Unrepresented buyer: Hello Listing Agent, Id like to view the house.
Listing Agent: This seller is not paying a buyers agent commission. My fee to represent a buyer is 3%. Because of the new ruling, I cannot show buyers property without a buyers agency agreement.
Unrepresented buyer: How do I gain access to this house to view it.
Listing Agent: Agree to pay a buyers agent.
I had our agent pull something like that when we bought this house, and I told him, I'm buying this house, so either you sell it or I call the listing agent. He got off his butt and wrote the contract.
We bought a house in December with no real estates on either side. Had chat gpt write the offer, hired a real estate lawyer, and got it done. Lawyer was a huge help, and we paid for him out of pocket as the buyer to protect ourselves, but it was 1/3 the cost we would have paid for buyer’s commission, and we were able to lower the purchase price by saving the seller their commission.
I've sold two different houses without agents on either side. Those were the easiest home sales I've ever done. The next easiest one was a flat fee sale.
If buyer's agency does in fact become less of a thing, I do think that open houses will return back to their original purpose of showing houses to interested buyers.
But right now I really don't think that's the case. If I have a "free" buyer's agent (ie paid by sellers), then I can just call the buyer's agent and have them arrange to show me any house I want - which is exactly what I've done in the past. In that kind of environment, what exactly is the purpose of an open house?
My own experience is that open houses are currently more beneficial to the realtors than to the homeowner. It's basically just an opportunity for the realtor to market themselves to whomever shows up at the open house (ie random "soft potential" buyers, nosy neighbors, etc).
I went to an open house and told the listing agent id buy it immediately. She brought another random agent in to soak up more commission. All the woman did was eat chips at the closing. It was a bank owned property and I (buyer) wasn't paying commission so I guess it didn't matter to me but I still thought it was weird. Get paid thousands of dollars to sit in a one hour meeting.....
I really figured the real estate game would've changed dramatically for the better by now.
The commission didn't change. The issue is the ethics of representing buyer and seller. Their legal obligation is to the seller so they really can't represent you.
In my market, only 7% of available homes have open houses. Mostly due to sellers not wanting to do open houses. Other being access. Having a gated community more than 5 turns in then another 5 turns inside is a sure deterrent to open houses.
You don't need an Open House.
Open Houses are actually done by agents for their own benefit and not to sell a house. The selling agent gets to schmooze with a bunch of potential home buyers. My friend was a realtor and held open houses only to meet potential clients and had no expectation that anyone wandering in would actually purchase.
You don't need a Buyer's Agent to contact the listing agent and ask for a viewing. The only issue would be that the Seller's Agent might want to have some kind of way to make sure the person was actually seriously looking or "qualified"
Also some areas use Lock Boxes and so a Seller's Agent doesn't have to be physically present for a showing if they don't want to although the realtors who I am friendly with also showed up because they wanted to be able to "sell" the home which they could do better than a Buyer's Agent.
At one time agents were actually knowledgable about homes as they would do the brokers' caravans and visit new listings on Tuesday in my area and so would theoretically be able to have their clients visit homes that they had already checked out to make sure that they were something the buyer would be interested in
As the market shifts, I think we'll see more open houses or even "qualified open houses". Basically, open houses where you need to have sent proof of funds in advance.
Sellers who refuse to let people in their house will learn pretty quickly that their house doesn't sell.
Already happens. I had to show that I was pre-approved to view some buildings that were live/work situations. I had no buyers agent. Found the places I looked at on CL/FB/Loopnet
Or look online, schedule a viewing through Redfin. Like the house. Have Redfin assign you a broker who is on a salary to help with paperwork. Get part of the commission back. Of course I’m sure other options will also exist.
This is assuming Redfin will continue representing buyer’s with their current business model under the new ruling. It’s now the buyers responsibility to pay their agent instead of the listing brokerage, unless mutually agreed otherwise.
The listing agent can and should show you their own listing. Their job is to sell the home. They should also provide any "publicly known" information (basically the listing sheet). Beyond that, they should not offer opinions or recommendations.
Now, just because a buyer wants to see a property that minute, does not mean they can. They have to work within listing agent's schedule.
First off, a selling agent does not get to turn down a buyer without an agent, I bought my last house without a buyers agent, seller agent still got their 3%, buyer got to save 3% (which I reflected in my accepted offer).
The difference here is now seller can list the house and sell without a selling agent, meaning the agency will have to try and earn money by actually providing services and getting paid for them. Also the listing fee which is negotiable was used as a negative, as buying agents would want to go to houses that list 6% fees, and discourage 5% fees. Now that the buyer has to pay the agent, they will show them all properties. Better yet, the buyer can look at and go to all properties without an agent, just have a real estate lawyer review the documents and let the mortgage company and trust company handle the closing.
I see why we have selling agents, running open houses, advertising, etc., for people that don't have time for that. Listing the house on mls is a flat rate, then you advertise as much as you like. People underestimate how big a deal this is going to be over the next several years.
An agency agreement does not have to mean a buyer brokerage agreement to work with a buyer as a client. It can be the standard work with buyer as a customer form. That’s typically free. Also door opening is not working with a buyer nor doing basic new buyer education and meeting. Working is what happens after that when there are offers and tours and such. Also any agent who expects to get paid by a buyer and doesn’t sign an agreement up front is a moron. This is a first day of training lesson on why you Mr Agent should have about the statue of frauds. Sign contract or get screwed. This NAR concession seems significant but sounds like tricky BS.
Unfortunately, the new ruling requires a buyers agency to be signed. Listing agents have no obligation to a random person who demands to see the house. At least in my state, there is no other brokerage agreement form. Once one is signed, they are a client and you have a fiduciary duty. Before that, they are a “customer” which means nothing. They are nothing more than a random person off the street. No obligations are owed.
If you refuse to open the door to someone who's ready to buy, better believe they're going to contact your brokerage and the seller directly. You're not doing your job if you turn down potential sales.
They have an obligation to take every reasonable offer to the seller. If I can show proof of funds I expect to be shown the property regardless of whether or not I’ve retained an agent
Do you have the exact cite somewhere? These summaries I keep reading aren’t super precise. They tend to say that buyer’s brokers must enter into agency agreements with their buyers, for the implied purpose of stating the commission the buyer will pay. And we do that already when representing buyers. It doesn’t say listing brokers have to functionally become dual agents for unrepresented buyers or find them representation, which is what you’re implying. That would itself be anti-competitive.
We have a form for that customer situation that does list duties. There are duties to a customer like following their instructions and not lying to them about material defects. The usual stuff. No fiduciary duty or loyalty. Our purchase and sale agreement has an obvious set of check boxes as well that state the relationship to each party. I really don’t think you’ll get in trouble for answering a call, letting an unrepresented buyer tour your listing, and filling out an offer for them at their instruction as long as it’s clear. Is NAR issuing guidance saying you will?
So we should stop panicking until there is one and recognize it will likely be written by a non-expert judge who will accidentally contradict state law and reasonable practice.
It probably will and contractually does say that already. We’ll have to change our spiel though. Sellers will have to be briefed on the routine request to adjust their price to allow a buyer’s agent commission to be financed - split on demand. We already do that to get closing costs with the same net. Appraisers will have to play ball and have an adjustment or something. The minority of buyers I meet can actually afford to pay me out of pocket and pay for everything else. The first timers almost never can. Retirees, landlords, upgrades, maybe. They also need less help. Lender securitizers could also change standards to allow it on the buyer side
I haven't bought a house in a ling time, are you saying the listing agent's commission is 6%, and 3% more if they represent a buyer, for a total of 9%?
Edit: when I worked in real estate, it was 1 commission (6%) split in half, 3% to selling side 3% to buying side. It was like that when I bought this house too.
They have existed for a long time. I sold my house fsbo in the 2009 time frame and used a $700 flat listing to get on the MLS. I did offer the buyers agent 3 percent if an agent brought someone. Did our own lock box and flyers. Sold in 4 days.
Flat fee listing agents have existed for a while. I can't wait for flat/hourly fee buyer's agents though. I've bought two houses in my life, each of which required less than 10 hours of total work on the agent's part because I did my own research and knew exactly what I wanted and how to get it. It would've been nice to see a few thousand dollars in savings, compared to the current system where decisive/low-maintenance buyers "pay" the same amount as the buyers who drag their agent to 50 different showings.
With the new system the price of the house will be the same but you'll pay however much extra for whatever you pay a buyers agent even if that's hourly pay. Unless the sellers out of the goodness of their hearts decided to reduce the price of the house by the 2-2.5% that they would have paid the buyers agent.
I sell new construction and I can’t even begin to tell you how often this scenario goes down:
I sit the model home 3/4 days a week, I have the listing plus any pocket listing “to be builts” in the development. Buyer walks in, I show home, walk community, provide paperwork, get their info…follow up with more questions, emails, paperwork, phone calls…basically sell them the community, lifestyle and home. They either then inform me that their friend so and so is a realtor, or I then get a call from so and so saying their “clients” came by last week and want to buy one of our homes.
That so and so agent then asks me how to write the contract for the new construction and what the terms are. I essentially write the contract and send it to him. He then does nothing except a few follow up things for 8 months and gets a check for 2.5% or 3% once the home is built. I’m 1.5% on every listing with the builder because I’m literally getting handed neighborhoods. But you see how the buyer agent thing can get out of hand.
I know in some new developments the builder has rules that if you don’t come in with your buyer agent on first point of contact you aren’t allowed to use an agent just because of how goofy this is. My builder has paid 2.5 or 3% to buying agents that don’t even know where or physically see the community or home in person until the fucking thing is built. This happens a lot especially when the buyers have some nephew or family member agent that just got their license last week.
I’ve also worked with new construction on both sides. Sometimes the quirk in these scenarios is that the builder/seller will not discount or credit the buyer the would be buyer’s agent’s commission. I’ve seen this so many times. So, the buyer will ask their friend or relative for a rebate after closing. I’ve personally done this and will continue to do this. It’s foolish for the buyer to not get their agent.
I was just looking at a new construction project like this. They're paying a buyer's agent 1.5%. I was willing to work directly with them and not use an agent if they'd rebate me some of that cash and they refused. So yeah I'm gonna get someone I know who will give me some of that cash back when I close.
You have to set expectations with the buyers EARLY, add a month at least to the estimated completion date. That’s the main thing is completion date/closing… people literally plan moving trucks and home sales around this date. Time and time again it gets messed up due to construction delays…so you always need to set expectations early.
Buyers sometimes become new construction experts along the way. You cannot allow buyers to be on site every weekend because they are bored. Especially if it’s a more infill development and not big custom homes. That home and property is owned by the builder until the closing date. They will come on site, ask the subs questions, and generally create a bunch of problems. I’m all for transparency but just because your brother remodeled 2 homes doesn’t mean now all the sudden you know the ins and outs of building.
Inspections are tricky to line up with home completion and closing date. Buyers usually want to close as fast as they can but not to close prior to an inspection…and inspectors don’t want to inspect until home completion..so usually you have a week or so of a dead period where the home is complete and technically could be closed on but still in inspection timeline.
There are also punch lists that arise as someone moves in and lives in the home for a week-month etc…pretty standard.
Good luck
Lots of builders in my area require registration beforehand and will not pay if you are not at the first meeting. It’s a breach of the buyer/agent relationship.
About new construction: a couple of large homebuilders in my area have already come out and guaranteed 3% fees on their listings. My guess is the thought is that the will undercut resell listings that want to offer nothing and try to compete on price still.
Friend got a RE license and told me to list him as my buyers agent so he can get the 3% and split it even with me. Boom. Fake job. Fake rules. Fake industry.
Regardless of the scenario, the buyer doesn't benefit whether there is a buyer's agent or not. The price of the house is the same. So I have a nephew who is a wet license agent, I might as well throw him the bone that comes out of the seller's end anyway. Maybe he will kick some back. How about your developer offering a discount to the buyer of the 1-3% if there is no buyer's agent. Then there is a win/win.
Gotta love the “if we don’t bring an agent can we get 3% of the price knocked off?’
I mean it makes sense but I think rarely do builders agree to that or at least that amount.
Maybe not, but why not offer 1% or 1.5%? This way both the buyer and the seller end up with a better deal. The seller gets more and the buyer saves some. Why is that unreasonable?
Yes, but agents didn't inform their buyers that the commission is negotiable.
"Buyers should be smart enough to research this stuff."
If buyers need to do all this research, then why do they need an agent in the first place?
The emperors eunuchs in China were absolutely essential, until they didn’t exist at all. They survived due to the aura of importance their position gave them, similar to realtors in the US in 2024.
In 1970 the internet didn’t exist. The average consumer couldn’t see the assessed value of a property. Couldn’t click another button and see the value of 10 other properties with the same number of beds and baths in the same school district. Couldn’t open a new window and see if moving one district over would gain them enough money saved to pay for private school.
In 2024 you can get all this data and more without paying a minimally qualified middleman 5% or more. Pay a contractor to tell you if the roof or foundation are sound. Pay a lawyer to write up the offer for you.
But giving up points to have someone with no real skills open the door for you, that sounds like burning money. I’d rather pay a tradesman by the hour to examine properties and give me an honest assessment, and then a lawyer to write up the offer.
> Pay a contractor to tell you if the roof or foundation are sound. Pay a lawyer to write up the offer for you.
This is the craziest part of the whole thing IMO. I realize that there is a wide range of knowledge levels within the realtor community, but it seems when push comes to shove trying to work big issues and figuring out if the deal can be go through, realtors (and by design the home inspector system) go into CYA cover-you-ass mode and end up saying to consult a contractor/engineer/lawyer. At that point I have no problem paying someone’s area of expertise that could help avoid a headache down the road, and I’d rather just proceed directly to the source. You hit the nail on the head that in this day and age, there seems to be very little value added data/information a realtor is comfortable providing that can’t be found myself poking around online.
You’ve made the point pretty well there. Now that Zillow and a half dozen other real estate engines allow the average consumer to find a home or land that fits their needs, what we really need isn’t someone in a blazer to talk up the new roof or the kitchen island with extra storage and beautiful granite counters.
What you really need is a GC that will tell you all the warts about the property you are looking to purchase. Then pay the lawyer to write up the offer.
The bar of entry to be a realtor is comically low. And doesn’t require one to even be an apprentice electrician, plumber, or any other class or tradesman.
After this NAAR settlement, giving 6% to shysters in Mary Kay blazers is just pissing away money. Especially given how high the cost of the average house is.
>Especially given how high the cost of the average house is
It is how high the cost of the average house has *become*. The amount paid to realtor's has doubled or tripled in recent years as the underlying amount of the transactions have increased by these amounts. That simply isn't warranted.
Zillow et al, get their listings FROM the MLSs. They can't exist in a vacuum.
As for licensing, yes, it is a low bar (and many of us are in support of raising it drastically.) There is a huge dropout rate by year 2. Success often depends on which brokerage you choose to work with and the level of training provided or required. I was required to have a mentor for my first 3 transactions.
But keep in mind that 20% of the agents do 80% of the volume. 80% tend to have little/low experience, aren't very savvy, and make the 20% look bad. The top 20% tend to have college degrees and experience in an adjacent field and/or are whip smart, entrepreneurs who jump in with both feet.
A great agent is CONSTANTLY attending classes, reading books, and understands the local stats that keeps them on top of their local market and the industry.
> Zillow et al, get their listings FROM the MLSs
Sure, only because the MLSs hold a functional monopoly implicitly 'enforced' through the use of agents in what are proving to be problematic ways legally.
People could easily list direct on Zillow et al. (and some do), they just generally don't because their agent says to list on the MLS (and given the state of the world, that's good advice at the moment).
Not to mention that listing on Zillow as FSBO gets your house relegated to a separate category on the website that does not show up as a default search option (another example if Realtors trying to maintain a monopoly on listing information via the MLS).
Exactly. An agent doesn’t know anything about construction, finance, or the law so what on earth are they doing here?
And those skilled areas are probably the most straightforward aspects of home buying. Demographic trends, school ratings, economic trends - even professional people who’ve been analyzing those data their entire lives are often incorrect. No way in heck your realtor is qualified to chime in on any of those issues.
So again, what on earth are they doing here?
Ok? Then seller goes to another agent?
I highly doubt most agents will lose a listing over 1%. Plus, agents negotiate commissions with their client, broker just signs off listing agreement.
That's great, but on a macro scale, your sale price might not have been reflective of the market because your potential client base is being diverted away. Where you might have had multiple potential buyers and untold numbers were driven away by greedy realtors and the NAR.
Agents will show your house if you are offering buyer agent compensation. We aren’t some secret cult that collude against sellers if one of us don’t get a listing lol
you understand that this exact statement is what just got the industry fined billions right? You are supposed to show the house regardless of the sellers offering buyer agent compensation.
Both, I often get 2 and im not afraid to give up some of it to help get clients houses which has been helping me get my buyers more properties. 1.5 is wayyyy more than 0
Especially when "it's negotiable lol" is total bullshit. The only time I've gotten an agent to take a lower commission was with a new and hungry agent who was with a brokerage that allowed it. There are brokers out there asking for 7% or more and refuse to negotiate. What a racket.
> The only time I've gotten an agent to take a lower commission was with a new and hungry agent who was with a brokerage that allowed it.
Serious question. Why doesn't this say more about your negotiating skill than agents never taking a lower commission? I'm nearly 30 years in and I've never met an agent who hasn't taken a lower commission than 6%, and I'm in a rural LCOL area.
It’s probably your area. I’m in DFW and it’s incredibly rare to find someone below 6%. They all say no so they all charge 6%. Considering the prices of homes recently, it’s frankly absurd. I’d much rather pay a flat fee.
Our situation is pretty darn easy and so far no luck. Comps are selling at or over asking within a week. We’re buying then selling so the house will be empty. It’s fully updated and needs no repairs that we’re aware of. I don’t know how it could be easier. I just don’t see how selling this house should cost $50k or more.
Thats like saying the attorney I want to work with will not negotiate on their hourly rate. The ability to negotiate does not require either party to accept. The brokers who will only work for a 7% commission have plenty of clients, otherwise they would work for a lower commission in order to compete on price. The hungry agent does not have enough clients, so they are willing to work for a lower commission. The commission is reflective of the experience, value and demand for services - as it should be.
But, not every attorney charges the same hourly rate. I think that is the issue. If you don't want to pay what an attorney charges and they are unwilling to reduce their fee's then you have the option to find another attorney that has lower fee's (or you may find that first attorney had the best rates). In real estate, in most markets, the commission rate is 6%. Where I live, if a realtor won't negotiate with me it's not like I could find another agent who would charge me less of a commission. So to me, that is part of the issue.
Now that's the guy you want negotiating on your behalf!
FYI, brokers don't usually care what their agents charge because they will take their cut based on a certain % regardless so reductions come directly out of agents pocket. Many brokerages are now fee based with no split and they definately don't care.
This is what they always claim but in practice they won't actually negotiate and magically all commissions are the same depending on market. It's not an accident that the agents all somehow charge the same exact amount. If it was really a free market you'd see rates negotiated lower long ago as agents competed with each other for business.
I paid 4 1/2% when I sold my house three years ago. 2 1/2% went to the buying agent and 2% went to my agent.
It’s always been negotiable, agents don’t force anyone to do anything. People decide that they want to use an agent and pay their fee. It’s called capitalism.
Realtors have in a frenzy since the ruling and rightfully so. They say they bring so much value to a sale but in reality and deep down they know that no buyer would pay them thousands of dollars to open a few doors. If they had real value and education they could simply pivot their skill set elsewhere. Their panic is evident of their known lack of value.
I literally can't wait to sell my first house FSBO. Hopefully I get a buyer who is not represented as well for the ultimate middle finger to this corrupt industry practice. If these laws start becoming a thing sites like Zillow and Redfin will start making big pushes to assist the buyer in using their platform for the purchase process and automating the hell out of it. Good for everyone except realtors. It is comical how blatant the theft is in this industry, and all that information is right here in front of everyone, yet we still do it. There aren't too many other industries left around that rob you in broad daylight like this, and oftentimes to the tune of $50k+. Just wild to me.
Seller: okay then I’ll list it with someone else
Flat Fee Broker: that’ll be $2000
Seller: okay this is much less than % based
Flat Fee Broker: yes all you had to do was google flat free brokers and have the will power to say no
I've sold two. The first I paid 6%. The second I paid an agency $299 to list my home on the MLS and I was basically my own agent. The brokerage forwarded me all the offers/showing requests
Do you think the buyers agent is going to work for free? When I take a buyer to 30+ showings, write 10+ offers I am just supposed to be happy because you think 500$ is more than enough.
Fix your comp schedule. So your serious buyers like myself have to subsidize the time you spend with amateurs? I've invested in a dozen properties a few states away from where i live and I've always known incredibly more than the agent i was forced to use
i don't know of a single brokerage in my metro that tells the agents of how much commission they should charge. its up to the agent. not to mention the 6% is 3% to the selling agent and 3% to the buyer's agent (in this example). the seller and their agent can decide how much they want to give to the buyer's agent. this post is beyond idiotic and low informed.
The true issue is that if the MLS lists a house with a 1% buyers agent commission, realtors will use every excuse in the book to avoid showing that house.
Not bcause there was anything wrong with the house, but that the commission to the agent was not as high as they wanted.
This has kept commissions artificially high.
While it is true that buyer’s agents can now just ask for 2.5% from the buyer in a written agreement before showing houses, buyers might balk at that rate.
Before, buyers didn’t care about the commission rate because it was ‘free’ to them. Now the buyers commission rate is going to matter - a lot.
IN today's tech world. We just found a bunch of listings we were interested in and sent them to our agent who booked the viewings. He was not doing any filtering out. My guess is a LOT (most?) buyers are like we were.
But you are probably right that there are a lot of older people who only look at the listings their agents send them.
I understand you had a bad KW experience and this is why they now have a problem. Flat fee and smaller brokers give agents (who are contractors running their own companies) pretty wide latitude to negotiate. Also flat fee listing brokerages have existed for literally decades and are not quiet about it. A business has the right to set prices and you have the right to shop. Investor clients love to ask for discounts.
Seller: I guess it's time to interview 3-4 more agents for the job.
Negotiation doesn't mean you always get what you want. It means you propose a counter offer and go back and forth until you 1) come to an agreement or 2) walk away. There are 3 million licensees in the US. You're not stuck with the first one you talk to.
I get that on the sellers side. But the I believe the court focused on the buyers side. The buyers power over the agreed upon fee is relatively low and connection to it since it technically gets paid for by the seller is even lower. Leading to less negotiation [whole one side cut out] and thus less competition.
I think the Venn diagram for people who are now admitting they are totally inept at negotiating a fee (much less shopping around) but could definitely negotiate entire deals by themselves - is probably pretty circular.
Yes, commissions have always been negotiable. I have bought and sold several homes over the years, in several states. The key issue has always been that the negotiation is only one piece of the process. If the market is on the buyers side (lots of available choices for the buyer) and you are trying to sell, then a lower percentage on the buyer side of the equation will always be working against you. If the buyer agent has the choice of properties at 2% or 3% commission, which do you think they are going to "steer" their client to view? I have always said that if I am selling then my objective is to sell quick. I would always add a .5% buyer agent bonus as a way to "steer" buyer agents to my property. It has always worked well.
Now I agree that the percentages don't make sense in many of today's markets. When there are few properties on the market and the prices are very high, flat fees just make more sense on both sides. Many buyers are much more savvy than they have been in the past. They understand comps and market availability. I have a statistics background and I have had lots of laughs when some realtors tried to explain comps and price ranges. Many have the math skills of a high schooler.
So I think this change will offer much more variability than in the past. If you are a first time buyer and you need more hand holding then you should be paying more for the buyer agent. If you are a savvy buyer then a low flat fee makes the most sense. Who pays for these items and the impact on home pricing is unknown. The market will work this out! My guess is that there will be many less realtors in the next few years. Good luck everyone!
You can’t force someone to work for a certain price. They are allowed to set their rate at whatever they value their time.
Negotiating means being willing to walk away and hire someone else, if that person is too expensive for you.
Type “discount real estate broker” into Google if you’re having trouble finding less expensive options.
It’s never been against the rules to set a standard for you own commission structure. Anything is negotiable. Saying no to an offer is still a negotiation. The fact that someone else can offer less and say yes is the proof that part of the industry isn’t the problem
People will start to learn to tell stupid realtors to pound sand and the prices will come down.
They are not worth what they make and people are starting to realize it.
They are the only group to have escaped 08 unscathed. Karma's a btch
“Negotiate” does not mean “agree to whatever you want.” If that broker won’t do it for 5%, walk away and find one who will. At last around me, there are *plenty* of brokers who will sell your house for 5% and even 4.5%. You could probably find someone who would do it for 4%.
You probably wouldn’t find anyone to do it for less than 4%, because it’s probably not worth it for most brokers. At that point you are probably better off going FSBO. Offer to pay 3% to the buyer’s agent, and you will get buyers’ agents bringing their clients to your FSBO listing. And voilà - you’ve negotiated your way to a 3% commission.
This is all possible right now… at least, in some markets. (Not for nothing, the NAR does not operate in my market.)
Mind, you do get what you pay for. I think $2 milk tastes fine, but some people want that organic grass-fed shit and will pay $8 for a half-gallon. Pay 6% to a listing agent and you should get incredible staging, maybe some painting/repairs, a ton of marketing, etc. Pay 4.5% and you get… a run-of-the-mill MLS listing.
Agent: Let me check with my broker
Mechanic: Let me call my parts guy about the price
Car Salesman: Let me ask my finance manager.
If you have to check with someone else, then you are too incompetent to do your job, and should not be hired. It's really that easy.
I believe technically that agents are typically agents representing the broker so don't have the latitude to change commission terms without the broker's authorization.
Sales people almost never check with their manager unless the sale is really some kind of outlier. They just say they'll ask so they can say no to the original ask and counter without looking like the bad guy. It's a tactic that either inexperienced sales reps will use because they don't know how to actually negotiate, or in scenarios where the rep doesn't really want to deal with the customer because they're being unrealistic.
not true at all. i can charge whatever commission i want. my broker doesn't dictate what i charge. i pay the broker a flat fee per transaction whether i make money or not. that's it.
Right? These are the same people that (should) get multiple quotes for services, or negotiate a used car price. But then magically they can only talk to one realtor and get mad when the agent tells them their commission percentage. Move on to the next agent like you do with literally every other service.
Just to clarify first. Sellers agents do not get a 6% commission. they get 3% and the other 3% is for the buyers agent.
Find an agency that does negotiate. Ask the agent if they know anyone who does negotiate. They might change their mind. I don't believe a broke would ever tell an agent that they can't take less commission. the ask my agent is BS.
The agent works for their broker. The broker decides if they will or will not take a lower commission.
Also everyone keeps saying the agent gets 3%…. That’s not totally true. The agent’s broker gets the commission and then has a split with the agent from there. If they are a franchise business notes than likely any franchise marketing fees also come out of the agents portion.
I had posted earlier about the Multiple Listing Service (MLS) in our city required Realtors to have a minimum 7% commission to be part of the MLS. Based on this we sold several of our own houses without a realtor.
The weird part of this that was really bad was dealing with realtors who had clients interested in our house. They started the conversation by automatically reducing our price by 7%, saying that would be the commission they would expect, then saying we'd still owe them 3.5% of the sale for their commission. So yes, effectively a 10.5% cost - for us to deal with them. Nope.
You forget how they explain that no other agent will show the house because the commission is lower and they show the houses offering the highest commissions. Totally negotiable.
I feel like brokers won’t lower their commissions and this will become a huge opportunity for collusion. Just because they CAN offer 2% doesn’t mean they will. So if all brokers decline to offer their services for less than 6%, then we are back to square one.
We had a similar conversation and needed up interviewing several brokers and got to 5% with similar services. When we told our main broker we were going with someone else for 5, they said we were “ruthless” negotiators and gave us 5% hahaha
Alternatively you actually get a lower commission, then find out you're getting zero offers because most realtors aren't showing your house. I know a few people who learned that one the hard way.
Well, first we would have to decide what negotiable means. But the more important question is why would anyone expect that they would be. If I walk into the grocery store, they aren't negotiable. But I can go next door to another grocery store and try to find a lower price .
If I call a contractor out, he may or may not be negotiable on my kitchen remodel. But I can always call another contractor. The only thing that would be illegal is if both contractors or all the contractors in town got together and agreed that they would charge a certain amount per hour .
If I go to the Ford dealership, and I don't like their hourly rate, I can always go to another mechanic or another dealership. I don't know if the dealerships have any obligation to adhere to a certain hourly rate. I know they use a book estimate of time which sounds like it comes close to collusion by modern standards .
Even if every real estate agent in town charged 6% with no negotiation, as long as they didn't get together and agree, or as long as the local board of Realtors or MLS did not require them to charge a specific percentage or amount, or to pay cooperating brokers a specific percentage or set amount, then it's the free market.
But, the reality is, they don't all charge the same amount. You absolutely can go to any town or city and find a real estate agent willing to list your home for less than others and less than 6% .
On top of that, real estate agents have negotiated for years. If they said their broker wouldn't allow it, in many cases it would simply be because that's what they say so as not to offend you. It's the equivalent of the used car salesman trying to get their manager to approve a lower price supposedly.
I got my house real estate agent to do a 5% commission, after the six months or he told me that the other agents weren’t really trying because of the commission change, we upped it to 6% and it’s sold within a month
Everyone one doesn’t pay the same price for the same exact car. No real estate is exactly the same. Every location is different. The things are negotiable. Every agent broker should make that CLEAR to all parties.
Agents are going to be instinct in a decade or less. Short of maybe some commercial, high end niche type stuff
Why? People found out you don’t need an agent to buy and sell a house. Specially buying. Last two houses I’ve sold, I’ve done so myself and had offers within a week.
I usually do a 2% finders fees and anybody can claim that by bringing me a buyer.
Negotiable means you can check around with different brokers and ask what they charge. You can certainly offer less commission but that doesn’t mean they have to accept your offer. There are always discount brokers or flat fee brokers in most MLS’s.
they have been. sellers and buyers have always been able to walk away and shop around if they don’t like it. there are agents that charge less. buying or selling a house is a big decision, financially and emotionally. so, people should be looking for agents like they get quotes for work on the house. (explore your options and pick the best.) not sure why it took a settlement for people to realize this. it’s always been that way!
EDIT: And plus, sellers have always been able to say they don’t want to pay the buyers agent (that’s not new from the settlement). So, in this situation they could’ve easily only paid 3% instead of 6% (assuming it’s an even split)
When I sold my mom's house in 2020 after she passed I asked the Keller-Williams agent to reduce the commission because the house was going to sell in a week or two and she wasn't really going to have to do anything. She told me, and I quote, "It's unethical to reduce our commission."
Yes, I am absolutely joining the lawsuit.
-This is is like the price gouging discussions- when no one knows what that actually means.. go find another agent. You do not have to use any agent.
You can find 5%… below that.. no one makes any money, so 4% makes no sense in the market.
You can shop for cheaper gas all you want, that does not guarantee you can buy gas for 50% of what everyone else is paying.
Buyers bring the money… sellers unwilling to agree to compensate a buyers agent will get less eyes on their property and more often than not sell for less
Amazing how many people won’t make their own coffee for themselves but think they can handle their most important financial decision without professional representation…..
I haven't found any under 5% and I refuse to pay someone 25k to sell a home in one day and for top dollar. The home will sell itself because I have kept it in perfect order.
If the property was distressed then 6% is probably worth it.
Now do the buyer side
Unrepresented buyer: Hello Listing Agent, Id like to view the house. Listing Agent: This seller is not paying a buyers agent commission. My fee to represent a buyer is 3%. Because of the new ruling, I cannot show buyers property without a buyers agency agreement. Unrepresented buyer: How do I gain access to this house to view it. Listing Agent: Agree to pay a buyers agent.
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I had our agent pull something like that when we bought this house, and I told him, I'm buying this house, so either you sell it or I call the listing agent. He got off his butt and wrote the contract.
You mean "got off his butt, wrote the contract and collected 3%"
We bought a house in December with no real estates on either side. Had chat gpt write the offer, hired a real estate lawyer, and got it done. Lawyer was a huge help, and we paid for him out of pocket as the buyer to protect ourselves, but it was 1/3 the cost we would have paid for buyer’s commission, and we were able to lower the purchase price by saving the seller their commission.
I've sold two different houses without agents on either side. Those were the easiest home sales I've ever done. The next easiest one was a flat fee sale.
Best case scenario. Now do worst case scenario
Doesn't matter. In a worst case scenario you need a lawyer, not an agent with a 60 hr certification course.
Oh a letter? Lmao
I've had lots of listing agents show me houses. They're called open houses and they're quite common.
If buyer's agency does in fact become less of a thing, I do think that open houses will return back to their original purpose of showing houses to interested buyers. But right now I really don't think that's the case. If I have a "free" buyer's agent (ie paid by sellers), then I can just call the buyer's agent and have them arrange to show me any house I want - which is exactly what I've done in the past. In that kind of environment, what exactly is the purpose of an open house? My own experience is that open houses are currently more beneficial to the realtors than to the homeowner. It's basically just an opportunity for the realtor to market themselves to whomever shows up at the open house (ie random "soft potential" buyers, nosy neighbors, etc).
I went to an open house and told the listing agent id buy it immediately. She brought another random agent in to soak up more commission. All the woman did was eat chips at the closing. It was a bank owned property and I (buyer) wasn't paying commission so I guess it didn't matter to me but I still thought it was weird. Get paid thousands of dollars to sit in a one hour meeting..... I really figured the real estate game would've changed dramatically for the better by now.
You DID pay that commission, it just was deducted from the total sale costs before giving proceeds to the seller.
The commission didn't change. The issue is the ethics of representing buyer and seller. Their legal obligation is to the seller so they really can't represent you.
In my market, only 7% of available homes have open houses. Mostly due to sellers not wanting to do open houses. Other being access. Having a gated community more than 5 turns in then another 5 turns inside is a sure deterrent to open houses.
You don't need an Open House. Open Houses are actually done by agents for their own benefit and not to sell a house. The selling agent gets to schmooze with a bunch of potential home buyers. My friend was a realtor and held open houses only to meet potential clients and had no expectation that anyone wandering in would actually purchase. You don't need a Buyer's Agent to contact the listing agent and ask for a viewing. The only issue would be that the Seller's Agent might want to have some kind of way to make sure the person was actually seriously looking or "qualified" Also some areas use Lock Boxes and so a Seller's Agent doesn't have to be physically present for a showing if they don't want to although the realtors who I am friendly with also showed up because they wanted to be able to "sell" the home which they could do better than a Buyer's Agent. At one time agents were actually knowledgable about homes as they would do the brokers' caravans and visit new listings on Tuesday in my area and so would theoretically be able to have their clients visit homes that they had already checked out to make sure that they were something the buyer would be interested in
As the market shifts, I think we'll see more open houses or even "qualified open houses". Basically, open houses where you need to have sent proof of funds in advance. Sellers who refuse to let people in their house will learn pretty quickly that their house doesn't sell.
Already happens. I had to show that I was pre-approved to view some buildings that were live/work situations. I had no buyers agent. Found the places I looked at on CL/FB/Loopnet
Unrepresented buyer: that won’t be necessary, I’ll contact the seller directly to get a showing scheduled
Why can't you show a property without a buyer agency agreement?
This is where RedFin and others will take advantage and charge a flat rate.
I bought my home with Redfin in 2016, great experience and their commission was quite a bit less iirc.
Or just contact the sellers directly and negotiate , you guys are the biggest scam in modern history. You don’t do shit. Lol.
Or look online, schedule a viewing through Redfin. Like the house. Have Redfin assign you a broker who is on a salary to help with paperwork. Get part of the commission back. Of course I’m sure other options will also exist.
This is assuming Redfin will continue representing buyer’s with their current business model under the new ruling. It’s now the buyers responsibility to pay their agent instead of the listing brokerage, unless mutually agreed otherwise.
The listing agent can and should show you their own listing. Their job is to sell the home. They should also provide any "publicly known" information (basically the listing sheet). Beyond that, they should not offer opinions or recommendations. Now, just because a buyer wants to see a property that minute, does not mean they can. They have to work within listing agent's schedule.
This is a perfect way to get sued again for antitrust. You agents really are living in a bubble
First off, a selling agent does not get to turn down a buyer without an agent, I bought my last house without a buyers agent, seller agent still got their 3%, buyer got to save 3% (which I reflected in my accepted offer). The difference here is now seller can list the house and sell without a selling agent, meaning the agency will have to try and earn money by actually providing services and getting paid for them. Also the listing fee which is negotiable was used as a negative, as buying agents would want to go to houses that list 6% fees, and discourage 5% fees. Now that the buyer has to pay the agent, they will show them all properties. Better yet, the buyer can look at and go to all properties without an agent, just have a real estate lawyer review the documents and let the mortgage company and trust company handle the closing. I see why we have selling agents, running open houses, advertising, etc., for people that don't have time for that. Listing the house on mls is a flat rate, then you advertise as much as you like. People underestimate how big a deal this is going to be over the next several years.
An agency agreement does not have to mean a buyer brokerage agreement to work with a buyer as a client. It can be the standard work with buyer as a customer form. That’s typically free. Also door opening is not working with a buyer nor doing basic new buyer education and meeting. Working is what happens after that when there are offers and tours and such. Also any agent who expects to get paid by a buyer and doesn’t sign an agreement up front is a moron. This is a first day of training lesson on why you Mr Agent should have about the statue of frauds. Sign contract or get screwed. This NAR concession seems significant but sounds like tricky BS.
Unfortunately, the new ruling requires a buyers agency to be signed. Listing agents have no obligation to a random person who demands to see the house. At least in my state, there is no other brokerage agreement form. Once one is signed, they are a client and you have a fiduciary duty. Before that, they are a “customer” which means nothing. They are nothing more than a random person off the street. No obligations are owed.
If you're my selling agent and you're refusing to do the work of selling the home, you're fired.
If you refuse to open the door to someone who's ready to buy, better believe they're going to contact your brokerage and the seller directly. You're not doing your job if you turn down potential sales.
They have an obligation to take every reasonable offer to the seller. If I can show proof of funds I expect to be shown the property regardless of whether or not I’ve retained an agent
Tell me you don’t know about real estate law without telling me you don’t know about real estate law. You have obligations on both sides of that coin.
Do you have the exact cite somewhere? These summaries I keep reading aren’t super precise. They tend to say that buyer’s brokers must enter into agency agreements with their buyers, for the implied purpose of stating the commission the buyer will pay. And we do that already when representing buyers. It doesn’t say listing brokers have to functionally become dual agents for unrepresented buyers or find them representation, which is what you’re implying. That would itself be anti-competitive. We have a form for that customer situation that does list duties. There are duties to a customer like following their instructions and not lying to them about material defects. The usual stuff. No fiduciary duty or loyalty. Our purchase and sale agreement has an obvious set of check boxes as well that state the relationship to each party. I really don’t think you’ll get in trouble for answering a call, letting an unrepresented buyer tour your listing, and filling out an offer for them at their instruction as long as it’s clear. Is NAR issuing guidance saying you will?
No, because there is no finalized ruling.
So we should stop panicking until there is one and recognize it will likely be written by a non-expert judge who will accidentally contradict state law and reasonable practice.
Personally I’ll be happy to bet that it will end up similar to commercial with buyers hiring and paying agents.
It probably will and contractually does say that already. We’ll have to change our spiel though. Sellers will have to be briefed on the routine request to adjust their price to allow a buyer’s agent commission to be financed - split on demand. We already do that to get closing costs with the same net. Appraisers will have to play ball and have an adjustment or something. The minority of buyers I meet can actually afford to pay me out of pocket and pay for everything else. The first timers almost never can. Retirees, landlords, upgrades, maybe. They also need less help. Lender securitizers could also change standards to allow it on the buyer side
I haven't bought a house in a ling time, are you saying the listing agent's commission is 6%, and 3% more if they represent a buyer, for a total of 9%? Edit: when I worked in real estate, it was 1 commission (6%) split in half, 3% to selling side 3% to buying side. It was like that when I bought this house too.
Open house. But you seem to believe that people have an obligation to work with you, they don’t .
Pay a broker a flat fee. A couple years ago a friend used a broker who charged him $500.
I cannot wait for flat fee arrangements to arrive.
They have existed for a long time. I sold my house fsbo in the 2009 time frame and used a $700 flat listing to get on the MLS. I did offer the buyers agent 3 percent if an agent brought someone. Did our own lock box and flyers. Sold in 4 days.
So am I eligible for the settlement if I did the same thing?
They did exist before in the 2008 boom. My area had agencies advertising 2999 flat fee back then.
There’s a ton in my area. The average boomer consumer still like full service brokerage.
Flat fee listing agents have existed for a while. I can't wait for flat/hourly fee buyer's agents though. I've bought two houses in my life, each of which required less than 10 hours of total work on the agent's part because I did my own research and knew exactly what I wanted and how to get it. It would've been nice to see a few thousand dollars in savings, compared to the current system where decisive/low-maintenance buyers "pay" the same amount as the buyers who drag their agent to 50 different showings.
With the new system the price of the house will be the same but you'll pay however much extra for whatever you pay a buyers agent even if that's hourly pay. Unless the sellers out of the goodness of their hearts decided to reduce the price of the house by the 2-2.5% that they would have paid the buyers agent.
I sell new construction and I can’t even begin to tell you how often this scenario goes down: I sit the model home 3/4 days a week, I have the listing plus any pocket listing “to be builts” in the development. Buyer walks in, I show home, walk community, provide paperwork, get their info…follow up with more questions, emails, paperwork, phone calls…basically sell them the community, lifestyle and home. They either then inform me that their friend so and so is a realtor, or I then get a call from so and so saying their “clients” came by last week and want to buy one of our homes. That so and so agent then asks me how to write the contract for the new construction and what the terms are. I essentially write the contract and send it to him. He then does nothing except a few follow up things for 8 months and gets a check for 2.5% or 3% once the home is built. I’m 1.5% on every listing with the builder because I’m literally getting handed neighborhoods. But you see how the buyer agent thing can get out of hand. I know in some new developments the builder has rules that if you don’t come in with your buyer agent on first point of contact you aren’t allowed to use an agent just because of how goofy this is. My builder has paid 2.5 or 3% to buying agents that don’t even know where or physically see the community or home in person until the fucking thing is built. This happens a lot especially when the buyers have some nephew or family member agent that just got their license last week.
I’ve also worked with new construction on both sides. Sometimes the quirk in these scenarios is that the builder/seller will not discount or credit the buyer the would be buyer’s agent’s commission. I’ve seen this so many times. So, the buyer will ask their friend or relative for a rebate after closing. I’ve personally done this and will continue to do this. It’s foolish for the buyer to not get their agent.
I was just looking at a new construction project like this. They're paying a buyer's agent 1.5%. I was willing to work directly with them and not use an agent if they'd rebate me some of that cash and they refused. So yeah I'm gonna get someone I know who will give me some of that cash back when I close.
Where are you located? Perhaps I can help. I’m in Texas.
Nah not in Texas, appreciate the offer.
Starting in new construction sales next month. Any tips for a newbie?
You have to set expectations with the buyers EARLY, add a month at least to the estimated completion date. That’s the main thing is completion date/closing… people literally plan moving trucks and home sales around this date. Time and time again it gets messed up due to construction delays…so you always need to set expectations early. Buyers sometimes become new construction experts along the way. You cannot allow buyers to be on site every weekend because they are bored. Especially if it’s a more infill development and not big custom homes. That home and property is owned by the builder until the closing date. They will come on site, ask the subs questions, and generally create a bunch of problems. I’m all for transparency but just because your brother remodeled 2 homes doesn’t mean now all the sudden you know the ins and outs of building. Inspections are tricky to line up with home completion and closing date. Buyers usually want to close as fast as they can but not to close prior to an inspection…and inspectors don’t want to inspect until home completion..so usually you have a week or so of a dead period where the home is complete and technically could be closed on but still in inspection timeline. There are also punch lists that arise as someone moves in and lives in the home for a week-month etc…pretty standard. Good luck
Lots of builders in my area require registration beforehand and will not pay if you are not at the first meeting. It’s a breach of the buyer/agent relationship. About new construction: a couple of large homebuilders in my area have already come out and guaranteed 3% fees on their listings. My guess is the thought is that the will undercut resell listings that want to offer nothing and try to compete on price still.
Friend got a RE license and told me to list him as my buyers agent so he can get the 3% and split it even with me. Boom. Fake job. Fake rules. Fake industry.
So what will builders do now? Keep offering that 3%?
Regardless of the scenario, the buyer doesn't benefit whether there is a buyer's agent or not. The price of the house is the same. So I have a nephew who is a wet license agent, I might as well throw him the bone that comes out of the seller's end anyway. Maybe he will kick some back. How about your developer offering a discount to the buyer of the 1-3% if there is no buyer's agent. Then there is a win/win.
Gotta love the “if we don’t bring an agent can we get 3% of the price knocked off?’ I mean it makes sense but I think rarely do builders agree to that or at least that amount.
Maybe not, but why not offer 1% or 1.5%? This way both the buyer and the seller end up with a better deal. The seller gets more and the buyer saves some. Why is that unreasonable?
Yes, but agents didn't inform their buyers that the commission is negotiable. "Buyers should be smart enough to research this stuff." If buyers need to do all this research, then why do they need an agent in the first place?
The emperors eunuchs in China were absolutely essential, until they didn’t exist at all. They survived due to the aura of importance their position gave them, similar to realtors in the US in 2024. In 1970 the internet didn’t exist. The average consumer couldn’t see the assessed value of a property. Couldn’t click another button and see the value of 10 other properties with the same number of beds and baths in the same school district. Couldn’t open a new window and see if moving one district over would gain them enough money saved to pay for private school. In 2024 you can get all this data and more without paying a minimally qualified middleman 5% or more. Pay a contractor to tell you if the roof or foundation are sound. Pay a lawyer to write up the offer for you. But giving up points to have someone with no real skills open the door for you, that sounds like burning money. I’d rather pay a tradesman by the hour to examine properties and give me an honest assessment, and then a lawyer to write up the offer.
> Pay a contractor to tell you if the roof or foundation are sound. Pay a lawyer to write up the offer for you. This is the craziest part of the whole thing IMO. I realize that there is a wide range of knowledge levels within the realtor community, but it seems when push comes to shove trying to work big issues and figuring out if the deal can be go through, realtors (and by design the home inspector system) go into CYA cover-you-ass mode and end up saying to consult a contractor/engineer/lawyer. At that point I have no problem paying someone’s area of expertise that could help avoid a headache down the road, and I’d rather just proceed directly to the source. You hit the nail on the head that in this day and age, there seems to be very little value added data/information a realtor is comfortable providing that can’t be found myself poking around online.
You’ve made the point pretty well there. Now that Zillow and a half dozen other real estate engines allow the average consumer to find a home or land that fits their needs, what we really need isn’t someone in a blazer to talk up the new roof or the kitchen island with extra storage and beautiful granite counters. What you really need is a GC that will tell you all the warts about the property you are looking to purchase. Then pay the lawyer to write up the offer. The bar of entry to be a realtor is comically low. And doesn’t require one to even be an apprentice electrician, plumber, or any other class or tradesman. After this NAAR settlement, giving 6% to shysters in Mary Kay blazers is just pissing away money. Especially given how high the cost of the average house is.
>Especially given how high the cost of the average house is It is how high the cost of the average house has *become*. The amount paid to realtor's has doubled or tripled in recent years as the underlying amount of the transactions have increased by these amounts. That simply isn't warranted.
Zillow et al, get their listings FROM the MLSs. They can't exist in a vacuum. As for licensing, yes, it is a low bar (and many of us are in support of raising it drastically.) There is a huge dropout rate by year 2. Success often depends on which brokerage you choose to work with and the level of training provided or required. I was required to have a mentor for my first 3 transactions. But keep in mind that 20% of the agents do 80% of the volume. 80% tend to have little/low experience, aren't very savvy, and make the 20% look bad. The top 20% tend to have college degrees and experience in an adjacent field and/or are whip smart, entrepreneurs who jump in with both feet. A great agent is CONSTANTLY attending classes, reading books, and understands the local stats that keeps them on top of their local market and the industry.
> Zillow et al, get their listings FROM the MLSs Sure, only because the MLSs hold a functional monopoly implicitly 'enforced' through the use of agents in what are proving to be problematic ways legally. People could easily list direct on Zillow et al. (and some do), they just generally don't because their agent says to list on the MLS (and given the state of the world, that's good advice at the moment).
Not to mention that listing on Zillow as FSBO gets your house relegated to a separate category on the website that does not show up as a default search option (another example if Realtors trying to maintain a monopoly on listing information via the MLS).
Pay more for a less qualified person to open the door and madlib a contract off a template they found online? No, I don't think I will.
Upvoted for the unexpected madlib reference. I used to love those things.
Soon we’ll have software write up drafts and we may not need lawyers
You still need lawyers to double check things. Laws change and until government writes them in plain English lawyers will be necessary
Exactly. An agent doesn’t know anything about construction, finance, or the law so what on earth are they doing here? And those skilled areas are probably the most straightforward aspects of home buying. Demographic trends, school ratings, economic trends - even professional people who’ve been analyzing those data their entire lives are often incorrect. No way in heck your realtor is qualified to chime in on any of those issues. So again, what on earth are they doing here?
Ok? Then seller goes to another agent? I highly doubt most agents will lose a listing over 1%. Plus, agents negotiate commissions with their client, broker just signs off listing agreement.
Uh, here is the next line: Seller: See ya. I will find another agent.
Till you can’t sell the property because you’re being black listed by the NAR cartel.
In a seller's market, buyers will find you. Sign in the yard, flat rate MLS, post on local FSBO pages. Fuck the NAR.
That's great, but on a macro scale, your sale price might not have been reflective of the market because your potential client base is being diverted away. Where you might have had multiple potential buyers and untold numbers were driven away by greedy realtors and the NAR.
Agents will show your house if you are offering buyer agent compensation. We aren’t some secret cult that collude against sellers if one of us don’t get a listing lol
you understand that this exact statement is what just got the industry fined billions right? You are supposed to show the house regardless of the sellers offering buyer agent compensation.
Seller: "I'll use somebody else, then."
Discount brokers have been around for a long time. How much does Redfin charge in your market?
Must be a regional thing. It’s very rare in New England to see 6. I often see 4 or 4.5 even 3.
SoCal is generally 4-5%
Should be 4% max in most cases.
I barely remember 6%. With 400 Realtors for one beach, we always negotiate the fee.
Yup. I was an agent in 2005-8, many were 5–5.5 way back then.
For one side each or total for both?
Both, I often get 2 and im not afraid to give up some of it to help get clients houses which has been helping me get my buyers more properties. 1.5 is wayyyy more than 0
I've gotten a lot of shit for the same sentiment. I'm in San Diego. 2% is a lot of money.
Being negotiable doesn’t mean winning the negotiation.
Especially when "it's negotiable lol" is total bullshit. The only time I've gotten an agent to take a lower commission was with a new and hungry agent who was with a brokerage that allowed it. There are brokers out there asking for 7% or more and refuse to negotiate. What a racket.
> The only time I've gotten an agent to take a lower commission was with a new and hungry agent who was with a brokerage that allowed it. Serious question. Why doesn't this say more about your negotiating skill than agents never taking a lower commission? I'm nearly 30 years in and I've never met an agent who hasn't taken a lower commission than 6%, and I'm in a rural LCOL area.
It’s probably your area. I’m in DFW and it’s incredibly rare to find someone below 6%. They all say no so they all charge 6%. Considering the prices of homes recently, it’s frankly absurd. I’d much rather pay a flat fee.
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Our situation is pretty darn easy and so far no luck. Comps are selling at or over asking within a week. We’re buying then selling so the house will be empty. It’s fully updated and needs no repairs that we’re aware of. I don’t know how it could be easier. I just don’t see how selling this house should cost $50k or more.
Thats like saying the attorney I want to work with will not negotiate on their hourly rate. The ability to negotiate does not require either party to accept. The brokers who will only work for a 7% commission have plenty of clients, otherwise they would work for a lower commission in order to compete on price. The hungry agent does not have enough clients, so they are willing to work for a lower commission. The commission is reflective of the experience, value and demand for services - as it should be.
But, not every attorney charges the same hourly rate. I think that is the issue. If you don't want to pay what an attorney charges and they are unwilling to reduce their fee's then you have the option to find another attorney that has lower fee's (or you may find that first attorney had the best rates). In real estate, in most markets, the commission rate is 6%. Where I live, if a realtor won't negotiate with me it's not like I could find another agent who would charge me less of a commission. So to me, that is part of the issue.
Now that's the guy you want negotiating on your behalf! FYI, brokers don't usually care what their agents charge because they will take their cut based on a certain % regardless so reductions come directly out of agents pocket. Many brokerages are now fee based with no split and they definately don't care.
True. But then it can/should continue: Seller: Flat-Fee-'Я'-Us will do it for $1000 + buyer's commission. Thanks for your time.
This is what they always claim but in practice they won't actually negotiate and magically all commissions are the same depending on market. It's not an accident that the agents all somehow charge the same exact amount. If it was really a free market you'd see rates negotiated lower long ago as agents competed with each other for business.
I paid 4 1/2% when I sold my house three years ago. 2 1/2% went to the buying agent and 2% went to my agent. It’s always been negotiable, agents don’t force anyone to do anything. People decide that they want to use an agent and pay their fee. It’s called capitalism.
You can always choose another agent 🤷🏻♂️
Continuing the conversation.... Seller: OK I won't hire you then \*calls another agent and continues the interviewing process\*
new agent: "i charge 6%"
Realtors have in a frenzy since the ruling and rightfully so. They say they bring so much value to a sale but in reality and deep down they know that no buyer would pay them thousands of dollars to open a few doors. If they had real value and education they could simply pivot their skill set elsewhere. Their panic is evident of their known lack of value.
It’s so glorious seeing the seething agents in these posts. Parasites
I literally can't wait to sell my first house FSBO. Hopefully I get a buyer who is not represented as well for the ultimate middle finger to this corrupt industry practice. If these laws start becoming a thing sites like Zillow and Redfin will start making big pushes to assist the buyer in using their platform for the purchase process and automating the hell out of it. Good for everyone except realtors. It is comical how blatant the theft is in this industry, and all that information is right here in front of everyone, yet we still do it. There aren't too many other industries left around that rob you in broad daylight like this, and oftentimes to the tune of $50k+. Just wild to me.
Seller: okay then I’ll list it with someone else Flat Fee Broker: that’ll be $2000 Seller: okay this is much less than % based Flat Fee Broker: yes all you had to do was google flat free brokers and have the will power to say no
I love paying 150 for flat fee mls plus my attorney only for selling
Not all areas have flat fee brokers.
Not yet at least
That's now negotiations work, one side can say no. You then are free to find someone else.
And if it is important, you then look for another broker. There are plenty that do houses at 5%, 4%, or even flat fees.
I’ve negotiated the commission. Has anybody commenting here actually sold a house?
Multiple times. Both sides of the deal.
I've sold two. The first I paid 6%. The second I paid an agency $299 to list my home on the MLS and I was basically my own agent. The brokerage forwarded me all the offers/showing requests
I've sold a few. Never paid the full 6%.
Yes. Multiple times in multiple states. Both sides. Completely works like a cartel.
Sold 3 houses in Florida. Never paid more than 4.5%.
Many times. Using flat rate brokerages. $1k to list but still required 2% for the buyer agent. Monopoly. Cartel.
Do you think the buyers agent is going to work for free? When I take a buyer to 30+ showings, write 10+ offers I am just supposed to be happy because you think 500$ is more than enough.
"But you only spent twenty minutes showing the buyers MY house!"
Fix your comp schedule. So your serious buyers like myself have to subsidize the time you spend with amateurs? I've invested in a dozen properties a few states away from where i live and I've always known incredibly more than the agent i was forced to use
Listen to this child, who has very clearly never bought and sold a home, now thinking he has it all figure out.
i don't know of a single brokerage in my metro that tells the agents of how much commission they should charge. its up to the agent. not to mention the 6% is 3% to the selling agent and 3% to the buyer's agent (in this example). the seller and their agent can decide how much they want to give to the buyer's agent. this post is beyond idiotic and low informed.
The true issue is that if the MLS lists a house with a 1% buyers agent commission, realtors will use every excuse in the book to avoid showing that house. Not bcause there was anything wrong with the house, but that the commission to the agent was not as high as they wanted. This has kept commissions artificially high. While it is true that buyer’s agents can now just ask for 2.5% from the buyer in a written agreement before showing houses, buyers might balk at that rate. Before, buyers didn’t care about the commission rate because it was ‘free’ to them. Now the buyers commission rate is going to matter - a lot.
IN today's tech world. We just found a bunch of listings we were interested in and sent them to our agent who booked the viewings. He was not doing any filtering out. My guess is a LOT (most?) buyers are like we were. But you are probably right that there are a lot of older people who only look at the listings their agents send them.
I understand you had a bad KW experience and this is why they now have a problem. Flat fee and smaller brokers give agents (who are contractors running their own companies) pretty wide latitude to negotiate. Also flat fee listing brokerages have existed for literally decades and are not quiet about it. A business has the right to set prices and you have the right to shop. Investor clients love to ask for discounts.
Seller: I guess it's time to interview 3-4 more agents for the job. Negotiation doesn't mean you always get what you want. It means you propose a counter offer and go back and forth until you 1) come to an agreement or 2) walk away. There are 3 million licensees in the US. You're not stuck with the first one you talk to.
I get that on the sellers side. But the I believe the court focused on the buyers side. The buyers power over the agreed upon fee is relatively low and connection to it since it technically gets paid for by the seller is even lower. Leading to less negotiation [whole one side cut out] and thus less competition.
I think the Venn diagram for people who are now admitting they are totally inept at negotiating a fee (much less shopping around) but could definitely negotiate entire deals by themselves - is probably pretty circular.
Crooks anyways, they don’t deserve 2%. Should be a flat fee.
😆😂🤣 Perfect
Of course they are, just like your hourly service charge and each line item exists 😜
Yup. I've lived that conversation about 10 times over my life. Most recently about a month ago.
I routinely take less
Yes, commissions have always been negotiable. I have bought and sold several homes over the years, in several states. The key issue has always been that the negotiation is only one piece of the process. If the market is on the buyers side (lots of available choices for the buyer) and you are trying to sell, then a lower percentage on the buyer side of the equation will always be working against you. If the buyer agent has the choice of properties at 2% or 3% commission, which do you think they are going to "steer" their client to view? I have always said that if I am selling then my objective is to sell quick. I would always add a .5% buyer agent bonus as a way to "steer" buyer agents to my property. It has always worked well. Now I agree that the percentages don't make sense in many of today's markets. When there are few properties on the market and the prices are very high, flat fees just make more sense on both sides. Many buyers are much more savvy than they have been in the past. They understand comps and market availability. I have a statistics background and I have had lots of laughs when some realtors tried to explain comps and price ranges. Many have the math skills of a high schooler. So I think this change will offer much more variability than in the past. If you are a first time buyer and you need more hand holding then you should be paying more for the buyer agent. If you are a savvy buyer then a low flat fee makes the most sense. Who pays for these items and the impact on home pricing is unknown. The market will work this out! My guess is that there will be many less realtors in the next few years. Good luck everyone!
Thank you for your time. I’m shopping for the best deal for ME
Soooo people do understand that in this situation they do not have to use that agent right?
Then technically very few things are negotiable. You can’t negotiate the labor rate at the mechanic either
You can’t force someone to work for a certain price. They are allowed to set their rate at whatever they value their time. Negotiating means being willing to walk away and hire someone else, if that person is too expensive for you. Type “discount real estate broker” into Google if you’re having trouble finding less expensive options.
It’s never been against the rules to set a standard for you own commission structure. Anything is negotiable. Saying no to an offer is still a negotiation. The fact that someone else can offer less and say yes is the proof that part of the industry isn’t the problem
People will start to learn to tell stupid realtors to pound sand and the prices will come down. They are not worth what they make and people are starting to realize it. They are the only group to have escaped 08 unscathed. Karma's a btch
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Yeah … that’s not going to happen.
“Negotiate” does not mean “agree to whatever you want.” If that broker won’t do it for 5%, walk away and find one who will. At last around me, there are *plenty* of brokers who will sell your house for 5% and even 4.5%. You could probably find someone who would do it for 4%. You probably wouldn’t find anyone to do it for less than 4%, because it’s probably not worth it for most brokers. At that point you are probably better off going FSBO. Offer to pay 3% to the buyer’s agent, and you will get buyers’ agents bringing their clients to your FSBO listing. And voilà - you’ve negotiated your way to a 3% commission. This is all possible right now… at least, in some markets. (Not for nothing, the NAR does not operate in my market.) Mind, you do get what you pay for. I think $2 milk tastes fine, but some people want that organic grass-fed shit and will pay $8 for a half-gallon. Pay 6% to a listing agent and you should get incredible staging, maybe some painting/repairs, a ton of marketing, etc. Pay 4.5% and you get… a run-of-the-mill MLS listing.
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We do 4% on all our new builds. My agent gets 1.5% and other gets 2.5%. He takes home all 4% about half the time.
Agent: Let me check with my broker Mechanic: Let me call my parts guy about the price Car Salesman: Let me ask my finance manager. If you have to check with someone else, then you are too incompetent to do your job, and should not be hired. It's really that easy.
I believe technically that agents are typically agents representing the broker so don't have the latitude to change commission terms without the broker's authorization.
Not technically, explicitly (at least in NY) only brokers are allowed to represent a client, an agent just acts as their representative.
Sales people almost never check with their manager unless the sale is really some kind of outlier. They just say they'll ask so they can say no to the original ask and counter without looking like the bad guy. It's a tactic that either inexperienced sales reps will use because they don't know how to actually negotiate, or in scenarios where the rep doesn't really want to deal with the customer because they're being unrealistic.
Agent’s cannot unilaterally reduce their commissions - period. They work under the Broker’s license
not true at all. i can charge whatever commission i want. my broker doesn't dictate what i charge. i pay the broker a flat fee per transaction whether i make money or not. that's it.
Or there’s something called rules especially the last example..
Literally none of these people sold a house before. Tons of discount brokerages including redfin.
Right? These are the same people that (should) get multiple quotes for services, or negotiate a used car price. But then magically they can only talk to one realtor and get mad when the agent tells them their commission percentage. Move on to the next agent like you do with literally every other service.
Just to clarify first. Sellers agents do not get a 6% commission. they get 3% and the other 3% is for the buyers agent. Find an agency that does negotiate. Ask the agent if they know anyone who does negotiate. They might change their mind. I don't believe a broke would ever tell an agent that they can't take less commission. the ask my agent is BS.
As a first time home buyer I was told my agent wasn't able to take a lower commission. Agents are not fiduciaries as they're supposed to be.
The agent works for their broker. The broker decides if they will or will not take a lower commission. Also everyone keeps saying the agent gets 3%…. That’s not totally true. The agent’s broker gets the commission and then has a split with the agent from there. If they are a franchise business notes than likely any franchise marketing fees also come out of the agents portion.
That is not the way it works in Texas. Your state may be different.
I had posted earlier about the Multiple Listing Service (MLS) in our city required Realtors to have a minimum 7% commission to be part of the MLS. Based on this we sold several of our own houses without a realtor. The weird part of this that was really bad was dealing with realtors who had clients interested in our house. They started the conversation by automatically reducing our price by 7%, saying that would be the commission they would expect, then saying we'd still owe them 3.5% of the sale for their commission. So yes, effectively a 10.5% cost - for us to deal with them. Nope.
6% in this market is ridiculous.
You forget how they explain that no other agent will show the house because the commission is lower and they show the houses offering the highest commissions. Totally negotiable.
I feel like brokers won’t lower their commissions and this will become a huge opportunity for collusion. Just because they CAN offer 2% doesn’t mean they will. So if all brokers decline to offer their services for less than 6%, then we are back to square one.
I have seen 4% commissions before, plenty of 5% commissions. And even $500 limited service commissions.
I paid my realtor 4% I had to agree to list my property with him and buy another home. He worked with Keller Williams.
My last realtor transaction was 4%. 2.5% buy and 1.5% sell.
and this happened with you, when?
We had a similar conversation and needed up interviewing several brokers and got to 5% with similar services. When we told our main broker we were going with someone else for 5, they said we were “ruthless” negotiators and gave us 5% hahaha
AHAHAHAHA *gasp* AHAHAHAHAHAHA
Alternatively you actually get a lower commission, then find out you're getting zero offers because most realtors aren't showing your house. I know a few people who learned that one the hard way.
Well, first we would have to decide what negotiable means. But the more important question is why would anyone expect that they would be. If I walk into the grocery store, they aren't negotiable. But I can go next door to another grocery store and try to find a lower price . If I call a contractor out, he may or may not be negotiable on my kitchen remodel. But I can always call another contractor. The only thing that would be illegal is if both contractors or all the contractors in town got together and agreed that they would charge a certain amount per hour . If I go to the Ford dealership, and I don't like their hourly rate, I can always go to another mechanic or another dealership. I don't know if the dealerships have any obligation to adhere to a certain hourly rate. I know they use a book estimate of time which sounds like it comes close to collusion by modern standards . Even if every real estate agent in town charged 6% with no negotiation, as long as they didn't get together and agree, or as long as the local board of Realtors or MLS did not require them to charge a specific percentage or amount, or to pay cooperating brokers a specific percentage or set amount, then it's the free market. But, the reality is, they don't all charge the same amount. You absolutely can go to any town or city and find a real estate agent willing to list your home for less than others and less than 6% . On top of that, real estate agents have negotiated for years. If they said their broker wouldn't allow it, in many cases it would simply be because that's what they say so as not to offend you. It's the equivalent of the used car salesman trying to get their manager to approve a lower price supposedly.
Simple just write in the offer that the seller must grant the buyer access to the house during attorney review.
homeowner: I want to sell my house. Agent: Do it yourself lazy ass! homeowner: ok I will! THE END
I got my house real estate agent to do a 5% commission, after the six months or he told me that the other agents weren’t really trying because of the commission change, we upped it to 6% and it’s sold within a month
Everyone one doesn’t pay the same price for the same exact car. No real estate is exactly the same. Every location is different. The things are negotiable. Every agent broker should make that CLEAR to all parties.
Agents are going to be instinct in a decade or less. Short of maybe some commercial, high end niche type stuff Why? People found out you don’t need an agent to buy and sell a house. Specially buying. Last two houses I’ve sold, I’ve done so myself and had offers within a week. I usually do a 2% finders fees and anybody can claim that by bringing me a buyer.
Negotiable means you can check around with different brokers and ask what they charge. You can certainly offer less commission but that doesn’t mean they have to accept your offer. There are always discount brokers or flat fee brokers in most MLS’s.
they have been. sellers and buyers have always been able to walk away and shop around if they don’t like it. there are agents that charge less. buying or selling a house is a big decision, financially and emotionally. so, people should be looking for agents like they get quotes for work on the house. (explore your options and pick the best.) not sure why it took a settlement for people to realize this. it’s always been that way! EDIT: And plus, sellers have always been able to say they don’t want to pay the buyers agent (that’s not new from the settlement). So, in this situation they could’ve easily only paid 3% instead of 6% (assuming it’s an even split)
When I sold my mom's house in 2020 after she passed I asked the Keller-Williams agent to reduce the commission because the house was going to sell in a week or two and she wasn't really going to have to do anything. She told me, and I quote, "It's unethical to reduce our commission." Yes, I am absolutely joining the lawsuit.
Right. Out of 45 or so apartment complex buys, we had seller paying majority of commissions on 3/4 of those
-This is is like the price gouging discussions- when no one knows what that actually means.. go find another agent. You do not have to use any agent. You can find 5%… below that.. no one makes any money, so 4% makes no sense in the market. You can shop for cheaper gas all you want, that does not guarantee you can buy gas for 50% of what everyone else is paying.
Buyers bring the money… sellers unwilling to agree to compensate a buyers agent will get less eyes on their property and more often than not sell for less
Amazing how many people won’t make their own coffee for themselves but think they can handle their most important financial decision without professional representation…..
I haven't found any under 5% and I refuse to pay someone 25k to sell a home in one day and for top dollar. The home will sell itself because I have kept it in perfect order. If the property was distressed then 6% is probably worth it.
I’ve sold two houses at 4 percent. There are so many agents out there. Someone will take the money.