Buyers dont need to pay 10's of thousand of dollars to a buyers agent buy a home. Terms on a purchase contract are not hard to understand. Consulting with a real estate attorney, asking the listing agent for advice or doing your own research is enough to get the home you want without paying someone to drive you around and tour homes isnt worth it.
If someone is of low income most likely they would be renting not buying a home. They wouldn't have the income to qualify for a home loan. If you are smart enough to make enough money to buy a home, you are smart enough to hire a real-estate lawyer to write an offer. A home inspector, a title company, and a contractor to make repairs. There is no value in paying 30K on a 500K home which is about the average cost of a home. We can do all this ourselves and it won't cost 30K.
I think I have cautiously veered into both sides of the argument. I really do understand why sellers feel they should not be footing the bill for the other side, when it works against them. Especially with 5-6% comission rates. It may have remained more palatable if the rates were 1-3%. I do see why it may be difficult for the buyer, but it is a service they are benefitting from, so I don’t think it’s totally outrageous to pay a fee - especially since many buyers do waste the time of the realtor, and - after multiple showings - they may still ditch the realtor, or buy nothing at all, which is a time waster. I wonder if this might open the door to a flat rate, or a retainer fee to be paid upon working with a buyer’s agent. It could be per day, per month, etc. This definitely opens doors to innovation, and larger brokers will have to make it competitive. Either way, I am very curious to see where this goes.
I just read an interesting point of view by a realtor. The seller brings a property to the table. The buyer brings money to the table. The seller adds the cost of the realtor fees to the price of the house. In conclusion, it has always been the buyer that paid the fees. Can you tell me the difference between a broker and a realtor? I do feel a relator that does their job will be worth the money. You just need to get the correct realtor. If I were to buy in Sarasota, I would definitely pick you. 💕💕💕
Thank you so much for your kind words! :) A realtor is a licensed real estage agent that belongs to the National Association of Realtors. A broker typically requires at least 2 years of work experience, needs to take educational courses and pass the broker state test. A person that has a real estate broker license can choose to work independantly and open their own brokerage and hire real estate agents if they choose to do so. @@katec4096
As someone only on the selling side and deals with new construction, I think it’s about time buyers had a little skin in the game with respect to home shopping. I can’t tell you the number of times people say they have 4-5 buyer agents looking for them, and still decide to call me without any of them to come and show them a home. Buyer agents and the way they operate have trained buyers to have no value for what they offer. They never get buyer agent agreements, don’t even bother getting them prequalified….and feel like it’s perfectly fine to hop in a car, waste my time and theirs, and drive these lookie lous to a bunch of houses. To top it off, their primary sales pitch has been for years to hire a buyer agent because it’s completely free. People don’t value things that are free, and they don’t value time of people who put no value on their own time.🤷♀️ Our local realtor association told its members, via their lawyer, recently that buyers agents could no longer advertise their services as free and paid for 100% by the seller. So…..it was pretty common knowledge and accepted that this was the sales pitch they used. No wonder people think they are useless.
Thanks for the perspective...well done. I do not share your opinion that the market's been wide open to competitive commissions. I've seen widespread mutual understanding between realtors on both side of the buyer-seller relationship that culminates in a sale that may not be in the best interests of their customers. I want the buyer's agent purely on my side if I'm the buyer, and the opposite on the seller's side. Period.
I don't think a Sales man is on anyone's side but his own. Both of them want the sales to happen, and they will say anything to make it happen. Also, both side are incentiviced for the transaction price to be as high as possible. We will see what happen in the future, I got a feeling there will be companies popping up trying all type of ways to conduct home sales.
There is a reason that it only took the jury two hours to find the realtors liable and they assessed a 1.78 trillion verdict,... the system that the realtors built and were imposing on sellers was CORRUPT.
Sellers have always had the right to pay zero commission as agents have always had the right to not work for free or any amount less than what they want to earn.
@@zm6301 But you have a problem when the agents control the only real way to advertise your home. So it's either play ball by paying 6% or get out! Even without this decision, the playing field was being leveled out by Redfin and others. This decision will simply speed the process up.
Great video. My wife works mostly buyer side purchases and buyers who forgo a buyer agent and sellers that won’t comp a buyer agent will both be at a disadvantage.
As a first time home buyer this is motivating me to get licensed or learn what a buyer agent knows. I’ve been learning how to draft an offer/what contingencies to add(there are free templates online), buddying up with a real estate lawyer, what an escrow entails, how to comp a property like an appraiser, the questions to ask a listing agent (especially in caveat emptor states),etc
Be a listing agent, and only take on buyers if working under a buyer agency agreement. I’m certain sellers will test the market, etc yet only time will tell (for a specific market) if there’s enough buyer demand under this new system. Good agents work hard, and will adapt. The agents who worked fast & loose (not on agreement) are at even more risk of failing. It seems like many agents who already work in this manner (on agreement) won’t change their approach, other than not representing as many buyers as previously. This will lead to more unrepresented buyers being taken advantage of, unfortunately. If no commission disclosure is allowed any longer in MLS, simply provide a link in MLS to the showing site and put the commission there instead. Working buyer agents will still see commission (or lack thereof) and simply not show those homes if they don’t have an agency agreement, or show all homes to their buyers if buyers agree to cover compensation. Honestly, this is how it already is set up with the forms/legalities. Many agents will have to change how they operate.
Creating a website that posts commissions is like raising your hand and shouting, "Please sue me and take all my money." After the current ruling, every attorney would love to take this case with a 100% chance of winning.
The discussion ignores the fact that most Florida listing agents choose the Transaction Brokerage relationship with their Sellers. NAR has promoted this relationship for years. It is an absurd practice since the listing agent is privy to their Seller’s personal info and circumstances…… hence the need to return to the fiduciary relationships of Buyer and Seller Agency. The changes will benefit both Sellers and Buyers as their agents will truly become advocates for one side of the transaction or the other and allow a more transparent and negotiable position with regard to fees and commissions.
NAR is a national trade association and does not change or overrule state laws. NAR should correct their messaging and use the term Cooperating Broker Compensation not Buyer Broker Compensation. And add a phrase the settlement will be implemented according to each state’s laws.
All that will happen is buyers will enter into a contract with their RE agent. And buyer agents will now have to actually represent the interests of the buyer. Sellers are still going to pay RE fees, just not the buyer’s agent. Both parties were paying this one way or the other as it was, but in reality, buyer agents were not really representing the buyer.
Truth! And in reality, the buyer pays everyone, the seller, the seller agent, and the buyer agent. Buyer’s deserve to have someone who is actually representing the buyer’s interest.
Funny, a big part of this lawsuit was sellers not wanting to pay commission to buyers agent that is working against their interests, i.e., working for the buyer, and here you are complaining that buyers aren't being represented. People are so confused, lol!
Buyer agents are "supposed" to represent the buyer, and this is a good and necessary service THAT THE BUYER SHOULD BE NEGOTIATING and PAYING FOR. Let the seller pay for their agent, and the buyer decide if they want an agent. Currently, the seller is forced to pay for both agents. And yeah, they can "negotiate" the commission they are willing to pay. Still, buyer agents have been steering their clients away from smaller commissions and towards greater commissions instead of representing their client's interests. Hence the lawsuit. No one is confused; bad, lazy, and greedy agents ruined the industry. @@zm6301
Great job. First one of these response videos are truthful and realistic. Things change and sometimes good things happens after some change. Great agents will adapt. Again, nice work.
Thanks for the overview. We are selling a family home in Louisiana and I had a discussion with our Remax agent on how the dual agent representation does not seem fair and the 6% really high. This was my thoughts/feeling on prior sale of a townhouse that stayed on market only 1 day. I renegotiated for reduced rate of 5% rather than 6%. At the time, everyone else’s opinion was that I was not being reasonable. Interesting development.
There isn't a broker in the US that's not happy with 5% for dual agency. Many will do it for even less in markets thst sre 4% or 5%. If it sold in a day, you got robbed since the agent spent little time or money. You should have asked for some of ot back on your contract or asked them to get more than your list price!
There isn’t a seller in the world that isn’t happy to have a sales contract in 1 day You want to know unish your Realtor for doing a great job. Nice going (insert sarcasm here)
Depends on the comp analysis. Strategic price discussions should happen with a clear view of the fair value of the home and current market trends and projections.@@steak5599
Thank you for your informative, HONEST video. I finally understand. Different biased opinions had made this new law confusing for me. I would definitely want you as my Realator!
Yes you can "ask" if there is a buyer's agent compensation from the seller, if you want to get sued for shaking down sellers, just like what happened to the NAR. I mean what are you going to do if you "call" and the seller or seller's agent says they are offering nothing? Not show that home to your buyer, or try to steer them away from that listing? What do you think the lawsuit was about in the first place? Sounds like a really bad idea to me. Face it, sellers paying buyer agent commision is OVER. It will have to come from the buyer. Now, as you said, homeowners in difficult markets can offer cash back incentives to buyers (like they already do for repairs and renovations), and that money could theoretically go to a buyer agent fee. The whole point of this law suite is that sellers cannot be coerced in anyway to pay buyer agent fees. Even the perception that this is happening can get you in a lot of trouble. Sellers can offer incentives to the buyers, or just sell the home at a lower price, but buyer agents will have to work out compensation for their services with the buyer. End of discussion, unless you want to open yourself up to a lawsuit. Oh and buyers don't need a buying agent just to look at homes, they can just find them online and contact the listing service, agent, or owner, and schedule an appointment themselves. Wealthy sellers and buyers will use agents because they have more money than time. However, most homeowners will use online services with real estate lawyers, title companies, and appraisers. It will be just like travel agents, there was a time when virtually everyone used a travel agent to book trips, now when was the last time you used a travel agent? You just go online and do it yourself right? Unless you are wealthy, then there are still concierge services that will still do those things for you, but not for the average budget shopper. Turns out it wasn't as difficult and fraught with peril as everyone thought, and real estate sales will be no different.
@@Nogi-aka-DJNugz LOL what "vetting" I have had many realtors show me homes, and if you have a pulse and show interest, you're in. Most won't even ask for any sort of pre approval unless you decide to make an offer. And if someone does produce a preapproval letter, how often does anyone even bother to verify it, especially if you are just looking? Oh and what about an open house? If a bunch of people show up, you're going to tell me all those people are vetted and supervised? I have been left to wander other people's homes unsupervised more often than not, and the realtors had no idea who I was, at most they try to get you to sign their log book and you could put whatever name you want. Vetting and pre approval, what a joke. A homeowner will do a far better job vetting and monitoring home shoppers in their own home, far more than any realtor. It's the age old adage, if you want something done right, do it yourself.
@@ericmichel3857 In our state we enter into a fiduciary relationship with our buyers. Vetting is just one of the jobs a buyer agent has in the transaction. I don’t expect anyone who works in our industry to understand the value that buyer agent has.
@@ericmichel3857 we have practiced buyers agency since 90s in our state. It’s a fiduciary relationship with the buyer. Vetting and getting a pre approval from our trusted lenders is one of many tasks a buyer agent does for their client
Eric, you may want to read the 108 page document :). I don't believe you fully understand how the buyer broker agreement will work if this gets approved by the court. Also, seller offering to compensate buyer's agents will still be legal.
I think it's illogical to think that home prices wouldn't go down by 1% or more likely 2% if the law really took effect with force. Every dollar that the Buyer has to take from their down payment to pay for something extraneous (like buyer representation) will reduce their purchasing power and whenever buyers have less buying power, sellers will need to meet them where they are. That is still supply and demand at work.
@@katrinstake 30% cash buyers can't support the whole market, plus even those that can afford it won't want to pay their agents commission on top of the full price knowing that the seller is pocketing the savings, this happens to FSBOs all the time, buyers want to save money too or at least not feel they are not being taken advantage of. Prices will come down.
Good information, thank you! 👍 Could you please make a video on how to practice to lead the conversation with the buyer regarding signing buyer agreement and how talk to seller agree to pay buyer agent commission. This would be super helpful.
If supply and demand is the only factor in the price of a home then why do realtors charge a percentage of the home’s value as compensation? This implies that their efforts increase the asking price of a home. If it’s all about supply and demand then agent’s comp should be a flat fee to cover their hours and expenses.
Who shows it to them? A buyer's agent who has vetted them and taken responsibility for them. Are you just going to let someone who may be unqualified off the street into your home, lol?
It may eliminate the buyers agent. Or severely reduce the need for them. Why do agents get a percentage of the total sales price?? The value they add to the sales process is probably best set as a fee.
Although many are saying "not much changed" with regard to the settlement, it actually changes everything IMO. I think the settlement will get approved through the court but further regulations lie ahead for the industry. The landscape as we've known it will change. There will be more competition on the MLS level, Business models will change, dual agencies will become more common. Both sellers and buyers will become more educated because of this leading to big changes with regard to commissions on both agent sides from the brokerage level on down. I foresee new business models built to devalue the buying agent, more flat fee agents, and who knows what else. I have wonderful partnerships with realtors and value their principles and hard work. I can't help but feel for them and hope they can adapt and pivot successfully.
As a Listing Agent (LA) if the Seller only agrees to pay you a 2.5% Listing Broker commission and the Buyer doesn't have an Agent and wants you to represent them as a transaction broker, how much would you negotiate your fee? Would you charge the buyer an additional percentage or two for the additional work that you have to do in order to represent both sides in the transaction?
How do you feel about there are some other companies NOT the major players in known in the RE brand but some priv family member who make their own brand company name still follow the RE terms and laws on EACH state (around the 50 state USA) or countryside (overseas) make up a name brand of real estate office. How do you charge them?
your right in that. i just became my own broker a couple of years ago, but i didn't join nar, because they wanted to charge way to much for membership. GNIAR expects you to post comission on the MLS. the training course i took in indiana to be my own broker says doing that is ILLEGAL. imagine my surprise when i learned that...
First and foremost, those attorneys who brought the suit against the NAR , should they too be regulated on what they charge their clients? We are Licsensed by the department of real estate and we have the right to negotiate with sellers or buyers, we too have fees we have to pay to list and markets homes …what ever is negotiated between agents, buyer m and sellers is agreed and commissions are negotiated we don’t do fix pricing and sales commissions are write off to sellers, they get credit !!!
I beleive the sellers agents with a lot of business will work with the seller about what to offer a buyers agent. I know of some buyer agents approaching FSBO listings this way with some sucess. When I listed my condominium 20 years or so ago with a broker who billed in the $8 million plus range, her standard commission was 5%.
A Seller also benefits from the Buyer haveing representation. It minimizes a lawsuit for one… AND it incentivizes the Buyer’s representative to make sure the deal closes on the Seller’s home. If not, the Buyer’s agent may get paid regardless of which house a buyer purchases. Sellers pay for commitment and security, plain and simple.
OR, they can just shop online, find a home, contact the listing agent or homeowner to view in person, and then just hire a real estate lawyer and appraiser. It is not exactly rocket science and there are so many online resources these days.
@@ericmichel3857I was thinking the same thing. It’s going to be a challenge for a lot of agents not providing legitimate value. I don’t mean to sound like a wacko, but it’s a repetitive transaction, AI is good at this.
In reality the buyer was always paying everyone, the seller, the seller’s agent, and the buyer’s agent. Sellers were just hiding these fees from the buyer by baking them into the price.
@@SC-sh6ux That is some twisted logic. Home values are set by the market (supply and demand), whether or not a seller chooses to hire realtors and pay realtor fees, is irrelevant. Let me explain with a couple of examples: 1. Two identical homes on the same street and both are appraised at $500K, one seller uses realtors and has to give $30K when the home sells. Now when he buys his next home also for $500K he now has to come up with that $30K difference. The other seller does for sale by owner and refuses to pay any realtor fees, he also sells for market value ($500K), when he buys another home he has $30K more. 2. let's say you buy a home (100% financed) for $500K and a few weeks later something unexpected happens, and now you must move and sell the home. So, now you are the seller of a home worth $500K, and if you sell it with realtors you are the one that will have to come up with another $30K to pay back the bank. Whereas if you sell it yourself you have $30K more to give back to the bank. The seller pays, not the buyer, the only time the buyer pays is when they become the seller. If you don't use realtors and your home is worth $500K are you going to sell it for $470K because you are not paying realtor fees? Or even better, do you think someone is going to pay $530K for a house that is worth $500K, just because you are using a realtor and have to pay their fees? This idea that realtor fees are somehow "baked in" to home prices is absurd. Realtors try to sell this idiotic logic to justify their ridiculous fees.
I'm a small fish real estate investor and I believe agents deserve to be paid if they close a sale. I get that there are some shady agents out there. the two agents I've worked with been hard working and knowledgeable. the few loan officers I use have indirectly been a type of mentor or advisor. of Corse they want to close the deal to get paid and that's perfectly fair.
Great explanation. thank you for that. I sold my house in may 2023 and paid 5% commission. How do I receive from the settlement? Will I be notified or will I need to apply for it.
Incorrect information! Buyers will NOT be required to go through a buyer agent. They CAN deal directly with the seller agent. They can CHOOSE to hire a buyer agent, and would be paying for that service. Sometimes it makes sense to do so, but only if you end up with a competent agent that will actually represent the buyer interest. But truth be told, good agents are far and few, better to do your own due diligence, and get a good real estate lawyer.
Eduardo, I never said a buyer needs to go through a buyer's agent. You probably did not watch all the way through. The buyer has many different options.
Home Buyers should automatically doc 15-30k off their offers for all homes now. Knowing the seller isn't paying the buyer's broker, then they should just offer less than the selling price because sellers aren't going to be honorable and reduce the prices of their homes.
So if home prices dip say 10% in the future because of supply and demand, should buyers "do the honorable thing" and pay what the house used to be worth? Do you see what a clown statement that is, prices are simply a factor of supply and demand, "honor" has absolutely nothing to do with it. Maybe folks will just buy and sell homes without realtors at all going forward.
Any Chance a Buyer Agent would get eliminated completely? I am still confused on why can there be 1 agent who hands both buyer and Seller. I understand Both side needs a Lawyer, but as far as Agent goes, aren't they just a Middle man between a buyer and seller?
Yes, lots of folks buy and sell homes without realtors on either side. This development will make it much easier for folks on both ends to do business without a realtor. You still need a realestate lawyer, appraiser,and title company, and maybe hire other services a la carte for things like marketing, showings, and even neighborhood analysis advice. But it will be up to the individual and will ultimately lower costs for both buyer and seller.
@@katrininsarasota You missed the point. I agree that agents are legally allowed to post the buyers agent commission on non MLS websites. Just because something is legal does not make you exempt from liability. Both the seller and buyers agent are required by law to do what is best for their client. It is not to the sellers benefit to publish the buyers commission on any website. For the benefit of the seller, their agent should not disclose the buyers commission. If the selling agent acted for the benefit of their seller, they would not offer any commission to the buyer. They buyers agent should also never ask or look up what the seller is offering in terms of commission until their buyer is actively negotiating with the seller. If the buyers agent ever hints they know what the seller is offering a commission to them, they could be held liable for steering their buyer to a home that offers a higher buyers commission.
A buyer does not have to sign with a buyers agent. He can present a contract ( offer) , either written by himself or by an attorney, directly to the listing agent. You make it sound like the buyer has to hire a buyers agent. An educated consumer with a knowledge of the real estate market can access all the information he or she needs on their own. And MLS is not the only place to get information on what's for sale in a specific market. I am a retired real estate broker in Florida who keeps his license active on a referral basis.
I didn’t make it seem like it was the only option. Work directly with the listing agent and/ or get a lawyer to write up offer. Whatever makes the most sense for you.
Actually, yes you did. You stated that all across the country if you want to see a house you saw on Zillow, you will have to sign with a buyer agent. And that’s not accurate.
If you want to use a buyer's agent affiliated with the MLS, you have to sign a buyer broker agreement before seeing a home no matter where in the US. Listen to it again 9:07. Sorry, but you missed hearing a few words.@@eduardocorrea530
I’m 45 and looking for a career change. I’ve been seriously looking at my life as a realtor the last few months. The idea is exciting to me, but Is this the worst time ever to become a realtor?
If this is what you want to try, why not do so? It might actually be easier for you to adapt vs an agent that is used to the old ways. Just know it takes a while to learn the business. My recommentation is to work with a mentor.
There are some brokerages that pay a salary instead of commission. You'll need to be knowledgeable on real estate as the people who were bartenders that switched for a quick $$$ knew very little and that's why many folks say buyer brokers were useless.
As a Realtor for 34 yrs. This settlement is an Atomic bomb on the RE Industry. I think multiple offers will be few and far between. I think that commissions will eventually erode to 1.5% per side. I think Gary Keller has already predicted this?? Many buyers will be hurt by this. Especially first time buyers as well as VA buyers. Will be interesting to see how this all shakes out.
From what I read, but not totally sure, it seems as if the lawyers are asking for $85 million and the rest I assume would go to sellers (approx. 500,000 sellers). Sellers are not getting much.
Buyer agents who are paid by the seller agent naturally work in the seller agent’s interest. Buyer agents need to be paid by the buyer if they will ever work for the buyer’s interest.
We love people like you. You end up paying a lot more for the house being unrepresented. If you ever get legal battle, would you hire a lawyer or represent yourself?
That is nowhere near being true but even if it were, they are bringing a buyer to the seller, without which any commission being "saved" by the seller would be meaningless as the property sits on market due to lack of traffic and offers. If sellers want to sell, they need to offer a competitive commission for their market. Of course, they're free not to, but this will affect buyers' ability to purchase due to cash requirements or their willingness to purchase because they think the seller is gaining at their expense. One way or another, the seller is going to pay, it's just a matter of how. Is it going to be through a commission or a price reduction?
@@jimmcdaniel2157 I would pay the lawyer by the hour for his time, just as a buyer's agent should be compensated. A percentage of the sales price is ludicrous.
There are percentages of that 3% that goes to the broker of the company and the company and the realtor which has to pay taxes on commission . Plus the mls dues, e&o insurance and other license requirements. Plus the signs, advertisements, and vehicle use.
I think the courts got this all wrong as usual. I have owned several homes in my life that I sold and I always negotiated my percentage with my realtor. I even told my realtor how much of a percentage to give the buyers agent. At the time it was 4% total and they were to give 50% of the 4% to the buyers agent. So 2 and 2. If they sold the home to their own clients they get the whole 4%. It was so simple and no one got ripped off. Now if I were a realtor today I'd charge 5% or more and share nothing because this settlement should knock out the competition and small realtors leaving only the largest real estate agencies to collude on a high fixed commission.
@@marciamakoviecki3295 I think they will be forced to pay higher commissions if you want a realtor to sell your home. I see a ton of independent and small real estate firms going away leaving only the larger firms. And you know those few large firms will all set the new fees. If K.W. wants 6% no way will C.B. under cut them. There will be plenty backroom deals for sure. We shall see. I think buying a home just got more expensive thanks to this decision.
Here’s what I see happening: 1 buyer can’t afford the commission, so the property doesn’t get the same showings as a property that does offer commission 2. Buyer goes unrepresented then sues the seller for an undisclosed material fact.
It is illegal for a buyer's agent to steer their buyer to a listing with a higher buyer's agent commission. The agent is required by law to do the best thing for their client. The lawyers just won against the realtors. Do you really think agents who steer clients from homes with lower commissions are not going to be absolutely crushed by lawsuits?
The agent won’t steer but the buyer likely will if the other option is to pay out of pocket. Sellers are likely going to offer buyers compensation as a marketing tool when needed making their property more attractive with buyers.
@@katrininsarasota the seller will not be able to market buyers compensation effectively since it is not allowed on the MLS. Here is what will happen, buyers will call the seller directly, and ask the selling agent if they know an agent in their office who will handle the paperwork for a few hundred $'s. Buyers agents will be nothing more than a transaction coordinator, the listing agent will get paid for the average listing up to $5k. This is a big win for sellers!!!
I’m building a new house, payed that realtor 3%, I have to pay the realtor selling my house, and they want me to pay the buyer’s realtor… not fair! The buyer should pay the realtor doing the work for them. If they don’t show my house because of compensation that is not fair to buyer or seller, just a selfish move.
What if the number of buyers able to purchase your home goes down by a 1/3 because many can't afford a down payment plus $10,000? Suddenly, with less buyers you have less chances to sell your home for top dollar. Simple economics. Buyer pool will lower with new rules, and no one will benefit (except the lawyers from the lawsuit).
I would imagine that a lot of first time home buyers who do not have extra funds will either go direct to a listing agent, employ the services of a lawyer, or sign up with a buyer's agent and look only at homes that offer a buyer's agent commission. We will need to see how this all shapes out. @@rasman007
Mist people these days are moving fron another town state they really need a buyers agent so I don't see so much change. And truth is ir right many house will get traffic and the ones who don't offer payment won't get any buyers coming by. My friend made a mistake offering his home at only 1 and half % to buyers agent guess what it didn't sell haah and it was in a great hood .once he went to 3 % it sold in 1 week
Apparently you and Katrin are not paying attention to what just happened here. What you just described is exactly what the lawsuit was about. The NAR was essentially coercing sellers to pay this 3% buyer agent fee or else! It would be a real shame if agents didn't show your home or steered buyers away from it because they didn't pay this fee. Even a realtor suggesting (as she did) that sellers that offer a buyers agent fee will somehow have more buyers looking at their home, could be a enough to bring a lawsuit. That is the entire point of this, realtors CANNOT coerce sellers to pay their fee, and that is exactly what they are doing when they suggest there could be a difference in buyer traffic because of this "fee". It is no different to the "Gee nice place you got here, would be a real shame if something would happen to it, maybe you should pay our insurance fee". It is not different when it's "Gee nice house, it would be a real shame if most buyers don't get to see it, maybe you should think about paying our buyers agent fee" Get it? They don't know it yet, but even the hint of anything like that happening, can and will bring a lawsuit.
Eric, if a seller offers a buyer's agent commission in a landscape where the other option is for the buyer to pay the buyer's agent fees, the buyer themselves are more likely to go see those homes that offer the buyer's agent commission. It is not the real estate agent driving this unless the buyer asks the real estate agent to only see homes where the buyer's commission is paid (I am sure this could happen). The real estate agent is not supposed to steer a buyer. So the extra traffic will come from the buyers decision themselves! BTW - flat fee services, discount agents, getting a listing on the MLS for a few hundred bucks has been an option for years now. Commission has been negotiable. @@ericmichel3857
I have bought property using the seller's agent and it worked out fine. Not everyone is comfortable with that, and some agencies will not 'dual represent'.
You have no representation at all in that scenario, so if you’re inexperienced or a newbie buyer you may get burnt. The seller in this scenario is the only one protected.
Yes, and that is what has been done forever now. What the buyer needs is a good real estate lawyer before they sign a contract. Real estate agents do not represent you, only an attorney can represent you.
The seller's agent will be getting paid - in using one agent the seller would net more $ because he saves1/2 commission, but the buyer better know what he's doing. I've done it twice no problem, but very easy deals. @@milo29841
I wonder how brokers will respond. The general public may not know that we Realtors pay a significant portion of our commission to our brokers. Many of the big box brokerages are a 60/40 split until you hit a certain threshold. Mine is a boutique and the split is 80/20, but the resources they provide are slim to none. Then, you thrown on the fact that we’re 1099 commission only contractors and therefore are taxed heavily (15-30%). The reality is that most realtors aren’t taking home anywhere close to the “commission” that is being charged. It’s unfortunate that Realtors are being vilified when in reality it’s the people that were supposed to “protect” us that are to blame.
I understand your sentiment. I believe brokerages will start competing much more on the split or providing extra services to keep agents. Agents also have choices of where to hang up their license :).
I guess you’re the spokesperson for Caldwell. The agent trainer. The common theme I see is, real estate agencies are running scared. They seem to be afraid their overpriced services are now coming out into the open to the public being seen for what they are. I hear the same thing, advice the buyers of your worth to them. Bull.
I am not a spokesperson for anyone but for myself. Don't get an agent if you do not see their worth. It's a free world :). I have experience on both sides (agent and consumer), and I know that it can pay off if you get the right one especially when coming from out of town, when time pressed, not a data person, etc. But again, you do you and that's all good.
@katrintherealestateguide, I understand you completely. I’m retired now and looking to buy my last home in a warmer climate. I’ve lived here for 32 years now so I haven’t had to deal with buying or selling a home since. I’ll give this home to a son but now that I’ve been looking (Zillow mostly) for almost a year now to get the feel of things I’m very dissatisfied with the industry. My buyer’s agent has shown me several homes , almost all vacant, and I haven’t seen one lazy sellers agent or anyone yet who knows anything about the house. The only thing my agent has known is how to open the lock box. Tell me what her big value is for doing nothing but pushing some electronic paper. As far as negotiating, her advice is always “ make an offer and make it strong so the seller accepts it. Wow, some negotiating skills she has. “Offer more than the asking price because there may be multiple offers”. And you think this is an agent working for me? Which is greater, 3% of $350,000 or 3% of $300,000? I don’t need someone with self satisfying goals negotiating for me. All I need is for the sellers agent or the seller (who I am never allow to meet) to show me the house. I’ll make an offer and they can take it or leave it. Have it inspected and appraised, have a title company and lawyer do their thing and it’s a done deal. I’ve done it that way twice before. FYI, I will never sign a contract with a buyers agent just to be tied to them contractually from then on. I don’t want to see an entire industry destroyed but it looks like you’ve done it to yourselves through greed. Not to mention the seller and buyer agents who conspire together to the detriment of their clients all for a few extra bucks. Good luck getting through whatever is to come. It’s going to be a mess.
This decision isn't that impactful. The big decision is coming out of an Illinois lawsuit that could prohibit seller's agents from sharing commissions with the buyer's agent.
Hmm l will take a shot at that… “Who would likely be the most impartial juror based upon their experience (or lack there of) in real estate transactions?”
I'll answer - not renters. Many have hate for 'greedy landlords' and jealousy of people who own homes - 'the rich' or "evil corporations" and would jump at any chance to inflict pain on "crooked realtors" . All you have to do is read the comments on many of these real estate videos to see my point. Justice is not blind in this country - far from it, in case you have not been paying attention.@@theGHSV
I've always frowned upon listing agents capitalizing by overinflating SRP ....These high prices attract buyers agents looking for their slice of an overpriced pie....this leads to the buyer's agent creating a false sense of demand ,in turn, convincing the buyers to submit an offer at or above the overinflated list price.... Then theres plenty of loan sharks and stretching appraisers to seal the deal.. No disrespect Kat....Im sure you provide superior value to your clients, however the system had created a housing unaffordability crisis.... Again...the middle class is compromised
You are spreading misinformation! The settlement states when a buyer is represented there must be a written buyer representation agreement prior to showing any properties. In New York State we have subagency thereby allowing a licensee to work with unrepresented buyers and receive cooperating broker compensation or for direct and in-house transactions paid by the terms in the listing agreement.
@@katrinstake The proposed settlement only addresses Realtors representing buyers. There is no restriction for Realtors working with buyers in other types of agency relationships. In New York State we can act as a seller's agent for either a direct or in-house deal OR as a broker agent or seller's agent when showing another broker's listing. Therefore NAR and Realtors from other states should refrain from commenting publicly about the only way a buyer can view properties when the settlement rules are in place is to have a signed buyer representation agreement executed before hand. NAR or any other trade association cannot adopt rules that supersede a state's laws. I know my state agency laws and am 100% certain of my facts. If you disagree, please show me why my thoughts are inaccurate. I am open to hearing opposing viewpoints from anyone.
IMHO this settlement is bad news for buyers, especially lower income & first-timers.
Yes, that is likely going to be the case
They'll have to save up to pay for a broker. I suspect it'll go to a lower flat rate, $2k etc like an attorney fee.
Buyers dont need to pay 10's of thousand of dollars to a buyers agent buy a home. Terms on a purchase contract are not hard to understand. Consulting with a real estate attorney, asking the listing agent for advice or doing your own research is enough to get the home you want without paying someone to drive you around and tour homes isnt worth it.
If someone is of low income most likely they would be renting not buying a home. They wouldn't have the income to qualify for a home loan. If you are smart enough to make enough money to buy a home, you are smart enough to hire a real-estate lawyer to write an offer. A home inspector, a title company, and a contractor to make repairs. There is no value in paying 30K on a 500K home which is about the average cost of a home. We can do all this ourselves and it won't cost 30K.
Listing agents won't give advice without you signing an agency agreement.
The ones who are truly harmed the most are the agents that have built a carrier based on what NAR has advised and now it got yanked away.
It was so easy to prove the sellers offering less than 2.5 percent to buyers were getting no traffic.
This happened to me just last week.
If that was the case, then buyer’s agents were not acting in the best interests of their clients.
I think I have cautiously veered into both sides of the argument. I really do understand why sellers feel they should not be footing the bill for the other side, when it works against them. Especially with 5-6% comission rates. It may have remained more palatable if the rates were 1-3%.
I do see why it may be difficult for the buyer, but it is a service they are benefitting from, so I don’t think it’s totally outrageous to pay a fee - especially since many buyers do waste the time of the realtor, and - after multiple showings - they may still ditch the realtor, or buy nothing at all, which is a time waster. I wonder if this might open the door to a flat rate, or a retainer fee to be paid upon working with a buyer’s agent. It could be per day, per month, etc. This definitely opens doors to innovation, and larger brokers will have to make it competitive.
Either way, I am very curious to see where this goes.
Innovation has to happen.
I just read an interesting point of view by a realtor. The seller brings a property to the table. The buyer brings money to the table. The seller adds the cost of the realtor fees to the price of the house. In conclusion, it has always been the buyer that paid the fees. Can you tell me the difference between a broker and a realtor?
I do feel a relator that does their job will be worth the money. You just need to get the correct realtor. If I were to buy in Sarasota, I would definitely pick you. 💕💕💕
Thank you so much for your kind words! :) A realtor is a licensed real estage agent that belongs to the National Association of Realtors. A broker typically requires at least 2 years of work experience, needs to take educational courses and pass the broker state test. A person that has a real estate broker license can choose to work independantly and open their own brokerage and hire real estate agents if they choose to do so. @@katec4096
As someone only on the selling side and deals with new construction, I think it’s about time buyers had a little skin in the game with respect to home shopping. I can’t tell you the number of times people say they have 4-5 buyer agents looking for them, and still decide to call me without any of them to come and show them a home. Buyer agents and the way they operate have trained buyers to have no value for what they offer. They never get buyer agent agreements, don’t even bother getting them prequalified….and feel like it’s perfectly fine to hop in a car, waste my time and theirs, and drive these lookie lous to a bunch of houses. To top it off, their primary sales pitch has been for years to hire a buyer agent because it’s completely free.
People don’t value things that are free, and they don’t value time of people who put no value on their own time.🤷♀️ Our local realtor association told its members, via their lawyer, recently that buyers agents could no longer advertise their services as free and paid for 100% by the seller. So…..it was pretty common knowledge and accepted that this was the sales pitch they used. No wonder people think they are useless.
Thanks for the perspective...well done. I do not share your opinion that the market's been wide open to competitive commissions. I've seen widespread mutual understanding between realtors on both side of the buyer-seller relationship that culminates in a sale that may not be in the best interests of their customers. I want the buyer's agent purely on my side if I'm the buyer, and the opposite on the seller's side. Period.
I don't think a Sales man is on anyone's side but his own. Both of them want the sales to happen, and they will say anything to make it happen. Also, both side are incentiviced for the transaction price to be as high as possible.
We will see what happen in the future, I got a feeling there will be companies popping up trying all type of ways to conduct home sales.
Maybe subconsciously but realtors have a fiduciary obligation to their clients.
There is a reason that it only took the jury two hours to find the realtors liable and they assessed a 1.78 trillion verdict,... the system that the realtors built and were imposing on sellers was CORRUPT.
Sellers have always had the right to pay zero commission as agents have always had the right to not work for free or any amount less than what they want to earn.
Sure, Juries get it right all the time!
I can promise those jurors are as confused as the general public
Sure tell that to first time buyers who have rented all their lives
It wasn’t $1.78 TRILLION!
The jury verdict was roughly $1.8 billion, negotiated down to $418 million. Geez!
@@zm6301 But you have a problem when the agents control the only real way to advertise your home. So it's either play ball by paying 6% or get out! Even without this decision, the playing field was being leveled out by Redfin and others. This decision will simply speed the process up.
Great video. My wife works mostly buyer side purchases and buyers who forgo a buyer agent and sellers that won’t comp a buyer agent will both be at a disadvantage.
Thanks for sharing!
As a first time home buyer this is motivating me to get licensed or learn what a buyer agent knows. I’ve been learning how to draft an offer/what contingencies to add(there are free templates online), buddying up with a real estate lawyer, what an escrow entails, how to comp a property like an appraiser, the questions to ask a listing agent (especially in caveat emptor states),etc
Be a listing agent, and only take on buyers if working under a buyer agency agreement.
I’m certain sellers will test the market, etc yet only time will tell (for a specific market) if there’s enough buyer demand under this new system.
Good agents work hard, and will adapt. The agents who worked fast & loose (not on agreement) are at even more risk of failing.
It seems like many agents who already work in this manner (on agreement) won’t change their approach, other than not representing as many buyers as previously. This will lead to more unrepresented buyers being taken advantage of, unfortunately.
If no commission disclosure is allowed any longer in MLS, simply provide a link in MLS to the showing site and put the commission there instead. Working buyer agents will still see commission (or lack thereof) and simply not show those homes if they don’t have an agency agreement, or show all homes to their buyers if buyers agree to cover compensation.
Honestly, this is how it already is set up with the forms/legalities. Many agents will have to change how they operate.
Your analysis is spot on. I would like a dedicated website where coop commissions are posted outside of MLS.
I would not be surprised if this will become an option
Creating a website that posts commissions is like raising your hand and shouting, "Please sue me and take all my money." After the current ruling, every attorney would love to take this case with a 100% chance of winning.
@@scientificapproach6578 law says do not post on the MLS, but can publish elsewhere.
The discussion ignores the fact that most Florida listing agents choose the Transaction Brokerage relationship with their Sellers. NAR has promoted this relationship for years. It is an absurd practice since the listing agent is privy to their Seller’s personal info and circumstances…… hence the need to return to the fiduciary relationships of Buyer and Seller Agency. The changes will benefit both Sellers and Buyers as their agents will truly become advocates for one side of the transaction or the other and allow a more transparent and negotiable position with regard to fees and commissions.
Transaction Brokerage is the elephant in the room that no one attributes to this NAR conundrum.
NAR is a national trade association and does not change or overrule state laws. NAR should correct their messaging and use the term Cooperating Broker Compensation not Buyer Broker Compensation. And add a phrase the settlement will be implemented according to each state’s laws.
All that will happen is buyers will enter into a contract with their RE agent. And buyer agents will now have to actually represent the interests of the buyer. Sellers are still going to pay RE fees, just not the buyer’s agent. Both parties were paying this one way or the other as it was, but in reality, buyer agents were not really representing the buyer.
Are you sure sellers won't be paying buyer's agents?
Truth! And in reality, the buyer pays everyone, the seller, the seller agent, and the buyer agent. Buyer’s deserve to have someone who is actually representing the buyer’s interest.
Funny, a big part of this lawsuit was sellers not wanting to pay commission to buyers agent that is working against their interests, i.e., working for the buyer, and here you are complaining that buyers aren't being represented. People are so confused, lol!
@@milo29841 Not if the plaintiffs in the Illinois lawsuit prevail.
Buyer agents are "supposed" to represent the buyer, and this is a good and necessary service THAT THE BUYER SHOULD BE NEGOTIATING and PAYING FOR. Let the seller pay for their agent, and the buyer decide if they want an agent. Currently, the seller is forced to pay for both agents. And yeah, they can "negotiate" the commission they are willing to pay. Still, buyer agents have been steering their clients away from smaller commissions and towards greater commissions instead of representing their client's interests. Hence the lawsuit. No one is confused; bad, lazy, and greedy agents ruined the industry. @@zm6301
Great job. First one of these response videos are truthful and realistic. Things change and sometimes good things happens after some change. Great agents will adapt. Again, nice work.
I appreciate that!
Thanks for the overview. We are selling a family home in Louisiana and I had a discussion with our Remax agent on how the dual agent representation does not seem fair and the 6% really high. This was my thoughts/feeling on prior sale of a townhouse that stayed on market only 1 day. I renegotiated for reduced rate of 5% rather than 6%. At the time, everyone else’s opinion was that I was not being reasonable. Interesting development.
Good for you for negotiating. :)
There isn't a broker in the US that's not happy with 5% for dual agency. Many will do it for even less in markets thst sre 4% or 5%. If it sold in a day, you got robbed since the agent spent little time or money. You should have asked for some of ot back on your contract or asked them to get more than your list price!
There isn’t a seller in the world that isn’t happy to have a sales contract in 1 day
You want to know unish your Realtor for doing a great job. Nice going (insert sarcasm here)
If it was sold in 1 day, it means you priced it too low. You got rob, the agent should have advised you to get more money.
Depends on the comp analysis. Strategic price discussions should happen with a clear view of the fair value of the home and current market trends and projections.@@steak5599
Thank you for your informative, HONEST video. I finally understand. Different biased opinions had made this new law confusing for me. I would definitely want you as my Realator!
I appreciate your positive feedback and thank you 🙏🏽
Yes you can "ask" if there is a buyer's agent compensation from the seller, if you want to get sued for shaking down sellers, just like what happened to the NAR. I mean what are you going to do if you "call" and the seller or seller's agent says they are offering nothing? Not show that home to your buyer, or try to steer them away from that listing? What do you think the lawsuit was about in the first place?
Sounds like a really bad idea to me. Face it, sellers paying buyer agent commision is OVER. It will have to come from the buyer. Now, as you said, homeowners in difficult markets can offer cash back incentives to buyers (like they already do for repairs and renovations), and that money could theoretically go to a buyer agent fee.
The whole point of this law suite is that sellers cannot be coerced in anyway to pay buyer agent fees. Even the perception that this is happening can get you in a lot of trouble. Sellers can offer incentives to the buyers, or just sell the home at a lower price, but buyer agents will have to work out compensation for their services with the buyer. End of discussion, unless you want to open yourself up to a lawsuit.
Oh and buyers don't need a buying agent just to look at homes, they can just find them online and contact the listing service, agent, or owner, and schedule an appointment themselves.
Wealthy sellers and buyers will use agents because they have more money than time. However, most homeowners will use online services with real estate lawyers, title companies, and appraisers. It will be just like travel agents, there was a time when virtually everyone used a travel agent to book trips, now when was the last time you used a travel agent? You just go online and do it yourself right? Unless you are wealthy, then there are still concierge services that will still do those things for you, but not for the average budget shopper. Turns out it wasn't as difficult and fraught with peril as everyone thought, and real estate sales will be no different.
And let strangers in your home who haven’t been even vetted or have a pre approval. Good luck with that
@@Nogi-aka-DJNugz LOL what "vetting" I have had many realtors show me homes, and if you have a pulse and show interest, you're in. Most won't even ask for any sort of pre approval unless you decide to make an offer. And if someone does produce a preapproval letter, how often does anyone even bother to verify it, especially if you are just looking? Oh and what about an open house? If a bunch of people show up, you're going to tell me all those people are vetted and supervised?
I have been left to wander other people's homes unsupervised more often than not, and the realtors had no idea who I was, at most they try to get you to sign their log book and you could put whatever name you want.
Vetting and pre approval, what a joke. A homeowner will do a far better job vetting and monitoring home shoppers in their own home, far more than any realtor. It's the age old adage, if you want something done right, do it yourself.
@@ericmichel3857 In our state we enter into a fiduciary relationship with our buyers. Vetting is just one of the jobs a buyer agent has in the transaction. I don’t expect anyone who works in our industry to understand the value that buyer agent has.
@@ericmichel3857 we have practiced buyers agency since 90s in our state. It’s a fiduciary relationship with the buyer. Vetting and getting a pre approval from our trusted lenders is one of many tasks a buyer agent does for their client
Eric, you may want to read the 108 page document :). I don't believe you fully understand how the buyer broker agreement will work if this gets approved by the court. Also, seller offering to compensate buyer's agents will still be legal.
Nice explanation. It goes beyond other videos I've seen!
Thank you 🙏🏽
I think it's illogical to think that home prices wouldn't go down by 1% or more likely 2% if the law really took effect with force. Every dollar that the Buyer has to take from their down payment to pay for something extraneous (like buyer representation) will reduce their purchasing power and whenever buyers have less buying power, sellers will need to meet them where they are. That is still supply and demand at work.
Will be interesting to see how the market reacts which includes est. 30% cash buyers
@@katrinstake 30% cash buyers can't support the whole market, plus even those that can afford it won't want to pay their agents commission on top of the full price knowing that the seller is pocketing the savings, this happens to FSBOs all the time, buyers want to save money too or at least not feel they are not being taken advantage of. Prices will come down.
Good information, thank you! 👍
Could you please make a video on how to practice to lead the conversation with the buyer regarding signing buyer agreement and how talk to seller agree to pay buyer agent commission. This would be super helpful.
If supply and demand is the only factor in the price of a home then why do realtors charge a percentage of the home’s value as compensation? This implies that their efforts increase the asking price of a home. If it’s all about supply and demand then agent’s comp should be a flat fee to cover their hours and expenses.
Buyer's agents don't bring in buyers. Buyer's are using the Internet to find housing that they want to look at.
Who shows it to them? A buyer's agent who has vetted them and taken responsibility for them. Are you just going to let someone who may be unqualified off the street into your home, lol?
It may eliminate the buyers agent. Or severely reduce the need for them. Why do agents get a percentage of the total sales price?? The value they add to the sales process is probably best set as a fee.
Although many are saying "not much changed" with regard to the settlement, it actually changes everything IMO. I think the settlement will get approved through the court but further regulations lie ahead for the industry. The landscape as we've known it will change. There will be more competition on the MLS level, Business models will change, dual agencies will become more common. Both sellers and buyers will become more educated because of this leading to big changes with regard to commissions on both agent sides from the brokerage level on down. I foresee new business models built to devalue the buying agent, more flat fee agents, and who knows what else. I have wonderful partnerships with realtors and value their principles and hard work. I can't help but feel for them and hope they can adapt and pivot successfully.
Thank you for sharing your detailed thoughts. I think it’s too early to fully tell how the market will adapt but one things for sure, we must innovate
Excellent information!
As a Listing Agent (LA) if the Seller only agrees to pay you a 2.5% Listing Broker commission and the Buyer doesn't have an Agent and wants you to represent them as a transaction broker, how much would you negotiate your fee? Would you charge the buyer an additional percentage or two for the additional work that you have to do in order to represent both sides in the transaction?
That is a discussion to have with your broker. But you will be taking on more responsibilities which you way want to get compensated for.
Bank or buyer should have always been providing funds for the buyers agent fee.
Bottom line buy and sell yourself through title company, hire a attorney, cost under 2500.00 everyone wins.
Excellent information AND presentation. Thank you.
Thank you for your appreciation 🙏🏽
How do you feel about there are some other companies NOT the major players in known in the RE brand but some priv family member who make their own brand company name still follow the RE terms and laws on EACH state (around the 50 state USA) or countryside (overseas) make up a name brand of real estate office. How do you charge them?
your right in that. i just became my own broker a couple of years ago, but i didn't join nar, because they wanted to charge way to much for membership. GNIAR expects you to post comission on the MLS. the training course i took in indiana to be my own broker says doing that is ILLEGAL. imagine my surprise when i learned that...
First and foremost, those attorneys who brought the suit against the NAR , should they too be regulated on what they charge their clients? We are Licsensed by the department of real estate and we have the right to negotiate with sellers or buyers, we too have fees we have to pay to list and markets homes …what ever is negotiated between agents, buyer m and sellers is agreed and commissions are negotiated we don’t do fix pricing and sales commissions are write off to sellers, they get credit !!!
I beleive the sellers agents with a lot of business will work with the seller about what to offer a buyers agent. I know of some buyer agents approaching FSBO listings this way with some sucess. When I listed my condominium 20 years or so ago with a broker who billed in the $8 million plus range, her standard commission was 5%.
A Seller also benefits from the Buyer haveing representation. It minimizes a lawsuit for one… AND it incentivizes the Buyer’s representative to make sure the deal closes on the Seller’s home.
If not, the Buyer’s agent may get paid regardless of which house a buyer purchases. Sellers pay for commitment and security, plain and simple.
And yet, more often than not they get neither, and just end up paying a bunch of middlemen.
This issue I see is the buyer may have to pay the buy agent out of pocket, which may be a tough thing for a 1st time buyer
Indeed
OR, they can just shop online, find a home, contact the listing agent or homeowner to view in person, and then just hire a real estate lawyer and appraiser. It is not exactly rocket science and there are so many online resources these days.
@@ericmichel3857I was thinking the same thing. It’s going to be a challenge for a lot of agents not providing legitimate value. I don’t mean to sound like a wacko, but it’s a repetitive transaction, AI is good at this.
In reality the buyer was always paying everyone, the seller, the seller’s agent, and the buyer’s agent. Sellers were just hiding these fees from the buyer by baking them into the price.
@@SC-sh6ux That is some twisted logic. Home values are set by the market (supply and demand), whether or not a seller chooses to hire realtors and pay realtor fees, is irrelevant. Let me explain with a couple of examples:
1. Two identical homes on the same street and both are appraised at $500K, one seller uses realtors and has to give $30K when the home sells. Now when he buys his next home also for $500K he now has to come up with that $30K difference. The other seller does for sale by owner and refuses to pay any realtor fees, he also sells for market value ($500K), when he buys another home he has $30K more.
2. let's say you buy a home (100% financed) for $500K and a few weeks later something unexpected happens, and now you must move and sell the home. So, now you are the seller of a home worth $500K, and if you sell it with realtors you are the one that will have to come up with another $30K to pay back the bank. Whereas if you sell it yourself you have $30K more to give back to the bank.
The seller pays, not the buyer, the only time the buyer pays is when they become the seller.
If you don't use realtors and your home is worth $500K are you going to sell it for $470K because you are not paying realtor fees? Or even better, do you think someone is going to pay $530K for a house that is worth $500K, just because you are using a realtor and have to pay their fees?
This idea that realtor fees are somehow "baked in" to home prices is absurd. Realtors try to sell this idiotic logic to justify their ridiculous fees.
I'm a small fish real estate investor and I believe agents deserve to be paid if they close a sale. I get that there are some shady agents out there. the two agents I've worked with been hard working and knowledgeable. the few loan officers I use have indirectly been a type of mentor or advisor. of Corse they want to close the deal to get paid and that's perfectly fair.
Agents appreciate you saying that
For sale by owner.
Great explanation. thank you for that. I sold my house in may 2023 and paid 5% commission. How do I receive from the settlement? Will I be notified or will I need to apply for it.
Missouri sellers won this lawsuit…
You made a deal. Why do you think you should get any money? sheesh.
@@maddierosemusic BECAUSE MILLIONS OF DOLLARS HAVE TO GO SOMEWHERE DUH!
I wouldn't bother u might get 15 bucks .lawyers get the millions
You are right - the lawyers :) @@dsheppard8492
Buyers getting hurt means less money to buy a house that means less demand , and this yes have an effect on inventory and prices.
Incorrect information! Buyers will NOT be required to go through a buyer agent. They CAN deal directly with the seller agent. They can CHOOSE to hire a buyer agent, and would be paying for that service. Sometimes it makes sense to do so, but only if you end up with a competent agent that will actually represent the buyer interest. But truth be told, good agents are far and few, better to do your own due diligence, and get a good real estate lawyer.
Eduardo, I never said a buyer needs to go through a buyer's agent. You probably did not watch all the way through. The buyer has many different options.
Home Buyers should automatically doc 15-30k off their offers for all homes now. Knowing the seller isn't paying the buyer's broker, then they should just offer less than the selling price because sellers aren't going to be honorable and reduce the prices of their homes.
So if home prices dip say 10% in the future because of supply and demand, should buyers "do the honorable thing" and pay what the house used to be worth? Do you see what a clown statement that is, prices are simply a factor of supply and demand, "honor" has absolutely nothing to do with it. Maybe folks will just buy and sell homes without realtors at all going forward.
Well explained 👍
Thank you for leaving this nice comment
I don’t know y the buyers need an agent, currently in the market to buy a house and I do not need an agent I will def refuse to pay any commission
I predict some realtors will quit.
100% agree
Any Chance a Buyer Agent would get eliminated completely?
I am still confused on why can there be 1 agent who hands both buyer and Seller.
I understand Both side needs a Lawyer, but as far as Agent goes, aren't they just a Middle man between a buyer and seller?
Yes, lots of folks buy and sell homes without realtors on either side. This development will make it much easier for folks on both ends to do business without a realtor. You still need a realestate lawyer, appraiser,and title company, and maybe hire other services a la carte for things like marketing, showings, and even neighborhood analysis advice. But it will be up to the individual and will ultimately lower costs for both buyer and seller.
Have you ever bought or sold a home in California? @@ericmichel3857
How will this apply to acreage someone buys to build on?
Any listing agent that posts the buyer's commission will open themselves to massive liability. Lawyers will have a great time with lawsuits.
You might want to read the 108 page NAR settlement. If it is not on the MLS, compensation can be provided and communicated . Read up my friend.
@@katrininsarasota You missed the point. I agree that agents are legally allowed to post the buyers agent commission on non MLS websites. Just because something is legal does not make you exempt from liability. Both the seller and buyers agent are required by law to do what is best for their client. It is not to the sellers benefit to publish the buyers commission on any website. For the benefit of the seller, their agent should not disclose the buyers commission. If the selling agent acted for the benefit of their seller, they would not offer any commission to the buyer.
They buyers agent should also never ask or look up what the seller is offering in terms of commission until their buyer is actively negotiating with the seller. If the buyers agent ever hints they know what the seller is offering a commission to them, they could be held liable for steering their buyer to a home that offers a higher buyers commission.
Let's see how this will work when the time is here.
A buyer does not have to sign with a buyers agent. He can present a contract ( offer) , either written by himself or by an attorney, directly to the listing agent. You make it sound like the buyer has to hire a buyers agent. An educated consumer with a knowledge of the real estate market can access all the information he or she needs on their own. And MLS is not the only place to get information on what's for sale in a specific market. I am a retired real estate broker in Florida who keeps his license active on a referral basis.
I didn’t make it seem like it was the only option. Work directly with the listing agent and/ or get a lawyer to write up offer. Whatever makes the most sense for you.
Actually, yes you did. You stated that all across the country if you want to see a house you saw on Zillow, you will have to sign with a buyer agent. And that’s not accurate.
If you want to use a buyer's agent affiliated with the MLS, you have to sign a buyer broker agreement before seeing a home no matter where in the US. Listen to it again 9:07. Sorry, but you missed hearing a few words.@@eduardocorrea530
I’m 45 and looking for a career change. I’ve been seriously looking at my life as a realtor the last few months. The idea is exciting to me, but Is this the worst time ever to become a realtor?
If this is what you want to try, why not do so? It might actually be easier for you to adapt vs an agent that is used to the old ways. Just know it takes a while to learn the business. My recommentation is to work with a mentor.
Don’t quit your full time job!!
There are some brokerages that pay a salary instead of commission. You'll need to be knowledgeable on real estate as the people who were bartenders that switched for a quick $$$ knew very little and that's why many folks say buyer brokers were useless.
As a Realtor for 34 yrs. This settlement is an Atomic bomb on the RE Industry. I think multiple offers will be few and far between. I think that commissions will eventually erode to 1.5% per side. I think Gary Keller has already predicted this?? Many buyers will be hurt by this. Especially first time buyers as well as VA buyers. Will be interesting to see how this all shakes out.
If I may ask a question, who exactly is going to be receiving the money from this 418 million dollar settlement if approved by the court ?
From what I read, but not totally sure, it seems as if the lawyers are asking for $85 million and the rest I assume would go to sellers (approx. 500,000 sellers). Sellers are not getting much.
@@katrinstake Thanks for your quick response, and as always the consumer loses. Good job.
I wonder if the lawyer's commission should be adjusted as well? Seems fair. @@katrinstake
33.3% to attorney's
@@TG-pr4ve Thanks, roughly 137 million. Lol
I can see 1) new buyer agent fee or 2) buyer on their own using internet resources. Any which way, buyer get hit.
It should be 6%, split between both agents, unless listing agent sells it.
Should be negotiable
Buyer agents who are paid by the seller agent naturally work in the seller agent’s interest. Buyer agents need to be paid by the buyer if they will ever work for the buyer’s interest.
Oh well. 40 years ago we had 18% mortgages. Things change. They'll figure it out.
1 to 2% total fee works in other countries.
Discount brokers have been available but most consumers did not use them…
@katrintherealestateguide the norm in UK for example. Works fine.
The value that a buyer’s agents bring is almost nothing, certainly no where near 3%.
We love people like you. You end up paying a lot more for the house being unrepresented. If you ever get legal battle, would you hire a lawyer or represent yourself?
That is nowhere near being true but even if it were, they are bringing a buyer to the seller, without which any commission being "saved" by the seller would be meaningless as the property sits on market due to lack of traffic and offers.
If sellers want to sell, they need to offer a competitive commission for their market. Of course, they're free not to, but this will affect buyers' ability to purchase due to cash requirements or their willingness to purchase because they think the seller is gaining at their expense. One way or another, the seller is going to pay, it's just a matter of how. Is it going to be through a commission or a price reduction?
@@jimmcdaniel2157 I would pay the lawyer by the hour for his time, just as a buyer's agent should be compensated. A percentage of the sales price is ludicrous.
There are percentages of that 3% that goes to the broker of the company and the company and the realtor which has to pay taxes on commission . Plus the mls dues, e&o insurance and other license requirements. Plus the signs, advertisements, and vehicle use.
@@briancupchurch And it's still too high!
There is only one buyer for one house.
I think the courts got this all wrong as usual. I have owned several homes in my life that I sold and I always negotiated my percentage with my realtor. I even told my realtor how much of a percentage to give the buyers agent. At the time it was 4% total and they were to give 50% of the 4% to the buyers agent. So 2 and 2. If they sold the home to their own clients they get the whole 4%. It was so simple and no one got ripped off. Now if I were a realtor today I'd charge 5% or more and share nothing because this settlement should knock out the competition and small realtors leaving only the largest real estate agencies to collude on a high fixed commission.
I think sellers will be smarter than that
@@marciamakoviecki3295 I think they will be forced to pay higher commissions if you want a realtor to sell your home. I see a ton of independent and small real estate firms going away leaving only the larger firms. And you know those few large firms will all set the new fees. If K.W. wants 6% no way will C.B. under cut them. There will be plenty backroom deals for sure. We shall see. I think buying a home just got more expensive thanks to this decision.
Here’s what I see happening: 1 buyer can’t afford the commission, so the property doesn’t get the same showings as a property that does offer commission 2. Buyer goes unrepresented then sues the seller for an undisclosed material fact.
It’s a possibility
Buyers should pay their agent. Sellers should not reduce their home prices because they don't pay for the buyers agent.
It is illegal for a buyer's agent to steer their buyer to a listing with a higher buyer's agent commission.
The agent is required by law to do the best thing for their client.
The lawyers just won against the realtors. Do you really think agents who steer clients from homes with lower commissions are not going to be absolutely crushed by lawsuits?
The agent won’t steer but the buyer likely will if the other option is to pay out of pocket. Sellers are likely going to offer buyers compensation as a marketing tool when needed making their property more attractive with buyers.
@@katrininsarasota the seller will not be able to market buyers compensation effectively since it is not allowed on the MLS. Here is what will happen, buyers will call the seller directly, and ask the selling agent if they know an agent in their office who will handle the paperwork for a few hundred $'s.
Buyers agents will be nothing more than a transaction coordinator, the listing agent will get paid for the average listing up to $5k.
This is a big win for sellers!!!
Let's see how this will play out in July.
Do you know how this will affect real agents in the villages?
Hi no I do not yet. The Villages has their own MLS so I am not sure.
@@katrinstake thank you I like to buy in the villages by this time next year. I know I need a MLS & VLS agents.
I’m building a new house, payed that realtor 3%, I have to pay the realtor selling my house, and they want me to pay the buyer’s realtor… not fair! The buyer should pay the realtor doing the work for them. If they don’t show my house because of compensation that is not fair to buyer or seller, just a selfish move.
What if the number of buyers able to purchase your home goes down by a 1/3 because many can't afford a down payment plus $10,000? Suddenly, with less buyers you have less chances to sell your home for top dollar. Simple economics. Buyer pool will lower with new rules, and no one will benefit (except the lawyers from the lawsuit).
I would imagine that a lot of first time home buyers who do not have extra funds will either go direct to a listing agent, employ the services of a lawyer, or sign up with a buyer's agent and look only at homes that offer a buyer's agent commission. We will need to see how this all shapes out. @@rasman007
Mist people these days are moving fron another town state they really need a buyers agent so I don't see so much change. And truth is ir right many house will get traffic and the ones who don't offer payment won't get any buyers coming by. My friend made a mistake offering his home at only 1 and half % to buyers agent guess what it didn't sell haah and it was in a great hood .once he went to 3 % it sold in 1 week
Apparently you and Katrin are not paying attention to what just happened here. What you just described is exactly what the lawsuit was about. The NAR was essentially coercing sellers to pay this 3% buyer agent fee or else! It would be a real shame if agents didn't show your home or steered buyers away from it because they didn't pay this fee. Even a realtor suggesting (as she did) that sellers that offer a buyers agent fee will somehow have more buyers looking at their home, could be a enough to bring a lawsuit.
That is the entire point of this, realtors CANNOT coerce sellers to pay their fee, and that is exactly what they are doing when they suggest there could be a difference in buyer traffic because of this "fee". It is no different to the "Gee nice place you got here, would be a real shame if something would happen to it, maybe you should pay our insurance fee". It is not different when it's "Gee nice house, it would be a real shame if most buyers don't get to see it, maybe you should think about paying our buyers agent fee"
Get it? They don't know it yet, but even the hint of anything like that happening, can and will bring a lawsuit.
Eric, if a seller offers a buyer's agent commission in a landscape where the other option is for the buyer to pay the buyer's agent fees, the buyer themselves are more likely to go see those homes that offer the buyer's agent commission. It is not the real estate agent driving this unless the buyer asks the real estate agent to only see homes where the buyer's commission is paid (I am sure this could happen). The real estate agent is not supposed to steer a buyer. So the extra traffic will come from the buyers decision themselves! BTW - flat fee services, discount agents, getting a listing on the MLS for a few hundred bucks has been an option for years now. Commission has been negotiable. @@ericmichel3857
NAR has no backbone and should have appealed the verdict
so if I see the home on Zillow and want to take a look the seller's agent will show it to me and write the contract for me?
I have bought property using the seller's agent and it worked out fine. Not everyone is comfortable with that, and some agencies will not 'dual represent'.
You have no representation at all in that scenario, so if you’re inexperienced or a newbie buyer you may get burnt. The seller in this scenario is the only one protected.
Probably not without payment.
Yes, and that is what has been done forever now. What the buyer needs is a good real estate lawyer before they sign a contract. Real estate agents do not represent you, only an attorney can represent you.
The seller's agent will be getting paid - in using one agent the seller would net more $ because he saves1/2 commission, but the buyer better know what he's doing. I've done it twice no problem, but very easy deals. @@milo29841
I wonder how brokers will respond. The general public may not know that we Realtors pay a significant portion of our commission to our brokers. Many of the big box brokerages are a 60/40 split until you hit a certain threshold. Mine is a boutique and the split is 80/20, but the resources they provide are slim to none. Then, you thrown on the fact that we’re 1099 commission only contractors and therefore are taxed heavily (15-30%). The reality is that most realtors aren’t taking home anywhere close to the “commission” that is being charged. It’s unfortunate that Realtors are being vilified when in reality it’s the people that were supposed to “protect” us that are to blame.
I understand your sentiment. I believe brokerages will start competing much more on the split or providing extra services to keep agents. Agents also have choices of where to hang up their license :).
@@katrinstake yep. I think there is going to be a wave of agents moving brokerages as a result of this.
I can see that happen as well.@@movingtokc
Wow just wow
I guess you’re the spokesperson for Caldwell. The agent trainer. The common theme I see is, real estate agencies are running scared. They seem to be afraid their overpriced services are now coming out into the open to the public being seen for what they are. I hear the same thing, advice the buyers of your worth to them. Bull.
I am not a spokesperson for anyone but for myself. Don't get an agent if you do not see their worth. It's a free world :). I have experience on both sides (agent and consumer), and I know that it can pay off if you get the right one especially when coming from out of town, when time pressed, not a data person, etc. But again, you do you and that's all good.
@katrintherealestateguide, I understand you completely. I’m retired now and looking to buy my last home in a warmer climate. I’ve lived here for 32 years now so I haven’t had to deal with buying or selling a home since. I’ll give this home to a son but now that I’ve been looking (Zillow mostly) for almost a year now to get the feel of things I’m very dissatisfied with the industry. My buyer’s agent has shown me several homes , almost all vacant, and I haven’t seen one lazy sellers agent or anyone yet who knows anything about the house. The only thing my agent has known is how to open the lock box. Tell me what her big value is for doing nothing but pushing some electronic paper. As far as negotiating, her advice is always “ make an offer and make it strong so the seller accepts it. Wow, some negotiating skills she has. “Offer more than the asking price because there may be multiple offers”. And you think this is an agent working for me? Which is greater, 3% of $350,000 or 3% of $300,000? I don’t need someone with self satisfying goals negotiating for me. All I need is for the sellers agent or the seller (who I am never allow to meet) to show me the house. I’ll make an offer and they can take it or leave it. Have it inspected and appraised, have a title company and lawyer do their thing and it’s a done deal. I’ve done it that way twice before. FYI, I will never sign a contract with a buyers agent just to be tied to them contractually from then on. I don’t want to see an entire industry destroyed but it looks like you’ve done it to yourselves through greed. Not to mention the seller and buyer agents who conspire together to the detriment of their clients all for a few extra bucks. Good luck getting through whatever is to come. It’s going to be a mess.
@@danielbaird7419 sorry you had a bad experience with the buyer's agent.
That is what an appraisal does not the realtor again you are steering buyers by doing this.
A realtor does a comp analysis (not an appraisal). It is part of what a realtor does and always has been.
skip all this crap when selling and do "for sale buy owner"!
people have had that option but est. 89% choose to sell with an agent
This decision isn't that impactful. The big decision is coming out of an Illinois lawsuit that could prohibit seller's agents from sharing commissions with the buyer's agent.
Tell me the jury are all renters without telling me the jury are renters.
Hmm l will take a shot at that… “Who would likely be the most impartial juror based upon their experience (or lack there of) in real estate transactions?”
I'll answer - not renters. Many have hate for 'greedy landlords' and jealousy of people who own homes - 'the rich' or "evil corporations" and would jump at any chance to inflict pain on "crooked realtors" . All you have to do is read the comments on many of these real estate videos to see my point. Justice is not blind in this country - far from it, in case you have not been paying attention.@@theGHSV
@@theGHSV Right, if anything they are more likely homeowners sick and tired of being coerced into paying these ridiculous "fees".
I've always frowned upon listing agents capitalizing by overinflating SRP ....These high prices attract buyers agents looking for their slice of an overpriced pie....this leads to the buyer's agent creating a false sense of demand ,in turn, convincing the buyers to submit an offer at or above the overinflated list price....
Then theres plenty of loan sharks and stretching appraisers to seal the deal..
No disrespect Kat....Im sure you provide superior value to your clients, however the system had created a housing unaffordability crisis....
Again...the middle class is compromised
Thank you for sharing your viewpoint Mark.
@@katrinstake...
Thank you for insightful content
You are spreading misinformation! The settlement states when a buyer is represented there must be a written buyer representation agreement prior to showing any properties. In New York State we have subagency thereby allowing a licensee to work with unrepresented buyers and receive cooperating broker compensation or for direct and in-house transactions paid by the terms in the listing agreement.
You may want to read the settlement agreement
@@katrinstake The proposed settlement only addresses Realtors representing buyers. There is no restriction for Realtors working with buyers in other types of agency relationships. In New York State we can act as a seller's agent for either a direct or in-house deal OR as a broker agent or seller's agent when showing another broker's listing. Therefore NAR and Realtors from other states should refrain from commenting publicly about the only way a buyer can view properties when the settlement rules are in place is to have a signed buyer representation agreement executed before hand. NAR or any other trade association cannot adopt rules that supersede a state's laws. I know my state agency laws and am 100% certain of my facts. If you disagree, please show me why my thoughts are inaccurate. I am open to hearing opposing viewpoints from anyone.