My Response to the NAR Lawsuit (Real Estate Is Changing Forever)
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- Опубликовано: 9 апр 2024
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The NAR Realtor Settlement:
What Is The NAR?
This is a trade organization that real estate agents can pay into if they want to receive the designation of becoming a Realtor®. This means they’ve pledged to a higher code of ethics, adopt additional industry standards, and they get access to a wide range of services and forms.
The Current Payment Structure:
The commission is - and always has been - completely negotiable. However, the MLS previously required that the listing agent offer some form of compensation to the buyer’s agent - even if it was just $1. Despite this, most buyer’s agent commissions were listed at 2.5% in the MLS.
The NAR Lawsuit:
The lawsuit alleges the “existence of an anticompetitive agreement that resulted in home sellers paying inflated commissions to real estate brokers or agents in violation of antitrust law. Their entire argument relies on the belief that - if commission rates were negotiated directly by the home buyer, for their own services, commissions might begin to fall as agents compete for the buyer’s business.
The NAR Outcome For Housing Prices:
FOR SELLERS: The only confirmed change is that the MLS is no longer required to display buyer’s agent commissions. This doesn’t mean that sellers can’t (or won’t) pay commissions - but it’ll no longer be a required section to list.
For buyers, it’ll soon be required that they sign a buyer’s representation agreement before touring any MLS-listed property, that specifically states the amount or rate of the agent’s compensation.
The Realistic Changes:
I believe that buyers probably wouldn’t want to pay a cost like this out of pocket, especially when so many of them are already cash-strapped to begin with. This means, any commission would have to be written into the offer and “baked in” to the selling price of the home.
Second, I wouldn’t be surprised if some buyers simply chose to forgo any representation, entirely, as a way to either save money or make their offer more competitive - which, can be incredibly risky.
Sources:
List of NAR Dues and Benefits:
www.car.org/-/media/CAR/Docum...
The Basis of the NAR Lawsuit
www.prnewswire.com/news-relea...
The NAR Settlement for Buyers, Sellers, and Agents
apnews.com/article/national-a...
The NAR Presidents Resign:
www.nar.realtor/magazine/real...
www.washingtonpost.com/busine...
The $418 Million Settlement Terms
projects.propublica.org/nonpr...
Sellers May Receive Only $13
www.ocregister.com/2024/03/25...
Additional Settlement Terms:
www.veteransunited.com/educat...
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The text in your videos is very low resolution, it bothers me! (example 14:24) It's been like this for a while.
😊😊😊😊😊😊😊❤
Thanks for share your time. I appreciate you
Graham, hope you’re having a great day.
What’s the best way to get in touch with you to setup a meeting? I have several business here in the vegas valley and want to connect with you.
Much obliged,
Kyle
Are you no longer an agent?
As a “Realtor” I want to say thank you finally someone explained it correctly this going to show who’s a good agent and who’s just doing the bare minimum.
You got it!
@@GrahamStephan what about new agents, they don’t have that much experience, how are they going to convince the buyer that there worth it
@@RahmaniMaadat Just like any other business does.
Couldn’t agree more I had a bad experience buying my first home . The realtor lazy and let me go on my own to a lot of open houses . I was doing the searches for open houses and new sale homes . In between all that I met another realtor that knew the area better and I liked his customers service . He actually shared way more useful information. He put in the effort and said “ why wouldn’t your realtor come represent you,” I was like “ I know right !,” he snatched me away from the younger guy . He was older than the young guy that I got on Zillow . I ended up going with him and left the other younger guy . Not saying that age if a factor, but there’s a lot of lazy realtors that don’t really connect with home owners anymore. I think a lot of those are the ones that ruin the experience and in present time give “ Realtors,” a bad reputation.
@@RahmaniMaadat new agents should interview brokerages and see in writing which ones have a marketing plan that will help you do so. This lawsuit I think is putting the emphasis on the Brokerages greed; taking too much from agents and not providing them with enough value. I say that as a Brokerage owner now after almost 20 years as an agent. Agents deserve better for what they pay their brokerages in a lot of cases.
The seller is NOT going to lower the price if they do not have to pay the realtor as much. They are just going to pocket that savings.
exactly
Queue the lawsuits from the buyers that we saw in the late 80s early 90s saying that they are getting taken advantage of and demanding sellers agents cooperate and offer buyer agency again
There is a reason why buyside compensation was offered out on the MLS and the industry will probably rediscover that was done in the first place 😂
Correct. Markets have never and will never be determined by a margin or commission, they are based on what someone is willing to pay for a product or service.
I.e. Supply versus Demand Econ 101. (Politics and marketing/media also play a part)
@@LikeawormThe rest of the world has discovered they don't need it
As I’ve finished the video now, I do agree the biggest change will be that some agents actually have to show “here’s why I’m worth what you’re paying me”, and that should hopefully cut out the incompetency in some agents.
Sometimes it makes me think some people should retire early in RE. One time I had an older but very experienced agent text me, after we’ve been in contract for weeks and had dozens of communications on the phone, ask me where she can find my phone number, because she “couldn’t find it online”…. I was at a loss for words of the stupidity.
I don’t see how she’s going to show her value over me after the changes, so agents like that will lose market share and have to just quit or transition out.
Agent investors are going to be even more valuable. Average agent never even owns a property
That’s funny. Well our agent was so old she had more lipstick on her teeth than her lips.
@@Superdada😂😂😂
For a first-time homebuyer, I honestly feel like the majority of the process of me buying my first home was just myself handling the bulk of the process and negotations. I feel like i’ve spoken with the seller’s agent, lender, and title company more than the realtor has representing me.I feel like in the future, real estate agents representing homebuyers will definitely need to prove their worth once this takes into effect.
Yep standard realtor. The title company does all the things that people think the realtor does.
What? I’ve been in RE for 20 years. Never never would I let that happen. My buyer talk with the sellers or sellers agent?? No way. The only thing my buyer needs to take care of is their mortgage cause that’s a private financial matter.
Yeah, I second what Sandy said. There’s absolutely no reason your agent should’ve even let you speak to the seller’s agent. You want as much ammo as possible when negotiating and you don’t want to trip over your words.
I would fire my agent the second I had to talk to a listing agent
if all that was true, your agent was terrible. maybe instead of telling them they need to prove their worth, you should know when to fire someone and not put yourself through that misery. victimhood mentality much?
I remember in 2007 when I was working in real estate seeing people buy homes new from builders with the intention of selling before close of escrow to a new buyer for profit. The crash was so brutal and fast that I remember seeing a lot of these units foreclosed on with the builder plastic still on the carpet.
Given that we are not used to such volatile markets, the fact that the US stock market has been on its longest bull run in history helps to explain the widespread fear and enthusiasm. There are chances if you know where to look, as you noted when I earned more than $780k in the prior ten months. I hired a portfolio advisor because I knew I would need a solid plan to get through these difficult times.
Please who is the advisor that assist you with your investment and if you don't mind, how do I get in touch if you don't mind
It was run by “Tenley Megan Amerson” , who I learned about and got in touch with thanks to a CNBC interview. Since then, it has served as the point of entry and departure for the games we have emphasized. A search on the internet can be done if tracking is necessary.
Thank you for sharing, I must say, she appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive.
I wish people would stop saying it's "always" been negotiable. While that might be true, most agents never mentioned that. We need to be intellectually honest here. This typical non disclosure is why the lawsuit was brought and won.
not true at all. I've always let my sellers know how the commission works and that it's negotiable
When a seller asks me what is my commission, I always respond that commission is negotiable and we will go over that when we meet in person.
Not sure what agent you worked with but I have always told my clients that I am open to negotiation. That's why you should always interview multiple agents before proceeding. Even when I knew I was pretty much was going to be selected, I still told my clients that the commission was negotiable. It's just bad for business not to disclose that.
Looks at all the honest good agents saying "not me!"
@1999tenorio your sample size of one doesn't make it not true
The last house we bought was an FSBO and we didn't use a Realtor. Everything was handled through our lawyer, the bank, and the title company.
How much was your lawyer?
Certainly not 25k
@@jeanneburgess7078 not at all
@mumap5 my house was 280k, so a lawyer would have been more expensive for me.
What is your state? I am just starting to think about getting out of California.
You definitely have my sub. This content is next level. For me Eledator was the turning point. Please keep doing what you do and keep being you, love it.
As a Realtor of over 20 years I definitely appreciate the thought you put into this video. The most important thing you mentioned was that the settlement is still subject to court approval. While things will change and lots of agents will quit the business the ones who stick around will definitely have to prove their worth.
I hope you’re right. Most people think that realtors are rent seekers. Taking a lot while providing very little in return.
This lawsuit is disgusting and the DOJ made sure it happened. They interfered with the free market. It's a marxist mess! Sellers were always allowed to offer 1.00 to the buyer agent if they wanted to. This attack is about real estate as independent contractors. They want them all to be employees. There never was an Antitrust. This is all bogus!
I totally get it. I’ve worked with plenty of good agents and some that were just looking for vacation money. When we are entrusted to assist someone with what is likely to be their largest financial purchase of their life there should be some sense of value provided right?! I take it as a great sense of responsibility when someone believes in me enough with that decision.
Real estate is a perfect job for former sex workers or prostitutes. You you have to see as many clients as quickly as possible. You have to get them in and out as quickly as possible. You have to get the most money as quickly as possible... Some real estate agents will do ANYTHING to sell that house.
@@DakotaFord592 Clown comment of te week.
Agents would NEVER NEGOTIATE commission. I tried multiple times.
I know a lot of agents that negotiate their commission. When I was new to the business I probably would have if I had been a solo agent as I would have been experimenting on clients while I learned basics but I jumped on team immediately with agents who had been doing hundreds of transactions a year for decades and ranked top 20 in nation so that I wouldn't be experimenting on those clients given sale / purchase of a home is typically one of / if not their largest asset
I was previously in consulting, and now I am in real estate for the last eight years
I kind of find it to be similar to consulting and that if someone doesn't want to pay the amount I need to charge in order for me to see it to be worth my time / experience (my entire extended family is in RE brokerage / construction and development ) then I'm not interested in taking on the client especially given that I know my own colleagues and peers in the real estate business and I know that I provide more value. If someone wants to take a discounted agent im totally fine with that as long as they dont waste my time
As a Seller, I've always negotiated the commission.
not true
@@1999tenorio The lawsuit says different
@sterlingmarshel6299 then those realtors broke our code of ethics and should be reprimanded.
appreciate the real estate vid again, throwback to the channels roots
Thank you!
It's a good day when we get an upload from both Graham and the Hammer.
Hope you enjoy!
What is the real value of realtor? Showings? They don't tell you nothing about house condition, what to know. All they want to do is sell you a house. All technical stuff like home inspection, the legal contract and build process of of these things are not look through microscope with an agent. You have to do the work yourself. There is no value and there are not a lot of honest realtors.
They're glorified comparison websites. "oh you want these things in a house? I'll run these listings through a filter to give you those things, which I'll present you in a list of results. I'll even make each one a link to view online!"
They're redundant and they're now panicking
We are legally bound not to give specifics. I want to help change the negative view.
The one I worked with could get me viewings very quickly and even get an offer in before the open house even started, scheduled appointments for inspectors, and handled a lot of the process overall. I see the value for one in a competitive market.
There is not a lot of honest people, period. This is not a realtor only thing.
You sound like you've dealt with a really crappy agent I'm sorry they hurt you. Majority of my clients are on their second third or fourth transaction (personally or via family) .
I tend to talk buyers out of houses more than I talk them into buying them
Biggest winners: listing agents (seller's agents) if more choose to double end, home sellers and real estate attorneys (if we see an increase in listing agents representing the seller and the buyer = double ending).
Those negatively effected are first time home buyers as well as FHA & VA buyers who may not have the funds to pay their real estate agent (if the seller is unwilling to pay for a buyer agent commission). So, in other words buyers getting screwed again when we already have high inflation, near record low housing affordability, 7%+ mortgage rates, elevated home prices, etc.
Feels like in every story, in every industry, the buyers and the “have nots” are getting screwed by the “haves”. Increasingly Stacking the cards against us. 😢
100% this.
@@bdhanes Just try to remember, most of those 'haves' used be on the 'not have' camp as well. Stay with your game plan and don't lose hope - its a marathon not a sprint.
I know I'm going to sound like a conspiracy theorists however, it seems as if big daddy GOV wants more institutional investors to win.
I agree, sellers, listing agents, loan officers took massive advantage of the market during low interest rates, they knew buyers has more capital due to rates and increase their home values beyond reason and justification. There were multiple factors which set this in motion. Now buyers are in a interest rate market where the prices have not even decrease, a duplex renting for 3K per month 1.5K per unit is on the market for 600K, 700K and even 1M. This math does not add up at all. Regardless the market is entirely crazy, and renting is cheaper than buying. Plus all these is on theory, not evidence based. Moving forward there are many unknowns. I will stay out of the on market real estate market until the correction and if there is never an correction then I'm completely fine. There are other global markets.
Buyers agents may end up disappearing. I mean, why not just look for a house yourself, get your own property inspector, then hire a real estate attorney to make sure you’re not getting screwed in the contract.
Haaa, Try it sometime and take out "I won't get screwed insurance"...
Because nothing stopped you from doing it before, yet buyer's agents still exist. There's a value to having an intermediary when you're buying, but unless you're relying on their expertise in a particular niche, the value is not worth the 2-3% they're making in most cases.
Nothing stopped you from doing that before, FSBO ring a bell? One thing to note is for sale by owners on average sell for significantly less than properties that hit the market. Also buyers agents are out there vetting buyers working to get them pre approved. They have relationships with lenders and bring serious buyers, in your scenario good luck getting the most exposure in the form of qualified buyers, everyone wants to buy a home but who can actually do that. As a seller how does it benefit us to not have thousand of agents out there finding and qualifying buyers and then directing them to the MLS where sellers go to sell their home. Very short term outlook on this whole situation by most of the public. Real estate is sold the way it is because it’s the most effective way to get top dollar. I’ve listed a ton of properties and had the neighbors come stop me and ask what we are listing at and scoff and say that’s way overpriced but guess what everyone of those sold
Not having a quality buyer rep will result in missed deadlines, litigation and failed closings. Additionally, sellers will put themselves at risk by showing their homes to those who have not been vetted. The unforeseen and unintended consequences of the anticipated changes will be far-reaching.
@@vickilindsey4499 Agents will still exist, but they're probably gonna make less money.
most of real estate agents representing buyer actually don't care about the buyer paying less for their property. It is in fact conflict of interest. I call BS on the word of mouth thing. Most of agents think only about the current sale, and they know this buyer is probably not going to buy another property for a very long time or never.
So, yeah, agents will not try to negotiate on buyer's behalf
Please don't bucket us all into the same category that's super offensive. I lose sleep at night worrying about my client during and after the transaction especially the ones I warned not to buy the property in the first place. I've talked more buyers out of homes , than I have talked into buying specific homes.
Don't hire an inexperienced Agent or one whom needs any one deal to close at any time
My guess is with your attitude you hire the cheapest agent you can find or go directly thinking you're gonna save money in which case I love being on the Listing side of these fools because by law, I can't actually do anything other than represent the seller
In that case you as a buyer have a lot higher chance of getting screwed because I can't represent you and I'm a better negotiator than you are by a longshot and I'm also better at marketing than you so if you don't give the offer I want I will find it as long as it's a number the market will pay and I've done a good job at marketing the property but you think you're getting a good deal and who am I to tell you any differently? , Listing Agent will be laughing all the way to the bank and so will their clients for the buyers who decide to go direct or end up negotiating with a inexperienced buyer agent at a cheap discounted commission rate you get what you pay for boo I love when an experienced agents come to me to negotiate because it makes it easier for me to garner a win for my seller clients.
The more I see the comments on this the more excited I am to transition. At first I felt bad for a lot of buyers but now I'm starting to realize that most of them don't think we're worth anything which makes me even more valuable to my listing side clients
negotiating is literally my favorite thing to do in life. that doesn't always mean nickel and diming the other side ... negotiating is an art best acquired over thousands of transactions
Being good a screwing people over is not something to be proud of
As a former agent we will do everything in our power to get you the best deal . Most the time you’re only gonna be able to negotiate a listing down $10k-50k . In California where the average home is $900k , that only takes around $250-$1250 out of our paycheck. We’re glad to lose that and make sure that you tell everyone that we saved you a good deal .
Not true at all. There are some bad realtors of course, but one deal does not make a realtor. I want to negotiate for you and help you get the best value and represent your best interests. If you are happy, you will refer people to me.
You changed my whole life I was homeless couch surfing late early 30's whenever I subbed. Now I have my own home some debt and multiple sources of income plus investments. you thought me money I would hide a body for you ..... Thank you for everything you do and keep doing it you do have a good effect on the world
Thanks for making this graham. I really appreciate the real estate videos you put out.
wow thankyou for this info
Glad it was helpful!
Thanks for explaining it clearly, and being able to separate what actually is happening and what you think is going to happen. I really appreciate listening to you because you are able to make those clear lines of facts vs opinion.
Keep up the great work!
You're very welcome! Glad it was helpful!
I agree with you, I don't think it will bring prices down and I think it will make it harder for buyers.
Thanks for these information...
Of course!
This was very interesting and informative. Thanks!
This will not reduce prices. Prices are not based on commission they are based on what the people are "willing" to pay. They drive the prices up with multiple offers.
Remember that this guy is just a RUclipsr. Always do your own research. Do not rely on random people to make big decisions. The idea that everything was negotiable is a complete lie that’s why the lawsuit was legitimate and the NAR was a monopoly. Also, why is the commission based on the gross sale of the house and not the net? Because agents want as much money as they can pull out of a seller. Hopefully the industry will change to à la cart menu or a truly negotiable price
You do know that agents don’t get paid unless they sell and that the brokerage takes 30%-40% of the commission! Plus all the fees they have to pay every year…I’ve worked with people for months and got paid zero.
An a la carte menu means a more concentration of real estate in fewer and fewer hands…That’s where this is going! And once that happens the bar to Americans owning their own home will be mostly a pipe dream! It’s already happening.
@@jamiesouza The brokers/agents also carry E&O Insurance to deal with litigation. I wonder how many FSBO gets sued for non-disclosures annually?
Real-estate Agents are the "waiters" of real-estate. Id rather walk to the counter to get my food.
I’ve sold a couple homes as FSBOs and tried with a third. My fear as a FSBO seller has been that RE agents will steer their clients away from properties. I know this happens but I don’t know how pervasive it is and how much it really impacts the sale of my properties.
Great video. When I was going through my licensing classes, I remember the teacher explaining that commissions were always "negotiable" but wink-nod it's always 5%-6%
Yes, the local brokerages that control the majority of listings control the market rate for commissions.
Real estate is a perfect job for former sex workers or prostitutes. You you have to see as many clients as quickly as possible. You have to get them in and out as quickly as possible. You have to get the most money as quickly as possible... Some real estate agents will do ANYTHING to sell that house.
@DakotaFord592 keep posting this comment, someone is bound to like it
@@markme4 it's true. Real estate is the perfect profession for retired sex workers or prostitutes. ❤️ You have to get clients in and out of the house as quickly as possible. You have to get as many clients in and out of the house. Some real estate agents will do ANYTHING to make the sale. 💕
@@markme4 Dakota sounds like somebody who got their license and then couldn't close any deals.
I’m curious how much if it does change anything.
Thank you for the info, Graham!
Great stuff bud! Thanks. Great info.
Any time!
Graham, it sounds like incentivizing the sell side to not share with the buying agent, causing more successful agents to be selling agents and encouraging the sale of homes but not the purchase of homes. This along with themes like “renting is cheaper than owning”. Seems to me an attack on the only asset the middle class comfortably had which provided them generational wealth.
I personally would like to see a detailed video on inequality.
Graham, thank you so much for putting this video together. I thought about making one myself, but I don't have the following you do. You have pretty much said everything my broker and I have discussed in private. So many people, especially the media, have not covered this correctly. I feel like you are pretty spot on with your observation. This video will probably appeal to agents more than anyone else, but I feel it was worth your time to make. Not all agents are as educated on the matter (majority of part-timers) and are making assumptions based on inaccurate news and social media posts. This is my full-time career in which I'm very passionate about. One thing in particular that you touched on is exactly what I tell my clients, I'm here to make an honest living, not make a quick buck. My reviews are more important to me than anything. Thanks again for taking your time to make this video. I know you're a busy guy, but I'd be happy to discuss this or any other matter with you anytime. Keep up the good work!
Do you buy individual stocks?
I remember when the MLS was a thick client you had to install and not a website. I had a lot of realtor clients as a PC sales and technician.
So much uncertainty around this but I feel like it will lead to industry consolidation. Only the competent full time agents will be able to itemize and productize their services. This will also mean that the agents who survive will survive on volume more than ever. So, you will have a small pool of agents doing more deals. While there is a lot of confusion to sort out, ultimately this just means there will be less commission to go around and the dominos will fall from there.
My thoughts are that this will be a big nothing burger when the dust settles. But there's going to be a tumultuous time in between when everyone tries to figure out how to navigate this new world.
I totally agree with this. It could actually end in the really savvy persuasive agents making even more money because now they can negotiate even higher amounts. The standardization of prices made it easier for the bad agents to make money but harder for the good agents to make a lot. I want to see what will happen, but it will be interesting none the less.
Thanks for sharing your opinion, certainly articulating your value to prospects will be more than ever a good system for any agent!!!
I feel like signing an agreement before you've looked at a property is going to get you stuck with an incompetent realtor. How do you know what kind of value and insight they have before touring a property? When you go with them they can point out possible future issues and its really their time to shine.
I agree with this as well as an agent I don't even know if I wanna work with specific clients until I've shown them a property or two, or sometimes several I would imagine that will be the same for them as well
You can sign for just certain properties or for just the day.
@@KeepswimmingkeepswimmingI thought that too as an agent. But yesterday I attended the FL Realtor association’s webinar about it. On the form it says the agent can get out of the agreement with a simple written request.
You meet with the agents first. You do a buyer consultation.
I feel like neither party is usually down to f on the first date
I do not understand why anyone would go into the RE business when unlike before, there will be no commission paid to the agency or broker who represents the buyer (good luck with that and good luck with the listing agent sitting in all open houses). Before the court ruling a 5% commission (or whatever was negotiated) was split between the listing agency and the agency and broker that represented the buyer of the house. If an agency or broker made 50% of their income from listing houses and 50% from selling not their own listings, then after July 2024 they will be missing 50% of their income or more because sellers will negotiate the 2.5% commission down to 1.5-2.0% leaving even less money for the RE agency and broker.
I’m a Realtor, and when I defined this as steering, my peers literally yelled at me and called me a liar and an idiot online 🤣🤣🤣
seems to be justifiable panic that they're reacting in fear 🙂
Steering how ? a lot of my clients want to know how much of the commission they'll have to cover
That's like telling the buyer to ignore the sales price or ignore the interest rates when they're looking at homes to line up for the next day to view
If you're a buyer agent and your client, the buyer doesn't understand what their net cost will be the day of closing and their payments moving forward thus it being important how much of the buyer commission is covered by the seller or how much will be coming out of pocket from the buyer Then the agent didn't explain their job because the part of commission that's paid is just as valuable as knowing the sales price of the home, the age of the HVAC, the age of the roof, the monthly payment, you guys are truly morons
While I can see some people looking for higher commissions, as sales people, I've never in my life come across someone only showing certain properties because of the interest rate is more of a hay we're looking at blank this will cost you blank out-of-pocket or looking at blank, this will cost you blank out-of-pocket before you go view the home
Real estate is a perfect job for former sex workers or prostitutes. You you have to see as many clients as quickly as possible. You have to get them in and out as quickly as possible. You have to get the most money as quickly as possible... Some real estate agents will do ANYTHING to sell that house.
"Steering" does have a historical meaning which is not the same.
I appreciate you covering this topic! I originally heard about it through the NYT podcast and appreciate your perspective. If my memory serves me right the original lawsuit was brought because a family working with an agent was never told the about the negotiable commission. It is a weird system and I am curious how this shakes things up in the future!
The agreement they made is a big mistake. They would be far better off going back to the old way of adding the buyer commission to the selling price. My realtor told me the commission would be less if there wasn't a buyer's agent....we agreed to it....there was a buyer's agent who I was happy to pay because the agents made it all happen and kept me out of it. Agents are a very useful buffer between the buyer and seller.
My man. I’ve followed you for years. Been waiting for this video. Thank you!
My pleasure!
I just go straight to the listing agent to write my offer
Thank you soooo much !!!
You're welcome!
Thank you talking about this!!
You got it!
You should put chapters for your video
I’ve thought of doing that! That’s why I’ve put captions on screen for each section.
@@GrahamStephanI see that. How about chapter time stamps? Would be easier to navigate the video
Great take on the subject. I do think buyer side commissions will go down but it won’t improve affordability. Most sellers will still continue to try to maximize their proceeds by pocketing the savings without lowering house prices.
By side commission should be much higher than it is because the cost in both time spent in person and level of uncertainty with each buyer is so much higher than doing a Listing
@@Keepswimmingkeepswimming I know many listing agents that work with sellers for months getting a house ready for market. That’s said I do agree with you that buyer’s agent tend to have more hours invested and should be compensated more, there’s so much hand holding in the process with many new buyers.
As a realtor, you are the first big content creator I have seen to accurately share what is going on rather than chasing headlines and clicks. You communicating in this way is going to save a lot of buyers/sellers from all of the misinformation out there!
How does this affect buying REOs?
Super interesting topic. Glad you tackled it!
Glad you enjoyed it!
As someone with no experience in real estate, who just finally saved up for a down payment, I feel completely drug through the mud… I know, because of my inexperience in real estate, this crap is gonna put me and probably most first time homebuyers at huge disadvantage. How easy will it be for a real estate pro to outbid a first timer just because they know the ins and outs of purchasing and don’t need to pay a buyers agent… this is so messed up 😔
It's actually in your best interest. The agents are the ones who will have some difficulty as their free cash cow parasitic existense will now be up for scrutiny 🙂
shelter = fundamental human right
@@d13x001 Nope. Shelter requires someone else's labor, so unless you want to go down the route of promoting chattel slavery, it (along with healthcare, food, and water) cannot be a human right.
It's going to on rough on first-time home buyers.
@@d13x001That's mean.
@@d13x001 Agreed except the shelter is a fundamental human right. This is lazy talk.
Finally somebody with some knowledge making a reasonable report on the situation that wasn’t this ridiculous Clickbait stuff that I’m seeing on all these online news sources. Great job Graham. Well put.
Thanks Graham. I was wondering about renewing my (mostly unused) license, and this was helpful.
You got it!
Average home price in california is 800k. Imaging getting paid 25k for just hours of work. That’s crazy.
Hours of work 😂😂😂😂 hilarious ! Clearly you have never walked a minute in a real estate agents shoes
"Hours of work" are you out of your mind? I want to be upset with you for that comment but my guess is that as agents we have made this way too easy for our clients by working in the back and to make it more seamless for our clients,. But your comment is the exact reason why we're building out a new model that charges a retainer upfront, and then by the hour. I'm interested to see if I make more money that way by people like you who think that we do not work 🤣
@@Keepswimmingkeepswimming You really want to enter the world of fiduciaries doing billable hours, the way lawyers do? Enjoy that, as the complaints come in.
If you think it's easy, then become a Realtor.
I think the lawsuit exposed the illegal activities of NAR and realtors. So, I know my argument has some standing.
To my understanding, just because buyer's agent commission is now negotiable between the buyer and the buyer's agent. DOES NOT mean that as a buyer's agent I am required to work for a discount rate or for free. Just by saying NO in a negotiation conversation, is in of itself, a negotiation nevertheless. It may not be the negotiation outcome that the buyer preferred, but again, if it were forced to be so, then that's not a negotiation.
Agreed. Agents should value their time and expertise, if a buyer offers too little - no reason to work with them.
True, but with the oversaturation of agents, you will have to REALLY show your worth it and have reputation or will be cut short from new agents wanting to glow their clientele.
@@WeTheeBrutal well if you want to experiment with a new agent to handle your largest asset then go for it I'm not discounting my rate I already feel like we don't get paid enough especially on the buy side
And on the Listing side, there's no way I'm doing both buy side and the listing side jib duties or anywhere near what the media and the politicians commenting with no experience in the business are insinuating. I have no problem switching to a corporate role or fully into law.
Consumers are playing themselves if they buy the BS thinking this will bring down home prices or be remotely beneficial to them. This is solely about corporations and government seeing opportunity for them to make more money and gain more control.
Be careful what you wish for
@Keepswimmingkeepswimming oh I'm against this. Buyers are going to get destroyed. But I also know the popularity of being a sales agent from media. You can only go so far into keeping your price before you start realizing it's not paying the bills anymore. So if it's someone's actual full time job and don't have a good reputation or well known network, it's going to be rough because if no one knows you, your just like any other rep to the buyer.
HAHAHA you're not being asked to work for discount or free, you're being asked to get paid what you're actually worth and not whatever your entire industry has decided for us all
Heads up if you’ve never bought or sold a home: When you hear that realtors “ensure a smooth closing”. Its easy to imagine this means getting two people in a room, getting them to shake hands, sign forms, and take pictures. Whats hes actually referring to is a 30-45 day period where the inspectors, township, loan originators, appraisers, title company, lawyers, etc, all scrutinize and dissect the house, its history, past owners, etc etc, to see if the home is actually worth what everyone thinks it is, that its safe to live in, and that its not breaking any codes. Its the realtors job to coordinate all of this, and deal with/solve all the issues that come up, that would otherwise stop the sale of the home. The process doesn’t just end for them once they show a house and an offer is sent and accepted, as many assume.
Thx Graham!
Almost all of the "advantages" of a realtor mentioned are all done by 3rd parties and paid for by the buyer in addition to the realtors fees - inspection, appraisal, financing (underwriter), closing (title company). I have personally represented myself as a buyer and seller multiple times. It's really not that hard. Realtors get paid way more than they're worth
I think a lot of the value of an agent is in the contract itself. Agents use contracts from their state realtor association that cover all of the bases. Some FSBO contracts I’ve read cause me anxiety even though I’m not an involved party.
@@dove861 in the past, I have just paid a law firm specializing in real estate to handle the contract portion and it only cost me a few hundred dollars. Lawyers are much better at analyzing contracts. Realtors constantly miss things or give bad recommendations as a result of not having sufficient legal knowledge.
A common argument and somewhat true. However, usually miss leading by saying it's really not that hard, as that can be put on any professional labor. You have similar arguments within the DIY world, whether working on automobiles or homes. I'm a real estate agent and I also do 90% of my own vehicle repairs and home improvements (including full plumbing and electrical work). Saving me tens of thousands of dollars in labor costs. Especially the plumbing work, they can easily run a homeowner 10-20k for a full 1200sqft ranch home plumbing reno that takes them 4-8hrs to complete. I can do the work "it's really not that hard", but I wouldn't tell people that, as most of the time when I try to walk someone through a DIY they go cross-eyed. And I only know what I know because I spent time learning it and I understood it and thought it worth my time to do myself. Many professional jobs come from a professional needing to redo DIY mistakes. So it really depends on what your time is worth ...sometimes it's worth more to hire a professional.
It comes down to whether what you do nets more than an agent (or any other service professional) charges. If you make less than agents make, want to navigate it on your own, and have the contacts and knowledge to get through numerous issues that will absolutely arise when you buy and sell a lot of real estate; by all means, diy it. If you are worried about saving money by not using an agent, because you don't make as much as they do, just become an agent. Then you can make that "easy money". Most people can also hang a ceiling fan, but if you are an attorney, and make 300-400 an hour, what kind of sense does it make to save $100 for an hour by not just having an electrician do it, who will do it right? There are numerous examples, but the bottom line is, even if you can do it yourself, it isn't always worth the time, and they can more than likely do it better if you have a good one.
@@QwayczarMusic My issue is mainly how much they make. Inspectors have a set price, lawyers have an hourly fee, yet realtors somehow they they deserve a percentage of the home value? That's insane. I personally would rather pay a lawyer, who has actually gone to law school, to look over the sales contract. Realtors who are supposedly "good" still miss things all the time in these contracts because that's not what their expertise is in yet we pay them 10x more than what a lawyer would cost. It makes no sense. Yes, they do other things, but that's really the most important part of the whole process
Why did you even hesitate about talking about this? This is literally your wheelhouse, and important enough to be something you should feel you must talk about.
because he has friends in the business who make money as buyers agents. He was probably conflicted about giving information that can save sellers money
Been waiting for this video!!
Genuinely think the only winners are the lawyers who argued the case.
House prices won't change because they are, like all assets, worth what people are willing to pay for them. And there is far more demand then supply.
I got my real estate license at 19 and worked in it for years while pursuing other interests. I learned early on that most agents and the industry care more about their own interests than the customer. I am not saying all do but most. I still do it sometimes because I really like the people but never wanted it to be my future. The NAR doesn't care about the customer. The local associations don't care about the customer. Zillow does not care about the customer. This is all of it coming home to roost. I think this is going to create a lot of opportunity but I don't think it is going to be for real estate agents. There is not a chance real estate agents should be getting anywhere near the amount of money they get now. $50,000 on a million dollar house? It is absolutely insane and I am an agent! An attorney on the same deal is maybe making $2,000. The mortgage broker/company, title company, no one is making anywhere near that kind of money. This is the beginning of the end for the real estate agent.
50,000 for a million dollar sale is completely reasonable. Real estate is sales after all
@@user-ki1iv9dq2kbut really how much more work is selling a $700k house than a $1 million house
So did you refund your customers your commissions then? Or did you "work" in real estate for years and never made a sale?
@@benberk8541 I've sold over 20 million dollars in real estate and these were not million dollar homes. No actual responses to my points. Good luck.
@@user-ki1iv9dq2k The mortgage broker is also sales but do they make $50,000? How about the title company? Attorney? $50,000 is crazy. Think about the seller in that situation.
Will you come on The Tom Storey Show to talk Real Estate?
That would be amazing!
Not doing many collabs lately outside of the iced coffee hour!
I love your rhythm, in-depth analysis and condensed information. Just the right amount. I always enjoy and learn from your videos. Thank you for the work that you do.
This has always been about the vagueness of Fiduciary responsibility and how so many Realtors don't understand it. I have always viewed the commission as Selling side / Buying side from a single Fiduciary perspective (seller subagents). That will likely continue, subagent commission will remain in the MLS and the only change is no reference to Buyer Agents in the MLS. Buyer agents will then have to make offers contingent on the redirection of the subagent (buyer side) commission with the permission of their client the buyer. If buyers will not agree to this arrangement then they dont need a Buyer Agent. The seller cost is the same.
Definitely hurts first time home buyers more than anyone. Speaking as someone who’s been licensed for 3.5 years and in the process of buying their first property.
Not really. Prob just won’t get swindled into a bad deal by a “closer” buyer agent
How's that?
Sounds like a first time homebuyer using a 3.5% down mortgage could use that 2.5% that the typical agent that just a cab service.
Can't the first time home buyers find the house using online tools and simply work directly with the listing agent (dual agency)?
If so, they won't have to pay a dime... Or did I miss something?
@@sparksmcgee6641Most first time homebuyers really don't know what to ask for or look for. Has everyone seen more and more videos of horrible horrible new construction? Things don't get checked correctly. Even as simple as flushing all toilets and letting water run for a bit, do you think first time home buyers do that? Yes, there are some very informative buyers but usually not everyone.
Let's be practical, buying a first house is and should be a great memorial experience but emotion sometimes clouds judgment. Now, choosing the right agent is definitely important. The same thing can be said in everything, you need to choose a great barber, butcher, cleaning crew, etc...
Yes, correct and that's going to become more common. It's already common in smaller cities where a few brokerages handle 90% of the listings. It's very common for them to do dual agency. There are only a few states that don't allow it, and I bet those states will be quick to change their laws
@@eddiemalvin
You work for 40yrs to have $1M in your retirement, meanwhile some people are putting just $10K in a meme coin from just few months ago and now they are multimillionaires.❤
Did you just rediscover the secret the rich intended to keep from you to keep people broke and dependent on government
That's always been the case. 80%, 10%, 10% rule
So buyers agreement is only required if it listed on MLS?
In the UK agent fees are 1-3% (less if they are the sole agent), you don't need any certification to be an agent and you generally only have agents representing the seller so fees are just paid by them on the transaction, not the buyer (though the buyer often has to pay government tax called SDLT)
First time on the channel: Subscribed based just on this video. Keep up the good content.
Thank you so much!
This title tho. I’ve never clicked a video so fast.
Thanks for watching!
The sellers and their agent are incentivized to get a good price, and the buyers agent is incentivized to get the deal closed.
Stay hard ❤
No viagra
It’s bc of videos like this that I believe people will wake up and realize that they don’t need realtors. They can buy and sell houses on their own. They only reason to use a realtor and the only reason to be a realtor was the MLS. But now with so many ways to find homes, Zillow, OfferUp, Craigslist, etc… you cans find your own home and take it from there. That alone is going to save you approximately around $3k for ever $100k. That’s about $12-15k commission for an avg house in SoCal.
People can do that now. Some people want to be guided through the process others do not.
Graham thank you for pointing out the most important fact. The buyers do pay their agent, with the money used to pay the seller. Most cant comprehend this.
Lol which comes out of the pocket of the seller..don't be silly
Associations and the nature of bureaucracy
If commissions are to be paid, then it should be a percentage of the sellers realized profit..not the sales price. If the seller makes money so do the realtors.
The de-coupling of the commission structure is much-needed and long overdue. And it absolutely will result in major improvements to how transactions are conducted. The big problem with the existing model is that the co-op fee doesn't discriminate based on the agent's experience or value they provide. Lazy, unethical, & unprofessional buyer's agents are compensated the same $ rate as the competent & knowledgeable ones. This incentive combined with the low barrier to entry keeps the agent pool full of low quality participants. 74% of agents in my metro area closed between 0-2 homes last year. These folks need to find alternative careers or go work as assistants for the top performers
Still liking. I'm currently competing in my competition. It's pretty tough right now. Hope you doing well man!
Good luck!! Thanks so much!
Finally a video that perfect explains how things actually work! Please send the link to the talking heads in the media. They all seem to be clueless on this subject even though they're spouting all kinds of false ideas on this subject. Thanks for being a voice of reason and truth!
Home inspectors and local contractors know more about real estate than the average realtor.
Great video Graham! Id like to add, so buyers are aware; listing agents are also going to have the buyers sign a BBA. It's obviously that they will have their sellers best interest in mind, and why it's crucial to hire an agent.
Not speaking on this because I'm a Realtor, but because it's our job to protect the Public, and I feel like I should put that out there so they are informed.
most buyer's agent(s) don't do much other than write offers.
Well Said !!
Boycotting by owner properties or properties with lower buyer's commissions is pretty shady.
Lets ask the question that nobody is asking..what was this lawsuit trully about..it def wasnt about the people
"...will lead to lower agent commissions and could persuade some homebuyers to skip using an agent altogether." Hmmm, let's see. How do I post that meme of Captain Kirk with a shocked face. Agents have been overpaid too long for the amount of value they bring.
Thank you for finally explaining it like it actually is rather than the clickbait headlines full of incorrect information everywhere!
Good video and info provide Graham! 👏
thanks!
Ultimately, I think this will reduce the quantity of buyers agents.
The Realtor market is an interesting one. There are some agents that make a ton of money and others that barely scrape by. There are some agents that plainly do not earn their commissions. Frankly, the average agent likely doesn't put in enough work or value-add to earn the $5-10k for 10-30 hours of work on a specific deal. That said, as someone who was previously a Realtor, I think that the average person needs a Realtor to help in looking up comparables, considering reasonable offers, negotiating terms, and guiding them through the process. If an agent isn't providing value in any of these areas (e.g., just offering the same as an asking price, merely letting buyers into a listing that the buyers found, etc.), then why pay them $500 per hour? The truth is that agents only make their money when spread across multiple failed deals, finding clients, etc., but that their cost for an individual deal often isn't warranted.
I sold a house in Washington last year, I paid out $30,000 just in realtor commissions.
I have grown to despise mortgage brokers, realtors and car dealerships.
It's never a good idea to centralize the market makers.
I wonder if companies like Redfin were behind this lawsuit-here in Missouri and several other states it is against the law to offer commission refunds. How exactly did this class action materialize-a bunch of KC sellers didn’t just get together and say hey - we’re being screwed. Agency laws have been in effect for many years in Missouri. I practiced here for over 30 years. Our offices commission was the same before the courts required buyers agency. I have a sneaky suspicion some investment firms overall don’t like how well priced a home is when it hits the market as agents have access to the sold listings and if you are good you price it correctly-commissions don’t affect the price like they are trying to say.
Long gone are the days of 5%, 6% (or more) listing fees! The new norm will be 2-3%...in the end, home sellers win!!
Lol you think the buyer agent will work for free 😂😂😂😂😂😂 maybe the garbage agents will?
Also, do you really think the listing agent is going to do the buyer agent side of work for free? if you knew how many hours / experience goes into the buyer agency side of most transactions and also the time that some listing agents put into transactions youd probably think twice about your comment
if you think agents will do both sides of the deal (and also be able to protect their clients interests) while simultaneously risking higher likelihood of deal falling apart and the vastly increased liability to be sued for the same percentage you're insinuating then I have a bridge to sell you
This more than likely ends up with a couple of corporations, maintaining all aspects of the real estate transaction which seems like it's gonna save you money in the short term, but the long-term is bad for both the financial side of RE and for citizens of this country as a whole regarding private property and for those who want the option to be a 1099 employee and work for themselves
I don't really care which direction this goes in relative to my livelihood as I don't rely on real estate commissions to survive, but what I will say is that my entire family who's been in real estate for several hundred years collectively actively hires real estate agents to represent them in buying and selling their properties in markets that they do not cover because they can't represent themselves as well as another representative who knows the market that they're in
I've never seen a poor real estate agent, let's make that happen by slashing their commissions?
Like what do they do that is worth $10,000+?
Agree that most buyer agents will need to go to a fee for service, and not just take a chunk of the invested equity we earned
I think nothing will actually change... not for the average buyer.