Buying A Home In Idaho Is About To Change Forever
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- Опубликовано: 4 окт 2024
- Big changes are coming to the real estate industry starting August 17th. The way realtor commissions are paid is about to shift, and now buyers could be on the hook to cover their real estate agent's fees. In this video, I’m breaking down exactly what these changes are, how they’ll affect you as a buyer, and how you can navigate this new landscape.
I’ve been getting a ton of questions about these updates, so I’m here to answer them all. Whether you're buying or selling in Idaho-or anywhere in the country-this is information you need to know. Watch the full video to stay informed and prepared for what's ahead.
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Here’s a Summary: The lawsuit states that agents weren’t transparent about the fees being negotiable with their sellers, essentially price fixing the commission rate for themselves and buyers agents.
They also accused buyer agents of steering their clients to homes where the commission was higher, further promoting price fixing for seller.
Because anti-trust charges would have been brought in a trial the NAR settled for $418MM and are changing the way commissions are discussed and paid.
Today, August 17th 2024, these changes take place which are:
-No longer will the buyers compensation be allowed to be listed anywhere on the MLS.
-Buyers agents are to negotiate their fee with their buyers, explaining that if they are not paid by the seller that they, the buyer, will be responsible to pay them.
-And no client being represented by an agent can view a property either physically or virtually without a signed buyers representation agreement.
-The fee agreed upon is negotiable and as it was before, working with an agent is fully optional.
-An agreement is not needed in order to view land.
If you’re confused as to why they are making these changes and how this fixes anything, welcome to the club. But hopefully once these changes are in practice they’ll get it ironed out.
The important part is, as a buyer, you’re not stuck with only one option to have to pay your agent. There are several ways to buy a house and not have to pay the agent on top of the cost of the house.
Feel free to reach out to us and we’ll be happy to go through this with you in more detail.
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I think that in many markets it's just not that complicated to sell or buy a house. We sold a house without a realtor and got to keep all the profit for ourselves. It's not rocket science and the average intelligent person can do it. We've been fear-mongered into believing that only a licensed expert can do this because it's such a complex job. Wrong! It's just another DIY project that takes some self-educating, time and effort. All we did was put a professionally made sign in the front yard, a couple was cruising the neighborhood looking for houses for sale. They call the number, set up an appointment, came to see it, loved it, made an offer, and between the two parties we got everything done. It really was a great experience and both of us were happy with how it all turned out.
Yes, I have sold many properties and have never used an agent. My wife loves looking at real estate and we come up with a price that is fair with some wiggle room. We advertise on free sites, bulletin bds, etc...very low cost venues. If possible, we offer land contracts with an adequate down payment. We then fill out a purchase offer and take it to a title company and they do the work for a very reasonable rate....it really isn't that complicated.
You are both right, it’s often not complicated, until it is. Not everyone is easy to work with, there are people out there with a very strong intention to take advantage of others through very calculated and manipulative ways. Think of it like a divorce. If both parties want the same thing no attorneys are needed. But the moment one party intends to stick it to the other an attorney is a very important person to have defending your best interest.
Another thing that often happens is sellers miss out on what they could when made on the sale of their home. For instance, the house I’m in now we bought directly from the seller. No agent represented them. When we got an appraisal, which the seller is not given unless they pay for one themselves, it stated we were getting the home for $60,000 under value. And this was in 2021/22 when the market was white hot and interest rates weren’t set by Lucifer. They left $60k on the table because they didn’t want to spend $15k on agent fees because “they knew how to sell their home themselves.”
When negotiating with such large sums hiring someone who really knows what they’re doing can return a sizable ROI.
Very true, but what Trent mentioned is DEFINITELY true. As a seller or buyer's agent who sees an unrepresented party, its like finding a giant bowl of candy for your client. Making an extra 50k because of an agent means you'll pay them a couple thousand for those extra 50,000 and it will be quite nice for you. Even at the extreme, if you assume the agent DOESN'T take on liability for you, and offers ZERO benefit other than getting you an extra 50 grand for a 500k home, the ~13-17k the agent gets paid is FAR less than what they got you only OVER your potential earnings. A friend of mine in another state (or I'd help him) has bought and sold his own homes for years, and in EVERY case, he's signing up for liability he literally doesn't even know exists, and in addition to that in every case I've seen - I could've gotten him nearly 30,000 more than he did (and this is in a smaller city, so ~250k is a big house).
A bad agent is a problem, one that you can easily fix by asking the broker to replace them mid-transaction, but a LACK of an agent is a nightmare, and it puts you on the hook for hundreds of thousands of dollars of liability in no time flat.
@@LivingLifeNorthIdaho the seller should have paid for appraisal not nearly $15k.
I still am not clear on how this works.
I have bought and sold several properties in my life, and I have yet to have an agent that actually brought a buyer to me or found the house that I bought. Isn’t that absurd?
These were all houses in the $750K and up market and the market at the time is really what determined the sale price and the days on market. What did any agent do to effect those numbers?
Like you said there are many hard working and competent real estate agents out there. However, in my estimation that’s maybe 10% of active agents.
It is waaaaaay to easy to get a license. Think about it. This is most peoples largest financial transaction yet you may have a part time or green agent looking out for your interest? That’s unsettling.
We have a multimillion dollar property in Idaho now that we are probably going to list in the spring and I want to see how this washes out.
Most of the world the commission on real estate is more like 1%-2 %
You’re absolutely right. It is too easy to get licensed and there’s hasn’t been enough transparency around what that agent is going to do for you and what they are charging for their services. That’s all going to change. Those agents are going to have a very tough time when they have to start explaining their value and negotiating with their clients how much they’re going to charge. That’s going to be a good thing. Trying to force the buyer to have to pay for their services even though they’re taking all the risk and bringing all of the money, not so much. Does that help clarify things?
I think so. I’ve been researching this all day and there is still a great deal of confusion among agents, that’s for sure.
It’s my understanding that the BA fee is negotiated within an offer and that is payable to the BUYER not the buyer’s agent. Then, the buyer can compensate the BA based on their agreement.
I see agents already misinforming potential sellers in that they are stating to say up front what you are willing to pay a BA.
Why would you do that? If a BA brings me a really good offer then they can ask a negotiate a higher fee/commission rate. If the offer is low ball, why would I state up front what I would pay the BA via the buyer?
That’s back to the old 5-6% 50/50 standard that has made real estate deals so expensive.
Anyway, all I know is that “dual agency” never should have been allowed to exist. The agents work for the seller period because a higher price means more commission. Human nature.
I’m not against realtors making money, but they have to bring value to their clients. I think some sort of fixed fee on the buy side and a negotiated commission rate on the sell side would serve everyone’s interest more judiciously.
I've been an agent in CA and was always told and it did make sense that it was the seller who was paying the commissions but in reality taking it a step further the ones who are bringing in the money and on the hook are the new buyers. It is the buyer side of the equation which has always paid the commissions with the new money from the buyers side. Traditionally.
I agree. That seller doesn’t pay anything until they receive the money from the buyers. There’s a reason it’s worked the way it has for 111 years.
I have 40 yrs. of mortgage banking knowledge and was a real estate agent in another state at one time. I only buy owner sales. I don’t like realtors as a general rule. I know more than they do and understand real estate law. Title companies are at my fingertip, so the legal portion can go through there.
This is good response. I too like very few agents, only the best and only the ones with integrity and humility. And yes, if you don’t like agents, or you think they’re over priced, do the thing yourself. It’s a great way for some. Others need that professional touch.
As always , YOU'RE IMPRESSIVE. Thank you Trent 👍🏼
I appreciate the feedback. Thanks for watching and commenting.
One thing I'm unclear on. If you enter a contract with a agent, is it also an exclusivity agreement? Like, what if you realize. Hey, I don't like this agent and I want to go with someone else?
My mom was an agent in the '70's. The amount of work she did compared to todays agents is mind boggling. The money todays agents make is totally out-of-line with the workload and responsibility. Housing prices have far outpaced every other metric yet the 6% commission stays in affect. That's attracted a lot of unscrupulous and lazy people to the profession. I'm in favor of anything that not only gets the numbers and reality out in the open, but also skims the unprofessionals from the equation.
This will definitely help but keep in mind, the average agent makes $82k a year in idaho. They are 1099 so they are responsible for all their own expenses, taxes and health insurance. They pay for all their marketing, branding and drive on average 30k miles a year. They also have to split their commissions with the brokerage they are forced to be under. Most agents do not disclose all of the costs so the general public only see the commission “going to the agent” but ultimately they get around 30-40% of that commission.
@@LivingLifeNorthIdaho Well I live outside Seattle and am preparing my house for sale next year- I'm going to say the agents here average a heck of a lot more or just work a heck of a lot less.(Idaho is a possible destination so I've been following you for a while)
Also there needs to be some context as far as average income- having bought and sold 5 houses in the last 20 years and having several friends that are agents, what I've noticed here is a majority of the agents work what would be considered part-time at best. Not to bash on agents or group you into my experiences with agents, but paying 6% for what amounts in my cases less than 5 total hours work (on both sides) isn't what I would call a hard living. And marketing, branding and milage are all tax deductible so that helps.
I used a friend to buy a house years ago and he stated the policy at the office was "forward 5 links and show two houses, after that cut them loose they aren't worth the hassle". I found my last three houses online and just used the agents to show me the house and write up the initial paper work. After that it was all the legal paper work with the mortgage and title companies. That was a lot of money for opening a door and handing me a pen.
With modern technology the percentage based system is ridiculously outdated and unfair to the seller/buyer. Costco sells cars that cut down the salesmen commission, no reason in 2024 real estate can't evolve.
Respect for the reply.
@DDPAV I do understand that what you see might seem extremely easy and involves very little work. I can’t speak for your agents but I can speak for mine. They work incredibly hard, many weeks that are 7 days. It’s incredibly difficult in the first few years to have boundaries with clients so you find yourself working very late in to the night and very early the next day, missing a lot of events and special occasions. There’s an incredible amount of anxiety that comes from not knowing when you’ll get your next closing and the costs do not stop.
Media only shows the fun parts, the “greedy” parts but never the raw parts. The alcoholism, missed birthdays and divorces that plague this industry. Any other job that asked this of their employees will compensate well over the average income. And if it doesn’t it’s because it’s a calling and a service to society.
If you don’t think they’re worth it don’t use them, but check your politics with your public beliefs and opinions. There’s a word for people that call for certain industries to be forced to make less so that they are more equal to the lower earners. There’s always going to be higher earners and lower earners, I believe in letting the market decide what the service is worth, not what a person “deserves” to make for doing it.
In my area agents only show houses that are offering a commission they want. They slip hold harmless clauses in their contracts. They open a few doors and send paperwork to title. I've had great experiences not using an agent. Hire a real estate attorney to help with and look over the contracts. Takes a little more leg work on your part but the protection of the attorney is great. I saved thousands in fees and payed way less for my home than what local agents said I needed to offer. Another perk with the attorney is it's a fixed fee, no commission drive affecting their judgement.
@@LivingLifeNorthIdaho Absolutely there are a lot of hardworking agents no doubt, and like every profession they have life altering ramifications. I've got a couple great agents now. I've also never haggled with any agents over commissions - I accept that it's the cost of doing business whether I agree with it or not(just like dealing with politics)
My main issue is with the system- is more work involved in selling a million dollar property than selling a $200K house? The difference in commission doesn't add up to me- but I'm also for a flat tax too- including property taxes. We'll see what the changes bring - which is absolutely the best way to let the market determine if change is good and the old guard changes or if the old guard had it right the entire time.
Cheers.
I have dealt with 2 agents on 2 homes In both cases the listing agent told me how impressed I would be with the marketing of my homes , was I supposed to be impressed with this untrained person apparently listing it on MLS Only and never once showing the property themselves just relied on the seller to Show the property with no knowledge of condition , Property pluses and property minuses. I found out later That the buyers We're being advised to lowball me and then require an inspection and low ball me again a second time. I see several videos on RUclips about realtors explaining how it's the same but different. It's another way to get in with the bank's realtors It's another way to get in with the bank, Realtors, Home inspection. All roads lead to a crappy product, Poorly built over priced And fine print in the future I will be for sale by owner and bank to give a homeowner a home with A Normal down payment, Fair interest rate, And very little fine print comparatively speaking I hope banks realtors McDonald's Subway, Meet there inevitable Future. Work with people not institutions they suck
All three of my agents (3 properties in 3 states) all seem to think that this won’t work out and could attract a different type of fraud.
What type would that be??
@@alm4132- Change allows the wise to take advantage of the unwise. The house prices should go down 3% under this new buyer obligation to pay their agent & their broker), but I’ll bet that won’t happen, so sellers will pocket more and buyers will pay more (via larger loans). Basically the same thing that happened when melrose realty tax was burdened onto the buyer of a new home, netting the builder a lowered construction expense, yet still charging full price to the ignorant buyers.
I will tell you as a common seller's agent, ever since the "news" of this has happened, its becoming VERY common for new buyer's to attempt to represent themselves, which is essentially like walking into a court-room blind without a lawyer. They're losing so much money and they (quite literally) aren't even aware as to how.
@@MEvegasRealtor So, how are they losing? Enlighten us please.
@@MEvegasRealtor- For the buyer that is unskilled, I agree that they are going to take a bath in mistakes when they don’t have someone helping them. I will also say, few agents are fully educated in what they are doing, so we have always had to lead them thru our transactions (selling or buying). Every few buyers are experienced enough to not have an agent.
We bought an Idaho house five years ago based on the photos we viewed on Zillow and a friend and real estate agent getting into the house to confirm that the photos were accurate. I did NOT have a signed agreement with the agent before viewing the house on Zillow.
Regardless of who’s paying for what in the transaction, it all comes out the same (unless someone is a sleep at the table). That means, if I sell a property at 100% and the buyer wants me to pay their Realtor (VA Loan requirement), then the price is 103% and I pay both agents then net 97%. If buyer pays, the price is 100% and I next 97%. If no agents are involved, the price is 97.5% and I pay the lawyer to draw up the documents, so I end up with 97%. This law changes nothing in the end. Just understand the burden’s and responsibilities.
Sounds like you actually have a great handle on it. Spot on.
How does this help Nlackrock, State street and Vanguard?
Well, if Congress passes the legislation that they were working on to force corporations to sell all of their single family dwellings over the next 10 years, the hedge fund subsidiaries can offload them without having to compensate the buyers agents, saving them anywhere from hundreds of millions to billions of dollars. (Based on an average of $7500 times 500,000 homes)
This question is exactly what I asked when I first started following the money. Soon as big corps bought up SFR's, I knew some kind of change equalling "the seller paying less" was incoming, just didn't know they would approach it like THIS.
Great question @baltazargren3995
As a real estate investor who only buys and never sells. I do NOT like these changes. It hurts the buyers, particularly first time buyers. Whom are already strapped financially due to higher interest rates and high home prices. All this does is net more for the sellers. Who already have unprecedented amounts of equity in their homes. Muddies and complicates things for the buyers and makes more work for the agents. Sure there are bad Realtors. But most of the agents that do the majority of the business. Are very hard working people. They give up their lives for their profession. Often working 7 days a week. Someone is always calling them. Even at 9-10pm at night. A lot of people don’t realize that. When you are a Realtor you are never “off work.”
Yeah stock traders work very long hours too but when you're working very long hours to siphon money off of other people and work against their best interests that doesn't garner a lot of respect. All of the real estate agents I've worked with are also property investors. They don't tell me this up-front, of course, but the implication for someone like me just trying to have a place for my family to live is that my agent is going to get me a mediocre to bad deal so they get more commission and they use that commission to snap up good deals before they get to the open market.
@@gorkyd7912 You should have prioritized homeownership and being financially wise before starting “a family.” Life is full of choices and decisions. You must live with the consequences of your choices and decisions. People don’t need to be having kids so young and having so many kids. Also, you are working with the wrong agent(s). I only use the best agents. I want a successful wealthy agent. That doesn’t need my business one way or the other. They aren’t desperate for a sale. Caveat emptor, as a consumer you should know a good from a bad one. No one was against real estate investors until recently. Someone has to invest in and provide rental housing. For the financially ignorant and irresponsible. Tenants ALWAYS have newer and nicer cars than their landlords. GO FIGURE…
@@gorkyd7912 Stock traders are paid for their long hours. Agent's are not (usually) paid unless they close. Do you work for free, out of curiosity, for 50-70% of your work-day?
There are already laws in place preventing quite literally everything you've mentioned. You legally have to tell your client in contract form if you are financially involved in ANY part of the transaction (up-front), as an agent its VERY obvious that "screwing a client" for ~2000 extra dollars is a dumb idea, because the average homebuyer sells and re-buys every 7 years or so, so you're losing long-term business for what MAY amount to a TINY bit extra on one... and doing that is again: illegal. And snapping up good deals before they go to market is something both agents AND non agents do, by simply doing their due diligence, and forming connections with other professionals. How else do you imagine it happens? There isn't some magical place us Realtors meet at on Sundays to throw around super discounted deals, because the OTHER agent would be getting screwed in that transaction. If you follow your argument to its logical conclusion, it doesn't make sense within its own context.
@Rossferguson5786 in your case, however, I agree with you completely. Its odd timing that a few years AFTER big corporations bought single family homes, suddenly this change came through, putting a bigger burden on buyers, isn't it? If you need some help navigating this stuff, feel free to reach out: I'm always glad to chat (even though I seriously doubt I'm in your city, I'd still be happy to help translate it for you, and even find you an agent over there that can be more specific if that would help).
I thought the main issue in the lawsuit was about for sale by owner homes NOT being listed on the MLS due to the real estate monopoly blacklisting them. Even if a buyer's agent knew there was the perfect ideal dream home for their buyer, they would never show it. Why would they if there is zero or very low commissions for them? Steering is illegal, but of course it happens. If I were a home buyer now, I would rather buy a new home directly from the builder or have a new custom home built. I would never enter in a locked contract with a real estate agent as a buyer.
A FSBO is not listed on the MLS, because the Multiple listing service was established to publish listings of Real Estate Agents. In recent years, there have been discount agents who charged a Flat fee, to list the property on the MLS, but did not offer full service real estate services. showings and other services were done with the home seller.
In regards to the agent not showing the buyer the home- WIth a FSBO , the buyer is essentially representing themselves- and the agent isn't needed to go see that FSBO. Buyer finds it online, goes to see it. Buyers go to open houses as well. You have many options.
In new construction, be aware that builders contracts are made for their advantage- I hope you will have your new home inspected by a third party inspector- who will be looking out for your best interests.
I totally feel your irritation (and share it) with agents steering clients (illegally mind you) to avoid low commissions. This is ALREADY illegal, however, so I just wish you the best of luck finding a solid agent who can help you get all of the advantages that good realtors offer their clients (better pricing, less liability, better available options (many aren't even on the market that I make offers on for clients simply because I know the agents that are GOING to list them, and reach out early... something no buyer can do on their own), professional analysis on things such as which inspections are necessary/not in your area, etc etc). I think, unfortunately, when one has an experience with a bad realtor they go "Hey, wait... I could do this myself!" and they're 100% correct! The problem is they're only right because they are comparing themselves to an atrocious agent. MOST buyers can represent themselves as well as a horrible agent, but virtually none can represent themselves as well as a great agent (they quite literally don't have access to the tools, OR the boots on the ground time in the market). If you represent yourself against a competent realtor on the other side, you're going to lose dozens of thousands of dollars (or more) and not even be AWARE of how its happening, in addition to that agent (in the best interests of HIS/HER client) heaping all of the liability on YOUR head, since you don't have a good agent protecting you and watching out for your best interests.
I’m a bit confused by this video. I sold my house in 2016 (not in Idaho) and negotiated with my realtor for a 4% fee which was split with the buyer’s agent. It took us a month to sell. I don’t know if buyers’ agents shied away from showing it to their buyers because of a reduced fee, but if they did then they were doing a disservice to the clients. I doubt that happened. So how does this new law change anything I did 8 years ago?
Trust me, a lot of agents are very confused by this and feel the NAR should have taken it to trial. Now what happens is there’s more transparency around the fees, and the buyers have to negotiate with their agents what their compensation should be.
@roberthamilton3755 Your experience was not the norm. I was a licensed agent for a couple years. What I experienced was brokers united to keep the commission rate at 6%. While this was an unwritten rule, it was definitely a conspiracy to fleece the seller. I left the industry due to the unscrupulous business practices and amorality. Flat Fee services is the only way to clean up the R.E. industry.
Well it looks likes the number of "Open Houses" available to see is about to skyrocket. Why would one want to be locked into only one Buyer's agent?
I would say it’s when you find a really good agent that will work hard for you, you’re going to want to show your commitment to them. There aren’t a ton of those and they won’t work with clients that are going to use and abuse them.
This change allows buyers and sellers more transparency.
If agents are worth 6%, then they will get paid 6%. My guess is very few agents will get paid 6%, and many will leave the business completely.
Ultimately, buyers and sellers will pay less for more competent realtors.
I think it’s important to note, no agent is getting paid 6%. At 6% the listing agent’s brokerage gets 3% and the buyers agents brokerage gets 3%. The brokerage take their fees, anywhere from 10%-50% of the total. Then the agent has their risk management fees, transaction processing fees, and that agents taxes that should get taken out immediately if they’re responsible. Now they’re sitting around 1-2% of the transaction. They’ll need to pay for marketing or referral fees in order to meet new clients, and pay for all of the things that allow them to be an agent and help their clients buy or sell homes.
I think the big misunderstanding is when agents don’t seem to be doing much but they’re getting a lot of closings. In those instabces there’s an entire team of people back at their office or remotely contracted to help them do all of the administrative work agents are required to do. They pay them a considerable amount per transaction for them to do these things in hopes they have more time to meet more clients and have more closings.
I think like anything, you get what you pay.
@LivingLifeNorthIdaho 6% of the average house in Utah is $36,000.
I would be happy to pay a fraction of that when selling a house. As a seller with a more average house, why should I pay more than $2-3k to sell? Nothing about my house would require a specialist. Ultimately, the buyer has much more risk as they exchange a fungible asset for a non-fungible asset.
@@scientificapproach6578 Well, a few things off the top of my head as to why you should pay more than 2-3k to sell:
1. Good agents often pay for professional photography of your house for the listing.
2. Good agents market your property. Something they pay thousands of dollars a year, just to have access to the MLS to do (which you, quite literally, cannot do without paying that)
3. Good agents can negotiate on your behalf, and get you a HIGHER sales price on your home. If you make 500,000 vs 550,000 on your home, you make an extra 50,000, and even at a 6% commission, you're paying an extra 22,000 to make 50,000. And that's ASSUMING you're paying both side of the transaction. If you're only choosing to pay YOUR agent (as a seller) you would be charged 3%, which is a price of 11,000 dollars to make 50,000. If you don't see the value in that = by all means sell it yourself.
Unless you put the time a good agent does (and HAVE the recognition/reputation your agent has built over 10-15 years), you simply won't have the connections to do what they do. A lesser version - certainly! It isn't rocket science. But when a buyer's agent sees you selling without one, they're going to nickle and dime you every step of the way, on behalf of THEIR client, and you're going to end up losing money overall. If its just the principle of the matter, and you'd rather EVERYONE loses (you get less money overall, you have higher liability for life, the agent doesn't get paid), then by all means. But I think what you said in your first statement above is true: better agents will make more money now, and worse ones will (hopefully) be disappearing. And you DEFINITELY get what you pay for ;)
This is a joke as a buyer supposed to negotiate with an agent BEFORE we see how well they perform! Too often a weak agent talks a big talk and then never follows through. So Trent, how does that work if agent A is a bonehead and we have an agreement but then need to find a different buyer's agent for whatever reason? Are we 'obligated' to pay for a property they showed us that we found on Zillow and asked them to show us inside and we realized right away they are a goon ???
Great question and one of the positives of this change. Buyer will be a lot more diligent in their discovery of who they are working with if they know they might just be the ones who have to pay that agent. But no, only if you agree to pay an hourly fee would you be responsible for paying them for their work but ultimately firing them if it’s not a good fit. You can still fire your agent without paying a fee but… Big But Here, if you fire them without good cause and then go buy that house they showed you with a different agent, you could be on the hook for paying them. Thats why you really want to work with an agent you can trust and have vetted.
@@LivingLifeNorthIdaho You can vet until blue in the face ... the real qualifications come to the surface when transactions have challenges. We have bought/sold 100's properties as an investor and real estate in an of itself is EASY, its the agent(s) that make it easy or a challenge and like a tea bag you may only find out what's in it when things are in 'hot water' ...
They have you locked in, like sellers agents do now.
I have your answer. We signed buyers agreement with a bone head lazy realtor who put on a good talk. Contract was due to expire in 90 days. We called him and said we don’t want to work with you anymore. He emailed us that that he released us and contract is hereby canceled.
No realtor will insist on working with clients who don’t want to see you again.
If he hadn’t, we would have gone in person to talk to his broker and raised a fuss. We also would have left terrible reviews.
We got a new realtor the same day.
@@gary9080no they don’t. You can fire them
I moved to Idaho just over a year ago. As a teacher, I have noticed lots of sexism and discrimination against men. Being a credentialed teacher with a bachelor's degree, it is very difficult to get hired, even though women with an AS degree and no credential get hired for the same positions I apply for. This state is doing more and more of what CA did many years ago. In 20 + years it will probably look a lot like how CA is now from what I have seen. Some of the same mistakes made down there are being made here. The same thing goes for increasing the wages of entry level fast food jobs, in effect, increasing the prices for customers.
I would say there are certain things that are outside of anyone’s control, like free market capitalism. There are still places refusing to increase their wages and they’re having a very tough time finding quality help. Suggesting they stick to their guns is to suggest they go out of business. As far as the education system, it’s federally funded so yes, they’ll do what keeps the dollars flowing in no matter what state they’re in. That’s why I’m all for removing the federal government out of our education systems and so are many Idahoans. But to say this state will turn in to California is pretty absurd, unless you hyper focus on very specific factors. I know one thing for certain though, criticizing something while putting no effort in to fixing it has never yielded anything positive.
You must be in Boise where it is very liberal. Move!
Nobody gives a shit about your degrees. Your a sensitive Liberal snowflake. Get the hell out Idaho. Nobody wants you here.
I will say, from having visited Idaho a number of times: there is absolutely a zero percent chance of Northern Idaho ever feeling exactly like California, haha. All states have to respond to growing public pressure on various issues, sure, but the actual culture is hardly shifting THAT dramatically. For example: if they don't raise the wages of fast food jobs, then those people will find jobs elsewhere, but if elsewhere ALSO refuses to raise wages - capitalism will win out, and they'll work SOMEWHERE and that company will survive/thrive. As long as we stick to the principles of capitalism, and not a pseudo capitalism, we'll do just fine.
I put in plenty of effort by becoming a certified teacher so kids can have a positive male role model that doesn't push a liberal agenda on them or teach lies, but I can't make them hire me.
Trent, if I buy land in Idaho on the reservation, do I have to pay them a permit fee to hunt my own land?
Time for MLS to go away. If the seller doesn't agree to pay the buyer's agent you have "no sale". Plain and simple. Flat fee has been around forever.
The commission rate has nothing to do with the MLS, What are you talking about?
@@alm4132 MLS has out lived it's usefulness. The amount they charge realtor is excessive.
There’s an anti trust lawsuit being launched against NAR by several agents. There are many that feel they have acted as a monopoly and rolled over with this lawsuit to save their own skin. It will be interesting to see what happens with that.
MLS = monopoly listing system. Also, flat fees would be perfect. If an agent sold a home for $300,000 and then sold that identical home 4 years later for $600,000, why do they deserve double the original commission?
@@jjman533 Specifically because the higher the cost on the house = higher liability for the agent. In every single career out there I can think of, wages raise with amount of liability/danger/etc. In addition, there is a TON of unpaid work that goes into buying and/or selling a home. I've mentioned it above in another comment, but in my current situation, when I agreed to an hourly fee instead of a commission, I ended up making MORE money than I would have otherwise. And now that the lawsuit makes it a legal mandate that you have a contract written up BEFORE you show a SINGLE home, it puts even less leverage in a buyer's hands than before (which I think is atrocious, but its what we're facing now).
Getting a percentage of the purchase price is ignorant. The effort must surely be the same or similar no matter the home. They should have a line item bill that charges their client for each task they do. If an agent takes me to 15 homes then charge me for those 15 trips. After you break down those tasks I think we would find that most or all tasks are almost as basic as unskilled labor and should be charged accordingly. Giving AI access to the pertinent information including public records will replace these agents anyway.
I'm about to sell my home, move to short term rental, than buy a new home. I feel like this is going to result in me paying roughly 6% of my home sale (3% listing, 3% buyer agent) and then I'm going to end up paying 3% for my own buyer agent for a total of 9% across 2 houses. If every transaction is not done methodologically the same, how does this scenario not occur? Seems like some people are just going to end up paying more.
I think it’s really going to come down to working with good, experienced agents that are capable of negotiating on your behalf. It’s also very unlikely that sellers will immediately shift to not compensating the buyers agents. And most sellers are smart enough to know that a good portion of buyers won’t be able to, or will not agree to, pay their agent on top of spending an enormous amount of money for a home. We’ll just have to see how things go over the next few months but I’ll be sure to drop updates as things change.
At least in Las Vegas, so far since the ruling has come down: buyers are coming in with offers written ON their offer sheet as soon as they offer, and there is a section now (added to the Residential Purchase Agreement) about "Buyer Broker Compensation" offered as a negotiation tool for the buyer. So, in your case for example (using your numbers), you would sign a listing agreement to sell your home in which you only agree to pay YOUR listing agent 3%. If a buyer comes in requesting you ALSO pay them 3%, counter-offer with your decline, or raise the price, etc (negotiate). When you buy your NEXT home, negotiate your fee with your buyer's agent, and perhaps also include in your offer a request for assistance with compensation, etc.
Sell your home: in your example you'd offer 3% total to your agent (or rather "you could")
Rent somewhere
Buy somewhere (pay YOUR agent 3%)
= 6% total for ya.
Hope that helped ;)
@@MEvegasRealtor Very helpful, thank you.
Every agent I know has always charged a flat commission based on a percentage of the sale price. For the buyer, it's just included in the price and is taken off what the property is sold for. Doesn't cost the buyer a cent extra above the agreed on price of the property. It's all paid out of what the seller was willing to sell the property for. If the buyer has their own agent, then the seller agent and buyer agent split the commission fee after the property has sold. I've never heard of paying an agent anything upfront or extra after a sale. I've lived in Idaho all my life.
Yes, that’s always how it’s worked. With this settlement comes required changes get could affect the process and who is paying what.
Yes but it has changed now.
You can still do this as a seller or you can now refuse to pay the buyer’s rep out of the sale.
So let's see if I understand this. A buyer has to pay their own agent a pre-agreed fee for the purchase of the property prior to being able to even see it? It is no longer the responsibility of the seller other than to pay their own agent? I was licensed years ago in the state we don't like to mention here in Idaho. I always knew the 6% fee was negotiable. Now it seems like here in Idaho I can go with a flat fee brokerage and hang the buyer for their own agent's compensation? When setting a price for a property I always calculated whatever real estate fee I was going to be willing to pay into what I was asking for the property. Now it seems most sellers will continue to do that and pocket the extra money.
It will be very interesting to see how this plays out and that’s why we are trying to inform our clients of these changes because they should have a voice about this too. There’s a very good chance sellers will see the problems with these changes and continue to offer compensation to the buyers agent.
To clarify though, it’s not set in stone that you will have to pay the agents fee as a buyer. Only if the buyer insists on buying a home where the seller refuses to lower the price or offer compensation. And every buyer has the option to go at it themselves and not sign any agreements.
It’s imperfect, it’s forced, and it’s unknown but it won’t be long before things get worked out and I’ll be sure to update everyone.
In my limited experience with real estate, the concept of "buyer's agent" or "seller's agent" is totally misleading. Neither of these agents are representing buyer or seller, they are trying to facilitate a transaction because they don't get paid unless a transaction takes place.
Furthermore, there are massive conflicts of interest in the industry. If a real estate agent or someone they know closely also buys and sells property for rentals, short term, investment or for another LLC they own that's a MASSIVE red flag. Don't ask someone to get you a good deal for you if they are making money off of good deals in the same market. You think they're going to get you a good deal for 6% when their other company can flip it into a rental and make twice that every year forever? Same problem for sellers. If they like your house they'll absolutely talk you down to a lower price so their friend or LLC can snap it up for themselves and pocket the commission on top of it.
If you think this eliminates most real estate agents, you are correct.
I think you’re pretty off on this assessment. The seller wants to sell their house. The buyer wants to buy a house. The seller wants the most money which the sellers agent is trying to get for them and the buyers wants the lowest price which the buyers agent is trying to get for them. There will be compromises yes, which is called negotiations. At the end of the day, the agents are there to see that the deal gets done and a lawsuit doesn’t come after, which is what everyone wants.
HGTV and other crap shows like selling sunset have glamorized Real Estate but the truth is very few people can do the job, and even fewer can do it well. It is messy, complicated and full of liability.
There’s a reason 95% of people choose to use an agent rather than mess with it themselves.
@@LivingLifeNorthIdaho You're saying the same thing as me. "At the end of the day, the agents are there to see that the deal gets done and a lawsuit doesn’t come after, which is what everyone wants." Correct. The agents want to see the deal get done. They do not care that the seller wants more money or that the buyer wants more money. The desires of seller and buyer are not the concerns of the agents.
@@gorkyd7912 But you're incorrect about that. Last time I checked, the average family sold/bought a home every 7 years. If you DON'T fight for your client's best interests, you're taking a commission and costing yourself ~10 commissions with that exact same client in the future. Its capitalism at its finest: if you don't do your best for your client, I PROMISE you, somebody like myself (or Trent) will pick up the slack and earn your business instead. Think about it: if I make (a made up number) of 3%, and the home is 500k, the 15k that I make... compare that to if I "trick" my buyer into paying 525k instead "just to get it done". I make a whopping extra 750 dollars, at the cost of losing another 15k in 7 years, which makes absolutely zero sense.
Its the same amount of work to sell a 500k home than it is a 10 million dollar home. Why 6%? Should be flat fee.
Well it's never been a set 6%. It's always been negotiable and $1MM plus homes often go for less than 3% to each agent.
Sales compensation is rarely about the work, it comes down to expertise and profit. When a $10MM home goes up in value 20% that is a $2MM increase. The seller capitalizing on that profit knows it is only realized if the home sells. These people are usually high achievers and high earners so doing it themselves will be too big of a distraction for them. On top of that, they know they are not Real Estate Experts so the chances they can successfully negotiate against an expert in Luxury Real Estate is probably pretty low. Not to mention if they screw something up in the sale they might be looking at a lawsuit, defending themselves against some very wealthy individuals.
So making $1.5MM instead of $2MM is often very worth it to that seller. House prices are not static, there's no Kelly blue book for homes, and price is always negotiable. Screwing up negotiations with a serious buyer means longer time that it will sit on the market which means lower offers as well as being subject to changing market conditions, which could quickly erode that 20% value increase leading to a bigger loss than the 5% they might pay to have it sold for them.
The pandemic really made it look like Real Estate was easy and like everyone was being overcompensated, but very few remember the challenges between 2008 and 2019. If Real Estate was easy everyone would do it and everyone would be rich. But only 10% are successfully making more than a job with similar demands and only about 1% are doing extremely well. That means 90% aren't doing well and end up failing within 2 years. Many agents end up taking an overall loss due to the costs of getting licensed and getting their business set up.
@@LivingLifeNorthIdaho Your right, on top of the 6% they also want an administrative fee, LOL! 99% of listing on the MLS state 3% for buyers agent and 3% for listing agent. I was a mortgage broker, real estate agent and insurance agent for a decade in Florida by the way. What if they have to sell the house at a loss, like when real estate dropped 50% in 2008? All agents do is list it on the MLS and have someone else contact them. If they find a buyer outside the MLS then they deserve a commission.
Groundbreaking for the 3 people thats gonna move to Idaho in the next decade
Who are you kidding
Agents don’t do most of that.
So on the same block there is a $350K home and a $450K home. It doesn't take any more effort to sell the lesser home than the larger home yet 6% of one is $21,000, and the other is $27,000, so $6K more simply because the cost of the house is more. Sure that's the way it was done 111 years ago. Homes were $20K, , $35K, we've just put a few more zeros on the end today. But that makes it a substantial more money out of the sellers pocket. It's always been on the backs of the sellers. Finally they said enough is enough. If a buyer wants to buy a house then the buyer needs to be qualified themselves to buy. The seller shouldn't have to qualify the buyer like they have for those 111 years.
It seems pretty straightforward but a couple of things to think about @willywold9090, did you pay your agent when you bought your house or did the seller? And where did the seller get the money to pay the buyer's agent? The money has always come from the buyer and making buyers pay their own agents directly will limit how many buyers are able to purchase a home, therefore driving down demand, which will drive down the prices overtime.
So? Why to homes have to go up every year? Look at the 40’s to early 70’s, almost a flat line until we were taken off the gold standard and they started printing fiat money. Sure buyers come up with money to buy but the “compensation “ to agents come off sellers bottom line.
@@willywold9090yes the old way is still possible but a seller can now refuse to pay the buyer’s agent from the sale price.
I saw contracts in Canada that charged a certain percentage up to say $100,000 and a lesser percentage amount above that.
If you say "it doesn't take any more effort to sell the lesser home than the larger home", you are (unfortunately) showing that you don't understand a Realtor's job at all. Liability goes up, quite literally, with the price of the home, and that's just the tip of the iceberg. If I'm selling a home: I'M paying for professional photography, and guess what? Photographers charge more for larger homes! So I'm paying more, out of pocket, with no guaranteed "pay back". I'm also now marketing to a different class of buyers/agents (depends on your experience of course), and you're dealing with a different set of buyers. If you think somebody spending 450k on a home you're selling demands the same as somebody spending 100k less, you're just too inexperienced to have a nuanced discussion about it with, because that's simply not true. Again: I won't hit EVERY point (because there are a LOOOOT), but these are plenty to "sink this ship".
TL/DR: Primary reason is your Realtor's liability goes up, dollar for dollar, so they're paid dollar for dollar. Other factors include the "free work" that EVERYBODY seems to forget that Realtors are expected to do all the time. I've already mentioned it above that the few times I've accepted contracts to work for hourly wage, instead of a commission, I've made MORE than I would've with the same transaction/commission.
Home buying is not worth it for 99.99% of people. Rent, when the home is trashed and falling apart, move and repeat.
Spoken like a true renter . If you trashed my place I'd make it hard for you to rent anything else.
@@ada-yw1bb all places get trashed. Over time everything crumbles to the earth. Live in a place until it is no longer worth the rent, then move and let the fool who owns or financed it renovate and sink their money into it. Homes are disposable, all of them. Banks know this and prey on people who finance to purchase one….AKA FOOLS.
So, instead of risking a loss with buying you guarantee a loss by renting? Gonna take a wild guess and say you probably buy a lot of Power Ball tickets?
@@LivingLifeNorthIdaho nope, I own a $2M home. Renting is much smarter than buying. Buying is only intelligent if you don’t finance and don’t mind your capital being eaten up by the repair, maintenance, taxes and insane insurance cost that come with home ownership..which most people can’t afford. Renting is the best play. More than likely I’ll sell my home, pocket the equity et Al then rent and let someone else deal with the maintenance and other cost associated with property ownership, it is stupid, I’ve owned 3 homes in my life time and it costs way more than it is worth, renting takes that burden off the table and leaves a good income earner with a fat bank account and plenty of capital to travel, live well, and enjoy life. Home ownership is a huge anchor of frustration and anxiety…not worth it.
Are you a firm believer in the "you will own nothing and be happy" quote? The rising costs of home insurance, hoa fees, property taxes, and maintenance will be added to the cost of the next rental agreement after the present one expires. What idiotic landlord would not pass on the costs to the tenant? You expect a landlord to eat the costs of renting out their property?