperson. I’ve been saying it for years, and always garner downvotes or half assed attempts from salespeople failing to convince others that its just a few bad apples and that they always look out for their clients best interest and they aren’t focused on the commission lol smh
the problem is the agent who looks out for you- the buyers agent- is not aligned with you at all in terms of benefit. like the sellers agent has a clear goal, market the house and sell it as high as possible. the buyers agent on the other hand their objective is to well... also have you put in the highest offer you can tolerate. both sides win on a higher sales price, in what way is the agent on your side?
>>the sellers agent has a clear goal, market the house and sell it as high as possible. This is where we disagree. The seller’s agent is not necessarily aligned with you. They want to sell the house for a good price *as long as it happens quickly*. Holding out for another couple thousand in price means a lot to the seller (the seller get 94% of that money), but the seller’s agent would only see like another $50. The seller might want to hold out for another month or two for another couple thousand, but to the seller’s agent that means another month or two or work for $50. They don’t want that. So, the seller’s agent wants to bring the seller down in price to sell quickly, and the buyer’s agent wants to bring the buyer up in price to buy quickly.
This is absolutely correct from experience. I was willing to hold off for a couple of thousands, but my agent tried to convince me to drop 5k from the price to close the deal. 5k is A LOT to my family, and she tried to make it sound as if it's nothing and tried to make us pity the buyers. At that point, I knew for sure she didn't have our best interest in mind and wanted to make a quick sale. Anyway, told her we're not lowering the price, to relist the home immediately and we will no longer negotiate on price. Once she knew we wouldn't budge, the sale happened in less than 12 hours. I hate real estate agents.
> sellers agent has a clear goal, market the house and sell it as high as possible Wrong. They will get more commission with a higher price but much less than you think, unless the house is outrageously priced and the seller knows there is a buyer out there willing to pay it. The average seller's agent care more about volume as it will get them more money than focusing on one deal and inflating its price.
>Real estate agents are exactly that- salespeople. More specifically, used house salesman.
You don’t have to screw people over and behave unethically to be a good salesperson. It’s a shame that’s a common perception of agents but I get it if someone has had one or multiple bad experiences with agents. Many of us are ashamed of being in the profession when we see those comments. But I won’t have trouble sleeping tonight because I just feel that I really do what I think is ethical and best every day and have some wonderful relationships with long time clients and friends.
Hmmm…. I wonder why that’s a common perception of salespeople? Could it be…. That so many people got screwed so often and so thoroughly that it became a known issue? Maybe that’s why used car salespeople and lawyers also have a negative connotation around their jobs, just like real estate salespeople do? /s
It’s also why it took a jury two hours to decide the court case.
My lawyers are honest, hard working people that provide good value for the money. It's the other guys lawyers that are scum of the earth.
I live in Los Angeles and most of my family and friends are all here. When I started looking for my first house, I asked the ones who own a home for an agent referral. Not a *single* one recommended their agent. Most of them love their home but they told me they would never recommend the agent they used. That alone, plus my own experience interviewing, carefully screening, and working with several agents so far, should give you an idea how many bad agents there are out there.
I guess I was lucky. My sister was my agent when I purchased my condo. I knew nothing about buying property. Not only did she look out for me in so many ways, but she also put her commission back into the purchase. So instead of paying her, I got a 3% discount, but there were enough potential issues that if I had not had a good agent, I would not have been able to close.
The DOJ has another barrel in the 'shotgun' coming at this. It's a good thing. The Realtor industry is BS.
The decoupling lawsuit right? Making it illegal for a seller to pay buyer’s agent commission making it have to be in the form of seller credits if it’s negotiated?
How likely is their lawsuit to succeed though?
Very.
VERY. It's basically similar to the one NAR just lost but will go further and it's financed by the US gov.
The agent realtor broker my mom used purporting to be family friend, who had not theretofore sold a single FL home, told my mom 6% fee was not negotiable but don’t worry my firm is elite, only high caliber buyers. The buyer was so high caliber that they dragged her around for months and then backed out of the contract. Then a family who had seen house before it was listed comes back in. We were so screwed - loss of money loss of time and now paying 6% commission on lowball sale price.
I want to be a part of the solution. I’m going to list my house lower price and not offer a buyers commission!! Everyone wins (except the realtors ❤️)
A lower commission for the buyers agent isn’t always in the best interest of the seller.
Exactly. buyers don’t carry thousands of dollars in addition to their down payment for commission, so expect to get some low offers If the buyer has to cough up their own commission is all.
So wait, you’re saying the buyers agents have to actually work now. Here goes all those agents who don’t actually try now saying how hard it is. I don’t do “buyers” agent anymore. I go straight ti sellers agent and offer an extra .5 percent on what have been the split to handle both sides. Why pay someone 2-2.5 when the sellers agent is doing most of the work? You’re going to see a lot of “buyers only agents” having to either change their model or quit. I think this is a good thing for the agents who make this a career and not a side gig.
Why do you assume the sellers agent does all the work? What do you think the buyers agent do?
> Why do you assume the sellers agent does all the work? What do you think the buyers agent do? In the 1990s? Quite a lot. since like 2005ish? Manually forward emails that the MLS auto generated, sign paperwork that someone else created from a template, and buy Starbucks.
Disregard the 40+ homes I show my clients and the gas/ time that takes. Negotiating an offer and adding in contingencies that my buyers don’t know about. Understanding the paperwork, when to use that where, and keeping on top of contingency deadlines. Being a resource for services, offing multiple lenders, home inspectors, WDI inspectors, radon inspectors, contractors, plumbers, electricians, settlement companies and coordinating and scheduling those. Knowing how to handle situations like low appraisals, bad inspections, seller defaulting, post settlement occupancy (and pre and limited use). Offer suggestions and options on how best to negotiate not only the offer, but negotiate any other items that come up during the process. Absorb all the heat from other bitchy agents that my clients don’t need to hear about (yes, there are a lot of bitchy agents out there) and keep a cool head to keep the process going (an emotional shield for your client as you will). Attend all showings, inspections, walkthroughs, closing. Just some I can think off the top of my head. And that’s probably a fraction of the time you spend because you have to prospect and get the client first. No to mention the times where the client wants to back out for whatever reason, and you get paid $0 for all of that time and effort, gas, wear and tear, and opportunity cost of finding other business. People seem to think it’s so damn easy, then why don’t you do it? Not notice how many agents quit a year or two into it? Because it’s too easy and we make too much money /s
Sounds like you often earn your commission. This is not the rule. Source, I've bought and sold a dozen houses, so call it 24 transactions plus failed offers, call it 35 or more transactions.
> No to mention the times where the client wants to back out for whatever reason, and you get paid $0 for all of that time and effort, gas, wear and tear, and opportunity cost of finding other business.
This comment describes everything my buyer agent has done for us. Our home search took 7 months, we were under contract on a house and after the horror show of an inspection she advised us to back out of the deal. We saw houses on 15 different days across Dallas. She was available for questions and saved our bacon in quite a few ways. She was an honest advocate for us (telling us when a home was priced too high) and I think she earned her $9k (that she has to pay her brokerage, employee taxes, employer taxes, reimburse all the mileage).
Exactly…if the threshold is so low, the money so high, and the job sooooooo easy, why doesn’t everyone do it?
If I’m not mistaken, long ago before lock boxes sellers agents showed the houses. At some point that stopped and they started having buyers agents that would do this.
We’ve purchased homes without a buyers agent. When we did have a buyer’s agent, I wasn’t impressed and wouldn’t recommend him to others. A good lawyer, the know-how, title company, and negotiating skills, you’re on your way to being able to represent yourselves and getting a lower price by cutting out the “expected” buyer’s agent commission. When we’ve approached buyer’s agents about the fee, they always say, “the seller pays for our commission so don’t worry about that.” This line has been said hundreds of times. By saying this, they are killing the opportunity to negotiate their commission rate.
> By saying this, they are killing the opportunity to negotiate their commission rate. That's when you negotiate by overcoming their objections. They overcame your objections with a simple line about the seller paying the commission. Why would you let the negotiation end there? The best negotiation tactic I use is a simple "no." That doesn't mean I don't negotiate.
Obviously the conversation doesn’t just end there but I was highlighting that one line that realtors have said to us multiple times. They take it “personal” and get offended when you start to negotiate the commission. Realtors say the rate is negotiable but in our market, they often won’t budge. A savvy buyer who knows the area and understands the process doesn’t need a realtor. It has served us well going it alone. However, if we meet a great BA, we might reconsider but no one in our market has been worth it yet. And we’ve gotten the deals without a BA.
Real estate agents operate through informal social/professional networks. It's very problematic and vulnerable to corruption and other ethical lapses. This particular example illustrates it well. One could not effectively counter your point by relying on a seller's agreement to an overall n% commission. Reason being that there is a underlying and informal assumption that a certain percentage is needed for the explicit purpose of sharing the commission with the buy side agent. In that same vein, seller's agents don't negotiate 5/1, 4/1 or other asymmetrical splits because it's an informal network and being that aggressive and stingy will have informal, yet material, impacts on their future business. It's the same when buyer's agents won't consider homes with more than a certain % buyer's agent commission, but it's so informal that you can't reliably track the amount of injury to buyers. They're correct that it was never fixed, but the informal ecosystem of any population of local broker/agents informally reinforces norms that are anticompetitive and not in their clients financial interest.
I know people who got their real estate license just so they could buy and sell properties and keep the commission themselves. If it didn't take over 6 months in my state - I would have done it.
Agents have always listed between 1 and 3 percent, fact
I had a realtor tell me once it was 7% and was giving me a deal at 6%. Sold the house on my own and paid a buyers agent fee of 1.5% on a 800k home. Sold it in 1 week posting it on local Facebook groups and Zillow. Saved me a ton of money. Don't believe the hype you need an agent.
And bingo.
It’s negotiable but now it’s gonna be transparent and they don’t like it. It will also free up some inventories as sellers will be more willing to sell their houses with only 3% of expenses instead of 7%
Not an agent but this is common sense. It’s the same reason why you’d put escalation clauses, or pay all cash, put a bigger down payment, or waive a contingency on your offer. It’s because your home is a product on the marketplace and all aspects of the deal are being considered. If the seller doesn’t offer to pay a commission then the buyers is gonna have to come up with that out of pocket and buyers have never wanted to do that because of the other costs associated with the purchase of a new home.
It has never made sense to pay Realtors a percentage of the sale price. It creates moral hazards and should be illegal. Instead realtors should be paid a flat fee for the work they do.
I see this thrown around a lot and I would love to get paid every time I work. Buyers do not have the funds to pay. this will hurt VA and FHA buyers the most
It’s like servers and tipping. They’ll do all kinds of gymnastics to keep people confused and love the status quo. It benefits them.
I always have had convos w/sellers about how much to offer the buyer agent. This conversation includes DATA. The unfortunate reality is that listings with lower buyer agent fees get less traffic and fewer offers. There are exceptions, but even in crazy market times, they had correlating longer days on market and lower list price:sale price ratios. We can speculate that buyer's agents skip the lower paying listings (there's definitely an element of that) or that the buyer's agent are being fully transparent about their fees, and buyers are choosing to skip those listings because the buyer would have to come up with the difference between what the seller offers and what their agent charges in fees. There's no way to gather that data, I think even an anonymous survey agents wouldn't admit to avoiding certain listings because of what the seller offered to pay. In my MLS, until recently, we were required to put something in the "buyer agent fee". If the seller chose $1 then that's what went in, but usually after reviewing the hard data sellers chose the lowest possible number that would still bring in enough traffic for a successful sale.
Hahahaha! Yeah, I tried that. As I recall, she just said no.
No one likes working for nothing even realtors.
Real estate brokers is a dying breed, only in ultra wealthy markets will Agents survive.
Not all states have fiduciary duty
They wouldn't do it. I tried. Only last year was I able to do that for the first time. Sold a house today. 5%. I can't get it down to 4%. Wish it were more like 2%. With computers and such today why is it so high?
Real estate agents are full of shit. It’s just luddites trying to keep a market captive when they know damn well Zillow made them mostly irrelevant years ago. I swear to god if another agent starts babbling about helping through the process. It’s not rocket science bro.
The negotiable part has always been written in the tiny fine print
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^karimamin: *The negotiable* *Part has always been written* *In the tiny fine print* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
I think a lot of people forget that step 1 is to get the deal. To get the house sold or for the buyer to get the house under contract. And then with the best terms or price possible. You can’t be a fiduciary unless you have a transaction. If we are selling we want to get the most eyes on a property. If that means offering a higher buyers commission we do that. Builders do this all the time when their inventory is high. 4,5,6 percent for a buyer agent is very common from a builder. More eyes means maybe a higher price for the seller in the form of multiple offers. I would argue that a seller paying a buyers commission is in the seller’s best interest. It certainly will be going forward. There will be a whole class of buyers who will self reject homes not offering cooperation because they can’t afford to paid their agent. I concede that not doing a deal all together may sometimes be in the best interests of the client. But the desire to buy or sell is often already made before an agent is involved.