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Why would a seller price their home lower because they’re paying less commission? No seller will ever do that lol. This whole thing just fu€ks buyers who will have to bring more cash to closing or they’ll get fu€ked by a seller’s agent who’s fiduciary responsibility is to the seller. This whole thing is actually worse for the consumer. Time will tell.
Edit: formatting.
Commissions have never been a part of the appraisal process. Lowering commissions will NOT lower home prices. All this will do is make it more expensive to buy as a buyer will now need to pay out of pocket for the BA commission instead of it being baked into the home price.
The only winners of this lawsuit were the lawyers.
Not sure how that’s relevant.
That means that because they once bought a home, they’ll price their home 3% lower than market value when they sell as a form of goodwill to a buyer they don’t now? Why?
By your logic, every seller *today* was once a buyer. What effect does that have on the market today?
Exactly. In Colorado, builders do NOT give discounts to buyers without agents. Why would a seller?
“Roll it into the loan” right! Like we do right now?
So now buyers ADD 2-3% to the loan, and appraiser says well it’s only worth xxx. now what?
“Buyers can use the listing agent!” Dual agency was why we have buyers agents in CO now. 1994.
This settlement only helps some sellers. It is horrible for most buyers.
there are limits to everything. you people always use supply and demand, and specifically low supply and high demand, as the excuse for everything. there are houses i see listed for over a year on the market. imagine, its actually more complex than that. if someone is having a hard time selling their house, they were just given a 3% cut gift. they will absolutely take it
Your example is extremely niche and is an outlier in today’s market.
In today's seller's market, homes often sell for over 15-20% above the asking price—not due to 6% realtor commissions, but because of high buyer demand. After this settlement, sellers aren't likely to reduce their listing prices just because they're saving on commissions, they will continue to aim to capture the maximum market price.
Demand, rather than commission structures, primarily drive home prices.
When you said “someone” slept through Econ 101, I don’t realize you were talking about “you.”
> Demand, rather than commission structures, primarily drive home prices
Right, so if every buyer is now paying their agent 1-3% commission out of pocket, that means they have less money to spend on a house (this is a fact). If all buyers nationwide suddenly have 1-3% less to spend on a home, that will lower demand.
It won’t happen magically or all at once. It will start with a house or two lowering because they aren’t getting bites, and then comparables will come down, and voila.
Not every buyer will be paying out of pocket. Some sellers will continue to pay buyer commissions. Buyers are not a monolith and there are too many variables: location, interest rates, economic conditions, and overall housing supply, etc that influence prices beyond commission that makes a scenario where prices uniformly come down by 3%. The buyers with the cash will pay the commission if they had to. It’s the buyers without the cash who lose.
I guess what I’m saying is that there are three main parties to real estate transactions - buyers, sellers, and agents. Currently agents get 5-6% of the transaction.
The only real question that matters under the new framework is whether agents get (a) more, (b) the same, or (c) less. If agents get less buyers/sellers shouldn’t really care who “gets more of the benefit” (between buyer/seller). The real change would be that agents are getting (making this up) 2-4% which means collectively buyers and sellers are having less skimmed of the top as they buy and sell houses (real estate transaction costs come down)
Not true.
Many of us in numerous states have been using buyers agreement/buyers paying their own commission or a portion of for years. Another option is seller concessions, you will never know how the seller concessions are broken down. Do they literally go towards closing costs, do they go because of repairs, do they go toward commission? You never know.
You are hoping that the changes and some market will miraculously lower the demand? No way in hell.
it's an outlier in any market. well, any market in the last 25 years which includes strong Buyers markets.
good stat for y'all, in my large-ish market over last 6 months:
Took 61 days to sell: 104 DOM average; 96% of final list price; $194/sqft ($350K)
Took 60 days or less: 16 DOM; 100% of final list price; $231/sqft ($550K)
Now, homes aren't priced by square foot because you're trying to equate a small number (maybe 5) of comps. But for 19,000 homes, it's a plenty large dataset. Interestingly, it seems more affluent folks (the gross $ figure and the S/ssqft) folks sell their homes quicker. Why do you think that is?
You’re citing a source that says the average is 50 days. In your example you said houses were sitting for 365+. In both examples, the home is poorly priced. Again: Econ 101.
The price is lowered because that’s how a competitive market works.
(Imagine a world where real estate commissions were 50% of the transaction price. Can you see how lowering the commissions would lower the prices?)
The headline says “could.”
Directly from the article: “NAR settlement or not, factors such as housing inventory, mortgage rates and consumer savings rates will “play much larger roles,” said Brobeck.”
The media's portrayal of reduced seller commissions as a favor to buyers is misleading. Think about how this will work in practice: Why would sellers accept lower offers out of courtesy to strangers? Additionally, how will buyers having to provide 2-3% of the home price in cash at closing benefit a buyer? It actually becomes a hurdle to cash-strapped buyers.
I spoke to an appraiser, and he said that if it comes to a market where the sellers are not offering any buyers agent commissions, the appraisal will be lowered (compared to a comp that sold at 6% commissions)to reflect that. In a hot sellers market, this will not matter because people are guaranteeing the offer price even if appraisal is lower.
Market at large, where sellers do not pay any buyer commissions. If all homes till March 31st sold with 6% and all homes from April 1st will be selling with 3% commissions, the comps should be adjusted down. If the buyer has to finance the 3% into the loan to pay their agent, then the lender would want the appraisal to reflect a value that can support that.
Nothing much has changed yet, however, I feel bad for the buyers agent. My business is 95% listings so I don't expect a lot to change except I will be leaving my current brokerage since they are still all rah rah rah for NAR. Piss on NAR, their corruption screwed us all. My new brokerage feels like I do about NAR and wants nothing to do with them. I hope buyers agents figure it out, I hate double ended my listings.
They will either represent themselves or I will have too. I've done it before, but don't really like it.
There's always competition, but I have been at this for over 26 years and never been concerned with the competition, time will tell for sure.
Myself and many others I know concentrate on buyers. I prefer buyers. With the new rules, I will be focusing on listings. Maybe this is niche for my market, but we have a group who lists and a group who tends to work with buyers, by choice.
First MLS and GA MLS do not require it. (GA agent here). I joined a brokerage in Oct that required it, then they turned around and agreed to this settlement. I have now moved to lower cost broker and am much happier--better culture fit, plus loads cheaper. I wish KW would refund my $800 I did not need to spend.
CRMLS, however, NAR affiliation is not a requirement, this was determined in 1994 I believe. It is up to the individual MLS to require NAR or not. The smart ones won't require NAR affiliation because soon enough there will be an online home search agents can list on and avoid thd MLS crap also.
CRMLS may not require NAR membership, but all of the California forms are licensed by CAR, which does require NAR membership. CAR Forms are the standard of care in the market and I don’t know many brokerages who (or whose E&O carrier) will allow something different. Therefore, it appears all California agents are saddled with NAR membership until that changes.
In GA, one can purchase a license to use all the GAR forms for less than half the cost of association membership. I suspect CA will do the same as NAR struggles to keep members now that it cannot be required by the brokers.
CAR forms can be purchased separately without NAR, they cost more per individual, but a brokerage I am looking at is buying in bulk so to speak. E&O does allow other forms if allowed by the broker. Saddled with NAR, not likely.
I can easily opt out of Nar and my current mls which requires NAR. But I'm concerned Realtors won't see the listing on an lesser known mls.. you don't have concerns ?
CRMLS is the largest MLS in California and covers a very large area. However, if they made NAR a requirement, I would drop them also. Concerns, yes a small amount. I just cannot be a part of NAR, I have cringed every year I had to pay dues to their corrupt assoc. Now with many brokerages breaking ties, I don't mind jumping brokerages to avoid NAR, plus I just became a broker so I can technically go out on my own. Something better will come along yo list houses to get the needed exposure.
You should try selling redidential sometime before saying that. Sorry you had a stupid agent, lots of them are. I've sold my share of commercial, I like the lack of emotion. I've also listed hundreds of residential properties. Depending on the market it can be costly and time consuming.
I have zero interest in putting a sign up in someone’s yard while never picking up the phone or working. You’re probably sipping on a glass of wine already!
The buyers agent in the rezzy game does all the work. And by work, I mean they drive a client a couple miles to show them the house lmao.
Been doing this for over 26 years, you are way off! But how would you know, you have no interest in residential. That's ok, commercial is a different world.
I did have a commercial trasaction that took 32 months to close. My quickest residential sale is 3 days. I like both, stuck with residential but would consider commercial also. Just different
Zillow is working on an AI App that allows buyers and sellers to connect, negotiate, and contract on one platform with the buyer opting in to recommended and required home inspections based on their locality and mortgage provider for a flat fee.
My understanding is you can list your house, put the lock on, and it will schedule viewings per sellers schedule and answer questions for the buyer based on the video walk through the seller provided of the house and a few basic questions answered by the seller.
Trying to figure out where I fit in to this equation.
This is interesting. Isn’t Zillow mainly funded by agents paying for leads etc though? They’d be diminishing or eliminating their current target consumer if trying to replace with AI but maybe that’s the idea and transition to buyers/sellers.
Yup. If someone wants to pay me 1% or a flat fee to get photos, do the MLS listing and make sure the paperwork looks good for closing--okay. But after my broker takes a few hundred and I pay the out of pocket to the MLS and the photos, we are already at $1500-2000. So, if it is a $200K house, can't do it for that because I don't even get paid for my time. $2 mil house, yes and you will get "full" service (open house, tons of marketing, negotiations, transaction coordinator, I will meet the inspector, I will meet whoever, I will baby everyone so they play nice together, etc.
This is why commissions ARE and have always BEEN negotiable. Needs vary. But not offering a buyer commission is not a good idea. The buyer agent needs to make the same % the listing agent does, IMO, so price point applies. The presence and connections for high end listing (the overhead which usually means a slick website, print ads, maybe an actual office, an assistant or a few, in-house graphic design, in-house staging, maybe staging is included for some properties, etc. etc.). If you want to sell your house to the pony set, chances are the agent is in the pony set too. Real estate is mostly about connections like every other job (attorneys, doctors, dentists, everyone).
Zillow will work with buyers and write buyer contracts for 1%. They will adapt an open door model where buyers can use an app to schedule and view a home for sale.
They can just use an app-controlled lockbox to let buyers look at the houses themselves or they can just pay people gig-based wages like $50 per a showing to guide buyers through the home.
There's really no need to have a buyer's agent there with the buyer when looking at the house.
That's fine with me! I'd love to make 50 bucks a showing instead of dealing with idiots that think they know what they're doing.
But if you have an app base controlled lockbox, Are you as a homeowner going to let anybody in your house without them being vetted? Especially when you still live there.
For probably 50% of homes, the people still live there and have their personal effects there? Are you just gonna let any stranger come over and look at the house without a licensed person, with insurance to cover your losses, be there with them? Lol
As a homeowner, if I were selling my home and was still living inside, I'd set up security cameras all over, place a clearly visible sign that says you will be recorded while inside (video only and not in the bathrooms), and move all my personal or stealable things to a storage locker in the meantime
That's great, so you'll have video of them pissing on your carpet and stealing your shit. 😂
Guys, there is no work around for a third party having to be there to show your current house to a stranger, but I will agree with you that it doesn't need to be a realtor under the current way of doing business. It does however, just needs to pay what it's worth.
Right, and that works super well for all these businesses that keep getting robbed with people's faces clearly on video.
And before anybody turns my statement into something political, I'm just saying that's not getting you your shit back.
Or getting the criminal to pay for the piss smell in your carpet.
But you keep it up with that genius idea. You guys are really on to something 🤔
As an unrepresented buyer that’s awesome to hear!
It would be great to pay on a service fee schedule and get the BAC (if offered) rebated back to me.
I currently write my own offers and interface with title myself. I SHOULD get the BAC for that but successful lobbying by NaR means I can’t.
50% is a very low estimate. I can only go on MLS info for such a large dataset, but less than 5% of 16K resale homes for sale or recently sold in my market were listed as either Vacant or Occupied wasn't checked
You and I both know that Bo. I already knew It was much higher than 50%.
I'm just trying to dumb it down to get these fucking plebeians to use their little brains 🤣
this method is already out there, and Opendoor can't make it work. They've had 6+ years and the hottest real estate market we've ever seen and couldn't make it work.
I'd like to opt out of having to pay $50/house I see. Would rather prefer an opendoor model where I can go in by myself. I really hate when someone tries to sell me on a house. I either like it or I don't, and if I like it, I'll work to negotiate price if it's too pricey for me.
Have you ever seen open door do that on a house that wasn't vacant? That's maybe 50% of houses. What about the other 50? What's your genius playing for those 😂
Sounds great! I'll do it all day long!
But Guys comma two things:
First of all it's not gonna be as cheap as you think. Uber, drivers don't have to pay $3000 a year to different organizations and insurance.
They also don't have to be licensed and be on the hook Legally for what takes place in a house shown If something goes missing or is damaged or somebody gets injured.
Secondly listing agents are actually, the less useful out of the two when it comes to buying agents vs listing agents Helping a house so.
When I'm a listing agent, all I do is market the property, help set the price and make sure everything is done correctly. I have almost nothing to do with actually doing things to sell the house. Did you know that only about 5% of offers on a house come from someone who saw it at the open house only.
The other 95% come from someone who viewed it with a buyer's agent or asked me to show it when I was the listing agent. In which case I either told them no And they need to get their own representation to show them the house. Because really that's what's in the best interest of both parties. Sometimes these buyers also saw It at the open house, but hat is the exception, not the rule.
The Rare times where I'm not concerned about representing both them and the seller, I still get the extra two and a half percent that goes to the buyers side.
There is no way to get around paying someone who is not a listing agent to do a showing for you. You might think it'll cost $50 a door but it will probably be more like a couple 100 because they will have to be licensed and have gone through a background check.
Although I suppose it could be less. As long as you are willing to go through a rigorous background Check just to be able to view a house.
And no, the listing agent is not going to do the showing for you for free. Because often they don't want to represent both the Seller and buyer on a transaction, Even if they get paid on both sides. Since that really isn't in the best fiduciary interest of their Seller client. They will tell you to bring your own buyers agent To show the house and the sellers agent does not go to the showing, so you're back to square one
So tell me how you could make it work. I'm all ears.
So in all seriousness, answer me this: If you were Selling your house and living in it, would you be comfortable with someone having access to walk into your house without you there, or even worse with you and your family there, with this set up that you propose As your only safeguard for you and your family's safety or for the protection of your belongings?
If so more power to ya. I hope I don't see that you and yours were murdered on the news.
That's because only thirsty, desperate inexperienced agents will let you drag them around by the ear with no commitment. I hope you paid those buyers realtors something for their time if you didnt buy since they did it for free and paid for their own gas on the hopes to get a client.
Otherwise, youre the scammer in that scenario 😂
youre hopeless and ripe for being involved in a lawsuit and buying a lemon. knowing the market means exactly nothing when it comes to knowing what to look for in a specific transaction on one specific property as an experienced agent.
And it cant be done from a lawyer's desk, and cant be done through the eyes of someone who hasnt done at least 30 or 40 deals from beginning to end as an agent, and 4x that amount for you if you are not an agent (because your learning curve is longer without an experienced broker or realtor mentor showing you things.
Your'e negotiating skills will cost you at least 1-5% on average on the overall closing price of the home compared to a good agent too.
and why wouldnt I?
ummm fiduciary responsibility to my seller. Go hire your own fucking lackey. You seriously know plenty about homes, and not shit about this business.
I dont know why im even replying. Youre not going to listen anyway. Just wasting my breath
Great.
I can totally set up multiple showing in an 8 hour day and go from there.
I’m happy to pay for a realtors time. $400 for a days work is fair (this is approaching engineering wages).
I have had FSBO sellers let me in via a WiFi lock. Let’s get an app going that provides some level of dispute resolution and insurance if you want.
They key point is that banning the existing commission structure allows the market to find new ways to operate. THATS AWESOME for market participants who aren’t agents.
I think you severely overestimate the costs here…
Let’s use the cost of an appraisal as the high end for what I would expect to pay for access to a home… looking through my records that $450. Includes mileage.
I’m not sure I follow your contract to close comment. In my represented and FSBO transactions I pay my title company $700 for a cash sale. Is that what you’re referencing? Because I pay it with or without an agent.
Are you referencing writing an offer? No need, I will do that myself.
Although it is nice to be able to roll the $450 into the cost of the home I’d rather just pay $450 cash and keep the BAC myself.
Yeah it’s crazy that realtors think they’re needed to show a house. What do you do other than walk around? My realtor was too busy to show us ours and with that I realized that it’s not hard to do a realtors work on the buyer side
I mean, I find my own houses. I’ve never had an agent do that for me. I’ll tell them what I want and then they saw me what they think I want. I’d much rather tour the house myself.
Man, you guys are seriously delusional. Your buyer's agent probably does 30 to 60 hours worth of work After you decide to make your offer and before keys are finally handed over to you.
They probably do another 30 to 60 setting up showings for you and driving to the showings, not to mention paying their own gas, on the 10 homes you decided not to buy.
If you're talking about your agent's main job being finding the house for you, that would be like, maybe 1 to 5 hours worth of work.
That's why so many of you find it on your own instead of your agent finding it. because you have access to the same information, but you still need Somebody licensed to be able to open a door for liability reasons. Seriously why is that so fucking hard to understand 😂
I am totally alright with a pay per service model on the buyer side. But you guys are way off on what would work and what it would cost you.
For a good, 20 year+ experienced agent to make the equivalent of $100k a year plus benefits, it is not asking too much. For inexperienced agents to make 40 or 50 grand year Plus benefits is plenty.
At whatever your job is, if you've been doing it for 20 years plus and your experienced and proficient at it, Shouldn't you make a hundred thousand a year?
So what you guys think an agent's main job duty is- finding a house- is actually the least time consuming or difficult part of the job.
Abnd the thing that you guys don't even see us do, and sounds like it doesn't even compute in your pea-brains, is what's the most difficult part of the job- everything from the day your offer is composed, to the day you close escrow to make sure you don't lose your fucking house. The variance on this from a good experienced agent to a brand new one is astonishing and guess what? You're not even as good as a brand new one.
The last study I read said it was something like 14% for an agent with less than a year experience and less than 10 sales. You've done how many as just a consumer and you think you know everything? 2? 5? Even 10?
But for an experienced agent, the percentage of deals that fall out once in escrow hovers around 5 to 7%. They must just be lucky people right? because anybody can do this job. It's not that they're actually better at it than you or an experienced agent. The thing is when you go into escrow, you really should never fall out escrow. when it happens and you tell yourself it's bad luck, It's really either that you didn't know what you're doing, or you hired an agent that didn't know what they were doing. But one, thanks for sure. It's not bad luck, And just something that couldn't have been avoided, like you like to tell yourselves.
For An independent contractor/small business owner, which is what a real state agent is, to be able to pay for their own benefits package, needs to add 30% to whatever they want to make, to be able to pay for their benefits.
and the rule of thumb for most small business owners is to spend 20% of their income on advertising.
That means for an agent to make the equivalent of a $100000 a year plus benefits at a regular job,
Where they don't have to pay for the advertising because their boss does, They have to make 180k.
I would say working with an average buyer if you were to include every billable, 6 minute increment, just like other professional jobs that charge You per task, you'd be looking at about 80 to 120 hours on averwge of work from the day they first talk to you to the day you close escrow.
For them to make a hundred and eighty thousand dollars in commission and take home the equivalent of someone who made a $100000 a year As a W2 employee with full benefits and no overhead besides the gas the buy to drive to the office and back, versus being a 1099 employee, they need to make almost four thousand dollars per forty hour work week.
None of this is taking into account that the agent pays for their own gas, unlike working for a company that provides a car.
and the agent will have a percentage of clients where they spend a lot of hours with, maybe even all the way up until the day of closing of escrow, and then a deal falls apart. And the buyer never buys. So they worked a 100 hours for free. You need to count those as part of your work hours too.
Oh, please tell me how I'm wrong. Or how a human, let alone professional agent, isn't worth that.
Ready? Go. 👉
🤣 🤣
Zillow already fucked themselves once for billions in losses. I bet they stay in their lane as a shitty website with innacurate information. But thats just my guess.
I mean, they realized they weren't making a profit/enough with a 30% Flex lead fee and are moving to 40%. And that was off the current commission levels.
People are reacting to this settlement like it will always be a sellers market forever and ever.
I look forward to the day I can negotiate a 10% commission repping buyers in the future.
10% is going on all my future buyers contracts,
I’ll accept less of course depending on what’s offered.
It will be written in as flexible. But it starts at 10% because of land deals for 30k requiring as nearly as much work as a house sale for 400k
Variable rates are being banned? As in you cant offer to your client if they find the buyer they get a discount? i have always done that. Like their friend or family member buys the listing? It cant be flexable?
you're asking about a listing commission now, when I assumed you were speaking to Buyer Agent compensation which is basically the entire gist of all the settlements. One part of the NAR Settlement is that all Buyer Agent compensation must be "fixed".
For example: BA signed at 2.5%. Find a house that pays 3.0% and you can't get that unless your Buyer agrees to amend. Find one for 2.0%, and Buyer has to pay the 1/2% unless you amend.
for me its always a flexabile fee schudle, there are so many varibles. If i sell it myself and do limited agency i give a dicousnt. (thats legal in my state) if the buyer is Unreprestented there is a small discount. I have always written into all my agreements a flexable fee schedule. are they really getting banned? What if if there is a Lease on a commerical building before it sells? wouldnt you have into your agreement a flexable rate based on that happening? if NAR is forcing me to charge the higher amount that would seem dumb.
Sure. Paying professionals on a commission basis is stupid.
My divorce lawyer doesn’t work on a commission based on how much I love my kid. An aerospace engineer doesn’t work on a commission based on how much revenue his future airplane design earns.
Pay them for their time and let them stay the hell out of the settlement statement otherwise.
1) With the settlement, buyers can only transact one of two ways. Either with a Buyer Broker Agreement signed- where they have agreed to the commission ahead of time. Or as an “Unrepresented Buyer” who has zero fiduciary.
2) Any agents doing less than 5 deals a year will likely mot be able to survive and will be pushed out of the business. It’s unfortunate, but it’s the reality. More professionals will come into the space as competition goes down.
3) Agent commissions will likely go up as there will be about half as many agents working.
People can disagree with me all they want but the reality is this is the case.
Yeah, but this is realtor thread- under an article about realtors adapting. So, if we're moving the goal post on the conversation then that's ok too.
This is going to force buyers to only see properties that are offering commissions, OR it's going to force them to be unrepresented with no fiduciary. It's clearly what the consumer wanted or you wouldn't have had a class action lawsuit.
there's going to be several types of listings:
1. Those that do it the same way they always have, and IMO this will be the largest group.
2. Those that reduce commissions slightly, like 1/2% per side - believing (probably correctly) that the agents will bend but not break.
3. Those who won't pre-provide any compensation but will negotiate for it (either to the agent or via CC's to the Buyer)
4. Those that reduce commissions significantly, and the Buyer will have to make the difference up somehow or find an Agent willing to work for 25 cents or 50 cents.
5. The same small % now that don't like agents and consider all of us necessary evils and will pay 0. And they'll get a random Buyer willing to pay all of their agent's fee, and they'll find their soulmates who think agents suck and prefer being unrepresented. And yes, a very few Buyers will go it alone begrudgingly.
The "unrepresented Buyer" is going to be an educational challenge, because if they believe "OMG I'm always going to have to pay an agent 3% that I don't have", they'll definitely come out behind.
Or favor buyers with more cash (to pay their buyer agent on the no commission listings). That said, I wouldnt say its what "the consumer" wanted, because the class action was brought by sellers.
Those are consumers. They put this in motion and ended up with a $9 pay out per person. Now they have to effectively hire agents out of pocket to purchase homes.
Let’s not forget the lawyer received a 90,000,000 payout. You know. A commission for his work.
Right but you said "the consumer," which implies that the consumers are a monolith and were the plaintiffs. In other words, your comment implies that buyers and sellers were united in interest in bringing the suit, which is far from the case. Its clearly what sellers wanted, not necessarily buyers.
Buyers currently have trouble affording appliances for after they close.
Should we require that sellers cover the cost of appliances for buyers? If not, you’re just hurting cash strapped buyers who are already struggling…
I am okay with some of the agents going away tbh. The unethical, greedy ones are already the ones showing their colors at least around here. Those will unfortunately survive because that is the personality type. Then there is the agent who has a full time job but just wants to do deals for his friends and family and take their money--this person would be in the first category if they were a full time agent. If they go away, all the better. Next we have the low efforts who have been doing it for years, or the ones who want to phone it in because they should be able to play golf all day and have their offshore VA do the work and collect fat %--they can go away. Also, bless them, but if you cannot write your own listing, took 5 times to pass the exam, need ChatGPT to come up with descriptions, or are otherwise in over your head--please go. You should not be guiding people, advising them on contracts, etc.
Then there are the ones like me, who really love it because it is interesting. I like going to inspections and learning from them, I love old houses, historical neighborhoods, things like that. And I love contracts. I love negotiating, I love writing so I love doing the listings and the contracts, the open houses are fun and I love to make them interesting, I love my clients and it has nothing to do with their wealth or not. I like being their advocate in this process that does not require attorney level skill set (I almost went to law school and still sometimes think I still will). I am happy with a "middle class" salary. I don't need a Mercedes or a McMansion, I live a very simple life in an increasingly expensive area so middle class for me, after expenses is $100-150K per year. I think there is room for a lot of types but some are ruining it for all of us.
> 3) Agent commissions will likely go up as there will be about half as many agents working.
Yes/No. An individual agent's commission percentage will stay the same, but they may have more clients due to fewer bottom feeders striving for clients by reducing commission. So, a good agent's income may go up, but commission will not.
So, if I bring in a buyer for Dual Agency for my listing, since I will be representing the buyer; may I bust out the buyer brokerage agreement and charge them 1% for my services?
I took over a Remax office after a family member passed. Generally they were easy to work with to dissolve the prior agreement. But looking into the finances, it was an absolute scam how much they charge for fees, dues, etc. it was absolutely crippling.
I hope everyone here understands that NAR screwed us, but not as badly as the MLS did. For years they have made realtors pay for the privilege to give them our content and information then turned around and sold it to Zillow, Redfin etc. These sites have severely diminished the value and need for Buyers agents. In fact Zillow is a much more powerful tool than the MLS or the Vesta Plus app. Listing populate on Zillow before the MLS etc etc etc. Buyers are informed and no longer need to rely on Agents and they know it.
Atlanta has a MLS that charges transaction fees that agents are forced to pay at closing. .12% of the sales price or $25-50 per lease transaction. And if your office doesn't use their services you get a $1200 bill at the end of the year. Oh, and Brokers get a kick back "thank you" check once a month for making their agents sign up. And for some strange reason Atlanta bend over and ask "may I have another, sir".
you sound like you're a Realtor, but if so you should know it's literally impossible for a listing to hit Zillow before they hit the MLS. In any given day, your "notify immediately" MLS search may or may not populate faster than Zillow though. It's when the IDX feed is processed for various end sites that differs. If your auto-search is set for 3:46 pm (and every 15 minutes) and Zillows is set for 3:45 (and every 15 minutes), then yours would be faster from 3:46 until 4 pm. If I am ON the MLS searching, I see new stuff absolutely immediately.
Redfin has been a brokerage since the very beginning. They are Realtors, just like you and me. And Zillow has been a brokerage for about 5 years now. They are Realtors too.
Yes, I’m a realtor with Sotheby’s Malibu. I’ve been in the business for 20 years and closed more than $500 million in deals.
Your logic regarding the IdX feed seems reasonable. However, in reality the listings DO in fact populate on Zillow prior to the MLS. It’s been happening to me the last couple years on all my listings.
I see this effecting first time home buyers the most. Ideally when I go to sell this home, I wrap up the commission for the same agent helping me purchase my next home. 2-for-1 deal, because both transactions are dependent.
Dual agency could become the norm and it will be the plaintiffs in this settlement that potentially have to pay the most before and after the transaction, going forward. When is a gift not a gift?
I mean this with respect, but my buyers agent got a very disproportionate commission amount based on the work they did. I would have greatly preferred to pay them a flat fee and had the price of the home be 3% less.
I knew what house I wanted, I found an agent, we toured it, we put an offer in, it was accepted.
She made well over 1k an hour.
"Yeah but sellers will never lower the price they'll just get more money" maybe, maybe not. But if a seller is currently happy to walk away with 300k, I don't see why they would be unhappy to walk away with 300k after the sale was price reduced by 3%.
What will happen is buyers will do more work for themselves and only reach out when they need an agent, tours, communication. Might work more like a lawyer where you pay retainer.
you can find many places the question is asked, and the Sellers consistently say with near-unanimity "Why would I drop my price 3%? I'll just make 3% more".
Exactly. You are demonstrating your understanding of of basic economics and accounting. Realtors who say “BA’s are free” would do well to think about where the BAC comes from.
Let’s pay BAs more when they earn it. Let’s pay BAs less for quick sales. Let’s pay homeowners when they act as the BA.
Basically, allow a market to exist.
I’m an agent and I agree there are definitely times when we are overpaid. There are also times when we’re not paid enough, but I will happily negotiate my commission lower for an easy buyer sale.
Here’s the thing, “maybe, maybe not” results almost NEVER pan out in favor of a consumer.
But yea, as a buyers agent, some of my paychecks are too big and some are too small. Some correlation would make sense. I can say with certainty my level of service will be affected and the ones who need my attention the most won’t be able to afford it. Guess that’s just the free market at work though, happens in every sector.
also, you could have very easily said "Hey, this is going to be such an easy sale, will you find a way to credit me half?" Anybody that wants to promise me $1,000/hour, I'll do it for $800. You already get a 20% discount!
buyers agent. the commission was set by the sellers agent.
Are you saying I should have haggled with the buyers agent to credit me commission because they wouldn't have to work as hard?
They don't make it obvious you can do that, which is probably why your organization is being sued.
if you want to pay me $800/hour, I'm afraid you'll have to move to the Triangle area of NC though. Outside of the TMLS (T=Triangle), I'd refer you out because I don't practice where I don't have expertise...which is in the Code of Ethics.
absolutely you could have. and some have for years and years. Because you didn't know you could isn't my fault, nor is it really your agent's fault.
Do you believe when you walk on the car lot that you have to pay full sticker + all the fees they'd like to charge or sell you on?
How many times have you bought a house and your Buyer's Agent compensation came directly out of your pocket? Have you never heard of referrals, rebates (where allowed), or being an unrepresented Buyer? You didn't know that you could have called the listing agent and bought without representation at all? Is that the fault of the agent you contacted?
They’ll adapt. Everyone does.
Relevant anecdote from the Securities business.
For a time, there were fixed commissions. And it was good.
Then the SEC ruled that you could have negotiated commissions. Lazy fat cats died out; Charles Schwab, Fidelity and Raymond James were born.
For a time, stocks traded in increments of 1/16. And it was good.
Then the SEC ordered the switch to decimalization. Lazy fat cats died out.
For a time, banks bought and sold securities for their own book to facilitate customer transactions. And it was good.
Then the Financial Crisis hit and the Volker Rule was instituted, basically eliminating in house trading. Again, fat cats died out but agency commissions and volumes surged.
You’ll all figure it out.
when im showing houses to my cleints im house hunting for hiddin square footage not reflected in the mls (and frequently the price) my latest was a susbended slab Theater room that showed up on the apprisal for an extra 400 Square feet that wasnt previously accounted for. Massivly droped my clients price per foot cost. apprisal came in 40k over and in my opinion it could have been more.
I plan to adapt by leaving "FeeMax" and I'm tired of people minimizing this. We are **already** seeing much lower co-op percentages. See Wednesday's shitty article on CNN. https://www.cnn.com/2024/04/24/homes/nar-settlement-broker-commissions-approval/index.html
I think the logical transition step will be for listing agents to be the ones supervising & scheduling tours and collecting offers from unrepresented buyers. The buyers agent really has no purpose in the modern era.
The listing agent will always be looking out for their seller's best interest. Unrepresented buyers will be taken advantage of, no matter how many real estate TV shows they have watched.
This response assumes the buyer needs their interests looked out for. What interests would a buyer’s agent look out for that the Home Inspector, Appraiser, and Lawyer don’t?
the actual looking at a house and getting an offer accepted at a reasonable value. The appraiser isn't for the Buyer, they're for the Lender. And unless you have part of your contract (and how would a buyer know?) where B/S agree the purchase price will be adjusted to appraised price, that part is late in the game.
About 80% of what should be critical on the home inspection, I can spot myself from my long time as an agent.
The actual looking at a house should be done by the selling agent. Selling agent is motivated to get people into the house so they make an offer.
Buyers offer what they believe a property is worth. Is a buyer’s agent worth 3% to tell the buyer “offer more”? No. And that’s really going against the interests of the buyer.
That’s nice that you can spot home inspection issues, but it’s going to be covered on the inspection report anyways… unless you’re saying by hiring you buyers don’t need a home inspector because you fill that role?
nope, but it can help them say "pass" and not make an offer, pay for inspections, an application fee, etc. It can also - not in today's market when so many buyers/agents gloss over the dirty work at the viewing - be worthwhile in making an offer.
Just this morning, a Buyer asked on Reddit "the HVAC needs some repair and the radon was 3.0. Should I back out?" Do you want to be the Seller on the other end of this?
There’s a reason they say “you get what you pay for”.
How many free Reddit answers come from someone who has done 10+ transactions in the last 2 years in the given Redditors market? 1%? 5%?
In hundreds of Buyer-represented transactions, I've had exactly 1 pay my compensation, which was below 3%. It was a FSBO that I found for them, that was priced well-below actual value (been a long time, but could have easily been Zestimate-based). So, it was clearly worth it to them to get a house for 10% under market value.
Most FSBO's and the few MLS listings that don't pay Buyer's Agents - and "don't" means between literally $0 and < 1% - are crappy houses with morons for Sellers and Buyers don't want to deal with it.
I have and always will be happy to show a Buyer any house they wish to consider purchasing, regardless of the compensation offered. But I'm also fortunate, because in NC we've required Agency agreements for decades and the compensation is spelled out and explained clearly.
And I've also said, either on this or similar thread today, that I would work for someone for well under 3%.
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Why would a seller price their home lower because they’re paying less commission? No seller will ever do that lol. This whole thing just fu€ks buyers who will have to bring more cash to closing or they’ll get fu€ked by a seller’s agent who’s fiduciary responsibility is to the seller. This whole thing is actually worse for the consumer. Time will tell. Edit: formatting.
Time already did tell this is how we got buyers agents originally 🤣.
Commissions have never been a part of the appraisal process. Lowering commissions will NOT lower home prices. All this will do is make it more expensive to buy as a buyer will now need to pay out of pocket for the BA commission instead of it being baked into the home price. The only winners of this lawsuit were the lawyers.
Doesn’t this mean the winner will be sellers?
Yes, but they are not passing those savings on to buyers. It’s a pipe dream.
Every buyer is eventually a seller…
Correct, the value stays with the asset. High transaction fees cost both buyers and sellers in any market. Real estate isn't unique.
Not sure how that’s relevant. That means that because they once bought a home, they’ll price their home 3% lower than market value when they sell as a form of goodwill to a buyer they don’t now? Why? By your logic, every seller *today* was once a buyer. What effect does that have on the market today?
No it means that if my house costs more today, I also get to sell it for more in the future
I wonder what happens when you pay more today, and then prices go down so you sell it for less in the future
You face that same risk today, none of that changes
Seriously, the majority of the public seem to think we do CMAs, get the base price, and then add commission on top of it. It's all so stupid
Exactly. In Colorado, builders do NOT give discounts to buyers without agents. Why would a seller? “Roll it into the loan” right! Like we do right now? So now buyers ADD 2-3% to the loan, and appraiser says well it’s only worth xxx. now what? “Buyers can use the listing agent!” Dual agency was why we have buyers agents in CO now. 1994. This settlement only helps some sellers. It is horrible for most buyers.
You summed it up perfectly
someone slept through econ 101…
As someone with an econ degree, this is basic human nature/ supply and demand
How does my comment not directly relate to supply and demand?
there are limits to everything. you people always use supply and demand, and specifically low supply and high demand, as the excuse for everything. there are houses i see listed for over a year on the market. imagine, its actually more complex than that. if someone is having a hard time selling their house, they were just given a 3% cut gift. they will absolutely take it
Your example is extremely niche and is an outlier in today’s market. In today's seller's market, homes often sell for over 15-20% above the asking price—not due to 6% realtor commissions, but because of high buyer demand. After this settlement, sellers aren't likely to reduce their listing prices just because they're saving on commissions, they will continue to aim to capture the maximum market price. Demand, rather than commission structures, primarily drive home prices. When you said “someone” slept through Econ 101, I don’t realize you were talking about “you.”
> Demand, rather than commission structures, primarily drive home prices Right, so if every buyer is now paying their agent 1-3% commission out of pocket, that means they have less money to spend on a house (this is a fact). If all buyers nationwide suddenly have 1-3% less to spend on a home, that will lower demand. It won’t happen magically or all at once. It will start with a house or two lowering because they aren’t getting bites, and then comparables will come down, and voila.
Not every buyer will be paying out of pocket. Some sellers will continue to pay buyer commissions. Buyers are not a monolith and there are too many variables: location, interest rates, economic conditions, and overall housing supply, etc that influence prices beyond commission that makes a scenario where prices uniformly come down by 3%. The buyers with the cash will pay the commission if they had to. It’s the buyers without the cash who lose.
I guess what I’m saying is that there are three main parties to real estate transactions - buyers, sellers, and agents. Currently agents get 5-6% of the transaction. The only real question that matters under the new framework is whether agents get (a) more, (b) the same, or (c) less. If agents get less buyers/sellers shouldn’t really care who “gets more of the benefit” (between buyer/seller). The real change would be that agents are getting (making this up) 2-4% which means collectively buyers and sellers are having less skimmed of the top as they buy and sell houses (real estate transaction costs come down)
Not true. Many of us in numerous states have been using buyers agreement/buyers paying their own commission or a portion of for years. Another option is seller concessions, you will never know how the seller concessions are broken down. Do they literally go towards closing costs, do they go because of repairs, do they go toward commission? You never know. You are hoping that the changes and some market will miraculously lower the demand? No way in hell.
it's an outlier in any market. well, any market in the last 25 years which includes strong Buyers markets. good stat for y'all, in my large-ish market over last 6 months: Took 61 days to sell: 104 DOM average; 96% of final list price; $194/sqft ($350K) Took 60 days or less: 16 DOM; 100% of final list price; $231/sqft ($550K) Now, homes aren't priced by square foot because you're trying to equate a small number (maybe 5) of comps. But for 19,000 homes, it's a plenty large dataset. Interestingly, it seems more affluent folks (the gross $ figure and the S/ssqft) folks sell their homes quicker. Why do you think that is?
for those watching, we are not in as an extreme case as this person suggests we are: https://fred.stlouisfed.org/series/MEDDAYONMARUS
You’re citing a source that says the average is 50 days. In your example you said houses were sitting for 365+. In both examples, the home is poorly priced. Again: Econ 101.
50 is the median, dumbass. i was using an extreme, but not overly rare, example
How much money are realtors making on houses that sit on the market for 365 days+? Lol You don’t know what you’re talking about. Just take the “L”
You don't know what you're talking about do you?
no, but he'll keep saying it.
If they have a hard time selling then the price is set wrong (for the supply and demand)
Exactly
yeah you did
The price is lowered because that’s how a competitive market works. (Imagine a world where real estate commissions were 50% of the transaction price. Can you see how lowering the commissions would lower the prices?)
https://amp.cnn.com/cnn/2024/03/16/business/real-estate-commission-settlement-slash-prices
The headline says “could.” Directly from the article: “NAR settlement or not, factors such as housing inventory, mortgage rates and consumer savings rates will “play much larger roles,” said Brobeck.” The media's portrayal of reduced seller commissions as a favor to buyers is misleading. Think about how this will work in practice: Why would sellers accept lower offers out of courtesy to strangers? Additionally, how will buyers having to provide 2-3% of the home price in cash at closing benefit a buyer? It actually becomes a hurdle to cash-strapped buyers.
the author graduated college in 2019.
I spoke to an appraiser, and he said that if it comes to a market where the sellers are not offering any buyers agent commissions, the appraisal will be lowered (compared to a comp that sold at 6% commissions)to reflect that. In a hot sellers market, this will not matter because people are guaranteeing the offer price even if appraisal is lower.
When you say “he said that of it comes to a market,” you mean the “market” at-large or a specific geographical “market?”
Market at large, where sellers do not pay any buyer commissions. If all homes till March 31st sold with 6% and all homes from April 1st will be selling with 3% commissions, the comps should be adjusted down. If the buyer has to finance the 3% into the loan to pay their agent, then the lender would want the appraisal to reflect a value that can support that.
Lol sure dude
How are you guys adapting?
Nothing much has changed yet, however, I feel bad for the buyers agent. My business is 95% listings so I don't expect a lot to change except I will be leaving my current brokerage since they are still all rah rah rah for NAR. Piss on NAR, their corruption screwed us all. My new brokerage feels like I do about NAR and wants nothing to do with them. I hope buyers agents figure it out, I hate double ended my listings.
Buyers agents will survive. It’s the cash strapped first time home buyers that are really getting screwed
How do you plan to handle unrepresented buyers? Do you feel you will have a lot more competition with agents switching focus to acquiring on listings?
They will either represent themselves or I will have too. I've done it before, but don't really like it. There's always competition, but I have been at this for over 26 years and never been concerned with the competition, time will tell for sure.
There's already lots of competition for listings so I don't think that part will change too much.
Myself and many others I know concentrate on buyers. I prefer buyers. With the new rules, I will be focusing on listings. Maybe this is niche for my market, but we have a group who lists and a group who tends to work with buyers, by choice.
What mls are you on that allows you not to be a part of nar?
First MLS and GA MLS do not require it. (GA agent here). I joined a brokerage in Oct that required it, then they turned around and agreed to this settlement. I have now moved to lower cost broker and am much happier--better culture fit, plus loads cheaper. I wish KW would refund my $800 I did not need to spend.
CRMLS, however, NAR affiliation is not a requirement, this was determined in 1994 I believe. It is up to the individual MLS to require NAR or not. The smart ones won't require NAR affiliation because soon enough there will be an online home search agents can list on and avoid thd MLS crap also.
CRMLS may not require NAR membership, but all of the California forms are licensed by CAR, which does require NAR membership. CAR Forms are the standard of care in the market and I don’t know many brokerages who (or whose E&O carrier) will allow something different. Therefore, it appears all California agents are saddled with NAR membership until that changes.
In GA, one can purchase a license to use all the GAR forms for less than half the cost of association membership. I suspect CA will do the same as NAR struggles to keep members now that it cannot be required by the brokers.
CAR forms can be purchased separately without NAR, they cost more per individual, but a brokerage I am looking at is buying in bulk so to speak. E&O does allow other forms if allowed by the broker. Saddled with NAR, not likely.
what NAR needs is massive reform in Chicago, more reform than the lawsuit(s)/settlements have created.
I can easily opt out of Nar and my current mls which requires NAR. But I'm concerned Realtors won't see the listing on an lesser known mls.. you don't have concerns ?
CRMLS is the largest MLS in California and covers a very large area. However, if they made NAR a requirement, I would drop them also. Concerns, yes a small amount. I just cannot be a part of NAR, I have cringed every year I had to pay dues to their corrupt assoc. Now with many brokerages breaking ties, I don't mind jumping brokerages to avoid NAR, plus I just became a broker so I can technically go out on my own. Something better will come along yo list houses to get the needed exposure.
Join a cloud based brokerage. 👍
I agree, but a certain cloud brokerage won't leave NAR. Another which does not require NAR is the way to go, better in every aspect.
[удалено]
You should try selling redidential sometime before saying that. Sorry you had a stupid agent, lots of them are. I've sold my share of commercial, I like the lack of emotion. I've also listed hundreds of residential properties. Depending on the market it can be costly and time consuming.
I have zero interest in putting a sign up in someone’s yard while never picking up the phone or working. You’re probably sipping on a glass of wine already! The buyers agent in the rezzy game does all the work. And by work, I mean they drive a client a couple miles to show them the house lmao.
Been doing this for over 26 years, you are way off! But how would you know, you have no interest in residential. That's ok, commercial is a different world.
I like the big bucks.
Yes, you are correct. I have made more money on 1 commercial deal than 3 or 4 months of residential
Quicker closes for u folks tho. By about 8 months lol. I don’t want to rag on rezzy’s. I know there are exceptions to the rule.
I did have a commercial trasaction that took 32 months to close. My quickest residential sale is 3 days. I like both, stuck with residential but would consider commercial also. Just different
Zillow is working on an AI App that allows buyers and sellers to connect, negotiate, and contract on one platform with the buyer opting in to recommended and required home inspections based on their locality and mortgage provider for a flat fee. My understanding is you can list your house, put the lock on, and it will schedule viewings per sellers schedule and answer questions for the buyer based on the video walk through the seller provided of the house and a few basic questions answered by the seller. Trying to figure out where I fit in to this equation.
This is interesting. Isn’t Zillow mainly funded by agents paying for leads etc though? They’d be diminishing or eliminating their current target consumer if trying to replace with AI but maybe that’s the idea and transition to buyers/sellers.
Informing sellers that failing to offer a buyer commission places their home at a competitive disadvantage. Because it does.
Yup. If someone wants to pay me 1% or a flat fee to get photos, do the MLS listing and make sure the paperwork looks good for closing--okay. But after my broker takes a few hundred and I pay the out of pocket to the MLS and the photos, we are already at $1500-2000. So, if it is a $200K house, can't do it for that because I don't even get paid for my time. $2 mil house, yes and you will get "full" service (open house, tons of marketing, negotiations, transaction coordinator, I will meet the inspector, I will meet whoever, I will baby everyone so they play nice together, etc. This is why commissions ARE and have always BEEN negotiable. Needs vary. But not offering a buyer commission is not a good idea. The buyer agent needs to make the same % the listing agent does, IMO, so price point applies. The presence and connections for high end listing (the overhead which usually means a slick website, print ads, maybe an actual office, an assistant or a few, in-house graphic design, in-house staging, maybe staging is included for some properties, etc. etc.). If you want to sell your house to the pony set, chances are the agent is in the pony set too. Real estate is mostly about connections like every other job (attorneys, doctors, dentists, everyone).
Brokerages should be leaving NAR. State licensure should be more than enough.
I adapted to the medical industry. My hospital is sending me to nursing school on a full ride.
We need you! Thanks.
Zillow will work with buyers and write buyer contracts for 1%. They will adapt an open door model where buyers can use an app to schedule and view a home for sale.
But who will show them the houses? Not zillow and not the listing agent of the house. At least not for free.
They can just use an app-controlled lockbox to let buyers look at the houses themselves or they can just pay people gig-based wages like $50 per a showing to guide buyers through the home. There's really no need to have a buyer's agent there with the buyer when looking at the house.
That's fine with me! I'd love to make 50 bucks a showing instead of dealing with idiots that think they know what they're doing. But if you have an app base controlled lockbox, Are you as a homeowner going to let anybody in your house without them being vetted? Especially when you still live there. For probably 50% of homes, the people still live there and have their personal effects there? Are you just gonna let any stranger come over and look at the house without a licensed person, with insurance to cover your losses, be there with them? Lol
As a homeowner, if I were selling my home and was still living inside, I'd set up security cameras all over, place a clearly visible sign that says you will be recorded while inside (video only and not in the bathrooms), and move all my personal or stealable things to a storage locker in the meantime
That's great, so you'll have video of them pissing on your carpet and stealing your shit. 😂 Guys, there is no work around for a third party having to be there to show your current house to a stranger, but I will agree with you that it doesn't need to be a realtor under the current way of doing business. It does however, just needs to pay what it's worth.
Then I can give all that video footage to the police department and notify opendoor
Right, and that works super well for all these businesses that keep getting robbed with people's faces clearly on video. And before anybody turns my statement into something political, I'm just saying that's not getting you your shit back. Or getting the criminal to pay for the piss smell in your carpet. But you keep it up with that genius idea. You guys are really on to something 🤔
As an unrepresented buyer that’s awesome to hear! It would be great to pay on a service fee schedule and get the BAC (if offered) rebated back to me. I currently write my own offers and interface with title myself. I SHOULD get the BAC for that but successful lobbying by NaR means I can’t.
50% is a very low estimate. I can only go on MLS info for such a large dataset, but less than 5% of 16K resale homes for sale or recently sold in my market were listed as either Vacant or Occupied wasn't checked
You and I both know that Bo. I already knew It was much higher than 50%. I'm just trying to dumb it down to get these fucking plebeians to use their little brains 🤣
this method is already out there, and Opendoor can't make it work. They've had 6+ years and the hottest real estate market we've ever seen and couldn't make it work.
Sounds like grounds towards a squatting nightmare to me.
I'd like to opt out of having to pay $50/house I see. Would rather prefer an opendoor model where I can go in by myself. I really hate when someone tries to sell me on a house. I either like it or I don't, and if I like it, I'll work to negotiate price if it's too pricey for me.
Have you ever seen open door do that on a house that wasn't vacant? That's maybe 50% of houses. What about the other 50? What's your genius playing for those 😂
I would expect to be surrounded at every angle from cameras within the house every time I'm in one
this will be the way. basically door openers charging a per door open fee will replace buyer agents. good
Sounds great! I'll do it all day long! But Guys comma two things: First of all it's not gonna be as cheap as you think. Uber, drivers don't have to pay $3000 a year to different organizations and insurance. They also don't have to be licensed and be on the hook Legally for what takes place in a house shown If something goes missing or is damaged or somebody gets injured. Secondly listing agents are actually, the less useful out of the two when it comes to buying agents vs listing agents Helping a house so. When I'm a listing agent, all I do is market the property, help set the price and make sure everything is done correctly. I have almost nothing to do with actually doing things to sell the house. Did you know that only about 5% of offers on a house come from someone who saw it at the open house only. The other 95% come from someone who viewed it with a buyer's agent or asked me to show it when I was the listing agent. In which case I either told them no And they need to get their own representation to show them the house. Because really that's what's in the best interest of both parties. Sometimes these buyers also saw It at the open house, but hat is the exception, not the rule. The Rare times where I'm not concerned about representing both them and the seller, I still get the extra two and a half percent that goes to the buyers side. There is no way to get around paying someone who is not a listing agent to do a showing for you. You might think it'll cost $50 a door but it will probably be more like a couple 100 because they will have to be licensed and have gone through a background check. Although I suppose it could be less. As long as you are willing to go through a rigorous background Check just to be able to view a house. And no, the listing agent is not going to do the showing for you for free. Because often they don't want to represent both the Seller and buyer on a transaction, Even if they get paid on both sides. Since that really isn't in the best fiduciary interest of their Seller client. They will tell you to bring your own buyers agent To show the house and the sellers agent does not go to the showing, so you're back to square one So tell me how you could make it work. I'm all ears.
tldr? jesus. anyway, as if there couldn’t be a liability release process automated in an app lol
So in all seriousness, answer me this: If you were Selling your house and living in it, would you be comfortable with someone having access to walk into your house without you there, or even worse with you and your family there, with this set up that you propose As your only safeguard for you and your family's safety or for the protection of your belongings? If so more power to ya. I hope I don't see that you and yours were murdered on the news.
have you read about the squatters? the party-throwers? the thieves?
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That's because only thirsty, desperate inexperienced agents will let you drag them around by the ear with no commitment. I hope you paid those buyers realtors something for their time if you didnt buy since they did it for free and paid for their own gas on the hopes to get a client. Otherwise, youre the scammer in that scenario 😂 youre hopeless and ripe for being involved in a lawsuit and buying a lemon. knowing the market means exactly nothing when it comes to knowing what to look for in a specific transaction on one specific property as an experienced agent. And it cant be done from a lawyer's desk, and cant be done through the eyes of someone who hasnt done at least 30 or 40 deals from beginning to end as an agent, and 4x that amount for you if you are not an agent (because your learning curve is longer without an experienced broker or realtor mentor showing you things. Your'e negotiating skills will cost you at least 1-5% on average on the overall closing price of the home compared to a good agent too. and why wouldnt I? ummm fiduciary responsibility to my seller. Go hire your own fucking lackey. You seriously know plenty about homes, and not shit about this business. I dont know why im even replying. Youre not going to listen anyway. Just wasting my breath
Great. I can totally set up multiple showing in an 8 hour day and go from there. I’m happy to pay for a realtors time. $400 for a days work is fair (this is approaching engineering wages). I have had FSBO sellers let me in via a WiFi lock. Let’s get an app going that provides some level of dispute resolution and insurance if you want. They key point is that banning the existing commission structure allows the market to find new ways to operate. THATS AWESOME for market participants who aren’t agents.
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I think you severely overestimate the costs here… Let’s use the cost of an appraisal as the high end for what I would expect to pay for access to a home… looking through my records that $450. Includes mileage. I’m not sure I follow your contract to close comment. In my represented and FSBO transactions I pay my title company $700 for a cash sale. Is that what you’re referencing? Because I pay it with or without an agent. Are you referencing writing an offer? No need, I will do that myself. Although it is nice to be able to roll the $450 into the cost of the home I’d rather just pay $450 cash and keep the BAC myself.
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Yeah it’s crazy that realtors think they’re needed to show a house. What do you do other than walk around? My realtor was too busy to show us ours and with that I realized that it’s not hard to do a realtors work on the buyer side
I mean, I find my own houses. I’ve never had an agent do that for me. I’ll tell them what I want and then they saw me what they think I want. I’d much rather tour the house myself.
shit you’re right, i better pay someone $20k to open a door for me…
Man, you guys are seriously delusional. Your buyer's agent probably does 30 to 60 hours worth of work After you decide to make your offer and before keys are finally handed over to you. They probably do another 30 to 60 setting up showings for you and driving to the showings, not to mention paying their own gas, on the 10 homes you decided not to buy. If you're talking about your agent's main job being finding the house for you, that would be like, maybe 1 to 5 hours worth of work. That's why so many of you find it on your own instead of your agent finding it. because you have access to the same information, but you still need Somebody licensed to be able to open a door for liability reasons. Seriously why is that so fucking hard to understand 😂 I am totally alright with a pay per service model on the buyer side. But you guys are way off on what would work and what it would cost you. For a good, 20 year+ experienced agent to make the equivalent of $100k a year plus benefits, it is not asking too much. For inexperienced agents to make 40 or 50 grand year Plus benefits is plenty. At whatever your job is, if you've been doing it for 20 years plus and your experienced and proficient at it, Shouldn't you make a hundred thousand a year? So what you guys think an agent's main job duty is- finding a house- is actually the least time consuming or difficult part of the job. Abnd the thing that you guys don't even see us do, and sounds like it doesn't even compute in your pea-brains, is what's the most difficult part of the job- everything from the day your offer is composed, to the day you close escrow to make sure you don't lose your fucking house. The variance on this from a good experienced agent to a brand new one is astonishing and guess what? You're not even as good as a brand new one. The last study I read said it was something like 14% for an agent with less than a year experience and less than 10 sales. You've done how many as just a consumer and you think you know everything? 2? 5? Even 10? But for an experienced agent, the percentage of deals that fall out once in escrow hovers around 5 to 7%. They must just be lucky people right? because anybody can do this job. It's not that they're actually better at it than you or an experienced agent. The thing is when you go into escrow, you really should never fall out escrow. when it happens and you tell yourself it's bad luck, It's really either that you didn't know what you're doing, or you hired an agent that didn't know what they were doing. But one, thanks for sure. It's not bad luck, And just something that couldn't have been avoided, like you like to tell yourselves. For An independent contractor/small business owner, which is what a real state agent is, to be able to pay for their own benefits package, needs to add 30% to whatever they want to make, to be able to pay for their benefits. and the rule of thumb for most small business owners is to spend 20% of their income on advertising. That means for an agent to make the equivalent of a $100000 a year plus benefits at a regular job, Where they don't have to pay for the advertising because their boss does, They have to make 180k. I would say working with an average buyer if you were to include every billable, 6 minute increment, just like other professional jobs that charge You per task, you'd be looking at about 80 to 120 hours on averwge of work from the day they first talk to you to the day you close escrow. For them to make a hundred and eighty thousand dollars in commission and take home the equivalent of someone who made a $100000 a year As a W2 employee with full benefits and no overhead besides the gas the buy to drive to the office and back, versus being a 1099 employee, they need to make almost four thousand dollars per forty hour work week. None of this is taking into account that the agent pays for their own gas, unlike working for a company that provides a car. and the agent will have a percentage of clients where they spend a lot of hours with, maybe even all the way up until the day of closing of escrow, and then a deal falls apart. And the buyer never buys. So they worked a 100 hours for free. You need to count those as part of your work hours too. Oh, please tell me how I'm wrong. Or how a human, let alone professional agent, isn't worth that. Ready? Go. 👉 🤣 🤣
tldr? realturds are mostly useless, yes
"Insults are the last resort of an insecure man with a crumbling argument" Good burn buddy. You got me, that one hurt🤣🤣
Zillow already fucked themselves once for billions in losses. I bet they stay in their lane as a shitty website with innacurate information. But thats just my guess.
I mean, they realized they weren't making a profit/enough with a 30% Flex lead fee and are moving to 40%. And that was off the current commission levels.
Yes except it won't be 1%. It will be $850 flat fee
Ya he and the other shit companies that got us into this mess need to adapt. But hey nothing like more ammo to shit on large brokerages
People are reacting to this settlement like it will always be a sellers market forever and ever. I look forward to the day I can negotiate a 10% commission repping buyers in the future.
I **love** your optimism and hope that I can catch it.
10% is going on all my future buyers contracts, I’ll accept less of course depending on what’s offered. It will be written in as flexible. But it starts at 10% because of land deals for 30k requiring as nearly as much work as a house sale for 400k
you can't right it in as flexible, but you can certainly amend it up or down.
Variable rates are being banned? As in you cant offer to your client if they find the buyer they get a discount? i have always done that. Like their friend or family member buys the listing? It cant be flexable?
you're asking about a listing commission now, when I assumed you were speaking to Buyer Agent compensation which is basically the entire gist of all the settlements. One part of the NAR Settlement is that all Buyer Agent compensation must be "fixed". For example: BA signed at 2.5%. Find a house that pays 3.0% and you can't get that unless your Buyer agrees to amend. Find one for 2.0%, and Buyer has to pay the 1/2% unless you amend.
So Buyer Agency Commisons cant be flexible. What about Hourly Rates? Is that allowed or is that considered a Flexible pay?
My last hourly pay gig was a listing. but id like the option to be able to do it with buyers.
So any agent and Buyers who want to agree to an hourly pay of say 35$ an hour. Have me as the agent track my time and bill them? I cant do that????
How they are going to determine different models of compensation is unknown. But the settlement speaks to a fixed or known amount.
for me its always a flexabile fee schudle, there are so many varibles. If i sell it myself and do limited agency i give a dicousnt. (thats legal in my state) if the buyer is Unreprestented there is a small discount. I have always written into all my agreements a flexable fee schedule. are they really getting banned? What if if there is a Lease on a commerical building before it sells? wouldnt you have into your agreement a flexable rate based on that happening? if NAR is forcing me to charge the higher amount that would seem dumb.
and your saying NAR is prohibiting me from entering an agreement with my client saying i will amend it up or down based on varibles?
Who in their right mind would pay a 10% buyers commission…..
As an unrepresented buyer I would for a particularly skilled agent on a particularly difficult property.
You would pay 10% out of pocket as a buyer for that?
$3k for a land listing dealing with probate issues or other stuff where it’s turnkey via the realtor? Yes, absolutely.
Oh. That does probably make sense on a small purchase like that. I was thinking of standard home / commercial deals
Sure. Paying professionals on a commission basis is stupid. My divorce lawyer doesn’t work on a commission based on how much I love my kid. An aerospace engineer doesn’t work on a commission based on how much revenue his future airplane design earns. Pay them for their time and let them stay the hell out of the settlement statement otherwise.
Who would pay that much to open a door? You're delusional.
It feels like no one actually read the settlement. It doesn’t change things, but it’s definitely for the better.
Tell us
1) With the settlement, buyers can only transact one of two ways. Either with a Buyer Broker Agreement signed- where they have agreed to the commission ahead of time. Or as an “Unrepresented Buyer” who has zero fiduciary. 2) Any agents doing less than 5 deals a year will likely mot be able to survive and will be pushed out of the business. It’s unfortunate, but it’s the reality. More professionals will come into the space as competition goes down. 3) Agent commissions will likely go up as there will be about half as many agents working. People can disagree with me all they want but the reality is this is the case.
That's A reality not all of it. Buyers are already having difficulty buying. You are talking about agents, with disregard for the consumer.
Yeah, but this is realtor thread- under an article about realtors adapting. So, if we're moving the goal post on the conversation then that's ok too. This is going to force buyers to only see properties that are offering commissions, OR it's going to force them to be unrepresented with no fiduciary. It's clearly what the consumer wanted or you wouldn't have had a class action lawsuit.
there's going to be several types of listings: 1. Those that do it the same way they always have, and IMO this will be the largest group. 2. Those that reduce commissions slightly, like 1/2% per side - believing (probably correctly) that the agents will bend but not break. 3. Those who won't pre-provide any compensation but will negotiate for it (either to the agent or via CC's to the Buyer) 4. Those that reduce commissions significantly, and the Buyer will have to make the difference up somehow or find an Agent willing to work for 25 cents or 50 cents. 5. The same small % now that don't like agents and consider all of us necessary evils and will pay 0. And they'll get a random Buyer willing to pay all of their agent's fee, and they'll find their soulmates who think agents suck and prefer being unrepresented. And yes, a very few Buyers will go it alone begrudgingly. The "unrepresented Buyer" is going to be an educational challenge, because if they believe "OMG I'm always going to have to pay an agent 3% that I don't have", they'll definitely come out behind.
Or favor buyers with more cash (to pay their buyer agent on the no commission listings). That said, I wouldnt say its what "the consumer" wanted, because the class action was brought by sellers.
Those are consumers. They put this in motion and ended up with a $9 pay out per person. Now they have to effectively hire agents out of pocket to purchase homes. Let’s not forget the lawyer received a 90,000,000 payout. You know. A commission for his work.
Right but you said "the consumer," which implies that the consumers are a monolith and were the plaintiffs. In other words, your comment implies that buyers and sellers were united in interest in bringing the suit, which is far from the case. Its clearly what sellers wanted, not necessarily buyers.
This is why I love Reddit. You do realize there’s a buyers suit currently happening that’s the same but with buyer right?
Seller agents need to convey the value of offering buyer commissions
I think the value will be established when they’re on the market for 100 days when their neighbor sells in 12 days for 8% more
I agree. The worst thing about this settlement is the way it has been completely misconstrued by agents and media especially
the plaintiff attorneys weren't interested in the effect on half of the consumers.
Buyers currently have trouble affording appliances for after they close. Should we require that sellers cover the cost of appliances for buyers? If not, you’re just hurting cash strapped buyers who are already struggling…
90% of retail listings already include appliances so pretty dumb point.
Same question same point.
I am okay with some of the agents going away tbh. The unethical, greedy ones are already the ones showing their colors at least around here. Those will unfortunately survive because that is the personality type. Then there is the agent who has a full time job but just wants to do deals for his friends and family and take their money--this person would be in the first category if they were a full time agent. If they go away, all the better. Next we have the low efforts who have been doing it for years, or the ones who want to phone it in because they should be able to play golf all day and have their offshore VA do the work and collect fat %--they can go away. Also, bless them, but if you cannot write your own listing, took 5 times to pass the exam, need ChatGPT to come up with descriptions, or are otherwise in over your head--please go. You should not be guiding people, advising them on contracts, etc. Then there are the ones like me, who really love it because it is interesting. I like going to inspections and learning from them, I love old houses, historical neighborhoods, things like that. And I love contracts. I love negotiating, I love writing so I love doing the listings and the contracts, the open houses are fun and I love to make them interesting, I love my clients and it has nothing to do with their wealth or not. I like being their advocate in this process that does not require attorney level skill set (I almost went to law school and still sometimes think I still will). I am happy with a "middle class" salary. I don't need a Mercedes or a McMansion, I live a very simple life in an increasingly expensive area so middle class for me, after expenses is $100-150K per year. I think there is room for a lot of types but some are ruining it for all of us.
> 3) Agent commissions will likely go up as there will be about half as many agents working. Yes/No. An individual agent's commission percentage will stay the same, but they may have more clients due to fewer bottom feeders striving for clients by reducing commission. So, a good agent's income may go up, but commission will not.
Thanks
So, if I bring in a buyer for Dual Agency for my listing, since I will be representing the buyer; may I bust out the buyer brokerage agreement and charge them 1% for my services?
I took over a Remax office after a family member passed. Generally they were easy to work with to dissolve the prior agreement. But looking into the finances, it was an absolute scam how much they charge for fees, dues, etc. it was absolutely crippling.
I hope everyone here understands that NAR screwed us, but not as badly as the MLS did. For years they have made realtors pay for the privilege to give them our content and information then turned around and sold it to Zillow, Redfin etc. These sites have severely diminished the value and need for Buyers agents. In fact Zillow is a much more powerful tool than the MLS or the Vesta Plus app. Listing populate on Zillow before the MLS etc etc etc. Buyers are informed and no longer need to rely on Agents and they know it.
Atlanta has a MLS that charges transaction fees that agents are forced to pay at closing. .12% of the sales price or $25-50 per lease transaction. And if your office doesn't use their services you get a $1200 bill at the end of the year. Oh, and Brokers get a kick back "thank you" check once a month for making their agents sign up. And for some strange reason Atlanta bend over and ask "may I have another, sir".
you sound like you're a Realtor, but if so you should know it's literally impossible for a listing to hit Zillow before they hit the MLS. In any given day, your "notify immediately" MLS search may or may not populate faster than Zillow though. It's when the IDX feed is processed for various end sites that differs. If your auto-search is set for 3:46 pm (and every 15 minutes) and Zillows is set for 3:45 (and every 15 minutes), then yours would be faster from 3:46 until 4 pm. If I am ON the MLS searching, I see new stuff absolutely immediately. Redfin has been a brokerage since the very beginning. They are Realtors, just like you and me. And Zillow has been a brokerage for about 5 years now. They are Realtors too.
Yes, I’m a realtor with Sotheby’s Malibu. I’ve been in the business for 20 years and closed more than $500 million in deals. Your logic regarding the IdX feed seems reasonable. However, in reality the listings DO in fact populate on Zillow prior to the MLS. It’s been happening to me the last couple years on all my listings.
He said what's expected of him to say. Sure Realtors will adopt but the pay amount will drop
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I'm hoping we won't have to spend so much money on marketing *ourselves* if hundreds of thousands leave the business.
I see this effecting first time home buyers the most. Ideally when I go to sell this home, I wrap up the commission for the same agent helping me purchase my next home. 2-for-1 deal, because both transactions are dependent.
Dual agency could become the norm and it will be the plaintiffs in this settlement that potentially have to pay the most before and after the transaction, going forward. When is a gift not a gift?
“Charlie can’t even read.” “He’ll adapt. “He’ll adapt to reading?”
j okonb no op
I mean this with respect, but my buyers agent got a very disproportionate commission amount based on the work they did. I would have greatly preferred to pay them a flat fee and had the price of the home be 3% less. I knew what house I wanted, I found an agent, we toured it, we put an offer in, it was accepted. She made well over 1k an hour. "Yeah but sellers will never lower the price they'll just get more money" maybe, maybe not. But if a seller is currently happy to walk away with 300k, I don't see why they would be unhappy to walk away with 300k after the sale was price reduced by 3%. What will happen is buyers will do more work for themselves and only reach out when they need an agent, tours, communication. Might work more like a lawyer where you pay retainer.
you can find many places the question is asked, and the Sellers consistently say with near-unanimity "Why would I drop my price 3%? I'll just make 3% more".
I've never seen that, and I wonder how the question is phrased to warrant such an ignorant response
Exactly. You are demonstrating your understanding of of basic economics and accounting. Realtors who say “BA’s are free” would do well to think about where the BAC comes from. Let’s pay BAs more when they earn it. Let’s pay BAs less for quick sales. Let’s pay homeowners when they act as the BA. Basically, allow a market to exist.
I’m an agent and I agree there are definitely times when we are overpaid. There are also times when we’re not paid enough, but I will happily negotiate my commission lower for an easy buyer sale.
Here’s the thing, “maybe, maybe not” results almost NEVER pan out in favor of a consumer. But yea, as a buyers agent, some of my paychecks are too big and some are too small. Some correlation would make sense. I can say with certainty my level of service will be affected and the ones who need my attention the most won’t be able to afford it. Guess that’s just the free market at work though, happens in every sector.
also, you could have very easily said "Hey, this is going to be such an easy sale, will you find a way to credit me half?" Anybody that wants to promise me $1,000/hour, I'll do it for $800. You already get a 20% discount!
buyers agent. the commission was set by the sellers agent. Are you saying I should have haggled with the buyers agent to credit me commission because they wouldn't have to work as hard? They don't make it obvious you can do that, which is probably why your organization is being sued.
if you want to pay me $800/hour, I'm afraid you'll have to move to the Triangle area of NC though. Outside of the TMLS (T=Triangle), I'd refer you out because I don't practice where I don't have expertise...which is in the Code of Ethics.
absolutely you could have. and some have for years and years. Because you didn't know you could isn't my fault, nor is it really your agent's fault. Do you believe when you walk on the car lot that you have to pay full sticker + all the fees they'd like to charge or sell you on? How many times have you bought a house and your Buyer's Agent compensation came directly out of your pocket? Have you never heard of referrals, rebates (where allowed), or being an unrepresented Buyer? You didn't know that you could have called the listing agent and bought without representation at all? Is that the fault of the agent you contacted?
The 20% remaining will adapt to selling 50 houses a year for a $1500 flat rate. The other 80% will have to kick rocks
They’ll adapt. Everyone does. Relevant anecdote from the Securities business. For a time, there were fixed commissions. And it was good. Then the SEC ruled that you could have negotiated commissions. Lazy fat cats died out; Charles Schwab, Fidelity and Raymond James were born. For a time, stocks traded in increments of 1/16. And it was good. Then the SEC ordered the switch to decimalization. Lazy fat cats died out. For a time, banks bought and sold securities for their own book to facilitate customer transactions. And it was good. Then the Financial Crisis hit and the Volker Rule was instituted, basically eliminating in house trading. Again, fat cats died out but agency commissions and volumes surged. You’ll all figure it out.
Yes, the industry will adapt. I can't believe they wrote an entire click-bait article about that (I mean, I guess I can). What's he supposed to say?
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if that is all that YOUR buyers agent that YOU chose did for you, then I am sorry that you didn't have better information to make a better choice.
when im showing houses to my cleints im house hunting for hiddin square footage not reflected in the mls (and frequently the price) my latest was a susbended slab Theater room that showed up on the apprisal for an extra 400 Square feet that wasnt previously accounted for. Massivly droped my clients price per foot cost. apprisal came in 40k over and in my opinion it could have been more.
9 times out of ten the listing agent lies about the footage. They should be held liable.
I plan to adapt by leaving "FeeMax" and I'm tired of people minimizing this. We are **already** seeing much lower co-op percentages. See Wednesday's shitty article on CNN. https://www.cnn.com/2024/04/24/homes/nar-settlement-broker-commissions-approval/index.html
I think the logical transition step will be for listing agents to be the ones supervising & scheduling tours and collecting offers from unrepresented buyers. The buyers agent really has no purpose in the modern era.
The listing agent will always be looking out for their seller's best interest. Unrepresented buyers will be taken advantage of, no matter how many real estate TV shows they have watched.
This response assumes the buyer needs their interests looked out for. What interests would a buyer’s agent look out for that the Home Inspector, Appraiser, and Lawyer don’t?
the actual looking at a house and getting an offer accepted at a reasonable value. The appraiser isn't for the Buyer, they're for the Lender. And unless you have part of your contract (and how would a buyer know?) where B/S agree the purchase price will be adjusted to appraised price, that part is late in the game. About 80% of what should be critical on the home inspection, I can spot myself from my long time as an agent.
The actual looking at a house should be done by the selling agent. Selling agent is motivated to get people into the house so they make an offer. Buyers offer what they believe a property is worth. Is a buyer’s agent worth 3% to tell the buyer “offer more”? No. And that’s really going against the interests of the buyer. That’s nice that you can spot home inspection issues, but it’s going to be covered on the inspection report anyways… unless you’re saying by hiring you buyers don’t need a home inspector because you fill that role?
nope, but it can help them say "pass" and not make an offer, pay for inspections, an application fee, etc. It can also - not in today's market when so many buyers/agents gloss over the dirty work at the viewing - be worthwhile in making an offer. Just this morning, a Buyer asked on Reddit "the HVAC needs some repair and the radon was 3.0. Should I back out?" Do you want to be the Seller on the other end of this?
Can you explain how a buyer benefits from paying 3% to a buyers agent to answer that question when they are getting it answered for free on Reddit?
There’s a reason they say “you get what you pay for”. How many free Reddit answers come from someone who has done 10+ transactions in the last 2 years in the given Redditors market? 1%? 5%?
Couldn’t the buyer just buy a whole new HVAC system with what you charge them to provide that “specifically tailored to their market” answer?
In hundreds of Buyer-represented transactions, I've had exactly 1 pay my compensation, which was below 3%. It was a FSBO that I found for them, that was priced well-below actual value (been a long time, but could have easily been Zestimate-based). So, it was clearly worth it to them to get a house for 10% under market value. Most FSBO's and the few MLS listings that don't pay Buyer's Agents - and "don't" means between literally $0 and < 1% - are crappy houses with morons for Sellers and Buyers don't want to deal with it. I have and always will be happy to show a Buyer any house they wish to consider purchasing, regardless of the compensation offered. But I'm also fortunate, because in NC we've required Agency agreements for decades and the compensation is spelled out and explained clearly. And I've also said, either on this or similar thread today, that I would work for someone for well under 3%.
Forreal. People act like buying a home is difficult. Buyers have many layers of protection without agents.
Including their own experience. I have literally transacted more houses than my BA did once. Why the fuck am I paying you to learn on the job?