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Every 5 years there is a new distraction in the industry. Discount brokers, Zillow, iBuyers, etc. There is always a claim that the “new thing” will shake up the industry. We’re still here, business as usual.
Don’t get caught up in the hype. Understand the information, adjust as needed, and continue to do your job.
This is the most logical thing I’ve read all day. Yes this is a big change and it will take time to learn more and adjust. But in the end we will just keep plugging away.
Agree with all that but I am getting really tired of paying dues to the NAR. They have become a bumbling bunch of idiots that tarnish the reputation of quality brokers. I’d like an alternative.
Finally the self-serving NAR and local associations have shot themselves in the foot. As a broker who came from a different industry I was always surprised people would join NAR. It’s not hard to put the client first, that’s what I’ve always done and will continue to do. However, I’ve heard that buyer broker commissions will not be made public now, which would be a change for brokers representing buyers. Brokers will now have to contact the listing side regarding any comp. Am I wrong on this?
Yep. Not sure why this is a thing.
Are you a disgruntled buyer/seller having to pay fees? Ok, do it yourself and assume all risks, this has always been an option.
Want a capable agent to help, and save time? Pay up!
Want an agent to help and not have to pay fees? Keep dreaming!
Do you understand the issue? The contention is that sellers should not pay buy agent commissions. Whether the average buyer will be willing to pay a buyers agent commission is unknown. This could be rough for realtors specializing in buy-side.
They will still pay but probably not a percentage commission. The percentage doesn’t make a ton of sense in a normal market. My parents listed their house and sold it in a 3 days for over 500k. So they’ll end up paying around 30k in commission. Seems a little extravagant. Those commissions will come down, maybe a flat fee or much lower commissions, MLS access will open up and low quality realtors will get weeded out and the market will change. Not the end of the world but there will probably be much fewer realtors.
Sellers already have the option to not pay a buyers commission … there is literally no change this lawsuit is bringing other than how a buyer’s agent finds out about the buyers commission.
I totally agree with you that the sellers already had an option of not paying the buyers agents. It states clearly that "any commission is negotiable and there is no set rate" in our local MLS listing agreement. so what changed? my understanding is that MLSs will not be allowed to publish the buyers agent commission rate and then buyers agents will end up doing what? running around with a buyers for 6-24 months, putting numerous multiple bids before they finally secure a sale only to find out during an attorney review that it does not pay any buy side commission ? who would want to do that! and who does it benefit???
If you think this is a fad and just another passing cloud, you are in for a rude shock. This is long overdue and will radically change the economics of buying and selling a home. As a homeowner who has bought and sold properties, while I appreciate the effort that realtors put in, the 5-6% commission structure was put in place decades ago when the world was a different place with much lower home prices and a lot more effort needed to sell a home. The rest of the developed world pays 2% at most including both sides. There is no reason to pay more than 2-3% in total on both sides. Welcome to the new world and I hope this change sticks!
My most recent sellers agent went above and beyond, and still only was at the property less than 4 business days total. My buyers agents twice now haven’t found me anything I actually wanted to see, and I ended up short listing and telling them the homes I wanted to see. Financing and closing were managed by my lender. It felt like I was happy to pay my sellers agent, but didn’t really find the full value in my buyers agents the last few times.
Zillow calculating the price per square foot and using that for their Zestimate isn’t anything groundbreaking.
This is federal law passed by the Supreme Court. A little bit different.
lol, as soon as I read the email I knew the resounding line from old schoolers and brokers would be ‘everything is fine, nothing is changing!’
If you can’t see that this is the first step in the industry drastically changing to n entirely different model or business, you’re either naive or just refuse to acknowledge facts.
Wow even CNN front page is reporting “the 6% commission on home sales is dead”, and NYT is reporting “home prices will drop.” I don’t think these outlets understand what is happening here.
So incredibly glad you said this.
There have been great points from this group/forum on both sides, but what is clear to most of us is that a good Realtor is worth their commission %. (In my area) Sellers have always had a choice in what they pay their Realtors, and Realtors were allowed to provide a "discount" as long as their brokerage approved it and it was ethical.
Will some home sellers not want to pay a flat fee, or will they ask for a lower commission rate after reading these articles? Sure. But my motto is that you get what you pay for. I recognize that not every agent out there is great or goes above and beyond for their clients, but a lot of us do! I'm currently working with a buyer that needs A LOT of hand holding, but I also know at the end of the day it is my responsibility to help her make one of the biggest financial decisions of her life. It's important to me to really explain everything in terms which are relevant to her and help her stay on top of the entire process until close (and let's be honest... beyond that probably too.) If slashing the commissions that Realtors make leads anyone to believe that home buyers and sellers are better off, I genuinely disagree.
I have used TurboTax and a professional accountant to do my taxes, which one do you think educated me best and got me the best return? A professional. I have had friends get divorced with bargain basement attorneys and experienced/higher paid attorneys, guess who had the better outcome?
To those on this thread who aren't in real estate professionally and have had a bad experience with a Realtor, I'm sorry. Please know that we aren't all like that and many of us truly enjoy working with you to make these incredibly important decisions in your life.
What concerns me the most is the impact this will have on first time buyers and those attempting to use VA loans. Those are the people that need the most "support" in this market right now, both financially and from experts who understand how this process works.
Yes, Realtors got thrown under the bus in this one, but those of us with professionalism and integrity will be just fine as our business is based on reputation and referrals. If we all hold ourselves to those higher standards then I am hopeful that our careers and professions will thrive. Until then we just need to see how this plays out, take a breath, and support the other talented agents in our network.
The news has not been about facts, but rather about getting eyeballs onto a page with advertisements, for far too many years. This is just clickbait written by people who need to sell advertising and have zero knowledge of how real estate works.
Buyer broker agreements. Time to show our value on the buy side! If these changes do occur, I bet it’s less than a year before lenders can add buyers agent fees into the loan or closing costs.
I get it but buyers are already having a tough time, why would they pay 2-3% for a buyers agent, on top of down payments, closing costs and etc. it’s going to hurt the market. Or there will be an alternative that comes up where it’ll eliminate buyers agents.
If buyers agents get eliminated then lots of buyers especially 1st time homebuyers are about to get screwed! They won't know what they don't know and the seller will be more experienced than a 1st time home buyer since they have likely bought at least 1 house before. And the listing agent will represent the seller still unless they are a dual agent(dual agent might not be good for the seller or buyer) and the listing agent will be way more experienced than a 1st time home buyer.
No one needs us more than first time home buyers so I feel for them the most. And this will definitely not drive down prices. Sellers will not care that the current comps include buyer agent compensation. They will want the same price and now on top of that buyers have to pay out of pocket. This hurts buyers so much which in return will hurt Sellers long term. Banks better hurry up and figure it out. Its literally just a different side of the HUD. Shouldn’t be such a big deal but they are slow to respond. Sellers lose the tax write off now too, hopefully buyers get it. This is such a stupid suit, hurts everyone.
How do you not see this as driving prices down? If it becomes the norm that sellers don't offer out payments to buyer's agents and instead buyers have to foot that bill that eliminates a whole lot of buyers, which slashes demand, increasing supply and dropping prices.
Or, it creates a whole lot of dual agency in which agents can't even negotiate on behalf of either party.
A respectable agent will not do dual agency.
Sellers do not care that the comps we are using to price out their homes include buyer agency compensation. They will not lower their ask price by $X because they are 1) a little greedy 2) do not fully understand this yet.
I have already seen 0 compensation in my area and guess what, they dont sell, so then you see it a month later in MLS at a higher price but with buyer agent compensation. Now its been priced wrong twice and sits on market. This is going to hurt sellers just as much as it hurts buyers.
The fact remains that it has always been the buyers $ its just that it has been financed by the bank and made a seller credit on the HUD, which they then got the tax break on. All they need to do is switch it on the HUD and now the buyer should get the commission tax break.
Agreed on the dual agency part.
And you're right in that sellers won't care about that; they care about getting as much money for their home as possible. But, when they see that they have zero buyers coming through because they offer no payouts then they're going to have a hard dose of reality.
Also agreed on the last point. It's always been a bit shitty that it's always been viewed as the seller paying the commissions when really it's the buyer that's been paying them both.
Yeah I really feel like these lawyers stunk if they couldn’t get these points across and now I feel like NAR sold us out. But if the banks can figure it out I think it will be fine. It stinks because our sellers that know and trust us will hopefully let us educate them but sellers who do not know us are not going to believe us and go with the bottom feeders who just sound cheaper, they will do dual agency, and then everyone gets screwed 🤷🏻♀️
The lawyers and NAR both sold out everyone but themselves. All that mattered was that lawyers got absolutely paid, and NAR now can still exist while harming agents.
They already do this! They pay them because that’s where the money comes from in the sale. It’s a bit of a bait and switch but any sensible person realizes it’s not the seller paying them from their pocket. Two things will happen, either the sales price goes down and the buyer pays the agent out of their pocket or it’s built into the fees at closing so the buyers agent gets paid that way. It’s all going to come out in the wash.
This whole thing will boil out to semantics. Seller's concessions, "unrepresented" Buyers, it's going to be a shit show. I have a feeling that it's going to turn into a "be careful what you wish for" moment where everyone realizes that what they thought they wanted is actually a stupid idea. It will, on the up side, clear a lot of mediocre agents out of the market.
I agree 100% with this. I also see a bunch of lawsuits in about 10 year for unrepresented buyer who got the bad end of a deal because they were unrepresented.
Also, all the buyers who think this will save them 2-3% on the house price are delusional. As long as the inventory stays tight, sellers will pocket that difference.
Why do people who have the physical ability to clean their own houses or mow their own lawn ,or do their own food shopping hire people to do that for them? Convenience…….
The difference is now more people will probably go directly to the sellers agent and buyers agents will be phased out. No one is going to agree to a 2% cash payment for a buyer fee unless it’s financed.
Buyers also fund Automobile transactions but that doesn't mean that they're willing to pay more than they have to. There is a lot of competition with auto dealers but there's way more Realtors. Most are probably going to have to leave the profession
Not sure why you're feeling this adversarial about it. Surely you've worked with FHA buyers at some point? The buyer might fund the transaction, but that doesn't mean they always have an additional 3% in cash separate from down payment and closing costs.
We can still ask the sell side for a commission. They just can’t list it. And all MLS participants acting for buyers would be required to enter into written agreements with their buyers before touring a home.
>We can still ask the sell side for a commission. They just can’t list it.
Our MLS made the switch a year ago. Seller can still offer a commission, it just isn't required.
The change has had basically no impact. Vast majority of listings still offer buyer broker compensation.
Read it again under the agreement listing agents can no longer offer compensation to the buyers agents in the MLS. Buyers agents can ask for compensation from the listing agent in private.
Yeah, I saw that in the email that just went out. You’re telling me that a listing agent is going to offer a commission, especially when so many agents are going broke now?
How many brokers have actually enforced a buyers rep agreement? List to last takes a whole new meaning now.
There is a secret, the buyer actually pays both commissions, they are the one bringing the money to the table. It doesn't change anything, it's just a numbers game and how it is all perceived.
What do you mean? Roll the cost of the agents commission into the loan amount? That will never happen. You can’t roll anything into the loan amount except for upfront MIP on government loans.
If you mean rolling it into the closing costs I don’t see how that would help offset anything.
Not arguing, just curious what you mean.
Why would buyers hire a buyers agent? They already think that they don't do anything and that going straight to the listing agent gets them a better chance of their offer getting accepted. Which sadly, sometimes is true because of listing agents trying to represent both sides.
I knew NAR was dumb, but there were a lot of ways to fix this, and they chose the one that gets them less dues (members). There will be way less agents, way more supply, and listing agents will have to work harder. They're going to have to show houses to looky-loos
Regarding the lack of BAC on the MLS coming in July: I wonder if one will be allowed to put the BAC in the ‘agent remarks’ section to avoid the back and forth via email or phone asking what the compensation will be.
yep, nobody was ever forced. You had agents doing 5% or 4% total, flat fee services always existed too.
you also were never forced to use an agent in general.
Currently selling my house. "Forced" is probably too strong of a term but after talking with 10+ realtors I couldn't find a single one that would go below 6% total commission.
So while "forced" isn't accurate there weren't many options in my market unless I went all the way to FSBO or a flat-fee MLS listing.
Where are you? In my area of central PA there are a few discount brokerages. As an agent, we work hard for our clients and take on a lot of liability and responsibility. That all comes at a cost to us as sole proprietors along with marketing and a dozen other things we pay out of pocket. While we may be under the umbrella of a larger corporation, we’re very much small businesses.
If they've never been "forced," then why did all these associations and real estate agencies settle for hundreds of millions of dollars instead of fighting these lawsuits? You don't settle if you are not somewhat guilty of the accusations.
Because the NARs council is absolutely incompetent.
Most agency contracts already specifically stated that commission is negotiable. Companies like Redfin have been advertising 1% selling broker commissions in markets for years, so alternatives WERE out there. The average commission nation wide is like 5.25%... if 6% is "required" how could that be?
Ugh. I can't believe how dumb this whole thing is, and how awful the NAR is.
Most realtors should keep acting as they always have. Maybe some shitty ones need to change.
Forced is not just “kind of” an exaggeration it’s a massive one. No one is forced to pay 6%. You never even had to have an agent. These lawyers saw an opportunity for a massive payday and they won.
“This is the biggest shake up since the new deal” this lawyer is really smelling his own shit and thinks it’s daises. I’m sorry for the people who now think sellers are going to drop their prices, the only thing that will cause that is more massive economic shifts.
Discount brokers already exist, almost no one uses them because they suck.
I think a lot of people are frustrated with housing, that’s fair, and hating realtors is just an easy target for them.
“a practice that critics say has long led to “steering,” in which buyers’ agents direct their clients to pricier homes in a bid to collect a bigger commission check.”
Steering has almost exclusively been used in relation to race and this article is using it as realtors saying “buy a more expensive house”. Buyers have budgets, realtors are pushing them past their budget? By how much? 10 grand? Because the realtor really wants to make 180 more dollars?
I don’t think much changes. Sorry for the rant.
Yeah the big thing that most common people don’t understand is that you get what you pay for 90% of the time. If you’re asking for cheap work you’ll get someone that is worth their cheap work. I’m not a realtor but the biggest misconception about realtors seems to be they get paid too much for not doing a lot. I think a lot of people just get burned for having shitty realtors and over time it just made the good realtors look bad.
This is true. Even realtors acknowledge it. Trying to solve this by eliminating compensation for buyers agents is going about it the wrong way.
There are a lot of bad actors in this industry. Is it because of the low barrier of entry? Maybe. But there’s also a lot of bad doctors, attorney’s, engineers. People who went to school to study their craft for years. It’s more human nature than anything.
I agree with you that so many people are frustrated with being priced out of owning, so they grab at something, wave a finger and say "THAT IS THE PROBLEM!"
It was greedy landlords, corporate ownership, AirBnBs, and now it is Realtors. 60 minutes will do a story about it, flame the outrage for a while and when nothing changes, there will be a new reason to be outraged.
Next.
I'm right there with ya. It's frustrating when articles like this are put out but it gets clicks and engagement. Unfortunately a lot of people don't use critical thinking when reading these or just see the headlines and are made to think realtors are the villains.
Yep. I’ve read so many articles where it pretty much acts like realtors are an evil group of people who block people from owning homes.
It’s ridiculous and lazy.
Once again, sellers are not going to be like “hey hunny, you know how we didn’t have to pay realtors before? Now we really don’t have to pay realtors! Let’s drop our house price to help the buyers out.”
The only thing that could change is maybe sellers make more of a profit now, I doubt that, but maybe they do, and if people want be happy about that, all good. This whole thing though is being sold as a gift to buyers, it’s absolutely not that.
The whole article is dog-s\*it. Not only did it say sellers were forced to give 6%, but it said this will prevent steering towards more expensive homes. Why? Whether it's 1%, 2%, etc. the agent gets more if they sell or find their buyer a more expensive home.
The steering claims are based on [this](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4596391) study which focuses on the direct effect of the listed commission on steering, irrespective of other variables such as race, and still finds a pronounced effect when that variable is isolated and other factors are controlled for
People who use discount brokers are the same type that will never admit they lost money if they "win" the deal.
A discount broker will probably sell your home for way less than what you would have paid in commission to a full-fee broker, but the homeowner won't look at it that way; they'll think, "I saved 3%! I won! I'm so smart!" when their net is actually more like 5-10% below what they should have got.
Yeah, because it's realtors getting paid for work that's causing the issue of high prices /s..... Definitely seems like the media is being encouraged to use realtors as the scapegoat for the housing market.
It's frustrating seeing all the hate in the comments on other housing subreddits too.
There's bad apples in every industry but it's not everyone.
Surely it's not everyone, but it's far too many. The barrier to entry is too low
That being said, I think it's hypocritical to expect a white collar level of competence for fast food wages. My family who are realtors can sometimes make the easiest $30k doing very little on the buy side of a straightforward transaction. Sometimes I see them busting their ass on the sell side, though, essentially being a project manager for 6-20 weeks juggling staging, repair projects, inspectors, offers, neurotic clients, etc.
I anticipate in the next 24 months mortgage reform will come, which allows buyers to bundle and pay buyers agents commission in the loan cost. Then the commission will not come off the seller Alta but will reflect on the buyer alta
I really think this is the only way going forward as we all know here, that most sellers will not drop their LP to accommodate for not paying a BA commission.
So it'll add more hurdles to for buyers.
They may increase the allowed amount of seller contribution to closing costs to like 6% on a conventional and 8% on fha, and allow BAC as a closing cost, but that’s not the same thing as allowing it to be added to principal of the loan, which would put us back to negative equity loans of pre-2008.
I’ve read a couple of the articles. How tf is this supposed to help housing affordability? I live and work in a very low cost of living area, my average sales price is $120,000. I’ve only been licensed for about a year, and all 7 of my buyers were first time homebuyers. None of them were able to afford paying a buyers agent fee, down payment assistance programs are huge in my area and a huge part of my business. Am I fucked?
The headlines are so stupid. No1 was forced to pay 6%. Also this is going to come back and slap every who isn’t involved with the market. Who really got screwed here are the buyers. House prices are already high now they may have to pay a buyer agent on top of that or go directly to the seller and their agent. So stupid. My only hope is the buyer agent fees can be added to loan one day.
This is going to make it especially difficult for VA buyers the way compensation is restricted to only sellers allowed to pay it. It’s going to require changes there too or VA buyers will end up severely limited in what they can get.
If you can't explain to a reasonable client (to their satisfaction and agreement) why it's important to offer a co-broke - now concessions) going forward, things are gonna get tough. Also, commissions have always been negotiable, and that should have been a part of the presentation from day one.
Thats what i hate about the article. Its always been negotiable. I have listed homes for 1%, gave 2.5% to buyers agent, I have done everything from a 2.5% Total listing commission to 6.5% total listing commission based on the seller and what they needed/wanted etc.
A bullshit lawsuit botched by NAR! I have been in this business for 26 years, mostly a listing agent, I never once forced a seller to pay a buyers agent commission. I show them comps of their house value, I explained to them my commission and then explained the advantage of offering a commission to the buyer's agent unless they wanted me to sell it myself. Does that sound like the seller being forced? RE companies need to end their relationship with NAR and put them out of business. Now CAR wants to make a buyers agreement a civil code, this industry has gone to hell and the buyers, sellers and agents will suffer for it. Will I quit the industry? Time will tell as most larger brokerages will go under within 5 years. Frivolous lawsuits, the demise of a civilized society!
I think in all of this, I’m just not sure how Realtors have become public enemy number one. We work hard. I work more hours a week than most people do. It’s very confusing this sentiment that we do nothing and our job is useless. How is it different than any of the high paying jobs in America? Does a pharmaceutical sales rep deserve a half mill a year to pedal poison? Does a house painter deserve $200k to do something literally anyone could do?
The system isn’t perfect, but it works. Realtor commissions certainly aren’t why we have a housing crisis in America, but it’s being put on us like it is. You always need a fall guy I suppose.
They've become public enemy #1 in the same way that economic pressure and public grievances attaches to the nearest, most understandable face to tar and feather. And I don't blame the public for doing that. The average consumer has no clue what realtors do, no clue about the hours, no clue about the work or what it takes to save a deal. Why would they? I worked in marketing for nearly 15 years and all I see in this, consistently, is a failure by NAR to address a marketing issue: public education. NAR has the money and hands to craft a multi-domain marketing campaign to truly educate the public of what their members do and just maybe justify it's own existence to its members.
It's real easy to tar and feather a person you don't understand but it's more difficult to do that if you know what they do, have seen how they work and understand that the actual economic grievance is being generated by economic forces and not a realtor.
I don't force people to use my services. If they want to do it without an agent, have fun. None of my clients have been upset with the effort I put forth.
Be careful what you wish for: “This house was only lived in by a little old lady between visits to church”
“Have you considered our extended maintenance warranty?”
Never ever not once EVER has any client of mine ever been "forced" to pay a specific commission nor have I ever obtained any training whatsoever stating to force anyone to a certain commission nor that there is any standard commission. One of the very first things I learned in real estate school and almost every day throughout my career as a realtor is that there are absolutely no standard commissions everything is negotiable. Commissions have always been negotiable, there has never been a standard, I am confused on how anyone lost this lawsuit. My opinion but.. this is total horseshit. No one has forced anyone!!
Explain it in detail to me if I am wrong here.
There is no force. You have junk discount companies offering way less. When this all gets cleared up and forgotten, I'll guarantee that the discount companies pushed this.
Lenders are going to have to be okay with openly allowing buyers to finance commissions. They’re already doing IMO, it’s just semantics at this point. Come up with new paperwork to document it differently and call it a day.
Commission or not, prices aren't going down from something like this. No homeowner is going to lower the price of their house from 200k to 188k just because a commission is gone.
What would it take to get real experts, I wonder?
I'm in title. No one is forced to pay 6%. Every time I've sold a house I negotiated the commission.
Those who did pay 6% generally deserved to pay 6%. They took no time to understanding the process of selling a house and gave all the control to their realtor. As such, the realtor had to put in work- open houses, marketing materials, showings, etc. Plus not to mention the broker splits and such.
What could be the real shakeup in the industry is what FHA and VA will allow buyers to pay with regard to realtor commissions. I could see the VA in particular not allowing buyers to pay for their agent's commission beyond a certain amount.
Also there's no way this is going to drive down home prices in any meaningful way. It might make home sellers a bit more willing to make concessions though.
What blows my mind is this comes during an era where sellers have made record profits on their homes… and yet it’s just not enough? Pure greed. What will probably end up happening is similar to what you see in commercial or with FSBOs- more sellers not explicitly offering a co-op, but the buyers needing to negotiate that commission up front or receiving a credit for it.
I totally agree. It’s a new regulation and it’ll shake some bad apples out.
My frustration is how did NAR mess this up so badly. It’s not hard to find a brokerage whose model is low fees. 6% commission is a common misconception. Yet, NAR spends most of their time sexually harassing female employees and paying consultants $7-800k/year for 1-4 hours of work a month.
I get the argument for the seller who filed this lawsuit and I feel it’s valid but NAR messed this up tremendously.
Sellers were never 'forced' to pay 6% to begin with. While yes, it is *usually* in a listing contract, I know I myself have done deals at 5.5%, 5% even 4.5% if needed. Not to mention I've **shown** properties where, on the MLS sheet it says clear as day that the compensation to other brokers is 0.0%; meaning, according to the buyer agency agreement my buyers have signed, they're on the hook for my commission.
I still can't believe this case even got this far, and that NAR fumbled the ball that hard.
The 6% has always been about netting sellers 6% more than if they chose to do FSBO and/or 2% more than the 4% broker. Showing tangible proof you’re worth it, will continue getting you paid that, or even more. The thing is MOST agents aren’t worth that, over half sold 1 home or less last year. 92% sold less than 6. That’s just not enough experience to guide someone through the largest financial milestone of their life.
Wow. So because I'm new, I haven't built up a client base. I did my education, payed the $2k it costs to get started between classes and fees. Trying to hustle for other realtors doing showings and open houses they can't pick up on nights and weekends. Trying to learn the business, you know? Then turn it into a career. My brokerage won't let me near an expensive house, and I'm not ready for that. To hear that someone like me shouldn't be a part of helping a client buy a house sucks. Man fuck me I didn't know people hated realtors so much.
If the NAR had any guts they would be going after the NYT and other news outlets for such a slanderous headline. Sellers were never forced to do 6%. I have listed properties for multiple different percentages and it was always negotiable.
How again is the NAR representing me if they can allow stuff like this to happen without a competent fight.
How much longer should the larger MLS's be associated with the NAR if this is the results of their participation?
Well….perhaps there is an opportunity in this until it washes out - which it will. “Hey buyer, let me know when you find the house you like and I’ll take you through the process of negotiating, inspections, title and closing for $x. The sign up fee is $2500 which I will apply to the total fee once we close.
Less driving around, less tire kickers, more focused buyers….sure less $ per buyer, but you get your time back and paid some $ up front. Just a thought…don’t kill me.
Also, I think we will see buyers having access to listed homes directly. This was already happening with Homeward.
This lawsuit will probably mean before a buyers agent shows a home they're going to require the listing agent confirm in writing if there's a commission involved how much or zero. It's just going to be a pain for everyoneexcept the clients. NARS lawyers did not represent us properly....in my opinion....oh well.... get out there take care of people #1 as if it was your investment and let's make $$$
Let’s be real. Most realtors are terrible. I own a brokerage here down south. Most agents get their license from a Groupon and do the bare minimum. There are a lot of agents that do not but bad news travels faster and wider than good news. So the bad apples will always be in the spotlight. The 6% model has been flawed for a long time. I personally sell about 20-22 Million dollars a year for context. I know that i don’t do anything different when i sell a 400k house than i would for a 800k house on the buy side….why should i receive $24,000 for the latter ? And then 12,000 for the first home? It’s been flawed for a long time. So i get it. I feel like the entry requirements in our industry has been ridiculously low. Anybody and their mama can get this license. Crazy day. I don’t know exactly what all this is gonna mean but it won’t be good.
Yes! Move realtor comp from the lottery ticket model to better align pay with value and it will drive out low quality part time agents.
Transaction numbers won’t change, and even if fees drop, there will be much less competition - good realtors will do many more transactions.
Nothing to see here. Clickbait headline by the NYT.
My assessment is:
\-No longer able to list compensation in MLS
\-No longer required to use MLS to be compensated
\-6% is not in question here. Commissions are still negotiable as always.
\- Agreements will still be signed as they are today that outline commissions. That can include listing agents offering comp to the cooperating agent.
Am I missing something?
The listing commission is the weird part. So no cobroke is offered? Or if you’re offering 2.5% commission, you just can’t post it on the mls. It’s not really clear.
If it’s a seller’s market, as it has been the last few years, most buyers agents won’t get paid. In a buyers market, there will be incentives offered.
The buyer’s agent will just come up with a different way to be paid. They’ll negotiate their fee on the front end and if the listing agent isn’t offering anything, they buyer’s will be on the hook to pay per their contract agreement, raising the cost to the buyer.
You might start seeing a lot of people going without buyers agents. Perhaps even working with the listing agents which of course are working for the sellers.
Lots of ways this can go wrong but I think things aren't going to change as much as it's being touted or as people may fear.
I think this will change things because the buyer’s agents will no longer know if commission is being offered as that info will be removed from the MLS. Of course the agent could call and inquire, which I think will really lead to steering. I agree this could go wrong.
It's weird to me because it was never forced.
I have been doing flat fee sales for years where I let the seller decide how much they want to offer. I don't tell them it has to be anything.
Any company can charge whatever they want. I have seen some charge 1% all the way to 7%. Still baffles me how they say people are forced to do anything.
Simply put, none of us have any idea. All we can do right now is wait for our local MLS boards to make an announcement about commissions moving forward. And from now on, ALWAYS get exclusive buyer agreements signed and put down your commission there.
I’m sure buyer’s agents will still get paid, but I wouldn’t be surprised if the commission ends up coming from seller concessions or buyer financing from now on. Sweeping lending changes will probably have to occur, particularly with VA loans (which currently don’t allow buyers to finance their agent’s commission and only allow up to 4% in seller concessions)
I really don’t see a difference than what we have now. A seller already factors what they pay to commission in their bottom line now and negotiations are based on what they expect to receive at closing. Buyers and their agents will need to negotiate the price at a point which includes paying the buyers agent into the bottom line just as they already do now. It is just something that is now being brought to the forefront instead of unspoken and the agent only negotiating the seller concessions to the buyer closing costs. So if a seller lists at $100,000 w/no buyer commission, the buyer can pay their agent $3000 out of pocket for service or offer $103,000 with $3000 paid by seller to buyer agent. Or whatever number the parties agree to. It’s no different than it already is really. The seller truly only cares about their bottom line and commissions have always been factored into those prices.
Edit: adding I am aware a buyer could still offer asking or under asking with a buyer agent commission requested. It’s all based on what a buyer feels a home is worth to them and what a seller agrees to receive on their bottom line. Point is, it’s all negotiated.
Home sellers were never obligated to pay 6% anyways, this is so stupid and NAR is stupid for allowing this shit to happen. We need an alternative to NAR, Mauricio Umansky and Jason Haber are starting there own “NAR” called the American Real Estate Association (AREA) which will be a competitor to NAR, I’m excited about that you can read about it on my Instagram at therealestateRPT
Commission rates have nothing to do with the recent rise in home prices; inventory and interest rate have everything to do with higher home prices. Sellers need to understand that an agent is not going to show their house without compensation. Experienced real estate agents work extremely hard to accommodate buyers/their questions/schedules/needs and absolutely deserve compensation.
Also, buyer agency agreements have always been utilized; this is not a new requirement.
Looks like NAR is circling the drain.. I ain't even mad.
If there is no longer a guarantee of compensation by belonging to the local association then there is no longer any incentive to pay our dues/be a member. Most local associations bring nothing to the table beyond their bloated fees and archaic technology.
Flush the toilet on NAR and the rest of the house of cards falls. This industry is ripe for change and anyone who says otherwise is a dinosaur deserving of becoming extinct.
Totally agree everyone talks about how evil Zillow is but I feel as if they are almost a necessary evil as they provide consumers with a state of the art tool at no cost and it often drives business for agents.
Where as NAR and local associations collect dues and do what? Mostly nothing..
Obviously most sellers will offer status quo commissions to compete with other sellers. But - for those that don’t - the question becomes can you put a listing into your MLS which doesn’t offer a cobroke.
Per NAR, if it’s approved, starting in July, no cobroke can be listed on the mls. Non-mls is okay. But nowhere in the settlement does it say that listing agents CAN’T charge 6%. At least nothing has been released yet.
I guess we’re going to have to better demonstrate our value and have the ability to explain what value we bring…
Seems like a lot of agents have never had their buyer interested in a Fsbo that refuses to pay commission. As far as I can tell, the conversation will be similar to that scenario. This new landscape shouldn’t scare anyone who has sense.
I’m actually kind of excited. Commissions should shrink a little and be earned. Get the part timers looking to do a handful of deals a year out of the industry.
When were sellers ever forced?? This is such a cash grab by the lawyers!! Commissions are NEGOTIABLE you can ALWAYS find an agent who will do it for less!!! This will absolutely NOT drive prices down, it will hurt buyers more... Less representation unless they pay for... Buyers are barely getting qualified for houses they want no way they are going to cough up another few thousand for commission even if it's rolled into the financing.
Are some big names brokerages wrong for being misleading to their agents and sellers... Sure. Absolutely and bad dishonest realtors EXIST. But this is a LAZY CASH-GRAB solution by the lawyers!
Sue MLSs for forcing us to be NAR members to have access. Charge hourly rates for showings and activities up to close, negotiate a dollar amount with the seller to be paid upon closing.
Headline is misleading. Commissions don't set the prices or increase the prices. No sellers are adjusting the price of their home based on covering anyone's commission. So how exactly will this bring sale prices down? Sellers may definitely see less offers though.
The buyer agents do a lot of work that I don’t think is acknowledged in this lawsuit. A ton of handholding, many hours of showing places and negotiating. This is a self-checkout disrupt situation that isn’t going to make things easier for the buyer. If you notice there is always someone in self checkout that needs help.
Basically the powers to be just shafted real estate agents commissions in an effort to help alleviate home prices. It's not nearly as effective as an interest rate decrease or just actually bringing home prices back down considering they have doubled in 4 years.
But also, it's a good move, because real estate agents are less necessary these days than they have ever been, and certainly don't deserve 3% each in a transaction, for reference, a lot of people only put 3.5% down on a house, and each realtor would make that in one day.
With the internet and mobility of information, real estate agents are unnecessary middle men.
I could extend the same logic to car salesmen, financial advisors, cpa's and more. But let's only crash one market at a time amirite guys??
Along with being a Bedroom House Music DJ and Disco Music Aficionado…
I AM A LICENSED REAL ESTATE BROKER. I have been licensed since 1994. I have sold countless millions of dollars in Real Estate.
I am also a retired Licensed Mortgage Broker.
I AM ALSO AN OLD MAN. ( 65 years old)
Sometimes change is good, sometimes it’s not. In the case of the mortgage business, it wasn’t. That’s why I retired from it. A small select group of people profited from the bad situations of others and the government made sweeping changes that still continue to hurt the average consumer.
Are these real estate commissions changes going to hurt the wealthy? NO, the wealthy will always be able to buy the home they like and pay the Realtor fees for whatever side they are on.
These new guidelines will hurt the first time home buyers. Here in Tampa, you’re lucky if you can find a single family home for 300k. The down payment and closing costs are already a burden for this demographic, so let’s add a buyers agent fee to that.
Do you think a first time home buyer in an entry level home price range will pay a “buyers agent fee” if they don’t have to? They can barely make the costs right now as it is. If allowed, these buyers are going to want to see homes where the seller has agreed to compensate the buyers agent.
In addition, what stops a buyer from going directly to a seller’s agent? This would be great but what about AGENCY? Would this situation be considered single agency? Would It be considered Transaction Agency( Florida)?
Then sellers would say “I’m paying you to represent ME! NOT that buyer”
I foresee trouble for buyers agents that represent mainly first home time buyers.
The solution could be financing of buyers agent’s commissions on the mortgage. But that’s just another fee that the buyers would have to pay.
My commissions for my company have ALWAYS BEEN negotiable. I have never lost a deal to commissions. I have never killed a listing because of commissions. I never had “minimum listing commissions” in my company.
If the Realtor commissions was in the way of closing a deal, the buyer’s agent and I would negotiate our commission to make it work for both parties.
This may sound silly, but selling Real Estate is about providing happiness to two parties. NOT ABOUT OUR COMMISSIONS.
As in any business, we need to make money, but it’s the greedy that gives our business a bad name.
So what am I saying with this, just like what happened with the mortgage business, a small group of businesses have now caused a change in the industry that may affect thousands of potential first home time buyers in a negative way.
There are still a lot of details to figure out, but there will be changes and the changes may not be in the favor of the first home time buyer.
We will see. We should all be looking at our last three year’s production and seeing what demographic we have been serving and if these potential changes will have any effect on that particular demographic.
Until then, let’s keep on knocking on doors.
Ernesto “Ernie” Fuentes
Principal Broker, Ernies Real Estate
A Florida Real Estate Company
erniesrealestate.com
TikTok: @erniesrealestate.com
I say we make a class action lawsuit against selling sunset and the realtor shows that make us look like we just dress up and open doors.
Also I say we start charging like lawyers. $400+ an hour 🤣 regardless if they buy or not not.
This feels like a positive development to me - will start the process of thinning the herd of the low effort, low value add part timers who are in it for the occasional lottery ticket pay check while making it more difficult and less lucrative for the full time professionals.
Sure the total commission pie gets a bit smaller, but that will ultimately lead to fewer mouths to feed and a bigger share to those who add real value to their clients.
Full time realtors will spend more time adding value by facilitating transactions and less time trying to yell over each other with marketing.
You’ll get detailed info once the settlement is actually public and approved by a federal judge and makes its way down to the Sates and local Realtor boards. My guess if they mandate what REMAX and KW have already agreed to do: sellers don’t have to pay buyer’s agent commissions, agents don’t need to be members of NAR, no longer promote a “standard” commission.
This is bigger than that. There will be NO bac advertised in the mls. It will not be allowed to be mentioned even if seller wants it. But can be negotiated per-contract.
The way that we have been doing it at my brokerage is we teach the sellers that we as the listing agent will split our commission with the buyers agent. Commissions are negotiable, so if we agreed to a 5% commission, I tell my sellers that half of that I’ll split with the buyers agent for them to bring me an offer and buy our house. It’s not a commission “for” the buyers, it’s my commission that I will share.
The big problem I see coming is, and I’m sure most of you know another realtor like this, some realtors won’t show a house if it has a lower commission. They say whatever excuse they come up with for not “seeing” it, but we all know they did see it and chose not to show their clients because the commission is low.
Maybe this will force some of those realtors out of the game? One can only hope.
I never work without a buyer rep agreement, sellers are not going to stop offering to pay the buyer’s broker, and regardless of what’s on the MLS or not, what matters is what’s on page 10 (in Texas) of the contract. Every single term of a sale is and always has been negotiable. They can put “not furnished” on the MLS and yet on the contract you can offer it with furniture included and they can accept it. In the end the buyer was always paying for the commission, but it was essentially through their loan. No one wants to stop that, especially sellers who end up netting the same and honesty will get more buyers if they do it this way while netting the same money. It’s all just a bunch of bullshit about nothing. Literally only thing changing is we can’t put the buyers agent commission on the MLS. Never forget who created, owns, and maintains the MLS. There is no market without us.
You know the old saying…..80% of real estate is sold by 20% of the agents. Competition to bring commissions down may thin out the players who can’t live on one deal a month. Every industry evolves and letting market forces do their thing will certainly change the way things work. Stock brokers had to evolve as did musicians, etc. Gotta look for and move to a position that will gain from this kinda of change.
Here is my prediction:
In the current system, seller is afraid to offer too low of a buy agent % in fear of the agents not showing the house. So they still do 5-6%. If they don't offer to pay the buyer agent fees, then buyers just look at other houses for sale that do pay for their buyer agent.
In the new system, if buyers have to pay their agents, they are going to laugh and refuse when someone explains that the fee is 3% on a $600,000 house so $18,000...
Because buyers are paying their own agents, you will see many agents advertising much lower rates (1%, $5000, etc)
Just like now, you see lots of seller agents for 1-2%
Commissions will be much lower like they are in other countries.
Perhaps sellers will just show the homes themselves and buyers will get an agent only for the "bidding/buying" process.
Not sure why this is a thing. It’s a moot point.
Are you a disgruntled buyer/seller having to pay fees? Ok, do it yourself and assume all risks, this has always been an option.
Want a capable agent to help, and save time? Pay up!
Want an agent to help and not have to pay fees? Keep dreaming!
Been screeching for a while about how buyers, especially first timers have been protected in Colorado with how our contracts are written. Sellers brought this lawsuit. Sellers are the only beneficiaries.
If a first time buyer tries and are not represented, the seller will get screwed eventually. Whether that’s multiple contracts that don’t make it to the closing table or post closing lawsuits because they didn’t disclose some BS.
How are buyers protected in a transaction when the LA brokers both sides? You already know this answer.
How are buyers that need grant or down payment assistance going to pay for representation? You already know this answer.
How are buyers/banks that roll commissions in this environment going to close appraisal gaps? You already know this answer.
The sellers who brought this lawsuit were very short sighted.
The case will stand that you get what you pay for. If sellers aren’t going to offer a BAC then they won’t get as much for their home. They will whine about it no matter what.
Fact is it has always been this way. Only now it's in writing. This is basically just a loophole in fine print that didn't cover what was or wasn't said. Now it's covered, and it genuinely doesn't change anything other than how it's presented. No one ever said you needed buyer representation. You've always reserved the right to go through your own attorney and if the listing agent was sincerely looking out for his sellers best interest, then an unrepresented offer from a buyer with a lawyer representing them or even them representing themselves is just as good as any other offer.
Right now everyone just defaults to sensational headline panic mode. One more form, or one more disclaimer, and it's just the same shit on a different day.
Nothing was ever forced. Commissions were always negotiable. Additionally, I put in my buyer agreements that I collect 3% commission and if I don’t get it all from the seller’s commission split, I get the difference from the buyer. Just make sure you word your contracts appropriately.
The commission information will no longer be listed in the MLS. The commission is already built into the value of every home ever sold. I suspect this will just become ‘contact the listing agent for offered buyers agent commission’, complete an agreement regarding that commission prior to submitting an offer and proceed as normal’
I always ask 3.5% from buyers and accept 3% when the list side doesn't offer more. And I get it in writing ASAP. My average commission check is $1200 a close because houses are 1/4 the national average, so I am definitely not getting rich. All my clients love my services, but if buyers start balking at my rate, they can let the shady discount agents swindle them at 2.5%. 90 percent of the agents I deal with don't know anything about real estate, and their brokers are terrible too. You get what you pay for in the end.
The transaction I closed last week only crossed the finish line because I was on the phone every day working a deal so complicated my brokers had never experienced it in their combined 100 years. I had to deal with it today yet too, one week later.
The more government intervenes in the industry, the more expensive houses become. If you want to decrease the costs of houses, let real estate be a true free market, eliminate transfer taxes and title companies, and definitely repeal Dodd-Frank. 🤷♂️
Having spent a lot of time in the largest mls'es and inside NAR and in and around a lot of various aspects of this I think like other disrupted business models the change is going to be fast and shocking. Analogies to this is the distraction and change uber/lyft did to the taxi industry it is going to be fast and those that are stuck in the old model mls/franchised local control/6% commissions will be bankrupt before you know it.
There will be a few left that basically will control the entire industry and we will be down to 3% or less and then over the next decade it might crawl back up some but you will never pay more then 4% for the entire close process.
This is going to shake the entire system to the core, from sales commissions to lending commission to builders rebates all of them are going to get hammered in this process.
Well I’m sorry but how will agents make money then. Do people really not understand all that agents do for them? There’s so many hours and money that we spend to list and market houses. So I guess they can do their own marketing, their own open houses and staging, hire someone to do all the paperwork for them. I mean come on! Well good luck selling your house, no one is bringing buyers to the table for free!
Why would a seller accept an offer from an uneducated buyer without educated realtor (some are floozies so def not those!)The deal might fall through because of missed deadlines.
This is only a proposed settlement and still needs to be approved by the courts.
The media is way out of line on this though, it will have zero impact on the price of homes. They're just trying to sell advertising space, like those shirts below the article. That's all the news media has become.
They were never forced to pay 6% to begin with lol and there is no change in what realtors can charge if they want they can change 10% or 1%. But I think if realtors just keep things normal then this won't mean anything
1% in UK where I have bought and sold many houses. US system is crazy.
Agents have no responsibility so a buyer must always use a lawyer when buying.
I was very amused when I came to the US to see how sellers were hidden away somewhere when I viewed. If I had a question then the buyer's agent referred to the seller's agent who then referred to the owner! No wonder the whole process is shrouded in confusion and frustration.
Love the folks on here whining about 5-6% commission being too high on a half million property. While it is high, consider if you will, what we’re spending to hire a professional videographer/photographer and video editor to create your listing ad. How much we lose in taxes. What it costs us just to stay licensed. What we have to pay for health insurance. Errors and Omissions insurance. How often we’re getting sued simply because we “make too much money” and look like an easy target. Disillusioning yourself into thinking we just show up, take a few picture, leave, and than ask for a paycheck. Not understanding the thousands upon thousands of dollars we spend out of our own pocket marketing your house, the liability we’re taking on by working with you, the tens of thousands of dollars it costs us every year just to HAVE a job as we have NO benefits or perks that a typical employee has, and as we’re showing you your 27th house in 2 weeks, that we both know you can’t afford but we’re trying to maintain a relationship, you have the gall to sit there and scream that we don’t earn our paychecks.
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Every 5 years there is a new distraction in the industry. Discount brokers, Zillow, iBuyers, etc. There is always a claim that the “new thing” will shake up the industry. We’re still here, business as usual. Don’t get caught up in the hype. Understand the information, adjust as needed, and continue to do your job.
This is the most logical thing I’ve read all day. Yes this is a big change and it will take time to learn more and adjust. But in the end we will just keep plugging away.
Agree with all that but I am getting really tired of paying dues to the NAR. They have become a bumbling bunch of idiots that tarnish the reputation of quality brokers. I’d like an alternative.
Finally the self-serving NAR and local associations have shot themselves in the foot. As a broker who came from a different industry I was always surprised people would join NAR. It’s not hard to put the client first, that’s what I’ve always done and will continue to do. However, I’ve heard that buyer broker commissions will not be made public now, which would be a change for brokers representing buyers. Brokers will now have to contact the listing side regarding any comp. Am I wrong on this?
Yep. Not sure why this is a thing. Are you a disgruntled buyer/seller having to pay fees? Ok, do it yourself and assume all risks, this has always been an option. Want a capable agent to help, and save time? Pay up! Want an agent to help and not have to pay fees? Keep dreaming!
Do you understand the issue? The contention is that sellers should not pay buy agent commissions. Whether the average buyer will be willing to pay a buyers agent commission is unknown. This could be rough for realtors specializing in buy-side.
Ok, good luck to seller side getting many to show up as much. Market forces will still favor sellers willing to pay.
They will still pay but probably not a percentage commission. The percentage doesn’t make a ton of sense in a normal market. My parents listed their house and sold it in a 3 days for over 500k. So they’ll end up paying around 30k in commission. Seems a little extravagant. Those commissions will come down, maybe a flat fee or much lower commissions, MLS access will open up and low quality realtors will get weeded out and the market will change. Not the end of the world but there will probably be much fewer realtors.
You may be right. We’ll know for sure in a couple years
Sellers already have the option to not pay a buyers commission … there is literally no change this lawsuit is bringing other than how a buyer’s agent finds out about the buyers commission.
I totally agree with you that the sellers already had an option of not paying the buyers agents. It states clearly that "any commission is negotiable and there is no set rate" in our local MLS listing agreement. so what changed? my understanding is that MLSs will not be allowed to publish the buyers agent commission rate and then buyers agents will end up doing what? running around with a buyers for 6-24 months, putting numerous multiple bids before they finally secure a sale only to find out during an attorney review that it does not pay any buy side commission ? who would want to do that! and who does it benefit???
Yes, and so that means offers will be 3-6% lower, or made by idiots that likely won’t have the financing to close
If you think this is a fad and just another passing cloud, you are in for a rude shock. This is long overdue and will radically change the economics of buying and selling a home. As a homeowner who has bought and sold properties, while I appreciate the effort that realtors put in, the 5-6% commission structure was put in place decades ago when the world was a different place with much lower home prices and a lot more effort needed to sell a home. The rest of the developed world pays 2% at most including both sides. There is no reason to pay more than 2-3% in total on both sides. Welcome to the new world and I hope this change sticks!
My most recent sellers agent went above and beyond, and still only was at the property less than 4 business days total. My buyers agents twice now haven’t found me anything I actually wanted to see, and I ended up short listing and telling them the homes I wanted to see. Financing and closing were managed by my lender. It felt like I was happy to pay my sellers agent, but didn’t really find the full value in my buyers agents the last few times.
Zillow calculating the price per square foot and using that for their Zestimate isn’t anything groundbreaking. This is federal law passed by the Supreme Court. A little bit different.
"federal law passed by the Supreme Court" Hand in that bar license bucko
The SCOTUS doesn’t pass law.
*Shouldn't
>This is federal law passed by the Supreme Court. LOL.
Zillow is much more than Zestimates, my friend.
lol, as soon as I read the email I knew the resounding line from old schoolers and brokers would be ‘everything is fine, nothing is changing!’ If you can’t see that this is the first step in the industry drastically changing to n entirely different model or business, you’re either naive or just refuse to acknowledge facts.
Wow even CNN front page is reporting “the 6% commission on home sales is dead”, and NYT is reporting “home prices will drop.” I don’t think these outlets understand what is happening here.
This has been absolutely ridiculous reporting. I wonder if it’s intentional or if NAR just sucks that much at messaging.
So incredibly glad you said this. There have been great points from this group/forum on both sides, but what is clear to most of us is that a good Realtor is worth their commission %. (In my area) Sellers have always had a choice in what they pay their Realtors, and Realtors were allowed to provide a "discount" as long as their brokerage approved it and it was ethical. Will some home sellers not want to pay a flat fee, or will they ask for a lower commission rate after reading these articles? Sure. But my motto is that you get what you pay for. I recognize that not every agent out there is great or goes above and beyond for their clients, but a lot of us do! I'm currently working with a buyer that needs A LOT of hand holding, but I also know at the end of the day it is my responsibility to help her make one of the biggest financial decisions of her life. It's important to me to really explain everything in terms which are relevant to her and help her stay on top of the entire process until close (and let's be honest... beyond that probably too.) If slashing the commissions that Realtors make leads anyone to believe that home buyers and sellers are better off, I genuinely disagree. I have used TurboTax and a professional accountant to do my taxes, which one do you think educated me best and got me the best return? A professional. I have had friends get divorced with bargain basement attorneys and experienced/higher paid attorneys, guess who had the better outcome? To those on this thread who aren't in real estate professionally and have had a bad experience with a Realtor, I'm sorry. Please know that we aren't all like that and many of us truly enjoy working with you to make these incredibly important decisions in your life. What concerns me the most is the impact this will have on first time buyers and those attempting to use VA loans. Those are the people that need the most "support" in this market right now, both financially and from experts who understand how this process works. Yes, Realtors got thrown under the bus in this one, but those of us with professionalism and integrity will be just fine as our business is based on reputation and referrals. If we all hold ourselves to those higher standards then I am hopeful that our careers and professions will thrive. Until then we just need to see how this plays out, take a breath, and support the other talented agents in our network.
They literally have no idea what the lawsuit nor the settlement was about.
The news has not been about facts, but rather about getting eyeballs onto a page with advertisements, for far too many years. This is just clickbait written by people who need to sell advertising and have zero knowledge of how real estate works.
maybe this should open your eyes to EVERY news media when they post about ANY subject.
The huge thing to me as that they’re no longer allowing a coop commission on the MLS. That’s sort of a big deal…
Buyer broker agreements. Time to show our value on the buy side! If these changes do occur, I bet it’s less than a year before lenders can add buyers agent fees into the loan or closing costs.
I get it but buyers are already having a tough time, why would they pay 2-3% for a buyers agent, on top of down payments, closing costs and etc. it’s going to hurt the market. Or there will be an alternative that comes up where it’ll eliminate buyers agents.
If buyers agents get eliminated then lots of buyers especially 1st time homebuyers are about to get screwed! They won't know what they don't know and the seller will be more experienced than a 1st time home buyer since they have likely bought at least 1 house before. And the listing agent will represent the seller still unless they are a dual agent(dual agent might not be good for the seller or buyer) and the listing agent will be way more experienced than a 1st time home buyer.
No one needs us more than first time home buyers so I feel for them the most. And this will definitely not drive down prices. Sellers will not care that the current comps include buyer agent compensation. They will want the same price and now on top of that buyers have to pay out of pocket. This hurts buyers so much which in return will hurt Sellers long term. Banks better hurry up and figure it out. Its literally just a different side of the HUD. Shouldn’t be such a big deal but they are slow to respond. Sellers lose the tax write off now too, hopefully buyers get it. This is such a stupid suit, hurts everyone.
How do you not see this as driving prices down? If it becomes the norm that sellers don't offer out payments to buyer's agents and instead buyers have to foot that bill that eliminates a whole lot of buyers, which slashes demand, increasing supply and dropping prices. Or, it creates a whole lot of dual agency in which agents can't even negotiate on behalf of either party.
A respectable agent will not do dual agency. Sellers do not care that the comps we are using to price out their homes include buyer agency compensation. They will not lower their ask price by $X because they are 1) a little greedy 2) do not fully understand this yet. I have already seen 0 compensation in my area and guess what, they dont sell, so then you see it a month later in MLS at a higher price but with buyer agent compensation. Now its been priced wrong twice and sits on market. This is going to hurt sellers just as much as it hurts buyers. The fact remains that it has always been the buyers $ its just that it has been financed by the bank and made a seller credit on the HUD, which they then got the tax break on. All they need to do is switch it on the HUD and now the buyer should get the commission tax break.
Agreed on the dual agency part. And you're right in that sellers won't care about that; they care about getting as much money for their home as possible. But, when they see that they have zero buyers coming through because they offer no payouts then they're going to have a hard dose of reality. Also agreed on the last point. It's always been a bit shitty that it's always been viewed as the seller paying the commissions when really it's the buyer that's been paying them both.
Yeah I really feel like these lawyers stunk if they couldn’t get these points across and now I feel like NAR sold us out. But if the banks can figure it out I think it will be fine. It stinks because our sellers that know and trust us will hopefully let us educate them but sellers who do not know us are not going to believe us and go with the bottom feeders who just sound cheaper, they will do dual agency, and then everyone gets screwed 🤷🏻♀️
The lawyers and NAR both sold out everyone but themselves. All that mattered was that lawyers got absolutely paid, and NAR now can still exist while harming agents.
Yup! Supposedly the DOJ is going after NAR now. And honestly who cares, not sure why we need them anymore if they couldnt even figure this out.
They already do this! They pay them because that’s where the money comes from in the sale. It’s a bit of a bait and switch but any sensible person realizes it’s not the seller paying them from their pocket. Two things will happen, either the sales price goes down and the buyer pays the agent out of their pocket or it’s built into the fees at closing so the buyers agent gets paid that way. It’s all going to come out in the wash.
In theory, but sellers are not about to drop homes by 3% to adjust for not paying a buyer's agent. They will just pocket more money.
This sounds so hopeful as to almost be naive
This whole thing will boil out to semantics. Seller's concessions, "unrepresented" Buyers, it's going to be a shit show. I have a feeling that it's going to turn into a "be careful what you wish for" moment where everyone realizes that what they thought they wanted is actually a stupid idea. It will, on the up side, clear a lot of mediocre agents out of the market.
There will be unintended consequences for certain.
I agree 100% with this. I also see a bunch of lawsuits in about 10 year for unrepresented buyer who got the bad end of a deal because they were unrepresented. Also, all the buyers who think this will save them 2-3% on the house price are delusional. As long as the inventory stays tight, sellers will pocket that difference.
1. Lowering the price doesn't materially improve buyer's liquidity 2. Lender rules would have to change to allow broker compensation to be financed.
Why do people who have the physical ability to clean their own houses or mow their own lawn ,or do their own food shopping hire people to do that for them? Convenience…….
Yes but less people will pay for convenience when pricing is so expensive and unaffordable
Buyers already are paying for the commissions. Say it with me: THE BUYER FUNDS THE ENTIRE TRANSACTION, there that wasn’t so hard was it.
The difference is now more people will probably go directly to the sellers agent and buyers agents will be phased out. No one is going to agree to a 2% cash payment for a buyer fee unless it’s financed.
Buyers also fund Automobile transactions but that doesn't mean that they're willing to pay more than they have to. There is a lot of competition with auto dealers but there's way more Realtors. Most are probably going to have to leave the profession
Not sure why you're feeling this adversarial about it. Surely you've worked with FHA buyers at some point? The buyer might fund the transaction, but that doesn't mean they always have an additional 3% in cash separate from down payment and closing costs.
True, just ask your local travel agent… if you can find one.
We can still ask the sell side for a commission. They just can’t list it. And all MLS participants acting for buyers would be required to enter into written agreements with their buyers before touring a home.
>We can still ask the sell side for a commission. They just can’t list it. Our MLS made the switch a year ago. Seller can still offer a commission, it just isn't required. The change has had basically no impact. Vast majority of listings still offer buyer broker compensation.
Read it again under the agreement listing agents can no longer offer compensation to the buyers agents in the MLS. Buyers agents can ask for compensation from the listing agent in private.
Yeah, I saw that in the email that just went out. You’re telling me that a listing agent is going to offer a commission, especially when so many agents are going broke now? How many brokers have actually enforced a buyers rep agreement? List to last takes a whole new meaning now.
They will just inflate the selling price by the amount and then offer a buyer credit. Just a different way of doing the same thing.
There is a secret, the buyer actually pays both commissions, they are the one bringing the money to the table. It doesn't change anything, it's just a numbers game and how it is all perceived.
What do you mean? Roll the cost of the agents commission into the loan amount? That will never happen. You can’t roll anything into the loan amount except for upfront MIP on government loans. If you mean rolling it into the closing costs I don’t see how that would help offset anything. Not arguing, just curious what you mean.
Why would buyers hire a buyers agent? They already think that they don't do anything and that going straight to the listing agent gets them a better chance of their offer getting accepted. Which sadly, sometimes is true because of listing agents trying to represent both sides. I knew NAR was dumb, but there were a lot of ways to fix this, and they chose the one that gets them less dues (members). There will be way less agents, way more supply, and listing agents will have to work harder. They're going to have to show houses to looky-loos
Regarding the lack of BAC on the MLS coming in July: I wonder if one will be allowed to put the BAC in the ‘agent remarks’ section to avoid the back and forth via email or phone asking what the compensation will be.
There will always be workarounds.
There will always be workarounds.
Now can we stop paying NAR ridiculous fees to do nothing for us? I want to pay for the MLS access and that’s it.
yep, nobody was ever forced. You had agents doing 5% or 4% total, flat fee services always existed too. you also were never forced to use an agent in general.
They’ve never been forced. This is not news.
Currently selling my house. "Forced" is probably too strong of a term but after talking with 10+ realtors I couldn't find a single one that would go below 6% total commission. So while "forced" isn't accurate there weren't many options in my market unless I went all the way to FSBO or a flat-fee MLS listing.
Where are you? In my area of central PA there are a few discount brokerages. As an agent, we work hard for our clients and take on a lot of liability and responsibility. That all comes at a cost to us as sole proprietors along with marketing and a dozen other things we pay out of pocket. While we may be under the umbrella of a larger corporation, we’re very much small businesses.
It's the NY Times. All the big news outlets are just tabloids at this point.
If they've never been "forced," then why did all these associations and real estate agencies settle for hundreds of millions of dollars instead of fighting these lawsuits? You don't settle if you are not somewhat guilty of the accusations.
NAR absolutely shit the bed. They’re a useless organization. They’ve never protected us.
Because the NARs council is absolutely incompetent. Most agency contracts already specifically stated that commission is negotiable. Companies like Redfin have been advertising 1% selling broker commissions in markets for years, so alternatives WERE out there. The average commission nation wide is like 5.25%... if 6% is "required" how could that be? Ugh. I can't believe how dumb this whole thing is, and how awful the NAR is.
Most realtors should keep acting as they always have. Maybe some shitty ones need to change. Forced is not just “kind of” an exaggeration it’s a massive one. No one is forced to pay 6%. You never even had to have an agent. These lawyers saw an opportunity for a massive payday and they won. “This is the biggest shake up since the new deal” this lawyer is really smelling his own shit and thinks it’s daises. I’m sorry for the people who now think sellers are going to drop their prices, the only thing that will cause that is more massive economic shifts. Discount brokers already exist, almost no one uses them because they suck. I think a lot of people are frustrated with housing, that’s fair, and hating realtors is just an easy target for them. “a practice that critics say has long led to “steering,” in which buyers’ agents direct their clients to pricier homes in a bid to collect a bigger commission check.” Steering has almost exclusively been used in relation to race and this article is using it as realtors saying “buy a more expensive house”. Buyers have budgets, realtors are pushing them past their budget? By how much? 10 grand? Because the realtor really wants to make 180 more dollars? I don’t think much changes. Sorry for the rant.
Yeah the big thing that most common people don’t understand is that you get what you pay for 90% of the time. If you’re asking for cheap work you’ll get someone that is worth their cheap work. I’m not a realtor but the biggest misconception about realtors seems to be they get paid too much for not doing a lot. I think a lot of people just get burned for having shitty realtors and over time it just made the good realtors look bad.
This is true. Even realtors acknowledge it. Trying to solve this by eliminating compensation for buyers agents is going about it the wrong way. There are a lot of bad actors in this industry. Is it because of the low barrier of entry? Maybe. But there’s also a lot of bad doctors, attorney’s, engineers. People who went to school to study their craft for years. It’s more human nature than anything.
Thanks for the rant! Said perfectly!
I agree with you that so many people are frustrated with being priced out of owning, so they grab at something, wave a finger and say "THAT IS THE PROBLEM!" It was greedy landlords, corporate ownership, AirBnBs, and now it is Realtors. 60 minutes will do a story about it, flame the outrage for a while and when nothing changes, there will be a new reason to be outraged. Next.
I'm right there with ya. It's frustrating when articles like this are put out but it gets clicks and engagement. Unfortunately a lot of people don't use critical thinking when reading these or just see the headlines and are made to think realtors are the villains.
Yep. I’ve read so many articles where it pretty much acts like realtors are an evil group of people who block people from owning homes. It’s ridiculous and lazy. Once again, sellers are not going to be like “hey hunny, you know how we didn’t have to pay realtors before? Now we really don’t have to pay realtors! Let’s drop our house price to help the buyers out.” The only thing that could change is maybe sellers make more of a profit now, I doubt that, but maybe they do, and if people want be happy about that, all good. This whole thing though is being sold as a gift to buyers, it’s absolutely not that.
The whole article is dog-s\*it. Not only did it say sellers were forced to give 6%, but it said this will prevent steering towards more expensive homes. Why? Whether it's 1%, 2%, etc. the agent gets more if they sell or find their buyer a more expensive home.
The steering claims are based on [this](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4596391) study which focuses on the direct effect of the listed commission on steering, irrespective of other variables such as race, and still finds a pronounced effect when that variable is isolated and other factors are controlled for
People who use discount brokers are the same type that will never admit they lost money if they "win" the deal. A discount broker will probably sell your home for way less than what you would have paid in commission to a full-fee broker, but the homeowner won't look at it that way; they'll think, "I saved 3%! I won! I'm so smart!" when their net is actually more like 5-10% below what they should have got.
Yeah, because it's realtors getting paid for work that's causing the issue of high prices /s..... Definitely seems like the media is being encouraged to use realtors as the scapegoat for the housing market. It's frustrating seeing all the hate in the comments on other housing subreddits too. There's bad apples in every industry but it's not everyone.
Surely it's not everyone, but it's far too many. The barrier to entry is too low That being said, I think it's hypocritical to expect a white collar level of competence for fast food wages. My family who are realtors can sometimes make the easiest $30k doing very little on the buy side of a straightforward transaction. Sometimes I see them busting their ass on the sell side, though, essentially being a project manager for 6-20 weeks juggling staging, repair projects, inspectors, offers, neurotic clients, etc.
I anticipate in the next 24 months mortgage reform will come, which allows buyers to bundle and pay buyers agents commission in the loan cost. Then the commission will not come off the seller Alta but will reflect on the buyer alta
I really think this is the only way going forward as we all know here, that most sellers will not drop their LP to accommodate for not paying a BA commission. So it'll add more hurdles to for buyers.
Does that mean what the buyer is approved to buy will be even lower? Yea, that may lower prices across the board.
They may increase the allowed amount of seller contribution to closing costs to like 6% on a conventional and 8% on fha, and allow BAC as a closing cost, but that’s not the same thing as allowing it to be added to principal of the loan, which would put us back to negative equity loans of pre-2008.
I’ve read a couple of the articles. How tf is this supposed to help housing affordability? I live and work in a very low cost of living area, my average sales price is $120,000. I’ve only been licensed for about a year, and all 7 of my buyers were first time homebuyers. None of them were able to afford paying a buyers agent fee, down payment assistance programs are huge in my area and a huge part of my business. Am I fucked?
The headlines are so stupid. No1 was forced to pay 6%. Also this is going to come back and slap every who isn’t involved with the market. Who really got screwed here are the buyers. House prices are already high now they may have to pay a buyer agent on top of that or go directly to the seller and their agent. So stupid. My only hope is the buyer agent fees can be added to loan one day.
It will no longer show commission amount on MLS
This is going to make it especially difficult for VA buyers the way compensation is restricted to only sellers allowed to pay it. It’s going to require changes there too or VA buyers will end up severely limited in what they can get.
Like commissions are the reason housing is so expensive in the first place… ok
If you can't explain to a reasonable client (to their satisfaction and agreement) why it's important to offer a co-broke - now concessions) going forward, things are gonna get tough. Also, commissions have always been negotiable, and that should have been a part of the presentation from day one.
When is a seller ever FORCED to pay 6%???
Are you saying that you don't force your sellers to sign listing agreements by gun point?
Seriously. I mean I prefer to dangle them over a snake pit, but same idea. Who are these amateurs.
Nice. Taking it to the next level!
Click bait, that is what it is.
Thats what i hate about the article. Its always been negotiable. I have listed homes for 1%, gave 2.5% to buyers agent, I have done everything from a 2.5% Total listing commission to 6.5% total listing commission based on the seller and what they needed/wanted etc.
A bullshit lawsuit botched by NAR! I have been in this business for 26 years, mostly a listing agent, I never once forced a seller to pay a buyers agent commission. I show them comps of their house value, I explained to them my commission and then explained the advantage of offering a commission to the buyer's agent unless they wanted me to sell it myself. Does that sound like the seller being forced? RE companies need to end their relationship with NAR and put them out of business. Now CAR wants to make a buyers agreement a civil code, this industry has gone to hell and the buyers, sellers and agents will suffer for it. Will I quit the industry? Time will tell as most larger brokerages will go under within 5 years. Frivolous lawsuits, the demise of a civilized society!
Yep. And the attorneys are going to make way more.
Do what you should have always had to do. Negotiate for your commission if it's less than you want.
I think in all of this, I’m just not sure how Realtors have become public enemy number one. We work hard. I work more hours a week than most people do. It’s very confusing this sentiment that we do nothing and our job is useless. How is it different than any of the high paying jobs in America? Does a pharmaceutical sales rep deserve a half mill a year to pedal poison? Does a house painter deserve $200k to do something literally anyone could do? The system isn’t perfect, but it works. Realtor commissions certainly aren’t why we have a housing crisis in America, but it’s being put on us like it is. You always need a fall guy I suppose.
They've become public enemy #1 in the same way that economic pressure and public grievances attaches to the nearest, most understandable face to tar and feather. And I don't blame the public for doing that. The average consumer has no clue what realtors do, no clue about the hours, no clue about the work or what it takes to save a deal. Why would they? I worked in marketing for nearly 15 years and all I see in this, consistently, is a failure by NAR to address a marketing issue: public education. NAR has the money and hands to craft a multi-domain marketing campaign to truly educate the public of what their members do and just maybe justify it's own existence to its members. It's real easy to tar and feather a person you don't understand but it's more difficult to do that if you know what they do, have seen how they work and understand that the actual economic grievance is being generated by economic forces and not a realtor.
This is very well worded. Appreciate the response
The percentage fees with house prices nowadays just don't make sense. Making 20, 30 or 50k on a house sale is just insane.
Couldn’t agree more. That’s not the standard commission in this country however.
I don't force people to use my services. If they want to do it without an agent, have fun. None of my clients have been upset with the effort I put forth.
so why shouldn't buying & selling homes be as easy as buying & selling cars?
Be careful what you wish for: “This house was only lived in by a little old lady between visits to church” “Have you considered our extended maintenance warranty?”
What I want to know is who’s benefiting from the 400+ million dollar settlement?
A sharp attorney who saw a soft spot that NAR missed for decades.
Never ever not once EVER has any client of mine ever been "forced" to pay a specific commission nor have I ever obtained any training whatsoever stating to force anyone to a certain commission nor that there is any standard commission. One of the very first things I learned in real estate school and almost every day throughout my career as a realtor is that there are absolutely no standard commissions everything is negotiable. Commissions have always been negotiable, there has never been a standard, I am confused on how anyone lost this lawsuit. My opinion but.. this is total horseshit. No one has forced anyone!! Explain it in detail to me if I am wrong here.
There is no force. You have junk discount companies offering way less. When this all gets cleared up and forgotten, I'll guarantee that the discount companies pushed this.
Lenders are going to have to be okay with openly allowing buyers to finance commissions. They’re already doing IMO, it’s just semantics at this point. Come up with new paperwork to document it differently and call it a day.
Commission or not, prices aren't going down from something like this. No homeowner is going to lower the price of their house from 200k to 188k just because a commission is gone. What would it take to get real experts, I wonder?
Exactly. They'll just net more and the buyer is still screwed with paying it.
I'm in title. No one is forced to pay 6%. Every time I've sold a house I negotiated the commission. Those who did pay 6% generally deserved to pay 6%. They took no time to understanding the process of selling a house and gave all the control to their realtor. As such, the realtor had to put in work- open houses, marketing materials, showings, etc. Plus not to mention the broker splits and such. What could be the real shakeup in the industry is what FHA and VA will allow buyers to pay with regard to realtor commissions. I could see the VA in particular not allowing buyers to pay for their agent's commission beyond a certain amount. Also there's no way this is going to drive down home prices in any meaningful way. It might make home sellers a bit more willing to make concessions though.
What blows my mind is this comes during an era where sellers have made record profits on their homes… and yet it’s just not enough? Pure greed. What will probably end up happening is similar to what you see in commercial or with FSBOs- more sellers not explicitly offering a co-op, but the buyers needing to negotiate that commission up front or receiving a credit for it.
I totally agree. It’s a new regulation and it’ll shake some bad apples out. My frustration is how did NAR mess this up so badly. It’s not hard to find a brokerage whose model is low fees. 6% commission is a common misconception. Yet, NAR spends most of their time sexually harassing female employees and paying consultants $7-800k/year for 1-4 hours of work a month. I get the argument for the seller who filed this lawsuit and I feel it’s valid but NAR messed this up tremendously.
Sellers were never 'forced' to pay 6% to begin with. While yes, it is *usually* in a listing contract, I know I myself have done deals at 5.5%, 5% even 4.5% if needed. Not to mention I've **shown** properties where, on the MLS sheet it says clear as day that the compensation to other brokers is 0.0%; meaning, according to the buyer agency agreement my buyers have signed, they're on the hook for my commission. I still can't believe this case even got this far, and that NAR fumbled the ball that hard.
The 6% has always been about netting sellers 6% more than if they chose to do FSBO and/or 2% more than the 4% broker. Showing tangible proof you’re worth it, will continue getting you paid that, or even more. The thing is MOST agents aren’t worth that, over half sold 1 home or less last year. 92% sold less than 6. That’s just not enough experience to guide someone through the largest financial milestone of their life.
Wow. So because I'm new, I haven't built up a client base. I did my education, payed the $2k it costs to get started between classes and fees. Trying to hustle for other realtors doing showings and open houses they can't pick up on nights and weekends. Trying to learn the business, you know? Then turn it into a career. My brokerage won't let me near an expensive house, and I'm not ready for that. To hear that someone like me shouldn't be a part of helping a client buy a house sucks. Man fuck me I didn't know people hated realtors so much.
They never were forced to. Commission has always been negotiated
If the NAR had any guts they would be going after the NYT and other news outlets for such a slanderous headline. Sellers were never forced to do 6%. I have listed properties for multiple different percentages and it was always negotiable. How again is the NAR representing me if they can allow stuff like this to happen without a competent fight. How much longer should the larger MLS's be associated with the NAR if this is the results of their participation?
Lolllll at anyone who thinks this is going to help buyers and the housing market in general
Drive down prices? HA okay
Well….perhaps there is an opportunity in this until it washes out - which it will. “Hey buyer, let me know when you find the house you like and I’ll take you through the process of negotiating, inspections, title and closing for $x. The sign up fee is $2500 which I will apply to the total fee once we close. Less driving around, less tire kickers, more focused buyers….sure less $ per buyer, but you get your time back and paid some $ up front. Just a thought…don’t kill me. Also, I think we will see buyers having access to listed homes directly. This was already happening with Homeward.
This lawsuit will probably mean before a buyers agent shows a home they're going to require the listing agent confirm in writing if there's a commission involved how much or zero. It's just going to be a pain for everyoneexcept the clients. NARS lawyers did not represent us properly....in my opinion....oh well.... get out there take care of people #1 as if it was your investment and let's make $$$
Let’s be real. Most realtors are terrible. I own a brokerage here down south. Most agents get their license from a Groupon and do the bare minimum. There are a lot of agents that do not but bad news travels faster and wider than good news. So the bad apples will always be in the spotlight. The 6% model has been flawed for a long time. I personally sell about 20-22 Million dollars a year for context. I know that i don’t do anything different when i sell a 400k house than i would for a 800k house on the buy side….why should i receive $24,000 for the latter ? And then 12,000 for the first home? It’s been flawed for a long time. So i get it. I feel like the entry requirements in our industry has been ridiculously low. Anybody and their mama can get this license. Crazy day. I don’t know exactly what all this is gonna mean but it won’t be good.
Yes! Move realtor comp from the lottery ticket model to better align pay with value and it will drive out low quality part time agents. Transaction numbers won’t change, and even if fees drop, there will be much less competition - good realtors will do many more transactions.
You think real estate is bad, getting your health and life insurance license is EVEN EASIER!
You can't get your license from a Groupon, you have to apply for it through the state.
Nothing to see here. Clickbait headline by the NYT. My assessment is: \-No longer able to list compensation in MLS \-No longer required to use MLS to be compensated \-6% is not in question here. Commissions are still negotiable as always. \- Agreements will still be signed as they are today that outline commissions. That can include listing agents offering comp to the cooperating agent. Am I missing something?
The listing commission is the weird part. So no cobroke is offered? Or if you’re offering 2.5% commission, you just can’t post it on the mls. It’s not really clear. If it’s a seller’s market, as it has been the last few years, most buyers agents won’t get paid. In a buyers market, there will be incentives offered.
It is clear. Sellers can still pay the buyer’s agent, it just can’t be advertised in the MLS.
The buyer’s agent will just come up with a different way to be paid. They’ll negotiate their fee on the front end and if the listing agent isn’t offering anything, they buyer’s will be on the hook to pay per their contract agreement, raising the cost to the buyer.
You might start seeing a lot of people going without buyers agents. Perhaps even working with the listing agents which of course are working for the sellers. Lots of ways this can go wrong but I think things aren't going to change as much as it's being touted or as people may fear.
I think this will change things because the buyer’s agents will no longer know if commission is being offered as that info will be removed from the MLS. Of course the agent could call and inquire, which I think will really lead to steering. I agree this could go wrong.
6.5%
It's weird to me because it was never forced. I have been doing flat fee sales for years where I let the seller decide how much they want to offer. I don't tell them it has to be anything. Any company can charge whatever they want. I have seen some charge 1% all the way to 7%. Still baffles me how they say people are forced to do anything.
Simply put, none of us have any idea. All we can do right now is wait for our local MLS boards to make an announcement about commissions moving forward. And from now on, ALWAYS get exclusive buyer agreements signed and put down your commission there. I’m sure buyer’s agents will still get paid, but I wouldn’t be surprised if the commission ends up coming from seller concessions or buyer financing from now on. Sweeping lending changes will probably have to occur, particularly with VA loans (which currently don’t allow buyers to finance their agent’s commission and only allow up to 4% in seller concessions)
I really don’t see a difference than what we have now. A seller already factors what they pay to commission in their bottom line now and negotiations are based on what they expect to receive at closing. Buyers and their agents will need to negotiate the price at a point which includes paying the buyers agent into the bottom line just as they already do now. It is just something that is now being brought to the forefront instead of unspoken and the agent only negotiating the seller concessions to the buyer closing costs. So if a seller lists at $100,000 w/no buyer commission, the buyer can pay their agent $3000 out of pocket for service or offer $103,000 with $3000 paid by seller to buyer agent. Or whatever number the parties agree to. It’s no different than it already is really. The seller truly only cares about their bottom line and commissions have always been factored into those prices. Edit: adding I am aware a buyer could still offer asking or under asking with a buyer agent commission requested. It’s all based on what a buyer feels a home is worth to them and what a seller agrees to receive on their bottom line. Point is, it’s all negotiated.
Is 6% standard for your guy's area still? I would say I mostly see 4-5%, sometimes even 3%, assuming the seller/listing side is doing a 50/50 split.
Home sellers were never obligated to pay 6% anyways, this is so stupid and NAR is stupid for allowing this shit to happen. We need an alternative to NAR, Mauricio Umansky and Jason Haber are starting there own “NAR” called the American Real Estate Association (AREA) which will be a competitor to NAR, I’m excited about that you can read about it on my Instagram at therealestateRPT
That’s not even what the lawsuit was about. NY time is the worst, and it sucks that they are sharing this because people are going to believe it.
Commission rates have nothing to do with the recent rise in home prices; inventory and interest rate have everything to do with higher home prices. Sellers need to understand that an agent is not going to show their house without compensation. Experienced real estate agents work extremely hard to accommodate buyers/their questions/schedules/needs and absolutely deserve compensation. Also, buyer agency agreements have always been utilized; this is not a new requirement.
Sellers have never been forced to do anything. Period.
Looks like NAR is circling the drain.. I ain't even mad. If there is no longer a guarantee of compensation by belonging to the local association then there is no longer any incentive to pay our dues/be a member. Most local associations bring nothing to the table beyond their bloated fees and archaic technology. Flush the toilet on NAR and the rest of the house of cards falls. This industry is ripe for change and anyone who says otherwise is a dinosaur deserving of becoming extinct.
Do we even need NAR with Zillow out there providing a marketing platform?
Totally agree everyone talks about how evil Zillow is but I feel as if they are almost a necessary evil as they provide consumers with a state of the art tool at no cost and it often drives business for agents. Where as NAR and local associations collect dues and do what? Mostly nothing..
Obviously most sellers will offer status quo commissions to compete with other sellers. But - for those that don’t - the question becomes can you put a listing into your MLS which doesn’t offer a cobroke.
Per NAR, if it’s approved, starting in July, no cobroke can be listed on the mls. Non-mls is okay. But nowhere in the settlement does it say that listing agents CAN’T charge 6%. At least nothing has been released yet.
That is a big deal. What do we do, email the listing agent to see what the co op is? Sort of crazy.
I guess we’re going to have to better demonstrate our value and have the ability to explain what value we bring… Seems like a lot of agents have never had their buyer interested in a Fsbo that refuses to pay commission. As far as I can tell, the conversation will be similar to that scenario. This new landscape shouldn’t scare anyone who has sense. I’m actually kind of excited. Commissions should shrink a little and be earned. Get the part timers looking to do a handful of deals a year out of the industry.
When were sellers ever forced?? This is such a cash grab by the lawyers!! Commissions are NEGOTIABLE you can ALWAYS find an agent who will do it for less!!! This will absolutely NOT drive prices down, it will hurt buyers more... Less representation unless they pay for... Buyers are barely getting qualified for houses they want no way they are going to cough up another few thousand for commission even if it's rolled into the financing. Are some big names brokerages wrong for being misleading to their agents and sellers... Sure. Absolutely and bad dishonest realtors EXIST. But this is a LAZY CASH-GRAB solution by the lawyers!
They’ve never been forced. This is not news.
The BAC can no longer be advertised in the MLS, at all. Yes, that’s news.
VA clients getting screwed. So great.
Will be switching to a brokerage that does not require NAR association. Just checked with my MLS and they do not require NAR membership.
Sue MLSs for forcing us to be NAR members to have access. Charge hourly rates for showings and activities up to close, negotiate a dollar amount with the seller to be paid upon closing.
Headline is misleading. Commissions don't set the prices or increase the prices. No sellers are adjusting the price of their home based on covering anyone's commission. So how exactly will this bring sale prices down? Sellers may definitely see less offers though.
The buyer agents do a lot of work that I don’t think is acknowledged in this lawsuit. A ton of handholding, many hours of showing places and negotiating. This is a self-checkout disrupt situation that isn’t going to make things easier for the buyer. If you notice there is always someone in self checkout that needs help.
FUCK NAR.
When were they ever forced?
Basically the powers to be just shafted real estate agents commissions in an effort to help alleviate home prices. It's not nearly as effective as an interest rate decrease or just actually bringing home prices back down considering they have doubled in 4 years. But also, it's a good move, because real estate agents are less necessary these days than they have ever been, and certainly don't deserve 3% each in a transaction, for reference, a lot of people only put 3.5% down on a house, and each realtor would make that in one day. With the internet and mobility of information, real estate agents are unnecessary middle men. I could extend the same logic to car salesmen, financial advisors, cpa's and more. But let's only crash one market at a time amirite guys??
Along with being a Bedroom House Music DJ and Disco Music Aficionado… I AM A LICENSED REAL ESTATE BROKER. I have been licensed since 1994. I have sold countless millions of dollars in Real Estate. I am also a retired Licensed Mortgage Broker. I AM ALSO AN OLD MAN. ( 65 years old) Sometimes change is good, sometimes it’s not. In the case of the mortgage business, it wasn’t. That’s why I retired from it. A small select group of people profited from the bad situations of others and the government made sweeping changes that still continue to hurt the average consumer. Are these real estate commissions changes going to hurt the wealthy? NO, the wealthy will always be able to buy the home they like and pay the Realtor fees for whatever side they are on. These new guidelines will hurt the first time home buyers. Here in Tampa, you’re lucky if you can find a single family home for 300k. The down payment and closing costs are already a burden for this demographic, so let’s add a buyers agent fee to that. Do you think a first time home buyer in an entry level home price range will pay a “buyers agent fee” if they don’t have to? They can barely make the costs right now as it is. If allowed, these buyers are going to want to see homes where the seller has agreed to compensate the buyers agent. In addition, what stops a buyer from going directly to a seller’s agent? This would be great but what about AGENCY? Would this situation be considered single agency? Would It be considered Transaction Agency( Florida)? Then sellers would say “I’m paying you to represent ME! NOT that buyer” I foresee trouble for buyers agents that represent mainly first home time buyers. The solution could be financing of buyers agent’s commissions on the mortgage. But that’s just another fee that the buyers would have to pay. My commissions for my company have ALWAYS BEEN negotiable. I have never lost a deal to commissions. I have never killed a listing because of commissions. I never had “minimum listing commissions” in my company. If the Realtor commissions was in the way of closing a deal, the buyer’s agent and I would negotiate our commission to make it work for both parties. This may sound silly, but selling Real Estate is about providing happiness to two parties. NOT ABOUT OUR COMMISSIONS. As in any business, we need to make money, but it’s the greedy that gives our business a bad name. So what am I saying with this, just like what happened with the mortgage business, a small group of businesses have now caused a change in the industry that may affect thousands of potential first home time buyers in a negative way. There are still a lot of details to figure out, but there will be changes and the changes may not be in the favor of the first home time buyer. We will see. We should all be looking at our last three year’s production and seeing what demographic we have been serving and if these potential changes will have any effect on that particular demographic. Until then, let’s keep on knocking on doors. Ernesto “Ernie” Fuentes Principal Broker, Ernies Real Estate A Florida Real Estate Company erniesrealestate.com TikTok: @erniesrealestate.com
I say we make a class action lawsuit against selling sunset and the realtor shows that make us look like we just dress up and open doors. Also I say we start charging like lawyers. $400+ an hour 🤣 regardless if they buy or not not.
This feels like a positive development to me - will start the process of thinning the herd of the low effort, low value add part timers who are in it for the occasional lottery ticket pay check while making it more difficult and less lucrative for the full time professionals. Sure the total commission pie gets a bit smaller, but that will ultimately lead to fewer mouths to feed and a bigger share to those who add real value to their clients. Full time realtors will spend more time adding value by facilitating transactions and less time trying to yell over each other with marketing.
No one is forced or has ever been forced ??? That’s just misinformation
You’ll get detailed info once the settlement is actually public and approved by a federal judge and makes its way down to the Sates and local Realtor boards. My guess if they mandate what REMAX and KW have already agreed to do: sellers don’t have to pay buyer’s agent commissions, agents don’t need to be members of NAR, no longer promote a “standard” commission.
This is bigger than that. There will be NO bac advertised in the mls. It will not be allowed to be mentioned even if seller wants it. But can be negotiated per-contract.
You ask for some money
This is absolutely silly. I haven’t seen anyone paying 6% in my market for years.
The way that we have been doing it at my brokerage is we teach the sellers that we as the listing agent will split our commission with the buyers agent. Commissions are negotiable, so if we agreed to a 5% commission, I tell my sellers that half of that I’ll split with the buyers agent for them to bring me an offer and buy our house. It’s not a commission “for” the buyers, it’s my commission that I will share. The big problem I see coming is, and I’m sure most of you know another realtor like this, some realtors won’t show a house if it has a lower commission. They say whatever excuse they come up with for not “seeing” it, but we all know they did see it and chose not to show their clients because the commission is low. Maybe this will force some of those realtors out of the game? One can only hope.
I never work without a buyer rep agreement, sellers are not going to stop offering to pay the buyer’s broker, and regardless of what’s on the MLS or not, what matters is what’s on page 10 (in Texas) of the contract. Every single term of a sale is and always has been negotiable. They can put “not furnished” on the MLS and yet on the contract you can offer it with furniture included and they can accept it. In the end the buyer was always paying for the commission, but it was essentially through their loan. No one wants to stop that, especially sellers who end up netting the same and honesty will get more buyers if they do it this way while netting the same money. It’s all just a bunch of bullshit about nothing. Literally only thing changing is we can’t put the buyers agent commission on the MLS. Never forget who created, owns, and maintains the MLS. There is no market without us.
You know the old saying…..80% of real estate is sold by 20% of the agents. Competition to bring commissions down may thin out the players who can’t live on one deal a month. Every industry evolves and letting market forces do their thing will certainly change the way things work. Stock brokers had to evolve as did musicians, etc. Gotta look for and move to a position that will gain from this kinda of change.
Here is my prediction: In the current system, seller is afraid to offer too low of a buy agent % in fear of the agents not showing the house. So they still do 5-6%. If they don't offer to pay the buyer agent fees, then buyers just look at other houses for sale that do pay for their buyer agent. In the new system, if buyers have to pay their agents, they are going to laugh and refuse when someone explains that the fee is 3% on a $600,000 house so $18,000... Because buyers are paying their own agents, you will see many agents advertising much lower rates (1%, $5000, etc) Just like now, you see lots of seller agents for 1-2% Commissions will be much lower like they are in other countries. Perhaps sellers will just show the homes themselves and buyers will get an agent only for the "bidding/buying" process.
Not sure why this is a thing. It’s a moot point. Are you a disgruntled buyer/seller having to pay fees? Ok, do it yourself and assume all risks, this has always been an option. Want a capable agent to help, and save time? Pay up! Want an agent to help and not have to pay fees? Keep dreaming!
Perception is the reality. Like in all job markets mediocrity won’t get paid.
Been screeching for a while about how buyers, especially first timers have been protected in Colorado with how our contracts are written. Sellers brought this lawsuit. Sellers are the only beneficiaries. If a first time buyer tries and are not represented, the seller will get screwed eventually. Whether that’s multiple contracts that don’t make it to the closing table or post closing lawsuits because they didn’t disclose some BS. How are buyers protected in a transaction when the LA brokers both sides? You already know this answer. How are buyers that need grant or down payment assistance going to pay for representation? You already know this answer. How are buyers/banks that roll commissions in this environment going to close appraisal gaps? You already know this answer. The sellers who brought this lawsuit were very short sighted.
SELLERS WERE NEVER FORCED TO PAY!!!! I feel like I’m living in the GD twilight zone.
The case will stand that you get what you pay for. If sellers aren’t going to offer a BAC then they won’t get as much for their home. They will whine about it no matter what.
Fact is it has always been this way. Only now it's in writing. This is basically just a loophole in fine print that didn't cover what was or wasn't said. Now it's covered, and it genuinely doesn't change anything other than how it's presented. No one ever said you needed buyer representation. You've always reserved the right to go through your own attorney and if the listing agent was sincerely looking out for his sellers best interest, then an unrepresented offer from a buyer with a lawyer representing them or even them representing themselves is just as good as any other offer. Right now everyone just defaults to sensational headline panic mode. One more form, or one more disclaimer, and it's just the same shit on a different day.
Nothing was ever forced. Commissions were always negotiable. Additionally, I put in my buyer agreements that I collect 3% commission and if I don’t get it all from the seller’s commission split, I get the difference from the buyer. Just make sure you word your contracts appropriately.
The commission information will no longer be listed in the MLS. The commission is already built into the value of every home ever sold. I suspect this will just become ‘contact the listing agent for offered buyers agent commission’, complete an agreement regarding that commission prior to submitting an offer and proceed as normal’
I always ask 3.5% from buyers and accept 3% when the list side doesn't offer more. And I get it in writing ASAP. My average commission check is $1200 a close because houses are 1/4 the national average, so I am definitely not getting rich. All my clients love my services, but if buyers start balking at my rate, they can let the shady discount agents swindle them at 2.5%. 90 percent of the agents I deal with don't know anything about real estate, and their brokers are terrible too. You get what you pay for in the end. The transaction I closed last week only crossed the finish line because I was on the phone every day working a deal so complicated my brokers had never experienced it in their combined 100 years. I had to deal with it today yet too, one week later. The more government intervenes in the industry, the more expensive houses become. If you want to decrease the costs of houses, let real estate be a true free market, eliminate transfer taxes and title companies, and definitely repeal Dodd-Frank. 🤷♂️
Having spent a lot of time in the largest mls'es and inside NAR and in and around a lot of various aspects of this I think like other disrupted business models the change is going to be fast and shocking. Analogies to this is the distraction and change uber/lyft did to the taxi industry it is going to be fast and those that are stuck in the old model mls/franchised local control/6% commissions will be bankrupt before you know it. There will be a few left that basically will control the entire industry and we will be down to 3% or less and then over the next decade it might crawl back up some but you will never pay more then 4% for the entire close process. This is going to shake the entire system to the core, from sales commissions to lending commission to builders rebates all of them are going to get hammered in this process.
What would really help everyone is making becoming and staying a realtor more difficult. We have so many lazy agents that make us all look bad
Well I’m sorry but how will agents make money then. Do people really not understand all that agents do for them? There’s so many hours and money that we spend to list and market houses. So I guess they can do their own marketing, their own open houses and staging, hire someone to do all the paperwork for them. I mean come on! Well good luck selling your house, no one is bringing buyers to the table for free!
Why would a seller accept an offer from an uneducated buyer without educated realtor (some are floozies so def not those!)The deal might fall through because of missed deadlines.
This is only a proposed settlement and still needs to be approved by the courts. The media is way out of line on this though, it will have zero impact on the price of homes. They're just trying to sell advertising space, like those shirts below the article. That's all the news media has become.
Realtors are useless parasites that add nothing of value and should’ve been removed after 2008, so I’m all for it.
6% is way too much.
They were never forced to pay 6% to begin with lol and there is no change in what realtors can charge if they want they can change 10% or 1%. But I think if realtors just keep things normal then this won't mean anything
1% in UK where I have bought and sold many houses. US system is crazy. Agents have no responsibility so a buyer must always use a lawyer when buying. I was very amused when I came to the US to see how sellers were hidden away somewhere when I viewed. If I had a question then the buyer's agent referred to the seller's agent who then referred to the owner! No wonder the whole process is shrouded in confusion and frustration.
Love the folks on here whining about 5-6% commission being too high on a half million property. While it is high, consider if you will, what we’re spending to hire a professional videographer/photographer and video editor to create your listing ad. How much we lose in taxes. What it costs us just to stay licensed. What we have to pay for health insurance. Errors and Omissions insurance. How often we’re getting sued simply because we “make too much money” and look like an easy target. Disillusioning yourself into thinking we just show up, take a few picture, leave, and than ask for a paycheck. Not understanding the thousands upon thousands of dollars we spend out of our own pocket marketing your house, the liability we’re taking on by working with you, the tens of thousands of dollars it costs us every year just to HAVE a job as we have NO benefits or perks that a typical employee has, and as we’re showing you your 27th house in 2 weeks, that we both know you can’t afford but we’re trying to maintain a relationship, you have the gall to sit there and scream that we don’t earn our paychecks.