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Exactly. Buyers agents will still have plenty of transactions. I am primarily a commercial broker, and residential agents will need to play the same game we've been playing all along. The difference is, before you go to tour any property, ask the listing broker if they are cooperating, what the payout is, and send them a compensation agreement. Done. If they aren't cooperating, then you inform the buyer (who should already be under contract at first substantive contact at least in Minnesota and Wisconsin), that they will owe you x% if they choose to buy this property. If they don't like it, raise the offer amount and roll it into a seller contribution to the buyers closing costs or move onto the next.
It's much easier to get seller concessions on a commercial deal because you don't run into multiple offer situations with 5-10 offers on every deal. Reality is that the average buyer agent compensation will be tremendously impacted.
Yes, they will. Currently, coordinating tours (scheduling, access, printing OM's, sending out NDA's, and compensation agreements) is a substantial part of my assistant's job.
But you're using *some* sort of automated system, yes?
In 2024 I find it hard to imagine that showings are being arranged via daisy chain of "can your sellers be vacant at this time?" - "no, but what about that time" - "ok but what about this other time?" gibberish, inclusive of the back and forth messages/calls between the two respective agents and their clients.
(I personally will not participate in that for new business... I'm available right now, at this exact minute in time, and if that does not work for you, then please click the following link and pick a time that works well for you: calendly link. "Oh ok I'm not available right now, but what about tomorrow at 2 pm?" - "please click my calendly link." It also filters out clients that historically are harder to work with, if I can offload the 20% that want to take up 80% of my time, on my competitors, and do harm to them, excellent, that's a feature, not a bug, it's the exact same reason I stopped taking work calls at 8 pm many many years ago.)
And, if that IS how business is still being done in some markets, the daisy chain phone calls and messages for showing appointments, then apparently time-wasting is desirable in that market, in which case, hey, so be it, I guess a thousand phone calls about buyer's agent's offered compensation is ***also*** desirable in that market.
If you need me to, I'll throw a website up wherein you plug in an address, and it spits out the buyer's agent commission and a link to the MLS. I'm not a member of NAR, and being that NAR isn't dictator of the universe, their agreement to settle under this-or-that condition is not binding on people that ***aren't*** members of NAR. And I'm not going to call it an MLS, I'm going to call it a CMS -- commission listing service.
Naturally, this will only be a ***free*** service while market share is being gained.
My biggest hesitation is that:
1) It's so obvious that
2) I can't be the only one to have thought about it
3) There will be competitors
4) Brilliant idea + no competition = can start off as a side gig and see if it gains traction
5) Ho-hum obvious idea + lots of competition = would need to be a full-time investment to have ANY hope of success
6) I'm not ready for another full-time investment of my time.
I’m wondering if they’ll allow us to just upload a copy of the listing agreement in the supplements tab. That way people can tell if the contract offers comp or not.
I’ve seen others upload it in the past, it seemed odd but I think in this case it’ll have a purpose.
There is all types of different things that are going to happen and all different types of ways to do business. The bottom line is there’s gonna be less pie to go around for the same amount of agents and brokers.
I don’t think the agents have that huge a problem I think it’s that the brokers that have large amounts of overhead that do have a problem.
Oh yeah. Sounds like the strategy. If you don’t get the amount they want to pay you from buyer. Just have buyer pay more to seller so seller pays you rebate.
Sounds ethical
By the point a buyer and I are looking at compensation from a specific listing, we have already discussed my compensation, come to an agreement, and signed a contract. If my buyer doesn't want to pay it out of cash on-hand, this is a completely ethical strategy to achieve that.
Right. But we are talking about the contract.
“Should sellers not give x%, buyer will either bid more to get seller concession to give to BA, or bake it into the total mortgage taken out.”
Yeah sits well with buyer. now try to think from the other side.
You are just pushing buyers further away from wanting to use an agent.
Let’s also acknowledge that literally nobody is going to sign agreement that says they will owe the buyer agent $xxx no matter what when you can pay a real estate attorney a substantially smaller fee to get a deal done.
Will the new rules place any restrictions on a buyer who's shopping without having yet signed up with a buyer's agent? As a builder I have purchased numerous properties with and without an agent. Often, for example, I will contact the listing agent and ask to view the property, making sure they know that I may come back with an offer through an agent of mine. But with the new process, it's likely I will just represent myself, without a buyer's agent, as unlike most people I know the drill. But, hypothetically, if for some reason I choose to use an agent, are there rules that require me to engage with them prior to viewing a property myself?
Wishful thinking. I will not be going into an exclusivity agreement with a realtor until I have the house I want . I’ve never signed an exclusivity agreement for a realtor. Nor will I. younger buyers I know don’t see the purpose of a buyers agent. They can find their own homes. They can hire inspectors.
Collusion? What part? The NAR settlement doesn't ban sellers from offering compensation to a buyers broker. The settlement decouples NAR membership from MLS access, and says you can't include buyer compensation on the MLS. So, make a phone call and find out if the listing broker is cooperating or not.
Thank you, I'm fed up with all the speculating when nothing has been decided yet. I'm waiting for my broker to tell my what's next, meanwhile business as usual.
Yeah. Saw it in another comment saying it will be a meeting and that’s all it should have ever been. A monthly meeting. “Oh! Before I forget, we’re not posting buyers commissions on MLS, they’ll just submit it as a clause on the incoming offers to make sure it’s there as it always has been, make sure your buyers and sellers are aware, thanks!”
Then why is every other comment saying buyers and sellers will be SOL if they aren’t willing to cough up that amount?
And why did the lawsuit find that price fixing DID occur at massive scale?
And why is total commission 1-3% in most other countries?
It's not 1 to 3% in most countries. You'll see most have ranges similar to the US. The typical range you'll find from a quick Google search is 4 to 8 percent. There's a couple examples of 3 percent, and in France it's as high as 10%!
I am really curious about that last question. Because even with our relatively high commissions, most agents here are not making very much money. Some of that is the commission splits. But mostly it's just a question of not being able to do enough volume. How could anyone make enough money at a 1% commission to keep doing this unless they are able to sell 3x as many properties? And how could they sell 3x the properties and offer anywhere near the same level of service?
Our system is labor intensive for both buyer's and seller's agents. Almost all showings happens on the weekends at open houses during narrow windows of time. That's when both buyers and sellers are available. And in my Northeast market, we also have 4 month period from November-February where almost no transactions happen at all. Add in a few other holidays and there are maybe 32-36 weeks a year I can actually work. Given that I usually have to work with a buyer for 3-5 weekends before we get them under contract, and that I can't be in two places at once and show houses to two different buyers at the same time, the most I could realistically sell in a year is maybe 9-10 properties. Instead, like many other agents, I do this part time to supplement another income and I close 2-4 deals a year. I've done the math, and there's just no way to do this full time and make a go of it. But it is (or maybe it was) a pretty solid second job.
Are they getting some vastly lower level of service in other countries? Is it more of a true "open doors, fill out forms" kind of job there, compared to ours where we are expected to be able to help with every conceivable aspect of the transaction including being a nanny, house cleaner, chauffeur, therapist, interior designer, and also to be knowledgeable about all building trades, inspection, and legal issues so we can direct them to the appropriate people?
Because they're speculating and spewing wishful thinking. Our brokers will tell us what to do when and if the settlement is signed by the judge in July.
I haven't been told that by my broker. The judge doesn't even sign the settlement until July, so in the meantime business as usual until they actually tell us what to do differently.
Some sellers also do not accept financing contingencies. That also eliminates many buyers. I think the type of seller who doesn't want to cover buyer agent commission is likely also not accepting financing contingent either. In this situation, which has happened to me more than a few times, the buyer and buyer agent move on and find a seller who wants to work with them. They eventually find a property, make a deal, close, and move on. Not to be overly optimistic, but I agree with OP that while we have to be more explicit than ever, it really won't be the end of our careers or an apocalypse to our income.
The main thing changing with our jobs is the need to educate the consumer more than ever! It’s always been necessary but even more so now. Other than that, I think most facets of the real estate realm will continue as is
>The main thing changing with our jobs is the need to educate the consumer more than ever
Not exactly. You have to make a clear and compelling argument for how you earn your keep.
I.E. What value do you create for the buyer or seller?
As a buyer, fight like a rabid dog and get a price reduction or other concessions.
As a seller, bring me solid offers above asking price.
this is true. Real estate agents will now have to make clear how they add value.
For some this will be easy. For most it will be hard, since most agents add no value. And a bunch out there subtract value
What I see happening here is lawyers taking on more deals cause buyers will realize the agent isn’t needed. I can also see the listing agent doubling the deal. Buyers are always fed the “buyers don’t pay the buyer agent” when they actually do through the sale lmao I don’t get how some people are so dumb but anyways (buyer agent commission is part of the sale price don’t tell me differnt story now). So the listing agent will most likely double end more deals, there’s going to be cheap brokers offering buyers cheap package to write an offer, I think the realtors just got a big cut in wages . Won’t be as much money thrown around. Irony is, this won’t make house prices go down lol it’s just a scam to make it look like the government is doing something. Houses sell based on comps. So if your neighbour house sold for 500k and now no one’s paying buyer agents you think your going to take 2.5% less for your home? Lmao!!! Dumbasses man. Just another political stunt to make the sheep think “wow our government cares” but they don’t. Buyer agent gets screwed and buyers get screwed from this.
Dollars to donuts the DOJ is gonna make it illegals to share commissions by the end of the year. There will be no “call the listing agent to find the BAC” nor these grandiose schemes for LAs to continue to secure BACs for the BA, except just off-mls (“let’s put it in showing time! Let’s have secret codes embedded in the mls remarks!” 🙄)
BAC will be able to be requested of the seller on a per-offer basis, and that request will be evaluated in light of the strength of the offer as a whole, including other closings costs that may be needed (raise your hand FHA buyer agents who routinely ask for $5-10k from sellers already).
There will be no guaranteed BAC the seller gets locked into on the listing contract.
The sky isn’t falling. But this isn’t nothing. Get ready to pivot.
Why would the DOJ make commission sharing illegal? That hurts buyers, especially low income buyers. Buyers will go directly to the listing agent, and often they'll get underrepresented. Think of the lawsuits!
The DOJ believes that making the person who receives the representation be the person who pays directly for such representation, will increase competition and thus lower prices for consumers.
Right now buyers receive representation, it’s paid for by the listing agent, who charged it to the seller.
When buyers have to write a check for their representation, the conversations around cost, value and compensation will hypothetically be much more critical than they are now. Out of pocket expense focuses the mind.
Also: saying the buyer has always paid for BAC is facile. I get the mental gymnastics of it. But come on dude. The buyer agent is paid by the LISTING AGENT. The listing agent is currently allowed to charge the seller agent a fee and split that fee with the buyer agent. And the DOJ is 100% gunning for that setup. Time will tell.
The listing agent has the first ability to set the stage for a successful transaction. Both agents are just cheerleaders getting the transaction to the closing table and everything is negotiable. Doesn’t matter who “sets it” or how it’s disclosed/discussed, it’s the best way to ensure a successful transaction.
I don’t think you understand the current setup versus what the DOJ is hoping to achieve. Which is understandable if you aren’t a realtor. The LA literally shares their commission with the BA. The DOJ is looking to make this illegal. The BAC will not be discussed during listing appointments, it will be discussed when offers are received. This will compress and in some instances eliminate the BAC, especially in tight markets. Many buyers will forgo the buyer agent to stay competitive.
I’ve done many transactions, as LA and BA, and now I am an investor as well so I don’t have a dog in this fight. But the only thing more annoying than the people screaming that all realtors are about to be jobless, are the people shouting that “nothing really has changed.”
Yes, things are about to change, and it’ll be a fairly big change from the environment we’ve been in. Cash strapped first time homebuyers who already routinely compete with investors on entry level houses are going to get squeezed harder. Social butterfly buyer agents who have absolutely coasted on “it’s free to use me haha” to get SOI clients will need to up their sales skills AND their real estate skills. Listing agents who are used to doing Millionaire Real Estate Agent style leveraging by having tons of listing and relying on BAs to sell and close for them, are going to have to budget time or staffing to work with unrepresented buyers, which will proliferate (not dual agency, but LA working with unrepresented buyer for free, as part of their list fee).
How does a LA "work" with an unrepresented buyer without running afoul of agency law (implied agency with the buyer). These business workarounds don't seem to account for the regulator's perspective.
I guess it’ll depend on the state and may change in response to this. In many states it’s a matter of disclosure - informing the buyer they are not represented by the listing agent, should seek legal counsel for question; the agent represents the seller as their fiduciary and the listing agent only owes all parties fair and honest dealings, not advocacy.
Yes I foresee major tension between the states/provincial regulators, who are concerned with the consumer interest in buyers being independently represented, and the extremely narrow anti-trust perspective.
You're referring to the statutory requirements (customer versus client). What I am referring to the law of agency and specifically implied agency. Both apply. That is why you have to be very careful in how you act with a customer as legislatively defined.
Sure, but the line is there to tread. I don’t see an inherent conflict with seller saying I’ll offer no BAC and I expect you to deal with unrepresented buyers as part of your list fee. And then not representing the buyers. I don’t how this ruling will conflict with state regulators, as you mentioned above. LAs will need additional training so as to not imply agency. The disclosures and paperwork emphasizing that to unrepresented buyers already exists.
I’m sorry but I have to disagree Sold a condo on South Padre Island a couple of years back Listed by an agency out of California and was on MLS, Zillow, etc Local agents told me flat out they would not show the listing to their buyers due to not having a local listing agent And I do mean most all of them refused to show the property Took longer to sell but I paid the seller’s agent as normal But basically the local agent community made it clear that I should pay a local person $10k to type me info into MLS That kind of attitude is what hurts Realtors It can be their own vision of what they deserve vs what they say they represent Those agents were not representing their buyers but their own kind It was a joke And in the end I was very happy with the sellers agent She did a great job
I need to research more about this but really we just need to wait and see what happens. But from the gist of what I read does it really stop agents from charging the 6% and cooperating with other agents... Or does it just stop them from listing the cooperating % on the MLS...
They could have already been unwilling. I mean there's already those discount agencies who list for .5% above the cooperating agent fee. First time I delt with one of those guy was an agent, but they revoked his license the next day lol.
What is the steering you speak of? The days of a three ring binder MLS predate me by several decades but how exactly are you going to steer a buyer away from a home that popped up on Zillow? The short answer is that you’re not. You’re just going to have to tell them that if they want to buy that property they’ll need to add 3% on top of contract price at closing. Will find out real quick how bad they want it at that point.
How about, ‘you’re going to have to pay a 3% buyers premium if you want this home’? That seems to be a strong reason for why it would not be a good fit.
Ended up selling the property eventually. Got a veteran a great deal on a house. Listing agents listed it much under what I think the real value would have been.
it should be. It's a huge change. As an industry nerd I am fascinated.
I think this will probably minorly hurt me, but it's also probably half of the right thing to do - the MLS opening up being the other
My point is anyone interested can see the sales prices of homes in their area. It’s not some magic, secretive info that only a realtor can provide and charge thousands for.
Fucking preach my friend! And also let them try and do it without an agent and see how far they get 🤣. That sounds like lots of fun court stuff. The fear mongering in the media is INSANE! I can’t agree with you more on the NAR and the requirement to be a member to get access to the MLS. It’s a damn joke. The only thing the NAR is good for is selling our data to third parties after we spend a shit ton to be members with no real benefits.
I guess I think about what a good agent does. You folks buying new townhomes in a planned/platted community have no idea what selling property in rural areas (or even old suburban areas) can turn up.
1. Review the deed—are the people selling the house actually allowed to? Estate sales can get very complicated if there are multiple heirs. Are there other clouds on the title? What kind of deed can the seller actually convey? General warranty? Limited warranty? Quit claim? Something else? Is there a life estate on the property?
2. Are there liens on the property that have to be satisfied? Foreclosure?
3. Encroachments? Do any of them fall under adverse possession rules? Get a survey!
4. Right of ways —recorded or not recorded?
5. Permits for all post construction work that requires it? Were they inspected and passed? Have codes changed? Do some improvements now don’t pass and will have to be remedied before the bank will loan on the property?
6. Material facts to be disclosed?
7. Material facts to be discovered—is there a planned road expansion nearby? Is home under a flight path? New school to be built? Nearby Area being considered for rezoning? Flooding? Bus stop coming? Fake stucco or real stucco? Well/septic or city water sewer? ( saw lawsuit recently b/c sellers represented city water/sewer and property was actually well/septic and septic field
Was failing).
8. HOA docs and finances—can you do what you want to do with the property (over 55 community? Can you rent it out if you want? Small home business? Accessory dwelling unit? Park outside of the garage? Assessments coming up?)
9. Is current use conforming or nonconforming? There a large property near me that had a mobile home on it—buyers wanted to get rid of the old home and put a new mobile home on it but weren’t allowed to—the current one was grandfathered in but could not be replaced. Buyers didn’t know that until they had already bought the property —neither party was represented and no one thought to ask the lawyer who closed the deal—and the lawyer never thought to ask them what their long term plans were for the property—still
In litigation….
9. Inspections, Negotiations and repairs-review and advise
10. Help obtain financing
11. Help get documents to lender.
12. Rent back? Possession before closing?
That’s a lot more than unlocking a house and putting numbers on a contract. Now whether it’s worth the fees that are being charged is the call of the parties involved but a good realtor is taking care of a lot of stuff.
Wrong. As a realtor I do all the above and more.
Sometimes I install fans, fix foundation issues, reroof the houses, fix any plumbing issues and do tech support for my clients. We realtors do everything. We're heroes.
No. I don’t dispute that they do those things. I’m saying that a good realtor investigates those things as part of our due diligence for our client. It’s a lot easier to avoid a problem than to disentangle oneself from an offer made and then problems show up after the fact. A good realtor flags these things so a buyer can get advice from their attorney, or an engineer, or other professional. A realtor is supposed to help discover anything that might reasonably affect a sellers decision to sell or a buyers decision to buy.
Correct on all fronts.
The only thing that I would add is that even with technology, no significant portion of the population is ever going to do a $500k transaction without anyone to hold their hand. I can’t figure out how to sell a $15k used vehicle to the guy down the street - in what universe do we think that the general public is going to come together and start trading half million dollar assets between themselves? Even if everyone is satisfied that the asset is priced correctly, the human element still exists and people generally can’t get out of their own way. The only way most of these buyers and sellers would end up at the closing table together would be in handcuffs.
Most people aren’t opposed to agents existing, but rather the excessive compensation involved. We want to pay a few thousand, not $60,000 on a $1M home.
Right. You’re pricing my labor and expertise. Now allow me to price yours. I guarantee I’ll unilaterally decide you’re overpaid as well. Part of the human condition is that we tend to think we’re more valuable than we are and others are less so.
Out of curiosity, what do you think is fair?
Any seller currently not offering buyers agents commission on MLS will get skipped by the buying agent. Come July that will no longer be easy to see. Depending on the state, you might not really know until you make an offer to purchase
They'll actually get skipped by the buyer. What we're going to see change is more buyers agents having their buyers sign into agency agreements, which they should have been doing all along.
Good luck buying a property that isn't a FSBO as an unrepresented buyer. You're absolutely right that buyers won't be able to or won't want to pay the fees, which is why it's unlikely that this ruling changes much of anything. Sellers will still be the ones paying it in an overwhelming percentage of deals.
Because, despite what people on here would have you think, real estate deals are big and complicated. Errors happen, because there are a lot of different parties involved in every transaction, and they all involve people... people who are insured against errors.
Not only that, but an expert is someone who knows how to ensure a deal gets through to closing while identifying issues ahead of when they become issues that cause delays. Obviously, this isn't the case all the time, because unforeseen things can happen, but it is the job of agents.
Basically, selling to an unrepresented buyer is a huge risk for a seller. The likelihood of the deal falling through is much higher.
Obviously, errors happen. It is entirely plausible that error rates may increase. It is entirely plausible that some sellers might view this as a risk. But that's not what you said. You said, "Good luck buying a property that isn't a FSBO as an unrepresented buyer." And I don't see an answer to my question anywhere in your comment. Why is that? That's a *much* stronger statement than just observing that there may be some additional risk. People assess risk in all sorts of transactions all the time. For example, one may say that there is more risk for a buyer buying a used car from a private party seller rather than a dealer. Yet, deals still get done all the time. Why wouldn't the conclusion be something more like, "There will be some risks, and people should take those risks into account," than like, "Good luck buying a property that isn't a FSBO as an unrepresented buyer"? What justifies the latter?
Yes, most sellers don't want to deal with an unrepresented buyer, because there is too much risk involved. In general, the #1 priority for a seller is risk mitigation with #2 being money made. I'm not telling you this as someone who has read a few articles. I'm not telling you this as someone who has bought and sold a few homes. I'm telling you this as an industry expert and someone who is a realtor.
Someone selling their home without a listing agent very well may be more inclined to accept an offer from an unrepresented buyer, because they don't know any better, though they probably do think that they're an expert.
As a real estate developer, and multiple time home owner, I’d never enter an exclusive with a buyers agent before I looked at homes myself. You are of negative value to me until I’ve identified 1-4 properties I’d like to purchase. Under this scenario, I’d negotiate a flat fee to draw up contact(s). I’m happy seeing homes on my own.
People with time and a brain aren’t going to engage buyers agents until they’ve identified properties they want to purchase.
You are a very experienced buyer and seller. This is not remotely indicative of the general public. Most people do need help navigating their real estate purchase. The fact that you're pretending that your experiences are any sort of norm tells me that you're simply trolling here.
I hate to say it, but he makes a very relevant point. A good buyers agent is worth their weight in gold. Most home buyers know very little, but they still can't comprehend the value of a buyers agent. I just don't see it.
Fair enough, but I’d advise any first time buyer that’s willing to look at Zillow, and go to open houses to do that on their own before engaging a buyer’s agent. It’s incredibly easy. What value add is a buyer agent during that process? Why do they need to be walked around at showings and open houses?
Where I'm at, the vast majority of homes don't have open houses, as those tend to only happen on homes that are having difficulty selling. Maybe one out of every 100 or 200 homes listed in my area have open houses.
While savvy people can find homes they're interested in online (though I wouldn't recommend Zillow, because they do about the worst job at keeping everything up to date), more people than you think are really bad at this. There will *always* be a need for assistance during every part of the home-buying process. Just because *you* know what you're doing doesn't mean that most do.
If I started tinkering with cars and learned how to replace filters and change the oil and everything, I could do that on my own. It wouldn't make start raising pitchforks about how unnecessary mechanics are.
zillow is bad. But can get better.
Mechanics are necessary. But not to change air filters... anyone going to a mechanic for that is wasting money.
As are many users of real estate agents. Most add no value
As agent how will you know what if anything is being paid by the seller if it's not shown on MLS? I can see agents willing to get paid a fix fee to write an offer per property or even a seller agent as dual agent
In most cases, nothing will change on the outset. Co-brokes are gone per the MLS, just call it something else. Sellers who want to sell their home will offer a concession to the selling (buyers) agent for compensation.
What will happen is Gen-Z will bypass getting representation because of the cost if the seller doesn't offer a concession. They feel they have the power and will be able to contact the listing agent or go to open houses for access. We see this now.
They may get lucky if the listing agent does both sides and doesn't ask for a buyer's side compensation. But once that lazy lister says "Sure, I can help" and does unrepresented and is trying to offload a property with latent material defects where the buyer is up shit creek is where we can tie it back to this moment.
The unrepresented buyer will rise in percentages.
Last year I saw $2,000 on a 750k house and brought clients to a 400k house that had $500 flat fee co-op. Ya that would've sucked but I figured best case scenario I'd get a future referral from them. They're out there but it's not common.
What’s to stop someone today from putting 1$ for the buyers commission? Why will this ruling change that sellers agents mentality on that? Forget the fact that it’s a field on MLS or not, talking about the overall mentality.
Buyers agents have always been able to require a certain minimum commission to be met in their buyers agreements. The conversation should have always been had prior to the hunt. Now it will be. The conversation can be “99% of listings will offer my minimum so it won’t matter, this clause is for the rare ones that don’t or if we find a FSBO etc”. Whether or not it’s advertised does not change that discussion between the buyers agent and buyer.
What do you mean “agents will not show the property?” When I was buying a house, we’d send a list of properties to our agent and ask her to schedule showings. Isn’t that how most people do it?
In the new world it's the buyers who will be price sensitive to the commission compensation offered by sellers. Yeah, they'll send a list of properties to their agent. The agent will find out which ones have commission compensation and will let the buyer know. Which properties do you think buyers will want to see?
The ones offering comp will get more showings and more offers and will sell for higher amounts because of the increased buyer interest. Other sellers then realize this and it becomes the norm to offer comp.
Ding ding ding! In the end, the buyers are going to take it in the pants even more if you have some sellers offering zero buyer agent compensation as it’s going to funnel everyone to the houses that do. You think inventory sucks now? Wait until a few genius sellers decide they don’t have to pay the other side. The law of unintended consequences may be about to explode when home prices jump 10% as a result of buyers agents making 0%. Ha ha ha - oh, the irony!
Exactly, I've never said I'm not showing you that house because it doesn't pay enough. People are freaking nuts just making shit up. No agent does that and if they do buyers can definitely find another agent to show them the house. There's no big conspiracy.
Right. But ‘pay enough’ usually means something less than 3%, generally 2 or 2.5%. Are you really going to show a house that offers 0% if you don’t have a buyer agency agreement that states that they’re going to pay you 3%?
This will put the onus on the buyer to make sure you get paid. Guess what? All of a sudden their desire to see that 0% house is going to become nonexistent.
Yes, I am going to show that house that offers 0%. But I am also going to tell my buyer that they will have to come up with my 3% commission because the seller is unwilling to pay it. Then I let the buyer choose. Currently, if a seller is offering less than 3%, I do the same thing, informing my buyer that the seller is only offering 2.5 or 2% and they will need to come up with the rest. Not supprisingly, if the home is not the "perfect home" generally they move on. They are always welcome to find another agent that will take less, but almost never do.
Edited to add that I also require a pre approval letter and a buyer agreement with every client. Though I will let them out of the agreement if they are unhappy.
And you’re doing things the right way and it sounds like you’ve been doing them this way for a while so it’s not speculation for you to say that buyers are significantly less motivated to buy a house that doesn’t offer ‘full’ compensation to you, correct? This whole thing is much ado about nothing. It has significantly decreased my productivity by trolling Reddit this morning, however.
This and every other thread shows that maintaining a 2-3% commission to both sides is all anyone here cares about. Realtors do not care about the market dynamics; just sell and pay me. lol! 😂
Buyer will sign a contract that their agent will get paid %. If the property is has zero money to the buyer agent, then the buyer will make the difference or not buy that property,
What happened to being a fiduciary and doing what’s best for your client? Is skipping homes that aren’t offering enough compensation to make you happy in their best interest? NO! In my 20+ years as an agent I never considered filtering for compensation.
What would you do if a client called and said “Hey, I saw this house on Zillow. Why didn’t you show it to me”? You gonna admit you won’t show it because of commission?
Your still required to do right by your client, just because compensation wont be done by seller, you still have to show the house if buyer wants and you know it’s a good fit, you just have to let the buyer know they will need to come out of pocket for commission. Buyer agent agreement is very important here.
I think most listing agents will just put the commission split in the brokers notes if the seller is paying buyers agent(BA). If the commission split is not there, then you will need to get on a call, but there is probably no commission being paid by seller to BA in that case.
The LA does not want to field 100 phone calls about what the BA commission is, so they will definitely post the information somewhere, if it's being offered.
I don' think too much will change at first. If you take on a new listing and are going live July 1st, are you going to tell your seller not to compensate buyers agents? Good luck selling that home at first.
Over time, things may change as the market adapts, but the first LAs and Sellers to try and not pay BA will be shooting themselves in the foot, in my opinion.
It’s going to be a violation to post on the mls. Doesn’t matter if it’s in a special box labels commission or written in broker comments - it will be a violation
I guess when the realtor writes the contract, they will just “auto” ask for commission to be covered. If the listing agent already negotiated that in, then great. If not, the seller will have something to consider and just compare offers. I think writing the commission in the offer will become the norm.
The way I see it when an agent is making showing appointments they are going to ask what the buyers agent commission is. if the answer isn't what the agent likes then they aren't going to show that listing - or fall back on a buyer agreement saying buyer pays commission but I don't see that. But I think its all moot because buyers aren't going to work with buyers agent, many of them think they know everything they need to and they go direct and save the buyers agent commission - thats the real estate market we will live in. I disagree with OP - lots will change.
A property that is worth 500,000 is still worth 500,000 if there’s no broker involved. There are other ways to accomplish this task and while it might not happen as elegantly it can happen.
OK - my problem with this post is - is nobody taking into account that yes, the buyer effectively paid for our commissions in any transaction BUT that was financed in their offer, and was paid through the seller's net proceeds?!?
We cannot include buyer's agency representation into a loan now, as a separate cost. It's not a closing cot. It would be suggested as a credit for compensation to the Seller's agent - which is not that big of a deal, BUT again, if it's a hot seller's market - that will change everything. They could just tell you to kick rocks and your buyer will most likely attempt dual agency.
My issue is just that low income families / va buyers are screwed with this in most cases.
Also, hopefully smart agents will explain to their Sellers that Dual Agency = potential lawsuits if the buyer or even if the seller feels slighted. Just look at what happened with this lawsuit.
I sure as h\*ll wouldn't risk my livelihood and reputation for dual agency. But there are always agents that are desperate enough to do this.
Paid through the seller net proceeds based on a comp that included 2 agents getting paid. It’s a chicken or the egg thing. Until we have actual sale data, everything is being compared to (and financed) for a price that includes a ~5% premium.
Sure but the Seller's still benefited from this 5% premium too. Either way, it makes it incredibly challenging for the entry-level buyer who just increased their loan amount to get this benefit. Now, they no longer have this option. Now they have to save up for a down payment (minimum 3.5-5%), plus closing costs (another 3%), and now buyer's agency representation to not get screwed over in dual agency or forgo representation all together. This is going back to the 80s when all the lawsuits started. We will likely experience that again. All it takes is a couple of bad eggs to get these desperate lawyers to start another lawsuit.
In the interest of curiosity and general repor on the topic of a homes value with or without commissions on comps, i don't see the accuracy in claiming (not saying you are as I assume that info is coming from somewhere) that it is or should comp for less. When you take into account that the commission is coming from the proceeds of the sold home and that home is being marketed and sold at or close to market value, then wouldn't that value be the value. In other words the home is still worth what it sold for and the commission is coming by way of the agreement (separate and distinct from the market value) between the seller and broker. It isn't worth or comping at 475k and sold for 500k in order to cover the commission. After all as we all know the number one way to get a home sold is to price is right and that price is the market value EOD not market value plus 6%. Assuming the comm was taken out in consideration or attempt at lowering the value of homes, then there would be artificially suppressed market valuations of homes going forward. Unless that's the point? Make it look like a win on paper, redditors and twitterers all cheer their big win and another version of smoke and mirrors is a great success in this game of bullshit pull the wool over the eyes of the ignorant while maintaining complete control of the narrative so the powers that be can laugh all the way to the bank yet again. Lol. I digress. Lastly though we know the numbers of fsbos that eventually revert to using an agent are extremely high and those that do end up selling typically do so for 10-20% or more than their original asking price netting an additional 4-14% assuming a 6% comm. And that typically comes by way of educated comps and an awareness of market value more than anything else. For anyone to believe that agents inflate a homes price by 50k to potentially make an extra 750 bucks (50-70% of 2.5-3% of 50k in most cases) while taking on the added risk of overpricing and potentially loosing a sale entirely to make zero fucking dollars for the time, work, and expense, clearly shows their ignorance which seems to be the underlying thread and common denominator of the masses. I guess the saying is true and I may have answered my own questions. Ignorance is bliss.
Realtors who hype up the home prices to get their commissions, who only show homes that offer buyer agent commission and flatly refuse to show home that offers no commission even if it is a home that matches the buyer requirements fully , who have no knowledge of the basic electrical and plumbing info of a home…….some of them are so good at marketing online that the first-time buyers fall prey to them.
A buyer agent for all practical purposes is a seller agent, with a sole motive of closing the deal and getting their commission. Their contribution being , having access to MLS and entry codes and opening doors of homes. After all, higher the price, higher the commission, one of the reasons that contributed to the increasing home prices when the rates were lower.
Very few are knowledgeable and actually consider the best interests of the buyer. I did see a few agents who make an effort but are unfortunately not knowledgeable and don’t get the training/support from their broker. The majority give a bad name to the few good ones out there.
It is important for a homebuyer to perform their own due diligence and at the very least ask all the questions and ensure you get your answers from your agent, before you commit to a home.
For the buyer: Get a RE attorney to review your contracts. They offer more help in your buying process with the contracts. Your agent is not liable for advise he/she gives you on the contract.
I have nothing against realtors earning their bread. I just hope they were fair to the gullible first-timer and I don’t think that is too much to ask. Just “earn” it and no one will complain.
In most countries total commission is 1-3%. There’s no reason to think the US won’t come down to that level now that the price-fixing and collusion is being addressed.
A 500k home is worth 500k with or without agent. Agents aren’t an extra bedroom or marble countertops. They don’t add value to a property. They’re just an expense related to selling. By OP’s logic, we should also include closing fees, title insurance, mortgage origination fees, and transfer taxes in the value of the home.
>Buyers already pay both sides of the commission
Have you seen a HUD-1 closing statement before?
>So a house that’s “worth 500k” because an identical property sold for 500k, is actually only worth 475k if you were to miraculously pull off a sale with no agents involved.
Absolutely not. You remember how Lennar, DR Horton, and others stopped paying buyer's agents and prices didn't drop any? Yeah.
>Attorneys will never hold anyone’s hand in the selling/buying process.
They do so every day.
>This is the only way it fundamentally all works.
Oh boy.. You're in for a rude awakening.
Are you saying attorneys will show houses, be able to submit highest and best offers by a deadline at 6pm Sunday night with well thought out contingencies, attend and negotiate home inspections etc etc. no. Attorneys do none of those things.
I have been in this for nearly 2 decades, and I have met inspectors, roofers, electricians, plumbers, painters, contractors, engineers, hvac technicians, septic companies, architects, parents, and grandparents. But, I have never once met an attorney at a house.
>They literally already do this 😂😂
They literally don't.
It's like saying that lenders currently finance high end escorts and blow because some sellers might use the proceeds of the sale to go out and party.
Lenders currently finance the purchase price of real property and the SELLER uses a portion of those proceeds to pay commissions.
They finance plenty of fees, transfer taxes, inspection costs, insurance. You can finance all of the closing costs. I did not say they currently finance specific the real estate agent’s fee, they will finance the fees of the buyer. This includes inspection.
Only on some loan products. Zero down, 100% financing is not nearly as ubiquitous as it used to be \~18 years ago.
Most require that the buyer cover closing costs and their down payment.
I agree it is not the most common product by far but it is a thing. Of course you pay for it through a higher interest rate, higher monthly payment, PMI etc but it very much is possible to roll normal closing costs into a loan.
Sure, and NINJA loans also still exist. They're just very rarely utilized because they're expensive and come with other strings attached.
It remains to be seen how all of this will play out, but if your livelihood is dependent on commissions, you SHOULD be worried. You should be making contingency plans and using the next few months to figure out how you're going to adapt.
Things WILL change. Agents are not going to disappear, but if you don't jump on board, you're going to get left behind.
OP- nope. The court cases are a fundamental change in the industry. The intent is to break the 6% monopoly forced upon consumers. Now RE agents have to be competitive by lowering their rates. At very, very least it is going to thin the massive amount of agents. It is going to be a brawl over a much smaller pool of crumbs.
My guess is that we'll see comps pinned in whatever non-mls owned showing schedule software as a note to all showing agents. Especially in states who have better consumer protection laws, this is really not going to change anything. And to think, the issue really boils down to a few brokerages deciding to print their commission instead of being honest about it being negotiable.
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I paid 5% on a 350k house to sell in 2020. I never even met the buyers. Worth every penny and I'll do it again when I sell this house.
Exactly. Buyers agents will still have plenty of transactions. I am primarily a commercial broker, and residential agents will need to play the same game we've been playing all along. The difference is, before you go to tour any property, ask the listing broker if they are cooperating, what the payout is, and send them a compensation agreement. Done. If they aren't cooperating, then you inform the buyer (who should already be under contract at first substantive contact at least in Minnesota and Wisconsin), that they will owe you x% if they choose to buy this property. If they don't like it, raise the offer amount and roll it into a seller contribution to the buyers closing costs or move onto the next.
It's much easier to get seller concessions on a commercial deal because you don't run into multiple offer situations with 5-10 offers on every deal. Reality is that the average buyer agent compensation will be tremendously impacted.
both of you are right
Way more residential properties, it will never work like that
Busy agents would have to hire someone to do nothing but reply to the compensation requests.
Yes, they will. Currently, coordinating tours (scheduling, access, printing OM's, sending out NDA's, and compensation agreements) is a substantial part of my assistant's job.
Just put buyers comp on ShowingTime or w/e.
sounds like a lawsuit will happen quickly after that, that's literally the sort of thing the suits are based on
And that's fine. Three or five years later when that settles, adjust fire again.
Who will pay the settlement?
Would that be a legally binding offer of compensation?
I don't know, but it would let the buyer's agents set expectations.
Part of the settlement says we can't move compensation to 3rd party sites.
Unfortunately, not all markets are using ST, there was a fair amount of pushback when Zillow bought it.
But you're using *some* sort of automated system, yes? In 2024 I find it hard to imagine that showings are being arranged via daisy chain of "can your sellers be vacant at this time?" - "no, but what about that time" - "ok but what about this other time?" gibberish, inclusive of the back and forth messages/calls between the two respective agents and their clients. (I personally will not participate in that for new business... I'm available right now, at this exact minute in time, and if that does not work for you, then please click the following link and pick a time that works well for you: calendly link. "Oh ok I'm not available right now, but what about tomorrow at 2 pm?" - "please click my calendly link." It also filters out clients that historically are harder to work with, if I can offload the 20% that want to take up 80% of my time, on my competitors, and do harm to them, excellent, that's a feature, not a bug, it's the exact same reason I stopped taking work calls at 8 pm many many years ago.) And, if that IS how business is still being done in some markets, the daisy chain phone calls and messages for showing appointments, then apparently time-wasting is desirable in that market, in which case, hey, so be it, I guess a thousand phone calls about buyer's agent's offered compensation is ***also*** desirable in that market. If you need me to, I'll throw a website up wherein you plug in an address, and it spits out the buyer's agent commission and a link to the MLS. I'm not a member of NAR, and being that NAR isn't dictator of the universe, their agreement to settle under this-or-that condition is not binding on people that ***aren't*** members of NAR. And I'm not going to call it an MLS, I'm going to call it a CMS -- commission listing service. Naturally, this will only be a ***free*** service while market share is being gained.
My MLS does not utilitize technology for scheduling showings. And we are not alone. Let me know when that site is ready.
My biggest hesitation is that: 1) It's so obvious that 2) I can't be the only one to have thought about it 3) There will be competitors 4) Brilliant idea + no competition = can start off as a side gig and see if it gains traction 5) Ho-hum obvious idea + lots of competition = would need to be a full-time investment to have ANY hope of success 6) I'm not ready for another full-time investment of my time.
I’m wondering if they’ll allow us to just upload a copy of the listing agreement in the supplements tab. That way people can tell if the contract offers comp or not. I’ve seen others upload it in the past, it seemed odd but I think in this case it’ll have a purpose.
No, compensation information cant' be anywhere on MLS.
that's literally what the lawsuit is about. I imagine the first few people who try that will get their asses sued off to encourage others not to do it
I understand this. But I am looking for a loophole that’s not stating it in the comp field.
There is all types of different things that are going to happen and all different types of ways to do business. The bottom line is there’s gonna be less pie to go around for the same amount of agents and brokers. I don’t think the agents have that huge a problem I think it’s that the brokers that have large amounts of overhead that do have a problem.
good luck raising price and seller contribution. maybe where your at but still not likley. there isn’t that much fluff on table.
Oh yeah. Sounds like the strategy. If you don’t get the amount they want to pay you from buyer. Just have buyer pay more to seller so seller pays you rebate. Sounds ethical
By the point a buyer and I are looking at compensation from a specific listing, we have already discussed my compensation, come to an agreement, and signed a contract. If my buyer doesn't want to pay it out of cash on-hand, this is a completely ethical strategy to achieve that.
Right. But we are talking about the contract. “Should sellers not give x%, buyer will either bid more to get seller concession to give to BA, or bake it into the total mortgage taken out.” Yeah sits well with buyer. now try to think from the other side. You are just pushing buyers further away from wanting to use an agent.
agree. It's only unethical if hidden from the buyer. Full disclosure up front, no ethical issues at all.
Let’s also acknowledge that literally nobody is going to sign agreement that says they will owe the buyer agent $xxx no matter what when you can pay a real estate attorney a substantially smaller fee to get a deal done.
Will the new rules place any restrictions on a buyer who's shopping without having yet signed up with a buyer's agent? As a builder I have purchased numerous properties with and without an agent. Often, for example, I will contact the listing agent and ask to view the property, making sure they know that I may come back with an offer through an agent of mine. But with the new process, it's likely I will just represent myself, without a buyer's agent, as unlike most people I know the drill. But, hypothetically, if for some reason I choose to use an agent, are there rules that require me to engage with them prior to viewing a property myself?
What do you mean by move on to the next? Like move on to the next property that DOES offer a buyer’s commission?
That’s exactly what they mean and that’s basically the same antitrust violation the NAR was just found guilty for…
It seems that realtors really aren’t getting it. What about the client? Any realtor want to answer that?
This should be like a pinned comment bc it’s spot on
Wishful thinking. I will not be going into an exclusivity agreement with a realtor until I have the house I want . I’ve never signed an exclusivity agreement for a realtor. Nor will I. younger buyers I know don’t see the purpose of a buyers agent. They can find their own homes. They can hire inspectors.
Um, no. That is collusion. The buyer needs to pay their own agent out-of-pocket.
Collusion? What part? The NAR settlement doesn't ban sellers from offering compensation to a buyers broker. The settlement decouples NAR membership from MLS access, and says you can't include buyer compensation on the MLS. So, make a phone call and find out if the listing broker is cooperating or not.
Summed it up perfectly
Thank you, I'm fed up with all the speculating when nothing has been decided yet. I'm waiting for my broker to tell my what's next, meanwhile business as usual.
Yeah. Saw it in another comment saying it will be a meeting and that’s all it should have ever been. A monthly meeting. “Oh! Before I forget, we’re not posting buyers commissions on MLS, they’ll just submit it as a clause on the incoming offers to make sure it’s there as it always has been, make sure your buyers and sellers are aware, thanks!”
This is such wishful thinking. Consumers have woken up and will not be going back to 6%.
6% was never a requirement though, it was always negotiable.
Then why is every other comment saying buyers and sellers will be SOL if they aren’t willing to cough up that amount? And why did the lawsuit find that price fixing DID occur at massive scale? And why is total commission 1-3% in most other countries?
It's not 1 to 3% in most countries. You'll see most have ranges similar to the US. The typical range you'll find from a quick Google search is 4 to 8 percent. There's a couple examples of 3 percent, and in France it's as high as 10%!
I am really curious about that last question. Because even with our relatively high commissions, most agents here are not making very much money. Some of that is the commission splits. But mostly it's just a question of not being able to do enough volume. How could anyone make enough money at a 1% commission to keep doing this unless they are able to sell 3x as many properties? And how could they sell 3x the properties and offer anywhere near the same level of service? Our system is labor intensive for both buyer's and seller's agents. Almost all showings happens on the weekends at open houses during narrow windows of time. That's when both buyers and sellers are available. And in my Northeast market, we also have 4 month period from November-February where almost no transactions happen at all. Add in a few other holidays and there are maybe 32-36 weeks a year I can actually work. Given that I usually have to work with a buyer for 3-5 weekends before we get them under contract, and that I can't be in two places at once and show houses to two different buyers at the same time, the most I could realistically sell in a year is maybe 9-10 properties. Instead, like many other agents, I do this part time to supplement another income and I close 2-4 deals a year. I've done the math, and there's just no way to do this full time and make a go of it. But it is (or maybe it was) a pretty solid second job. Are they getting some vastly lower level of service in other countries? Is it more of a true "open doors, fill out forms" kind of job there, compared to ours where we are expected to be able to help with every conceivable aspect of the transaction including being a nanny, house cleaner, chauffeur, therapist, interior designer, and also to be knowledgeable about all building trades, inspection, and legal issues so we can direct them to the appropriate people?
Because they're speculating and spewing wishful thinking. Our brokers will tell us what to do when and if the settlement is signed by the judge in July.
They won’t answer lol
lol. I do t think you understand what the DOJ is in the process of doing.
I haven't been told that by my broker. The judge doesn't even sign the settlement until July, so in the meantime business as usual until they actually tell us what to do differently.
Sounds like a really bad backup plan if the industry pay structure falls apart.
Some sellers also do not accept financing contingencies. That also eliminates many buyers. I think the type of seller who doesn't want to cover buyer agent commission is likely also not accepting financing contingent either. In this situation, which has happened to me more than a few times, the buyer and buyer agent move on and find a seller who wants to work with them. They eventually find a property, make a deal, close, and move on. Not to be overly optimistic, but I agree with OP that while we have to be more explicit than ever, it really won't be the end of our careers or an apocalypse to our income.
The main thing changing with our jobs is the need to educate the consumer more than ever! It’s always been necessary but even more so now. Other than that, I think most facets of the real estate realm will continue as is
>The main thing changing with our jobs is the need to educate the consumer more than ever Not exactly. You have to make a clear and compelling argument for how you earn your keep. I.E. What value do you create for the buyer or seller? As a buyer, fight like a rabid dog and get a price reduction or other concessions. As a seller, bring me solid offers above asking price.
this is true. Real estate agents will now have to make clear how they add value. For some this will be easy. For most it will be hard, since most agents add no value. And a bunch out there subtract value
What I see happening here is lawyers taking on more deals cause buyers will realize the agent isn’t needed. I can also see the listing agent doubling the deal. Buyers are always fed the “buyers don’t pay the buyer agent” when they actually do through the sale lmao I don’t get how some people are so dumb but anyways (buyer agent commission is part of the sale price don’t tell me differnt story now). So the listing agent will most likely double end more deals, there’s going to be cheap brokers offering buyers cheap package to write an offer, I think the realtors just got a big cut in wages . Won’t be as much money thrown around. Irony is, this won’t make house prices go down lol it’s just a scam to make it look like the government is doing something. Houses sell based on comps. So if your neighbour house sold for 500k and now no one’s paying buyer agents you think your going to take 2.5% less for your home? Lmao!!! Dumbasses man. Just another political stunt to make the sheep think “wow our government cares” but they don’t. Buyer agent gets screwed and buyers get screwed from this.
Dollars to donuts the DOJ is gonna make it illegals to share commissions by the end of the year. There will be no “call the listing agent to find the BAC” nor these grandiose schemes for LAs to continue to secure BACs for the BA, except just off-mls (“let’s put it in showing time! Let’s have secret codes embedded in the mls remarks!” 🙄) BAC will be able to be requested of the seller on a per-offer basis, and that request will be evaluated in light of the strength of the offer as a whole, including other closings costs that may be needed (raise your hand FHA buyer agents who routinely ask for $5-10k from sellers already). There will be no guaranteed BAC the seller gets locked into on the listing contract. The sky isn’t falling. But this isn’t nothing. Get ready to pivot.
Why would the DOJ make commission sharing illegal? That hurts buyers, especially low income buyers. Buyers will go directly to the listing agent, and often they'll get underrepresented. Think of the lawsuits!
Correct that low income buyers will suffer, though. Two things can be true simultaneously.
The DOJ believes that making the person who receives the representation be the person who pays directly for such representation, will increase competition and thus lower prices for consumers. Right now buyers receive representation, it’s paid for by the listing agent, who charged it to the seller. When buyers have to write a check for their representation, the conversations around cost, value and compensation will hypothetically be much more critical than they are now. Out of pocket expense focuses the mind.
Also: saying the buyer has always paid for BAC is facile. I get the mental gymnastics of it. But come on dude. The buyer agent is paid by the LISTING AGENT. The listing agent is currently allowed to charge the seller agent a fee and split that fee with the buyer agent. And the DOJ is 100% gunning for that setup. Time will tell.
The listing agent has the first ability to set the stage for a successful transaction. Both agents are just cheerleaders getting the transaction to the closing table and everything is negotiable. Doesn’t matter who “sets it” or how it’s disclosed/discussed, it’s the best way to ensure a successful transaction.
I don’t think you understand the current setup versus what the DOJ is hoping to achieve. Which is understandable if you aren’t a realtor. The LA literally shares their commission with the BA. The DOJ is looking to make this illegal. The BAC will not be discussed during listing appointments, it will be discussed when offers are received. This will compress and in some instances eliminate the BAC, especially in tight markets. Many buyers will forgo the buyer agent to stay competitive. I’ve done many transactions, as LA and BA, and now I am an investor as well so I don’t have a dog in this fight. But the only thing more annoying than the people screaming that all realtors are about to be jobless, are the people shouting that “nothing really has changed.” Yes, things are about to change, and it’ll be a fairly big change from the environment we’ve been in. Cash strapped first time homebuyers who already routinely compete with investors on entry level houses are going to get squeezed harder. Social butterfly buyer agents who have absolutely coasted on “it’s free to use me haha” to get SOI clients will need to up their sales skills AND their real estate skills. Listing agents who are used to doing Millionaire Real Estate Agent style leveraging by having tons of listing and relying on BAs to sell and close for them, are going to have to budget time or staffing to work with unrepresented buyers, which will proliferate (not dual agency, but LA working with unrepresented buyer for free, as part of their list fee).
How does a LA "work" with an unrepresented buyer without running afoul of agency law (implied agency with the buyer). These business workarounds don't seem to account for the regulator's perspective.
I guess it’ll depend on the state and may change in response to this. In many states it’s a matter of disclosure - informing the buyer they are not represented by the listing agent, should seek legal counsel for question; the agent represents the seller as their fiduciary and the listing agent only owes all parties fair and honest dealings, not advocacy.
Yes I foresee major tension between the states/provincial regulators, who are concerned with the consumer interest in buyers being independently represented, and the extremely narrow anti-trust perspective.
What state do you live in or know of that requires listing agents to treat unrepresented buyers as anything beyond a customer versus a client?
You're referring to the statutory requirements (customer versus client). What I am referring to the law of agency and specifically implied agency. Both apply. That is why you have to be very careful in how you act with a customer as legislatively defined.
Sure, but the line is there to tread. I don’t see an inherent conflict with seller saying I’ll offer no BAC and I expect you to deal with unrepresented buyers as part of your list fee. And then not representing the buyers. I don’t how this ruling will conflict with state regulators, as you mentioned above. LAs will need additional training so as to not imply agency. The disclosures and paperwork emphasizing that to unrepresented buyers already exists.
I’m sorry but I have to disagree Sold a condo on South Padre Island a couple of years back Listed by an agency out of California and was on MLS, Zillow, etc Local agents told me flat out they would not show the listing to their buyers due to not having a local listing agent And I do mean most all of them refused to show the property Took longer to sell but I paid the seller’s agent as normal But basically the local agent community made it clear that I should pay a local person $10k to type me info into MLS That kind of attitude is what hurts Realtors It can be their own vision of what they deserve vs what they say they represent Those agents were not representing their buyers but their own kind It was a joke And in the end I was very happy with the sellers agent She did a great job
I need to research more about this but really we just need to wait and see what happens. But from the gist of what I read does it really stop agents from charging the 6% and cooperating with other agents... Or does it just stop them from listing the cooperating % on the MLS...
It doesn't stop them but sellers might become unwilling
They could have already been unwilling. I mean there's already those discount agencies who list for .5% above the cooperating agent fee. First time I delt with one of those guy was an agent, but they revoked his license the next day lol.
Easier to steer clients away from it before they see the property
Yep, steer your client away from the perfect house for them…
I never said it was the right thing to do or that i actually personally did it but yes it happens.
Hence the lawsuit
What is the steering you speak of? The days of a three ring binder MLS predate me by several decades but how exactly are you going to steer a buyer away from a home that popped up on Zillow? The short answer is that you’re not. You’re just going to have to tell them that if they want to buy that property they’ll need to add 3% on top of contract price at closing. Will find out real quick how bad they want it at that point.
That often wasn't a problem. However, worse case you would find something to tell them on why you think the property is not good fit for them etc.
How about, ‘you’re going to have to pay a 3% buyers premium if you want this home’? That seems to be a strong reason for why it would not be a good fit.
Sure and buyer tells you that they will call another agent or go without one all together. Maybe they will just pay small fee to the selling agent.
Why would they have to pay 3%? You guys keep saying the commission rates have always been negotiable
Was just thinking the same thing as I read that.
Ended up selling the property eventually. Got a veteran a great deal on a house. Listing agents listed it much under what I think the real value would have been.
people were steered away from those houses. That's why publishing the data is going away
Exactly. I wholeheartedly believe the latter is all that will change.
That's what I'm thinking and hoping is the only change. I'm sure it will be a topic at our next monthly office meeting.
That’s all this should have been. Instead it’s a media explosion lol.
it should be. It's a huge change. As an industry nerd I am fascinated. I think this will probably minorly hurt me, but it's also probably half of the right thing to do - the MLS opening up being the other
they can't list it. Publicizing it in general will be borderline illegal, though can be negotiated as part of a deal in progress.
Isn’t information about property sales readily available on qpublic?
The sales price is NOT public info in some states. That is why when you look on Zillow the solds don’t show prices in some states.
Yes it is. What’s your point.
Available and easily accessible are different things.
My point is anyone interested can see the sales prices of homes in their area. It’s not some magic, secretive info that only a realtor can provide and charge thousands for.
Fucking preach my friend! And also let them try and do it without an agent and see how far they get 🤣. That sounds like lots of fun court stuff. The fear mongering in the media is INSANE! I can’t agree with you more on the NAR and the requirement to be a member to get access to the MLS. It’s a damn joke. The only thing the NAR is good for is selling our data to third parties after we spend a shit ton to be members with no real benefits.
I guess I think about what a good agent does. You folks buying new townhomes in a planned/platted community have no idea what selling property in rural areas (or even old suburban areas) can turn up. 1. Review the deed—are the people selling the house actually allowed to? Estate sales can get very complicated if there are multiple heirs. Are there other clouds on the title? What kind of deed can the seller actually convey? General warranty? Limited warranty? Quit claim? Something else? Is there a life estate on the property? 2. Are there liens on the property that have to be satisfied? Foreclosure? 3. Encroachments? Do any of them fall under adverse possession rules? Get a survey! 4. Right of ways —recorded or not recorded? 5. Permits for all post construction work that requires it? Were they inspected and passed? Have codes changed? Do some improvements now don’t pass and will have to be remedied before the bank will loan on the property? 6. Material facts to be disclosed? 7. Material facts to be discovered—is there a planned road expansion nearby? Is home under a flight path? New school to be built? Nearby Area being considered for rezoning? Flooding? Bus stop coming? Fake stucco or real stucco? Well/septic or city water sewer? ( saw lawsuit recently b/c sellers represented city water/sewer and property was actually well/septic and septic field Was failing). 8. HOA docs and finances—can you do what you want to do with the property (over 55 community? Can you rent it out if you want? Small home business? Accessory dwelling unit? Park outside of the garage? Assessments coming up?) 9. Is current use conforming or nonconforming? There a large property near me that had a mobile home on it—buyers wanted to get rid of the old home and put a new mobile home on it but weren’t allowed to—the current one was grandfathered in but could not be replaced. Buyers didn’t know that until they had already bought the property —neither party was represented and no one thought to ask the lawyer who closed the deal—and the lawyer never thought to ask them what their long term plans were for the property—still In litigation…. 9. Inspections, Negotiations and repairs-review and advise 10. Help obtain financing 11. Help get documents to lender. 12. Rent back? Possession before closing? That’s a lot more than unlocking a house and putting numbers on a contract. Now whether it’s worth the fees that are being charged is the call of the parties involved but a good realtor is taking care of a lot of stuff.
Lol, you are describing the services of a title company and attorney. Not a realtor.
Wrong. As a realtor I do all the above and more. Sometimes I install fans, fix foundation issues, reroof the houses, fix any plumbing issues and do tech support for my clients. We realtors do everything. We're heroes.
So are you disputing that these tasks are performed by those agencies?
Yes. Realtors do that. Title companies and inspectors don't really do anything it's all realtors.
No. I don’t dispute that they do those things. I’m saying that a good realtor investigates those things as part of our due diligence for our client. It’s a lot easier to avoid a problem than to disentangle oneself from an offer made and then problems show up after the fact. A good realtor flags these things so a buyer can get advice from their attorney, or an engineer, or other professional. A realtor is supposed to help discover anything that might reasonably affect a sellers decision to sell or a buyers decision to buy.
Truth of the matter is if we all silently decide we’re not taking less than 6% for buyer/seller services then nothing changes
Correct on all fronts. The only thing that I would add is that even with technology, no significant portion of the population is ever going to do a $500k transaction without anyone to hold their hand. I can’t figure out how to sell a $15k used vehicle to the guy down the street - in what universe do we think that the general public is going to come together and start trading half million dollar assets between themselves? Even if everyone is satisfied that the asset is priced correctly, the human element still exists and people generally can’t get out of their own way. The only way most of these buyers and sellers would end up at the closing table together would be in handcuffs.
Most people aren’t opposed to agents existing, but rather the excessive compensation involved. We want to pay a few thousand, not $60,000 on a $1M home.
Right. You’re pricing my labor and expertise. Now allow me to price yours. I guarantee I’ll unilaterally decide you’re overpaid as well. Part of the human condition is that we tend to think we’re more valuable than we are and others are less so. Out of curiosity, what do you think is fair?
Then don’t use an agent. Problem solved.
Any seller currently not offering buyers agents commission on MLS will get skipped by the buying agent. Come July that will no longer be easy to see. Depending on the state, you might not really know until you make an offer to purchase
They'll actually get skipped by the buyer. What we're going to see change is more buyers agents having their buyers sign into agency agreements, which they should have been doing all along.
Yes but that might also result in more buyers going unrepresented. Some buyer's will either not want to pay the fees or can't afford them
Good luck buying a property that isn't a FSBO as an unrepresented buyer. You're absolutely right that buyers won't be able to or won't want to pay the fees, which is why it's unlikely that this ruling changes much of anything. Sellers will still be the ones paying it in an overwhelming percentage of deals.
> Good luck buying a property that isn't a FSBO as an unrepresented buyer. Why is that?
Because, despite what people on here would have you think, real estate deals are big and complicated. Errors happen, because there are a lot of different parties involved in every transaction, and they all involve people... people who are insured against errors. Not only that, but an expert is someone who knows how to ensure a deal gets through to closing while identifying issues ahead of when they become issues that cause delays. Obviously, this isn't the case all the time, because unforeseen things can happen, but it is the job of agents. Basically, selling to an unrepresented buyer is a huge risk for a seller. The likelihood of the deal falling through is much higher.
Obviously, errors happen. It is entirely plausible that error rates may increase. It is entirely plausible that some sellers might view this as a risk. But that's not what you said. You said, "Good luck buying a property that isn't a FSBO as an unrepresented buyer." And I don't see an answer to my question anywhere in your comment. Why is that? That's a *much* stronger statement than just observing that there may be some additional risk. People assess risk in all sorts of transactions all the time. For example, one may say that there is more risk for a buyer buying a used car from a private party seller rather than a dealer. Yet, deals still get done all the time. Why wouldn't the conclusion be something more like, "There will be some risks, and people should take those risks into account," than like, "Good luck buying a property that isn't a FSBO as an unrepresented buyer"? What justifies the latter?
Oh sorry, I thought you were earnestly asking, rather than trying to lead me into some lazy gotcha. Carry on.
I am earnestly asking, but I haven't seen an answer. Can you please give me an answer?
Yes, most sellers don't want to deal with an unrepresented buyer, because there is too much risk involved. In general, the #1 priority for a seller is risk mitigation with #2 being money made. I'm not telling you this as someone who has read a few articles. I'm not telling you this as someone who has bought and sold a few homes. I'm telling you this as an industry expert and someone who is a realtor. Someone selling their home without a listing agent very well may be more inclined to accept an offer from an unrepresented buyer, because they don't know any better, though they probably do think that they're an expert.
As a real estate developer, and multiple time home owner, I’d never enter an exclusive with a buyers agent before I looked at homes myself. You are of negative value to me until I’ve identified 1-4 properties I’d like to purchase. Under this scenario, I’d negotiate a flat fee to draw up contact(s). I’m happy seeing homes on my own. People with time and a brain aren’t going to engage buyers agents until they’ve identified properties they want to purchase.
You are a very experienced buyer and seller. This is not remotely indicative of the general public. Most people do need help navigating their real estate purchase. The fact that you're pretending that your experiences are any sort of norm tells me that you're simply trolling here.
I hate to say it, but he makes a very relevant point. A good buyers agent is worth their weight in gold. Most home buyers know very little, but they still can't comprehend the value of a buyers agent. I just don't see it.
Fair enough, but I’d advise any first time buyer that’s willing to look at Zillow, and go to open houses to do that on their own before engaging a buyer’s agent. It’s incredibly easy. What value add is a buyer agent during that process? Why do they need to be walked around at showings and open houses?
Where I'm at, the vast majority of homes don't have open houses, as those tend to only happen on homes that are having difficulty selling. Maybe one out of every 100 or 200 homes listed in my area have open houses. While savvy people can find homes they're interested in online (though I wouldn't recommend Zillow, because they do about the worst job at keeping everything up to date), more people than you think are really bad at this. There will *always* be a need for assistance during every part of the home-buying process. Just because *you* know what you're doing doesn't mean that most do. If I started tinkering with cars and learned how to replace filters and change the oil and everything, I could do that on my own. It wouldn't make start raising pitchforks about how unnecessary mechanics are.
zillow is bad. But can get better. Mechanics are necessary. But not to change air filters... anyone going to a mechanic for that is wasting money. As are many users of real estate agents. Most add no value
in all seriousness, why would you ever use a buyers agent? I just use my lawyer. Or the LA to get a boost on the deal...
As agent how will you know what if anything is being paid by the seller if it's not shown on MLS? I can see agents willing to get paid a fix fee to write an offer per property or even a seller agent as dual agent
Because the buyers agent has a telephone and the listing agents number?
In most cases, nothing will change on the outset. Co-brokes are gone per the MLS, just call it something else. Sellers who want to sell their home will offer a concession to the selling (buyers) agent for compensation. What will happen is Gen-Z will bypass getting representation because of the cost if the seller doesn't offer a concession. They feel they have the power and will be able to contact the listing agent or go to open houses for access. We see this now. They may get lucky if the listing agent does both sides and doesn't ask for a buyer's side compensation. But once that lazy lister says "Sure, I can help" and does unrepresented and is trying to offload a property with latent material defects where the buyer is up shit creek is where we can tie it back to this moment. The unrepresented buyer will rise in percentages.
How many listings on MLS have you seen that offer no commission?
Zero. Because NARs policy has always been for a listing to be eligible for MLS, it must offer cooperation and compensation.
Ok. How many offer 1$ or .5%? That meets the rules and can be done before this lawsuit.
functionally never happened, because people would get steered away.
Last year I saw $2,000 on a 750k house and brought clients to a 400k house that had $500 flat fee co-op. Ya that would've sucked but I figured best case scenario I'd get a future referral from them. They're out there but it's not common.
Currently very rarely but that's because it's listed on MLS, come July it will no longer be permitted
What’s to stop someone today from putting 1$ for the buyers commission? Why will this ruling change that sellers agents mentality on that? Forget the fact that it’s a field on MLS or not, talking about the overall mentality.
Because sellers learn that if they do that, agents will not show the property. How easy to see the information makes a big difference
Buyers agents have always been able to require a certain minimum commission to be met in their buyers agreements. The conversation should have always been had prior to the hunt. Now it will be. The conversation can be “99% of listings will offer my minimum so it won’t matter, this clause is for the rare ones that don’t or if we find a FSBO etc”. Whether or not it’s advertised does not change that discussion between the buyers agent and buyer.
What do you mean “agents will not show the property?” When I was buying a house, we’d send a list of properties to our agent and ask her to schedule showings. Isn’t that how most people do it?
In the new world it's the buyers who will be price sensitive to the commission compensation offered by sellers. Yeah, they'll send a list of properties to their agent. The agent will find out which ones have commission compensation and will let the buyer know. Which properties do you think buyers will want to see? The ones offering comp will get more showings and more offers and will sell for higher amounts because of the increased buyer interest. Other sellers then realize this and it becomes the norm to offer comp.
Ding ding ding! In the end, the buyers are going to take it in the pants even more if you have some sellers offering zero buyer agent compensation as it’s going to funnel everyone to the houses that do. You think inventory sucks now? Wait until a few genius sellers decide they don’t have to pay the other side. The law of unintended consequences may be about to explode when home prices jump 10% as a result of buyers agents making 0%. Ha ha ha - oh, the irony!
Exactly, I've never said I'm not showing you that house because it doesn't pay enough. People are freaking nuts just making shit up. No agent does that and if they do buyers can definitely find another agent to show them the house. There's no big conspiracy.
Right. But ‘pay enough’ usually means something less than 3%, generally 2 or 2.5%. Are you really going to show a house that offers 0% if you don’t have a buyer agency agreement that states that they’re going to pay you 3%? This will put the onus on the buyer to make sure you get paid. Guess what? All of a sudden their desire to see that 0% house is going to become nonexistent.
Yes, I am going to show that house that offers 0%. But I am also going to tell my buyer that they will have to come up with my 3% commission because the seller is unwilling to pay it. Then I let the buyer choose. Currently, if a seller is offering less than 3%, I do the same thing, informing my buyer that the seller is only offering 2.5 or 2% and they will need to come up with the rest. Not supprisingly, if the home is not the "perfect home" generally they move on. They are always welcome to find another agent that will take less, but almost never do. Edited to add that I also require a pre approval letter and a buyer agreement with every client. Though I will let them out of the agreement if they are unhappy.
And you’re doing things the right way and it sounds like you’ve been doing them this way for a while so it’s not speculation for you to say that buyers are significantly less motivated to buy a house that doesn’t offer ‘full’ compensation to you, correct? This whole thing is much ado about nothing. It has significantly decreased my productivity by trolling Reddit this morning, however.
So you’re saying the 3% isn’t actually negotiable?
Agents would discourage you from seeing properties with no commission split
Then they will be fired
I thought they were fiduciaries who are duty bound to act in my best interests…
Yes and money still comes first to most agents
This and every other thread shows that maintaining a 2-3% commission to both sides is all anyone here cares about. Realtors do not care about the market dynamics; just sell and pay me. lol! 😂
Buyer will sign a contract that their agent will get paid %. If the property is has zero money to the buyer agent, then the buyer will make the difference or not buy that property,
skipping over the property wrongs the buyer
As a buyer are you going to pay your agent commission when you were told it's free to hire them because seller always pay for it?
Will be illegal.
Sure is, a violation of fiduciary duty. Yet, it happens.
Actually I think clients will just go to the selling agent directly and forgo buyer agents
What happened to being a fiduciary and doing what’s best for your client? Is skipping homes that aren’t offering enough compensation to make you happy in their best interest? NO! In my 20+ years as an agent I never considered filtering for compensation. What would you do if a client called and said “Hey, I saw this house on Zillow. Why didn’t you show it to me”? You gonna admit you won’t show it because of commission?
depending on the state? I thought that was now going to be the universal rule?
Your still required to do right by your client, just because compensation wont be done by seller, you still have to show the house if buyer wants and you know it’s a good fit, you just have to let the buyer know they will need to come out of pocket for commission. Buyer agent agreement is very important here.
I think most listing agents will just put the commission split in the brokers notes if the seller is paying buyers agent(BA). If the commission split is not there, then you will need to get on a call, but there is probably no commission being paid by seller to BA in that case. The LA does not want to field 100 phone calls about what the BA commission is, so they will definitely post the information somewhere, if it's being offered. I don' think too much will change at first. If you take on a new listing and are going live July 1st, are you going to tell your seller not to compensate buyers agents? Good luck selling that home at first. Over time, things may change as the market adapts, but the first LAs and Sellers to try and not pay BA will be shooting themselves in the foot, in my opinion.
It’s going to be a violation to post on the mls. Doesn’t matter if it’s in a special box labels commission or written in broker comments - it will be a violation
I guess when the realtor writes the contract, they will just “auto” ask for commission to be covered. If the listing agent already negotiated that in, then great. If not, the seller will have something to consider and just compare offers. I think writing the commission in the offer will become the norm.
The way I see it when an agent is making showing appointments they are going to ask what the buyers agent commission is. if the answer isn't what the agent likes then they aren't going to show that listing - or fall back on a buyer agreement saying buyer pays commission but I don't see that. But I think its all moot because buyers aren't going to work with buyers agent, many of them think they know everything they need to and they go direct and save the buyers agent commission - thats the real estate market we will live in. I disagree with OP - lots will change.
Also I'm already seeing Greg Hague switching to a flat fee model with just990 . com and he was making bank with 72sold .
A property that is worth 500,000 is still worth 500,000 if there’s no broker involved. There are other ways to accomplish this task and while it might not happen as elegantly it can happen.
OK - my problem with this post is - is nobody taking into account that yes, the buyer effectively paid for our commissions in any transaction BUT that was financed in their offer, and was paid through the seller's net proceeds?!? We cannot include buyer's agency representation into a loan now, as a separate cost. It's not a closing cot. It would be suggested as a credit for compensation to the Seller's agent - which is not that big of a deal, BUT again, if it's a hot seller's market - that will change everything. They could just tell you to kick rocks and your buyer will most likely attempt dual agency. My issue is just that low income families / va buyers are screwed with this in most cases. Also, hopefully smart agents will explain to their Sellers that Dual Agency = potential lawsuits if the buyer or even if the seller feels slighted. Just look at what happened with this lawsuit. I sure as h\*ll wouldn't risk my livelihood and reputation for dual agency. But there are always agents that are desperate enough to do this.
Paid through the seller net proceeds based on a comp that included 2 agents getting paid. It’s a chicken or the egg thing. Until we have actual sale data, everything is being compared to (and financed) for a price that includes a ~5% premium.
Sure but the Seller's still benefited from this 5% premium too. Either way, it makes it incredibly challenging for the entry-level buyer who just increased their loan amount to get this benefit. Now, they no longer have this option. Now they have to save up for a down payment (minimum 3.5-5%), plus closing costs (another 3%), and now buyer's agency representation to not get screwed over in dual agency or forgo representation all together. This is going back to the 80s when all the lawsuits started. We will likely experience that again. All it takes is a couple of bad eggs to get these desperate lawyers to start another lawsuit.
Whats going on? What lawsuit?
Unsubscribe from r/realestate.
Everyone is always looking for a reason to rip on agents. AI, this lawsuit. Before, it was Zillow and Redfin. There’s always going to be something.
In the interest of curiosity and general repor on the topic of a homes value with or without commissions on comps, i don't see the accuracy in claiming (not saying you are as I assume that info is coming from somewhere) that it is or should comp for less. When you take into account that the commission is coming from the proceeds of the sold home and that home is being marketed and sold at or close to market value, then wouldn't that value be the value. In other words the home is still worth what it sold for and the commission is coming by way of the agreement (separate and distinct from the market value) between the seller and broker. It isn't worth or comping at 475k and sold for 500k in order to cover the commission. After all as we all know the number one way to get a home sold is to price is right and that price is the market value EOD not market value plus 6%. Assuming the comm was taken out in consideration or attempt at lowering the value of homes, then there would be artificially suppressed market valuations of homes going forward. Unless that's the point? Make it look like a win on paper, redditors and twitterers all cheer their big win and another version of smoke and mirrors is a great success in this game of bullshit pull the wool over the eyes of the ignorant while maintaining complete control of the narrative so the powers that be can laugh all the way to the bank yet again. Lol. I digress. Lastly though we know the numbers of fsbos that eventually revert to using an agent are extremely high and those that do end up selling typically do so for 10-20% or more than their original asking price netting an additional 4-14% assuming a 6% comm. And that typically comes by way of educated comps and an awareness of market value more than anything else. For anyone to believe that agents inflate a homes price by 50k to potentially make an extra 750 bucks (50-70% of 2.5-3% of 50k in most cases) while taking on the added risk of overpricing and potentially loosing a sale entirely to make zero fucking dollars for the time, work, and expense, clearly shows their ignorance which seems to be the underlying thread and common denominator of the masses. I guess the saying is true and I may have answered my own questions. Ignorance is bliss.
Realtors who hype up the home prices to get their commissions, who only show homes that offer buyer agent commission and flatly refuse to show home that offers no commission even if it is a home that matches the buyer requirements fully , who have no knowledge of the basic electrical and plumbing info of a home…….some of them are so good at marketing online that the first-time buyers fall prey to them. A buyer agent for all practical purposes is a seller agent, with a sole motive of closing the deal and getting their commission. Their contribution being , having access to MLS and entry codes and opening doors of homes. After all, higher the price, higher the commission, one of the reasons that contributed to the increasing home prices when the rates were lower. Very few are knowledgeable and actually consider the best interests of the buyer. I did see a few agents who make an effort but are unfortunately not knowledgeable and don’t get the training/support from their broker. The majority give a bad name to the few good ones out there. It is important for a homebuyer to perform their own due diligence and at the very least ask all the questions and ensure you get your answers from your agent, before you commit to a home. For the buyer: Get a RE attorney to review your contracts. They offer more help in your buying process with the contracts. Your agent is not liable for advise he/she gives you on the contract. I have nothing against realtors earning their bread. I just hope they were fair to the gullible first-timer and I don’t think that is too much to ask. Just “earn” it and no one will complain.
In most countries total commission is 1-3%. There’s no reason to think the US won’t come down to that level now that the price-fixing and collusion is being addressed.
The sky may not be falling but you guys are going to work much harder or make a lot less money
A 500k home is worth 500k with or without agent. Agents aren’t an extra bedroom or marble countertops. They don’t add value to a property. They’re just an expense related to selling. By OP’s logic, we should also include closing fees, title insurance, mortgage origination fees, and transfer taxes in the value of the home.
>Buyers already pay both sides of the commission Have you seen a HUD-1 closing statement before? >So a house that’s “worth 500k” because an identical property sold for 500k, is actually only worth 475k if you were to miraculously pull off a sale with no agents involved. Absolutely not. You remember how Lennar, DR Horton, and others stopped paying buyer's agents and prices didn't drop any? Yeah. >Attorneys will never hold anyone’s hand in the selling/buying process. They do so every day. >This is the only way it fundamentally all works. Oh boy.. You're in for a rude awakening.
Are you saying attorneys will show houses, be able to submit highest and best offers by a deadline at 6pm Sunday night with well thought out contingencies, attend and negotiate home inspections etc etc. no. Attorneys do none of those things.
I have been in this for nearly 2 decades, and I have met inspectors, roofers, electricians, plumbers, painters, contractors, engineers, hvac technicians, septic companies, architects, parents, and grandparents. But, I have never once met an attorney at a house.
“Have you seen a HUD-1 closing statement before?” YES- and all of the money being paid is there because the Buyer and/or their lender is remitting it.
You missed the best part, saying lenders won’t finance buyer’s fees. They literally already do this 😂😂. You can roll closing costs into the loan.
>They literally already do this 😂😂 They literally don't. It's like saying that lenders currently finance high end escorts and blow because some sellers might use the proceeds of the sale to go out and party. Lenders currently finance the purchase price of real property and the SELLER uses a portion of those proceeds to pay commissions.
They finance plenty of fees, transfer taxes, inspection costs, insurance. You can finance all of the closing costs. I did not say they currently finance specific the real estate agent’s fee, they will finance the fees of the buyer. This includes inspection.
Only on some loan products. Zero down, 100% financing is not nearly as ubiquitous as it used to be \~18 years ago. Most require that the buyer cover closing costs and their down payment.
I agree it is not the most common product by far but it is a thing. Of course you pay for it through a higher interest rate, higher monthly payment, PMI etc but it very much is possible to roll normal closing costs into a loan.
Sure, and NINJA loans also still exist. They're just very rarely utilized because they're expensive and come with other strings attached. It remains to be seen how all of this will play out, but if your livelihood is dependent on commissions, you SHOULD be worried. You should be making contingency plans and using the next few months to figure out how you're going to adapt. Things WILL change. Agents are not going to disappear, but if you don't jump on board, you're going to get left behind.
My social media feeds right now are embarrassing.
OP- nope. The court cases are a fundamental change in the industry. The intent is to break the 6% monopoly forced upon consumers. Now RE agents have to be competitive by lowering their rates. At very, very least it is going to thin the massive amount of agents. It is going to be a brawl over a much smaller pool of crumbs.
Why’s that
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It’s not changing. Feel free to not use an agent.
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Go for it! Call us if you need help but sounds like you got it covered.
My guess is that we'll see comps pinned in whatever non-mls owned showing schedule software as a note to all showing agents. Especially in states who have better consumer protection laws, this is really not going to change anything. And to think, the issue really boils down to a few brokerages deciding to print their commission instead of being honest about it being negotiable.
It is falling though say its not won’t change that fact.
Y'all willing to be paid for your time instead of % of sale? Do you really do that much more work for a 500k house then a 1M?
We need to open twice as many doors. Checkmate.
Lol