People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.
Well i think, home prices will need to fall by at least 40% before the market normalizes. If you do not know whether to buy a house or not, it is best you seek guidance from a well-experienced advisor for proper portfolio allocation. So far, that’s how I’ve stayed afloat over 5 years now, amassing nearly $1m in return on investments.
Finding financial advisors like Amber Angelyn O'malley who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.
Home prices will come down eventually, but for now; its best to offset some of your real estate investments and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
buyers already pay both sides of the commission because sellers built commission in the sale price. So, this change won't make buying cheaper to buyers, if anything it will cost them even more.
ABSOLUTELY! THE MONEY IS WHAT MAKES THE HOUSE WORTH ANYTHING! The buyers have the money, the sellers have the house. Why change an efficient system that pushes the sale of the house, and has ton's of realtors wanting to push the sale of the house.
Also sellers are also buyers!! They sell and then buy a new home. Now they’ll have to pay on both end? The folks who say agent don’t do anything should try closing 3 deals on one day to get all parties into their new homes, they have no idea the stress and coordination it takes.
I understand what you're saying, and you're right, it is a lot to manage. But what you're saying is a result of the realtor profession and not anything to do with the seller. Why should a seller pay more because you have a lot of clients? Respectfully, you should change your mindset from "I'm busy with clients, my job is hard" to "I'm representing your best interests, my expertise will save you money (buyer)/net you the most money (seller) and protect you from headaches in the transaction and potential expensive litigation" No one is going to justify paying you more money because juggling clients is stressful. @@megansullivan9377
This is how its done in the commercial real estate industry. The market will adjust appropriately. Buyer's agent commissions aren't going away. It'll be wrapped into the purchase price or rolled into the mortgage payment alongside closing costs. You'll see a lot more buyer's agent require exclusive representation agreements with clauses that stipulate a buyer is to cover their commission if the seller does not. Again, that cost will be wrapped into the total closing costs.
In PA we are required to sign an exclusive BA agreement. The commissions already were enrolled in mortgage. Buyers deserve representation and if they can’t pay cash and the seller gets more net for not paying buyer commission that’s unfair and descriminatory.
@@albundy3929 Mortgage payments consist of principal, interest, and any associated closing costs (not paid at the time of closing). Appraisal is only tied to the principal portion of the loan. The commissions could likely roll into the total loan amount.
@@nicklaessig appraisal is based on the “principle” plus commissions because in residential real estate commissions are factored in the “principle” 🤦♀️
@@MariaKoroleva.Realtor Depends on the approach used for an appraisal. Cost based appraisal will not include commission. But for the majority, yes, the market value of a property assumes commissions. The thought is that if the seller will not pay the buyer's agent commission then the buyer will be responsible. It's unlikely the buyer will come out of pocket 2-3% for that (in addition to standard closing costs), therefore it'll be rolled into the loan.
All the people saying “great, agents have been screwing us all this time” you should know that this change reverts the industry back a few decades. The reason it changed into what it is today is because people just like you felt they didn’t have enough representation when buying homes so they started bringing lawsuits to real estate companies who represented the seller. So for decades homes have been selling faster and buyers have had more representation during the process all while significantly reducing the amount of lawsuits for misrepresentation by buyers. It will take longer to sell your home with these changes, you’ll sell for less most likely due to less offers. The current system is the absolute best for all parties. It’s the most efficient because of the law of supply and demand. You put thousands of agents to work for you by incentivizing them to bring you a buyer. Pay them $0 and see how many buyers they bring you.
Everything that happens, happens for a reason.. the above you said is probably is what is needed to shake up the sellers and make it a buyers market eventually.
Agreed on everything you said. Only part I didn't was that homes will sell for less - In the Bay Area, the demand is through the roof and supply is still historically low, the supply won't be catching up to the demand for a decades. Prices won't change here to due to this.
@@MrBayAreaRealEstate Agreed! Cash offers and unrepresentative buyers (a new majority I’m sure) will continue to drive prices up. Here cash buyers outbid financed sales on the left on the right all day 10-20% over asking with zero interest rate, working class will take the hit once again. The market will get even more stagnant and we all get a bad reputation fighting for sellers with more sellers going on DNC and DNM lists.
@@JimboGrace81In this business every single deal is different. Is a like 3 dimensional puzzle that can transcend into other dimensions. lol. There is no absolute way to systemize it. They are trying but is going g to back fire on them. This that is happening now although is not necessarily wrong by moral standards. It will definitely hurt everyone. The buyers, the sellers and the real estate professionals. Oh and the Realtors. I don’t understand what is so wrong with a sellers realtor willing to split their commissions with the buyers realtors for bringing a buyer and creating a space between the buyer and the sellers agent so the sellers agent can concentrate of doing good by the seller?
Dude, what universe are you living in? The vast majority of buyers do not have the money for even their own closing cost let alone money to pay a buyers agent. This is going to screw over the buyers. Only wealthy people will be able to pay their own buyers agent.
Nothing is going to change, sellers will still pay buyer agents 2% - 3% commissions to bring them buyers and 5% - 6% commissions to sell overall. If you pay attention to the details, the only change is that agents cannot list the buyers agents commission in MLS. Listing agents are still able to share the commission they charge sellers and offer buyer agents commission to bring buyers. Nothing has been stated that commissions need to be lowered or that buyers need to pay their own commission, that is not going to happen. The only thing that will change is there will be a new way that listing agents communicate how much commission buyers agents are receiving. That will be the only change. Also New Construction Builders will continue to pay commissions to buyers agent to bring them buyers, so the resale market will need to stay in line and pay buyers agents as well. No major changes will happen.
I don't know if I 100% agree with this. I think some sellers will push back and not want to offer buyer agent commissions. Also, with not knowing what commissions are from home to home buyer agents will need to be creative with how they secure buyers. Sellers need to wake up and realize that by paying a commission they incentivize their home to be sold but many of them are cheap!
EXACTLY. I was on a webinar with CAR today and we can put it in the confidential remarks. Any good agent will still negotiate a buyer's agent comp in the listing agreement.
@@beelergroup - Yes, we’ll figure it out. Everyone knows the one bringing the buyers holds the power as the selling agent. The listing agent is in the stronger position in the industry, however, selling agents do the selling. I’ll just put a commission clause in my offer contracts like I did when I first started.
Saying that a seller needs to pay a buying agent’s commission to sell a home is admitting that buyers agents incentives are misaligned which is part of what this ruling fixes. What does it say about a listing agent if they need 3% of your home value to use as a bribe to get people in the door who are then negotiating against you?
I love your mindset on being positive! If life gives you lemons, right? However, I disagree with your thoughts on prices. If less people can afford to buy a house even more than the market is right now, that's going to shrink the buyer pool even more. Supply and demand will take effect. While I am going to focus on the good and crush some listings, this is a sad day for the consumer.
@@Nottotv how does it have the potential of lowering prices? It's simple supply and demand. If a buyer is using an agent, and has to come out of pocket for it, even partially, that means the can afford less home. So this knocks them down in their price range or knocks them out of the market. So less demand, which equals housing pricing potentially coming down. The seller has always been able to set their own price, but if people aren't willing or can't afford it, it won't sell. This is how prices come down. I'm confused, is that what you're referring to?
Use a "Broker Pre-Screen Form" sheet to pre-qualify brokers to be sure that you can work with them. *_Never sign a general exclusive right to buy, which obligates you to pay a commission to the broker even when you find and buy the property on your own._* You can sign a *"specific-transaction exclusive right to buy"* when your broker is the procuring cause (he found the property for you). If you use a broker to list your property, then you will sign an exclusive right to sell, but keep the term limited so you can change to a new broker when you are dissatisfied with the efforts of the previous broker. Specify in the listing sale terms of "all cash" only (no FHA, VA, conventional or seller financing). You can still sell to a financed buyer, but you're not required to do so.
When the market flips to buyers sellers will be begging to get buyers and will post on listings "buyer agency plus bonus offered." The only people who won were the lawyers.
2 things in my mind: 1. Won't be more listings on the market since sellers will pay less money to sell?? and won't that drive home prices down?? 2. whoever wants to sell, needs to buy, so sellers will end up paying the 6% or whatever is agreed on, seller will end up paying their % but on 2 phases
I appreciate your insight, but I respectfully disagree with some points. Buyers agents can't just "switch" to be "listing heavy" because the competition for listings is already intense. The top listing agents will get richer and the buyers agents are going to struggle to get a piece of the listing inventory. There are not enough listings (in my market anyway) to accommodate a huge influx of buyers agents. Buyers are NOT going to want to pay a buyers agent commission (for the most part)---they already feel like they can do it on their own. I am not trying to be negative but this is what we are seeing regardless of the settlement. Sellers are the only one making out. The path to home ownership is going to be harder for the buyers out there. The banks aren't going to roll commission fees into a buyers financing package (I don't think), and it is just going to become a cluster%$#@...... This is just a big mess. I hope when the dust settles we can all prevail but gotta be honest, it 'taint looking optimistic
@@Vote4Cote Exactly. Buyers are going to be without representation basically if they don't want to pay & listing agents will be doing 2x the work facilitating the transaction, with half the pay. I see lots of lawsuits in the future.
Was never required a minimum to bring to a seller; most total comms were around 4% in neighborhoods worked in over 5 years ago. They were always negotiable. RE market has been set mostly by transactions done with/through a brokerage office. None of this makes any sense. Owner can always do it themselves. This settlement seems to create an environment of dual agency.
As a listing agent, I expect so many unreasonable offers from unrepresented buyers. Seller will pick the most money for sure. So many back to market properties as result. How many buyers will understand contingencies and other terms. Buyers who hire agent can not afford closing cost, down payment, and commission. There will be more court hearing and begin regretting not hiring buyer’s agent.
The compensation agreements will still exist, they will now just be negotiated separately and individually between brokers instead of being advertised on the MLS. The commission paid has always been negotiated between sellers and brokers individually and individual brokers have always decided what amount of that commission, if any, to offer a buyers broker, neither of these things will change.
The key is that they will come down greatly, the old amount of compensation will go down at least 30% if not more fairly quickly, prob in July, as the old 5-6% is meaningless now, as there is no upfront offer to the buyers agent No, brokers have not always decided mutually what the buyers commission would be, that was carte blanch the decision of the seller and sellers agent, with zero input, take it or leave it, from the buyers agent Now everything is up for grabs and IS not only negotiable, but HAS to be negotiated period, each and every deal, in writing, before a contract is finalized
It was a different story when homes were under one hundred thousand and we paid 6,000 for agents to split, but now in my world homes are 2 million and up. The commissions are outrageous. The title company does all the legal work anyway. I find my properties in the MLS. I have Never had an agent find me a property in 40 years!
Sellers never paid the commissions, the money comes from the buyers in order to buy the house and from that money both commissions are paid. It was all rolled into the deal but in the end where is the money coming from? The buyers loan or if they paid cash. Buyers were always paying the commission, it just didn’t seem that way. Also 6% was never set in stone it was always negotiable. In Illinois 6% almost never happens, so many agents do listing at 1 to 2.5%. Listing agents taking 3 % is not common at all.
Yes the seller pays from the money they receive from the buyer. In the end at the closing all the money is coming from the buyer from a loan or cash. And commissions paid out from the money the buyer paid for the property.
@@nickpaleo In every transaction there is an "exchange of value"....my 500K property for your 500K in monies. At the closing, you get the keys to the property and I get a credit on my HUD1 for the 500K. From MY credit, the commisions get paid.
As a two time home buyer, my agent really didn’t do much, I did most of my own search online; and I found it very cubersome having to call my agent to talk to seller’s agent to setup an appointment to show the house.
@@joepetreng471 You’re not an agent so I understand your ignorance. Real Estate is a very lucrative business. But if that’s your opinion, go ahead. Everyone is entitled to their own.
Great vid! And 100% agree with the approach of leaning into this. The rules and changes will find a new bottom (unwritten commission foundation) at some point that we all become accustomed to and continue to do business by.
No one has brought up the issue of Sellers are also Buyers on the other end unless they plan on living on a tree house when they sell their property. So no they’ll have to pay their agent twice. They’re not saving any money like they think they are.
A seller that is a buyer does not have to use the listing service or agent to buy their next home, which would itself be another form of collusion Sellers can use any service or means they want or need, re their other side of coin as buyers
Yup. 100%. The whole thing is a sham. Sellers are going to take their equity, pay 3% to the listing agent, then turn right around after closing, take their equity, and pay their agent another 3% to buy a house. Either that, or live in a tree just like you said. The only ones who win are the lawyers.... again.... $80 million dollars.... again.
Needed is a relative term What is "needed"? There have been FSBOS for years that have sold on their own No one "needs" a lawyer for that matter either Real Estate agents are the only occupation I am aware of where people say they are not needed Not mechanics, not doctors, not teachers, just RE agents
Agents in general have been living pretty fat on the 6% percentage for decades!! lol welcome to the club, long-term mortgage broker. Here we used to be able to set our fees and now we are minimized to a small fixed percentage no matter what the deal is., hard or small. Databases and websites do most of the shopping work and half of the viewing work these days. The law does not say they can’t pay a buyers agent. It’s just that they don’t have to. So good luck guys.
I love your thinking. What agents don’t understand is without buyers there would be no commission. Actually the buyers are paying commission for both sides of the transaction because both commissions are figured into the purchase price. Like you said if sellers are not going to factor in commission are they going to lower the price of their house… no they are not. We as listing agents just have to explain things.
I guess I understand your thinking to a point but commission is removed from seller proceeds. Therefore it's not totally accurate. Technically the commissions are split between buyer and seller, though the source of the funds is the buyer.
@@robzilla69 It is removed from the seller proceeds due to lender restrictions and due to the fact that most buyers only have the down payment required and no other money. The parties agreed to a purchase price and both commissions are a part of the purchase price. In my opinion, the price of the house (for appraisal purposes) should be less the commission but the buyer has to finance the entire amount so they are actually paying all the commissions.
Listing agents should ready to show their listed homes because they will need to work much harder to get their listing sold. Working for a 1% listing will not be enough compensation for the amount of work you will do to sell a home.
don't agents love two commissions in one transactions? if you state doesnt allow dual, then you have a referal partner to represent them. did i really have to say this@@JannelleCT
I will continue working the way I do, fully transparent, fully representing my clients, and by the contracts with my clients fully understanding the process.
I appreciate the enthusiasm. Some states don’t have dual agency. And buyers DO deserve a buyers representation and sellers do not deserve to have a larger net because they don’t want to pay. More agents will be knocking on the doors getting more communities to ban solicitation and material distribution as we have it here. More people will get on DNC and DNM lists. So good luck with all that. When it’s harder to buy, it’s harder to move, meaning the market will get even more stagnant. Maybe, just maybe, we should unite and do something legally about this when the NAR leadership let us down in such a major way.
Many buyer reps are going to quickly realize that the only way they can be assured of a paycheck is to focus primarily on getting listings. As more and more agents pile into the “listing” game, you can be assured listing agent commissions will plummet. With 1,000,000 real estate agents looking for a paycheck, the competition for listings will be fierce. The days of 2.0-2.5% listing commissions will quickly drop to 1% or even fixed fee listings deals. I see lawyers offering deals of “5 offers for $500” for actual buyers and then handling the closing costs for the buyers in a separate deal. Disruption is about to be enormous in the real estate transaction game.
Great. Let's go. I also wonder what type of pivots Mortgage Lenders may make. Will they come up with Loan products that allow for Buyer's Agent compensation to be included in the loan..... This is interesting. I am already a Listing Agent so I will need to double down and identify more training on the implications of this new model. Thanks Ricky
Most likely there will be some sort of mortgage reform. It’s already brutal for buyers to purchase now. And now they’ll have the shop for a cheap rate agent and also wrap the buyers agent commissions into their loan that they barely qualify for. All of this sounds horrible. 😢
Thank you for a reasonable view. Too many videos online spewing disinfo due to lack of knowledge. It helps to have experience selling and we are already going through every buying scenario we can think of in our office so our agents know how to handle it.
I’m excited for buyers to do it alone. See how they handle the anxiety if the offer was accepted or not, if they removed all contingencies and they loan didn’t go through and they lost their earnest deposit. They bought the home as is and didn’t know. The list goes on I just want to their experience
Washington State already has the mandatory buyers agency agreement prior to giving real estate services. Buyer has to agree to a percentage. Sellers now can decide what to offer. My current listing we reviewed comps for sale price and what other listings were offering in their market to decide what they would offer to the buyers agent. Not having it listed on the MLS will just mean that we need to call to find out what concessions are being offered and give our sellers that information so they can make an educated decision on what concessions they should offer. You can still state that concessions are offered. We just have to do more to keep buyers coming through the door!!!
So you don’t think listing agents are still gonna take five and 6% commission listings after this. Why would a listing agent lower their commission if they’re gonna have to do double the work work with the buyers?
Because once a few sellers do it at 2-3%, it'll be a chain reaction and if you don't adjust yours, they will go with another full service agent who is getting deals done at 2.5%. Same reason you can't get 8% now.
So, Agencies like Just 2 1/2% Realty might be the catalyst to make this a thing. Kinda like a "yardstick " that other Agents from other Realities will adjust to...
To me the future should be Seller’s agent conduct OPEN HOUSE (right now it’s buyer’s agent); and buyers can contact seller’s agent directly (don’t have to go through a buyer’s agent) to setup a viewing appointment. Once buyer wants to buy the house, they can go to a service to help them going through the paperwork.
I personally don’t like the idea of forcing my buyer to sign an agreement. I prefer to let my service speak for itself. But I honestly don’t see Sellers NOT offering a buyer commission either. And I don’t see how Dual Agency would work with the fiduciary & confidentiality components. Will we see a surge in facilitators?! Interested to see what the new norm is.
I don't work with a buyer unless they sign an agreement exclusively. I'll meet with them one time with no agreement and show a house just for the face-to-face meeting, after that, they wont see or hear from me again unless they sign exclusively. Too many buyers in the Bay Area who believe they can manipulate others, multiple agents at a time, to work for free.
Yup, they already try to out here. Even sellers do as well. Had a listing appointment last week and sellers now want to try and sell themselves just for the sake of saving 2.5%, even though the seller net sheet that I had drafted from my escrow colleague shows they would be netting over $1.5M hah! They are worried about 2.5%. @@michaelvargas2005
I think that we will see a lot more flat fee listing prices to cut out the higher priced commissions....and why shouldnt someone? I mean it's worth it to me to list 20 houses for 5k flat fees, than it is to sell 20 @ a % rate.
What you all don’t realize is that seller’s agent doesn’t provide much value either. Once people start looking for homes without an agent people are either going to realize either buyer’s agents provide enormous value they they previously didn’t realize, or they are going to realize they never needed them in the first place. There will a next Airbnb and Uber in real estate.
Example for seller: Old way seller sells $300k home at 6% commission =$18k, buys new home and pays 0% commission to buy there new home total spent $18k to sell and buy a new home......New way seller sells home for 3%= $9k now buying there next home say at $400k at 3% buyer commission fee= $12k. Now seller pays $3k more the new way things may go for sellers. This law suit is going to definitely cost buyers more money but will most likely cost sellers more than the 6% they pay to sell there home in the long run.
Nah, that's a delusional dream. RE commissions are coming down, not up. Only an ignorant consumer would offer 3% commission on either side. That's how antitrust laws work.
I really like this optimistic point of view and I agree, it actually helps to eliminate those lousy buyers who believe that can pull around multiple agents at the same time. I've always been an agent who does not work for buyers unless they have signed an exclusive buyer representation agreement. I know a lot of agents out there never bring this up with buyers, even when an offer is about to be written. As someone who does a lot of off-market deals, sellers don't pay commissions in those situations already. Whatever the sellers desired price is, an additional percentage would be paid by the buyers and rolled into their mortgage or paid out directly. So more of this is going to happen, for those who are knowledgable to structure it that way.
*_Remember that anything that is the result of a negotiation is re-negotiable._* That means that the real estate broker commission is fully negotiable and re-negotiable. A broker that wants a 5% commission at closing may allow a 30-day (60-day or 90-day) delay in payment, or allow a portion or all of it as a note. When I meet with a commercial listing broker to view a property, one of my first questions is "If I decide to buy, will you accept a note for your commission?" The usual answer is something like, "Uh, um, we've done that before." (He is reluctant to say YES, but he doesn't want to tarnish the relationship by saying NO so early in the discussion.) If he balks, then I can casually mention that _"I have no problem bringing in my own buyer's broker for half of the commission and I know that my broker will accept a note."_ Then talk about the benefits of a steady income stream from multiple notes. (This tactic is actually much easier with a residential real estate broker than a commercial real estate broker.)
After NAR giving companies like Zillow and Trulia access to the MLS system back in the day it’s almost like nar did this on purpose? The only way to really fix this is to have Naar and the MLS systems. Remove all of Zillow privileges pulling listings from the system and companies like Zillow so buyer agents will have a lot of value because they’re the only ones that have access to the MLS.
Fewer buyers will have buyer's agent's in tow. Yes, this means the listing agent will do their work plus work with the buyers to get them to sign a contract. Just like every other industry. New home builders handle this routinely.
@@jamesmoore176new home builders also have a massive legal team to protect their ass from lawsuits. I as a single broker do not, and playing dual agent is bound to land yourself in a litigation sooner or later
I've not read into it too in depth (I've been a non-practicing agent for years) but have they considered the fact that if you can negotiate the buyers comm into the sale that will effectively reduce the potential buyer concessions as they are limited to a %? Will concession limits be increased?
What I think will eventually transpire is that Lawyers will become the new buyers agents.... They will do the contract cheaper than a real estate agent. A buyer doesn't need a real estate agent to show them a house. All they need help with is with the contract.
And how much time will that lawyer spend with that buyer? Will that lawyer be available when that buyer has a post midnight panic attack about a forgotten cell phone bill? Now that’s screwing up the mortgage application ? Agents do a lot of hand holding that lawyers just won’t do
Time to abandon NAR..They caved...This is their settlement not ours...Its time for a national listing site that charges a low fee per listing instead of an annual fee and they can be our lobbyists...With a national platform it would rid us of segmentation of boards and all agents can see any listing anywhere....Your thoughts?
Having NAR involved in MLS is the incestuous problem. Fortunately i am in a MLS where I'm not required to be a NAR member. I saw this coming years ago when i kicked NAR to the curb. I'm still getting my commission.
I left NAR 14 YEARS ago because I'm disgusted at the lack of ethics by agents who CLAIM to have morals just because they're in the realtor CULT. I hate the organization! Recently our local MLS sold out to a big MLS forcing us to pay double the fees to stay on an MLS. There was no other option for our county. We were FORCED to join NAR as a result. Now fees are a disaster with this cult organization included. And within 1 month, NAR turns on it's members and acts like its doing them a favor! The only thing this settlement did was place NAR at the top for being excused from further lawsuits. They pissed their money away on useless bs instead of fighting for their paying members. They might as well have just said, "You're on your own fkrs! Good luck finding a job!"
Listing Agents: Get ready to negotiate the buying agent's commission with your seller, as it appears that starting in July, it will be included in the purchase agreement.
Sellers won't lower asking prices just because commission system changed. They will want to pay 3% to listing agent and pocket the 3% buyers agent's commission
You are assuming buyers don't pay their agents in THEIR closing costs. Sure, there could be ways around it, but they haven't said how they are going to implement it yet. There was nothing in any law now that said that commissions are 6% either, and you could already negotiate the rate or change it. So what might really change? MLS for anyone not in the NAR? Buyers pay their agents? No more listing agreements?
I think the most consequential part of the settlement is the requirement to have a written agreement with the buyer who is being represented. That buyer will be confronted with the service and the cost of the service. It remains to be seen what that cost will be and who will pay it, but the buyer will see the cost to them. Some agents will set their fee at whatever the seller is willing to pay, so it is free to the buyer. Then the agent will go to the sellers that they find will pay them an acceptable fee. They will only show those homes that will pay them that fee. Eventually, this will work less and less as buyers will understand the price they pay is reflective of the fee. I foresee videos on RUclips discussing strategies for buyers to see homes and contact selling agents without a buyer's agents fee involved, or buyers paying for the representation by the hour. In the final analysis, there will be far fewer agents selling a few homes per year, they will find other employment. Home prices will eventually be lower than they would have been.
This isn't how real estate is priced though. The fee is irrelevant, the price of real estate is based on buyer demand. If there's a lot of buyers out bidding each other, the price of real estate goes up as the new sales record raises the average which is used to price the next listing. If there's not enough buyers and the property sits on the market, price is reduced until someone finally makes and offer to buy, then that lower closing price lowers the average. Too many people really have no idea how real estate pricing works, sellers aren't just going to drop their prices 3%, they're still going to list for every penny they think they can get, and buyers are still going to have to out bid each other to win the deal.
How is not having an agent going to lower the price of the home Real estate is a commodity. Want home prices to go down? Add more inventory to the market
IMHO I don’t see buyers having to come out of pocket to pay their agent a commission unless they want to in a way to make their off stand out to a seller - I believe the sellers will still end up paying the buyer’s agent’s commission out of their proceeds just like they do today - again just they way I see it shaking out - seller will take the offer that nets them the most - and this will just put that front and center 🤷♂️
@@michaelvargas2005 maybe it should be disclosed on the purchase agreement.....because in michigan it isnt.....but it is advertised on the mls. If a client wants to see a house....I show it regardless of the commission schedule....I do a great job....and I get more clients in turn. I think the commission should be still paid by sellers and if not.....then they can show there house and deal with how us realtors just sit on our behinds and collect a check.....smh
@@michaelvargas2005 both parties -?buyers and sellers - share and can argue from a similar perspective - in that they both believe that they are the ones who pay for both of the agents commissions - and from their perspective’s; they are correct - what I am saying is that it’s been baked into the pie for over a century and I don’t see that changing - meaning I don’t see the buyers having to pony up at the closing table to put in more money to pay for their buyers agent as a separate closing cost item to them - unless of course they want to - even with these changes, commissions will still be coming out of the proceeds of the seller - and because of that, commission costs will still be baked into the price of a home - just my humble opinion
Hey Ricky - I 100% concur with you and what you're saying. I'd also like to add potential unintended consequences. Buyers will now have an opportunity to go directly to the Listing Agent to write the offer on their behalf. This will create a Duel Representation and "Double-Ending" the deal. This is illegal in 8 states. What then? Is a Realtor willing to represent a Buyer for 0% commission? I think this is going to spark a chain reaction in law suites from the unintended consequences of the current settlement at hand. Nobody is perfect, including lawyers and courts and I feel they all got this one wrong.
I would think as a buyer for two or 3% out-of-pocket. I would much rather invest in a real estate attorney as it pertains to protecting my legal interest versus a real estate agent? And in my head, I could see real estate agents working for real estate attorneys
No. Real estate attorneys are NOT PAID to assist buyers in making purchases or negotiating terms, nor do they have experience in selling. They're paid to draw up contracts and cover the legalities-- not show houses and warn you of wetlands, resale value problems, negotiating post inspections, etc. They're lawyers. Not brokers.
@@alouise3557 I would assume the real estate attorney would have more than enough intelligence to fulfill the duties required by agents and could also pass the needed exams required for local and state licensing. Not saying it would ever come to be just saying when it comes to contractual law. For 3% of a 500k (15k ish) maybe it’s wiser to have a lawyer on retainer Vs a professional salesperson?
It about intelligence. They don’t know the interacted of real rate transactions. And they don’t want to know otherwise they’d be realtors. Two different things. Attorneys have no clue of the details of a real rate transaction, understanding neighborhoods, values, and how to win bids, how to select the best offers, negotiate them, qualify lenders and so on.
@@albundy3929 great conversation. Let’s continue. Couldn’t the needed skills be taught/acquired? Enter Real estate sales consultants So it might look like this: Law Firm > Broker > Listing Agent? Not to mention the changing landscape with AI 🤖. With more and more transactions occurring online. It seems this, like most other industries, appear to be in the midst of a 21st century Industrial Revolution
Are you trying to be dense? Do you know any real estate attorneys? They handle contract law. They work 9-5 and they often themselves use agents when they handle their own real estate purchases and sales. Majority of them know legal terms. RE agents do a lot more leg work and know a lot more about the market and homes themselves and negotaiting than the attorney does. Attorney applies terms to law/contract law. Period. @@michaela.7687
Agent here! We can’t wait 5 to 7 years for the buyers to realize they need me lol Everything else is a great opportunity to learn something new an adjust to the system. 🎉❤ Let’s make more money 💰
There you go. In 5-7 yrs many agents will go out of business. I see a filtering of the agents in the next few years, where the consolidated ones will survive while the others, who aren't good anyway, will exit the arena. The remaining ones will do good after that, moving forward.
Don't be discouraged, in Real Estate there aren't really any pros or amateurs. Complete noobs can start fresh and crush it. It's all about sales and marketing yourself. I've seen very incompetent realtors be the most successful because they are good with people and promoting themselves. The work itself is easy enough for a teenager to do
In theory, buyers always paid payed the commission., Yes, the sellers gave us the money, but that money was given to the sellers by the buyers purchase. Ultimately, this will only be more transparent to the buyers by them, knowing that they are paying the commission. In my career there were times that I represented both the buyer and the seller in Colorado. It was called transaction Broker. And both buyers and sellers did not have a problem paying the commission because they knew they were being well represented. I can see this being pushed by Real Estate online companies, I would hope that these online companies were held more accountable for buyer/sellers if things go south on their deals.
RE Buyers calling us when they find a house and want contract help: I worry those buyers will actually end up calling attorneys for contract help, not us.
Yep, and they should!!! They charge much less than your commission for walking around a house and taking the buyers to more expensive houses, so your commission is even bigger.
@@sophiahuber4756the reason why an agent would take you to a more expensive house it’s because you the client is asking for a 4/2 with a 2 car garage with a pool on the lake for $500.
What do you think is going to happen with companies such as Ojo and Opcity? Who provide buyer leads to agents for a fee. Any thoughts on their future approach.
Basically the public wants free or almost free services from Realtors. I’m not playing that game. I am dropping my NAR membership on Monday. Those who are willing to work for greatly reduced commissions and can obtain plenty of property listings will survive on volume. Buyer agency is dead.
The public has always wanted to pay as little as possible for whatever product or service they buy - that just basic human behavior - but a buyer can’t walk on to the lot of a Mercedes dealership expecting to drive off in a brand new car for the price of a base model Honda - it just ain’t happening - you always get what you pay for And - there will always be people in this world who know the price of everything and the value of nothing
@@gregboudreau5778yes, but Mercedes brand talks by itself and clients can physically see the extra value. Realtors service value is more abstract to see. The public will want to cheap our work out.
lol imagine an agent telling their seller "hey i had someone who wanted to buy your house but they walked because I was going to charge them 3k to draw the contract you're paying me for already anyway" #fired
@@RickyCarruth you mean instead of using the local standardize form it takes about half an hour tops to fill out? No thanks on going under contract with a sellers agent who’s already showing they’d work in bad faith when they think the buyer is uninformed
I'm sorry I disagree. It's not going to be fun for most realtors who mainly represent buyers and are going to try to get paid helping people who can't afford them. It's also not going to be fun for struggling buyers who can't afford representation. Even listing agents who are now stuck with crazy unrepresented buyers. Maybe a little fun for listing agents (which I am) who can still charge a higher than 3% fee to list but honestly I think there will be blood in the streets in this industry all around...
Sadly new agents are the ones taking first time home buyers which are already difficult but honestly the most gratifying ones to work with. But if they can’t afford to pay any commission that sucks. They’re more out of luck now
Higher than 3% to list? Maybe in West Virginia and Mississippi. Not on the west coast (N. Cal) where a starter home can be $3-5 million! (Never understood why commission rates were uniform 5-6% nationwide, regardless of huge valuation gap).
How is this going to work with rentals? We have to push it to NY standard, where landlords pay one month com and renters pay one month commission to their agents.
Agents have been overcharging customers for too long. Supply and demand. Houses are selling faster than ever, most gone at first showing. Houses in certain cities, regularly go for 1 million. You think an agency deserves $60,000? I don't. Thats ridiculous and should be illegal.
If you don't find a realtor worth it then don't hire them. Or go with a discount agency. Entering into a voluntary transaction should be illegal? If you do your homework which people with million dollar homes tend to do, they go with a good agent at 5% and usually net in their pocket 10% more even after commisions if they didn't use the agent. That's why 95% of home sellers use agents. But please, tell us more how the open market should work.
*The corruption that runs through this administration is getting more scary. I feel for people with disabilities not getting the help they deserved. Anyone who is not investing now is missing a tremendous opportunity. Imagine investing $2000 and receiving $11,300 in 4days.*
I'm also one of the beneficiaries of Yetta Cox. Relying upon this administration is nothing but a total waste of time. So happy I gave it a trial after being skeptical of the process.
I bought a house and didn't use an agent and I can speak from experience that a buyers agent is best! It's not an easy prosses on your own. If you don't fully understand the prosses you can end up in legal trouble
So much disruption and chaos. Big opportunity. The big question. How will buyers see a listing without buyer agents? Open house? The buyers agent hosts those. How can a listing agent host ten open houses on all of their listings? They need a big team. Mega real estate teams are the winners here. Lots of consolidation coming
The optimism is great! So positive I love it. But in 3-5-7 yrs there will be something out that I’m sure they’re already working on that will make realtors nearly obsolete for the regular guy and a luxury for those who don’t want to deal with the process. It’s happening everywhere.
In Maryland, if you have dual agency, the broker has to assign two different agents to represent each side. Listing agents aren't going to be able to collect on buyer commission here. And you might have to pay out a referral fee or negotiate a commission for that dual agent.
We’re also going to have to make a rule approved by the seller that we can’t show their house without a pre-approval or pof to unrepresented buyers. Otherwise we’ll have to open the house to absolutely everyone or be sued to discrimination. I can’t show my clients house to every person who wants to case it for a robbery.
Now we can charge buyers before closing for our services by the hour. Like lawyers. You pay them ahead of time for their services doesn't matter if they win for you or not. Start having a set price for contract work, emails, phone calls etc.
@@BrianSOLDit unless it's just a flat fee across the board. I put my sign up, its mine to list for the seller, and show to the buyer. Maybe the MLS cooperation will be done? I do think that NAR does kind of have a monopoly going on......however I do believe as a REALTOR that I do have a better education/support system for moral and ethical behavior. It will be interesting how this all pans out
That’s a big concern for me as well. VA clients are already struggling in my market The only thing I can think is to write it in asking the seller to pay the fees but will that count against seller assist?
The big winner here is the title companies/Attorneys. Agents aren't needed..saying this as a real estate investor who's wife is a realtor. BUT, would recommend one agent on a majority of RE transactions. Gone are the days of two agents IMO. Keep in mind, it's the attorneys/title agency that does most of the work. Buyers would be better only working with the seller's agent at most AND work with their attorney/title company at a set hourly rate. Some title companies will do it for virtually free of you close with them.
Most buyers are extremely uneducated. This isn't going to allow them to negotiate the commission they pay their agents; it's going to make them think they can't afford a buyer's rep. And they're most likely correct, since using one will mean they'll be forced to pay an extra 3% at closing, even though most buyers can barely scrape together 3% for a down payment as it is. They will be forced to make the biggest purchase of their lives with absolutely zero representation. Most will be like lambs to the slaughter.
Plus, this isn't actually going to bring.the price of homes down. It's shocking how many people don't understand supply and demand economics, but the price of homes is entirely determined by how much buyers are actually offering and paying for homes and 0 to do with the commission. It may mean the sellers get a slightly larger take home, but buyers are still fked paying prices just as high as ever, and most without representation.
If every offer submitted to a seller includes 3% commission to the buyer agent then sellers will have not choice but to pay, if they want to sell. And this is not to suggest collusion or price fixing but it is something that could happen
I agree. Buyers are going to be shocked. The reality and complexities of the home buying process is going to slap more than a few, which will then change the subject back to let's find an agent to help us.
That’s laughable the idea that many buyers can’t see a deal through without an agent. As a multi fams owner I welcome and happy about this news. There’s no doubt this will represent an opportunity for both sellers and buyers to complete transactions with less going to a middlemen. Win win I for one am happy about this news. Now the most important person in the deal for me will my awesome lawyer by my side as part of my team. Can do without a buyers agent thank you very much 😅lol
Good luck winning offers if you are competing against a buyer agent and you show up with your lawyer. Sellers will pick the person who wants to close deals and not wreck them.
Massachusetts is an attorney state - I was a broker there - agents write contracts there - offers - then the attorneys turn it into a purchase and sales agreement - in California now - we are an escrow state
New Mexico Realtors have all documents from New Mexico Association of Realtors (NMAR). We are deemed transaction brokers no agency. The state is non-disclosure.
I don't understand why it's so difficult to continue charging sellers 5-6%, then negotiate what listing broker will share with buying broker separately, in a separate agreement that has nothing to do with consumers. Essentially the listing broker pays buying broker. It's really that simple. Change the language
If only someone would sue attorneys for charging 35% fees finally there’d be justice. Oh that’s right attorneys can do whatever they want, they’re a protected class apparently.
The more expensive homeownership becomes, the more difficult it becomes to purchase a home, the closer we can be changed into a form of a communist government. There’s a bigger picture going on with all this.
So many people do not see what is going on here. They think that the purpose of this lawsuit(by the DOJ) was because of "Real Estate agents bad". It has everything to do with the attack of owning property. All these "cheerleaders" here are going to hate living in a communist shit hole.
My Buyer's Agent found a home listed in the newspaper and decided not to show it to me because it was a FSBO, and the owner was not offering a commission. I also found that home in the newspaper and asked my Buyer's Agent about it. Long story short, I bought that home and directly paid my Buyer's Agent. I will never use agents again.
It’s all very interesting. I almost never use a agent when selling one of my properties, but I do occasionally use a agent when buying. I have always thought that the buyers agent should never receive compensation of any kind from the seller. I think it’s a conflict of interest for the buyers agent to get any money from the competitor selling the property. I would be all for paying a buyers agent out of pocket to negotiate down prices and get me the cheapest best deal. I think the lawsuit should have made it where the commissions can never be based on the sales price, but on the services provided by the seller agent, or buyer agent. who knows where it ends.
In fairness, the real estate course takes 2 months, and buying a home takes very little talent. You’ll have the odd dummy who fucks it up and gets sued but buying a home is a pretty simple process if you’ve done it a couple times.
I’m part of NWMLS and they’ve always been ahead of the game. They updated their forms to say listing agent, commission, buyer agent commission, and what happens if the buyer is unrepresented. So essentially, you could put in 3% for listing agent, 3% for buyers agent, and 5% to listing agent if there is an unrepresentative buyer. I wonder if other MLS will follow suit. I guess we’ll have to see when the MLS’s update us..
Our listing agreements in TX are similar. But the settlement says we can't list cooperative compensation on the MLS, however we're still allowed to do cooperative compensation, but it has to be negotiated at the contract point. Really the only fundamental change is we can't put the buyers agent compensation on the MLS. Nothing actually prevents still compensating the buyers agent though
so true! Also the buyers who think we get paid to be tour guides.....and not purchase. Not to mention the nay sayers who say to pay agents an hourly fee? That's not going to work either.
@@JaredNealeRealtor I think that having a retainer is a great idea for buyers..........,months of work then they show up at the inspection in a brand new car....lol
If buyers are willing to pay for theirs buyers agent commission do you think they can add that into the loan? They may not want to due to interest, but would that be an option? If you think about it when the sellers payed the commission that money came from the buyers purchase, and that purchase was done in a form of the loan so why couldn’t the buyers apply this “service Charge” to the loan? Idk just a thought.
Sellers are not going to let them in their home witbout a licensed Broker with them. I certainly would not. Buyers Brokers license protects the sellers when their home is viewed by buyers.
To be frank, buyers are m;uch more savvy than you think these days and are perfectly capable of buying on their own. Don't underestimate the intelligence of buyers.
What does this mean for Redfin? Sounds very bullish to me! •A lot of agents not willing to work when pay is slashed by 50%. So many quit. Means less direct competition with Redfin agents who are on w2 salary. •buyers find their homes directly on Redfin, and can sign an agreement directly with a Redfin agent to do the showing and tell Redfin exactly how much they are willing to pay in advance.
Redfin agents are easily overpowered by pro agents in transactions. Not the best representation for consumers. Not all agents are equal. Agents work at Redfin because they can’t hack it in business otherwise.
@@albundy3929 I don’t care about power when I hire an agent, We all know all agents just sit in their underwear at home and click a few buttons and send docusign to everyone, so I rather have a Redfin agent do that for me at 1% than a regular agent for 2.5-3%.
There's already a lot of flat fee businesses, how do you think they are doing? Not very good and also the services is jus the same. Just like anything in life, you get what you pay for. You want to go to a cheap restaurant, expect mediocre food and bad service. You want to save on a hotel, expect a dirty room with bad service. List goes on and on.
@@michaelvargas2005 amen! It was already a great system that pushed the sale with many agents.....now charge already strapped buyers to come up with more cash!? wtf
Very true , low cost agent will have poor service. But the fundamental of house hunting is see listings online, somehow visit property and submit offer. For a pro buyer who already understands process, poor availability from buying agent and agent who doesn’t look very experienced hardly matters if you save lot of money. I bought expensive SF bay area properly with REX homes, they returned 50% commissions to me as advertised in their company policy. It was huge savings, minor inconvenience don’t matter for that huge savings.
You made me giggle. A standard purchase agreement is easily written, this isn't a complicated contract and the boilerplate is out there. I can get an attorney to work for me for $500 per hour and would need less than 2 hours of their time. Why would a pay a flunkie $3k? I can also run any contract through AI, that hasn't sunk in yet.
It will just make it cheaper, far more so, to sell a home, may have negligible impact on prices at most, but it will be far cheaper, 30-50% more so, and remove half or more of RE agents in 1-2 years, the vast majority of them buyers agents What you will see is that most agents left will be listing agents, and buyers agent duties will be flat fee service, somewhat in line with door dash or amazon delivery, re people just talking people inside homes, more or less livery service now
Have had bought directly from sellers agent and saved a little money it was a flip house. Thinking this new law won’t make any difference if anything buyer will get hit with commission.
People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.
Buy now, home prices will not go lower. If rates drop, you can refinance.
The government will have no choice but to print more notes and lower interest rates.
Well i think, home prices will need to fall by at least 40% before the market normalizes. If you do not know whether to buy a house or not, it is best you seek guidance from a well-experienced advisor for proper portfolio allocation. So far, that’s how I’ve stayed afloat over 5 years now, amassing nearly $1m in return on investments.
Finding financial advisors like Amber Angelyn O'malley who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.
Home prices will come down eventually, but for now; its best to offset some of your real estate investments and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website… thank you for sharing.
buyers already pay both sides of the commission because sellers built commission in the sale price.
So, this change won't make buying cheaper to buyers, if anything it will cost them even more.
ABSOLUTELY! THE MONEY IS WHAT MAKES THE HOUSE WORTH ANYTHING! The buyers have the money, the sellers have the house. Why change an efficient system that pushes the sale of the house, and has ton's of realtors wanting to push the sale of the house.
Also sellers are also buyers!! They sell and then buy a new home. Now they’ll have to pay on both end? The folks who say agent don’t do anything should try closing 3 deals on one day to get all parties into their new homes, they have no idea the stress and coordination it takes.
I understand what you're saying, and you're right, it is a lot to manage. But what you're saying is a result of the realtor profession and not anything to do with the seller. Why should a seller pay more because you have a lot of clients? Respectfully, you should change your mindset from "I'm busy with clients, my job is hard" to "I'm representing your best interests, my expertise will save you money (buyer)/net you the most money (seller) and protect you from headaches in the transaction and potential expensive litigation"
No one is going to justify paying you more money because juggling clients is stressful. @@megansullivan9377
This is how its done in the commercial real estate industry. The market will adjust appropriately. Buyer's agent commissions aren't going away. It'll be wrapped into the purchase price or rolled into the mortgage payment alongside closing costs. You'll see a lot more buyer's agent require exclusive representation agreements with clauses that stipulate a buyer is to cover their commission if the seller does not. Again, that cost will be wrapped into the total closing costs.
In PA we are required to sign an exclusive BA agreement. The commissions already were enrolled in mortgage. Buyers deserve representation and if they can’t pay cash and the seller gets more net for not paying buyer commission that’s unfair and descriminatory.
How will lenders roll those cost into the mortgage payment because the house will only appraise for x.
@@albundy3929 Mortgage payments consist of principal, interest, and any associated closing costs (not paid at the time of closing). Appraisal is only tied to the principal portion of the loan. The commissions could likely roll into the total loan amount.
@@nicklaessig appraisal is based on the “principle” plus commissions because in residential real estate commissions are factored in the “principle” 🤦♀️
@@MariaKoroleva.Realtor Depends on the approach used for an appraisal. Cost based appraisal will not include commission. But for the majority, yes, the market value of a property assumes commissions. The thought is that if the seller will not pay the buyer's agent commission then the buyer will be responsible. It's unlikely the buyer will come out of pocket 2-3% for that (in addition to standard closing costs), therefore it'll be rolled into the loan.
All the people saying “great, agents have been screwing us all this time” you should know that this change reverts the industry back a few decades. The reason it changed into what it is today is because people just like you felt they didn’t have enough representation when buying homes so they started bringing lawsuits to real estate companies who represented the seller. So for decades homes have been selling faster and buyers have had more representation during the process all while significantly reducing the amount of lawsuits for misrepresentation by buyers. It will take longer to sell your home with these changes, you’ll sell for less most likely due to less offers. The current system is the absolute best for all parties. It’s the most efficient because of the law of supply and demand. You put thousands of agents to work for you by incentivizing them to bring you a buyer. Pay them $0 and see how many buyers they bring you.
Everything that happens, happens for a reason.. the above you said is probably is what is needed to shake up the sellers and make it a buyers market eventually.
Church!!!
Agreed on everything you said. Only part I didn't was that homes will sell for less - In the Bay Area, the demand is through the roof and supply is still historically low, the supply won't be catching up to the demand for a decades. Prices won't change here to due to this.
Nailed it!
@@MrBayAreaRealEstate Agreed! Cash offers and unrepresentative buyers (a new majority I’m sure) will continue to drive prices up. Here cash buyers outbid financed sales on the left on the right all day 10-20% over asking with zero interest rate, working class will take the hit once again. The market will get even more stagnant and we all get a bad reputation fighting for sellers with more sellers going on DNC and DNM lists.
The only thing I’m concerned about is when Zillow turns the switch and starts taking listings. I guarantee that’s gonna happen.
The whole industry is going to go to automation and AI like many others, making more and more humans obsolete.
@@JimboGrace81In this business every single deal is different. Is a like 3 dimensional puzzle that can transcend into other dimensions. lol. There is no absolute way to systemize it. They are trying but is going g to back fire on them. This that is happening now although is not necessarily wrong by moral standards. It will definitely hurt everyone. The buyers, the sellers and the real estate professionals. Oh and the Realtors. I don’t understand what is so wrong with a sellers realtor willing to split their commissions with the buyers realtors for bringing a buyer and creating a space between the buyer and the sellers agent so the sellers agent can concentrate of doing good by the seller?
@@JimboGrace81
this past year I have read about different corporations downsize or sell off assets to invest & implement AI into their business.
they already tried this didn't they? or were they only buying homes from owners? thought this had failed hard.
They already do have a seller lead program
Dude, what universe are you living in? The vast majority of buyers do not have the money for even their own closing cost let alone money to pay a buyers agent. This is going to screw over the buyers. Only wealthy people will be able to pay their own buyers agent.
Nothing is going to change, sellers will still pay buyer agents 2% - 3% commissions to bring them buyers and 5% - 6% commissions to sell overall. If you pay attention to the details, the only change is that agents cannot list the buyers agents commission in MLS. Listing agents are still able to share the commission they charge sellers and offer buyer agents commission to bring buyers. Nothing has been stated that commissions need to be lowered or that buyers need to pay their own commission, that is not going to happen. The only thing that will change is there will be a new way that listing agents communicate how much commission buyers agents are receiving. That will be the only change. Also New Construction Builders will continue to pay commissions to buyers agent to bring them buyers, so the resale market will need to stay in line and pay buyers agents as well. No major changes will happen.
Pretty much this... except for Internet companies. But it should also open the door to the Zillow/Redfin companies to sell directly with no agent.
I don't know if I 100% agree with this. I think some sellers will push back and not want to offer buyer agent commissions. Also, with not knowing what commissions are from home to home buyer agents will need to be creative with how they secure buyers. Sellers need to wake up and realize that by paying a commission they incentivize their home to be sold but many of them are cheap!
EXACTLY. I was on a webinar with CAR today and we can put it in the confidential remarks. Any good agent will still negotiate a buyer's agent comp in the listing agreement.
@@beelergroup - Yes, we’ll figure it out. Everyone knows the one bringing the buyers holds the power as the selling agent. The listing agent is in the stronger position in the industry, however, selling agents do the selling. I’ll just put a commission clause in my offer contracts like I did when I first started.
Saying that a seller needs to pay a buying agent’s commission to sell a home is admitting that buyers agents incentives are misaligned which is part of what this ruling fixes. What does it say about a listing agent if they need 3% of your home value to use as a bribe to get people in the door who are then negotiating against you?
I love your mindset on being positive! If life gives you lemons, right? However, I disagree with your thoughts on prices. If less people can afford to buy a house even more than the market is right now, that's going to shrink the buyer pool even more. Supply and demand will take effect. While I am going to focus on the good and crush some listings, this is a sad day for the consumer.
How 😂 it puts more power in the hands of sellers
IF YOU KEEP DRINKING THE LEMONADE AND NEVER QUESTION IT OR FIGHT BACK THEN YOUR LEMONADE WILL TURN INTO COOL-AID.
@@Nottotv how does it have the potential of lowering prices? It's simple supply and demand. If a buyer is using an agent, and has to come out of pocket for it, even partially, that means the can afford less home. So this knocks them down in their price range or knocks them out of the market. So less demand, which equals housing pricing potentially coming down. The seller has always been able to set their own price, but if people aren't willing or can't afford it, it won't sell. This is how prices come down. I'm confused, is that what you're referring to?
@@ellielumsden9208 I'm not sure the context of what you're saying.
Use a "Broker Pre-Screen Form" sheet to pre-qualify brokers to be sure that you can work with them.
*_Never sign a general exclusive right to buy, which obligates you to pay a commission to the broker even when you find and buy the property on your own._*
You can sign a *"specific-transaction exclusive right to buy"* when your broker is the procuring cause (he found the property for you).
If you use a broker to list your property, then you will sign an exclusive right to sell, but keep the term limited so you can change to a new broker when you are dissatisfied with the efforts of the previous broker.
Specify in the listing sale terms of "all cash" only (no FHA, VA, conventional or seller financing).
You can still sell to a financed buyer, but you're not required to do so.
When the market flips to buyers sellers will be begging to get buyers and will post on listings "buyer agency plus bonus offered." The only people who won were the lawyers.
there isn't enough inventory in the pipeline for this to happen (any time soon).
@@carlosrodriguez-hv5px not today, but I'm here for a long time. I'll wait....
Lol good luck buddy
Not allowed to market buyer broker compensation in the mls now.
exactly!
2 things in my mind: 1. Won't be more listings on the market since sellers will pay less money to sell?? and won't that drive home prices down?? 2. whoever wants to sell, needs to buy, so sellers will end up paying the 6% or whatever is agreed on, seller will end up paying their % but on 2 phases
I appreciate your insight, but I respectfully disagree with some points. Buyers agents can't just "switch" to be "listing heavy" because the competition for listings is already intense. The top listing agents will get richer and the buyers agents are going to struggle to get a piece of the listing inventory. There are not enough listings (in my market anyway) to accommodate a huge influx of buyers agents. Buyers are NOT going to want to pay a buyers agent commission (for the most part)---they already feel like they can do it on their own. I am not trying to be negative but this is what we are seeing regardless of the settlement. Sellers are the only one making out. The path to home ownership is going to be harder for the buyers out there. The banks aren't going to roll commission fees into a buyers financing package (I don't think), and it is just going to become a cluster%$#@...... This is just a big mess. I hope when the dust settles we can all prevail but gotta be honest, it 'taint looking optimistic
Listing agents will now become showing agents to get their listed homes sold.
@@Vote4Cote Exactly. Buyers are going to be without representation basically if they don't want to pay & listing agents will be doing 2x the work facilitating the transaction, with half the pay. I see lots of lawsuits in the future.
Was never required a minimum to bring to a seller; most total comms were around 4% in neighborhoods worked in over 5 years ago. They were always negotiable. RE market has been set mostly by transactions done with/through a brokerage office. None of this makes any sense. Owner can always do it themselves. This settlement seems to create an environment of dual agency.
Exactly. All this does is create more lawsuits between buyers and sellers for the lawyers to cash in on
Looking forward to seeing local associations backing out of NAR.
As a listing agent, I expect so many unreasonable offers from unrepresented buyers. Seller will pick the most money for sure. So many back to market properties as result. How many buyers will understand contingencies and other terms. Buyers who hire agent can not afford closing cost, down payment, and commission. There will be more court hearing and begin regretting not hiring buyer’s agent.
The compensation agreements will still exist, they will now just be negotiated separately and individually between brokers instead of being advertised on the MLS. The commission paid has always been negotiated between sellers and brokers individually and individual brokers have always decided what amount of that commission, if any, to offer a buyers broker, neither of these things will change.
The key is that they will come down greatly, the old amount of compensation will go down at least 30% if not more fairly quickly, prob in July, as the old 5-6% is meaningless now, as there is no upfront offer to the buyers agent
No, brokers have not always decided mutually what the buyers commission would be, that was carte blanch the decision of the seller and sellers agent, with zero input, take it or leave it, from the buyers agent
Now everything is up for grabs and IS not only negotiable, but HAS to be negotiated period, each and every deal, in writing, before a contract is finalized
It was a different story when
homes were under one hundred thousand and we paid 6,000 for agents to split, but now in my world homes are 2 million and up.
The commissions are outrageous. The title company does all the legal
work anyway. I find my properties in the MLS. I have
Never had an agent find me a property in 40 years!
Sellers never paid the commissions, the money comes from the buyers in order to buy the house and from that money both commissions are paid. It was all rolled into the deal but in the end where is the money coming from? The buyers loan or if they paid cash. Buyers were always paying the commission, it just didn’t seem that way. Also 6% was never set in stone it was always negotiable. In Illinois 6% almost never happens, so many agents do listing at 1 to 2.5%. Listing agents taking 3 % is not common at all.
Interesting take, but you are wrong...the seller pays.
Yes the seller pays from the money they receive from the buyer. In the end at the closing all the money is coming from the buyer from a loan or cash. And commissions paid out from the money the buyer paid for the property.
@@nickpaleo In every transaction there is an "exchange of value"....my 500K property for your 500K in monies. At the closing, you get the keys to the property and I get a credit on my HUD1 for the 500K. From MY credit, the commisions get paid.
As a two time home buyer, my agent really didn’t do much, I did most of my own search online; and I found it very cubersome having to call my agent to talk to seller’s agent to setup an appointment to show the house.
Agent here. I dont think people realize how this is actually going to backfire on sellers and buyers. Very interesting on how this plays out.
I agree this is interesting. I’m not afraid however I do realize how the cure system help move properties.
@@joepetreng471 You’re not an agent so I understand your ignorance.
Real Estate is a very lucrative business. But if that’s your opinion, go ahead. Everyone is entitled to their own.
@@joepetreng471Respect your opinion. But it’s clear you aren’t an agent 😂😅
I agree 100%
Lmao I think we are all agents here don’t there’s any concerned buyers here
Great vid! And 100% agree with the approach of leaning into this. The rules and changes will find a new bottom (unwritten commission foundation) at some point that we all become accustomed to and continue to do business by.
No one has brought up the issue of Sellers are also Buyers on the other end unless they plan on living on a tree house when they sell their property. So no they’ll have to pay their agent twice. They’re not saving any money like they think they are.
very smart
A seller that is a buyer does not have to use the listing service or agent to buy their next home, which would itself be another form of collusion
Sellers can use any service or means they want or need, re their other side of coin as buyers
Yup. 100%. The whole thing is a sham. Sellers are going to take their equity, pay 3% to the listing agent, then turn right around after closing, take their equity, and pay their agent another 3% to buy a house. Either that, or live in a tree just like you said. The only ones who win are the lawyers.... again.... $80 million dollars.... again.
You are so wrong!! Actually realtors are no needed anymore to buy a house. Didn't you know that?
Needed is a relative term
What is "needed"?
There have been FSBOS for years that have sold on their own
No one "needs" a lawyer for that matter either
Real Estate agents are the only occupation I am aware of where people say they are not needed
Not mechanics, not doctors, not teachers, just RE agents
Agents in general have been living pretty fat on the 6% percentage for decades!! lol welcome to the club, long-term mortgage broker. Here we used to be able to set our fees and now we are minimized to a small fixed percentage no matter what the deal is., hard or small. Databases and websites do most of the shopping work and half of the viewing work these days. The law does not say they can’t pay a buyers agent. It’s just that they don’t have to. So good luck guys.
I love your thinking. What agents don’t understand is without buyers there would be no commission. Actually the buyers are paying commission for both sides of the transaction because both commissions are figured into the purchase price. Like you said if sellers are not going to factor in commission are they going to lower the price of their house… no they are not. We as listing agents just have to explain things.
Facts
I guess I understand your thinking to a point but commission is removed from seller proceeds. Therefore it's not totally accurate. Technically the commissions are split between buyer and seller, though the source of the funds is the buyer.
@@robzilla69 It is removed from the seller proceeds due to lender restrictions and due to the fact that most buyers only have the down payment required and no other money. The parties agreed to a purchase price and both commissions are a part of the purchase price. In my opinion, the price of the house (for appraisal purposes) should be less the commission but the buyer has to finance the entire amount so they are actually paying all the commissions.
@@realcarmen You are attempting to explain something to me that I have already stated that I understand. Not sure why but ok. Read what I wrote again.
Listing agents should ready to show their listed homes because they will need to work much harder to get their listing sold. Working for a 1% listing will not be enough compensation for the amount of work you will do to sell a home.
Them: "Can I see the house today?"
Me: "Yes, if you have an agent. Our seller doesn't want unaccompanied buyers just walking around their property."
You need a new script. Become their agent genius.
@@albundy3929 he was referring to unaccompanied buyers who don't want to pay for an agent
Me: OK , Ill call your seller and tell him you wouldnt show me the house.
Seller: Hey Nick, youre fired
So you’re asking a listing agent to do the showings too?
don't agents love two commissions in one transactions? if you state doesnt allow dual, then you have a referal partner to represent them. did i really have to say this@@JannelleCT
I will continue working the way I do, fully transparent, fully representing my clients, and by the contracts with my clients fully understanding the process.
I appreciate the enthusiasm. Some states don’t have dual agency. And buyers DO deserve a buyers representation and sellers do not deserve to have a larger net because they don’t want to pay. More agents will be knocking on the doors getting more communities to ban solicitation and material distribution as we have it here. More people will get on DNC and DNM lists. So good luck with all that. When it’s harder to buy, it’s harder to move, meaning the market will get even more stagnant. Maybe, just maybe, we should unite and do something legally about this when the NAR leadership let us down in such a major way.
I'm with you on that last part, I don't understand why all agents are not coming together to stand against this contraction case
Many buyer reps are going to quickly realize that the only way they can be assured of a paycheck is to focus primarily on getting listings. As more and more agents pile into the “listing” game, you can be assured listing agent commissions will plummet. With 1,000,000 real estate agents looking for a paycheck, the competition for listings will be fierce. The days of 2.0-2.5% listing commissions will quickly drop to 1% or even fixed fee listings deals.
I see lawyers offering deals of “5 offers for $500” for actual buyers and then handling the closing costs for the buyers in a separate deal. Disruption is about to be enormous in the real estate transaction game.
Great. Let's go. I also wonder what type of pivots Mortgage Lenders may make. Will they come up with Loan products that allow for Buyer's Agent compensation to be included in the loan..... This is interesting. I am already a Listing Agent so I will need to double down and identify more training on the implications of this new model. Thanks Ricky
Most likely there will be some sort of mortgage reform. It’s already brutal for buyers to purchase now. And now they’ll have the shop for a cheap rate agent and also wrap the buyers agent commissions into their loan that they barely qualify for. All of this sounds horrible. 😢
Thank you for a reasonable view. Too many videos online spewing disinfo due to lack of knowledge. It helps to have experience selling and we are already going through every buying scenario we can think of in our office so our agents know how to handle it.
I’m excited for buyers to do it alone. See how they handle the anxiety if the offer was accepted or not, if they removed all contingencies and they loan didn’t go through and they lost their earnest deposit. They bought the home as is and didn’t know. The list goes on I just want to their experience
Of course they'll still tell everyone it was easy and they did a great job even when those things happen to them. That's the culture we live in.
Right, I am dying to see that too 😂😂
Washington State already has the mandatory buyers agency agreement prior to giving real estate services. Buyer has to agree to a percentage. Sellers now can decide what to offer. My current listing we reviewed comps for sale price and what other listings were offering in their market to decide what they would offer to the buyers agent. Not having it listed on the MLS will just mean that we need to call to find out what concessions are being offered and give our sellers that information so they can make an educated decision on what concessions they should offer. You can still state that concessions are offered. We just have to do more to keep buyers coming through the door!!!
So you don’t think listing agents are still gonna take five and 6% commission listings after this. Why would a listing agent lower their commission if they’re gonna have to do double the work work with the buyers?
Because once a few sellers do it at 2-3%, it'll be a chain reaction and if you don't adjust yours, they will go with another full service agent who is getting deals done at 2.5%. Same reason you can't get 8% now.
Great answer to a great question 💪
@@RickyCarruth y’all are agreeing to be poor. Fools.
So, Agencies like Just 2 1/2% Realty might be the catalyst to make this a thing. Kinda like a "yardstick " that other Agents from other Realities will adjust to...
Why does anyone think that NAR is gonna stay in business? They are going to raise fees for the 1 million agents and are these agents gonna pay?
To me the future should be Seller’s agent conduct OPEN HOUSE (right now it’s buyer’s agent); and buyers can contact seller’s agent directly (don’t have to go through a buyer’s agent) to setup a viewing appointment. Once buyer wants to buy the house, they can go to a service to help them going through the paperwork.
I personally don’t like the idea of forcing my buyer to sign an agreement. I prefer to let my service speak for itself. But I honestly don’t see Sellers NOT offering a buyer commission either. And I don’t see how Dual Agency would work with the fiduciary & confidentiality components. Will we see a surge in facilitators?! Interested to see what the new norm is.
I don't work with a buyer unless they sign an agreement exclusively. I'll meet with them one time with no agreement and show a house just for the face-to-face meeting, after that, they wont see or hear from me again unless they sign exclusively. Too many buyers in the Bay Area who believe they can manipulate others, multiple agents at a time, to work for free.
Buyers will want to cheap out your great service. That's for sure.
Yup, they already try to out here. Even sellers do as well. Had a listing appointment last week and sellers now want to try and sell themselves just for the sake of saving 2.5%, even though the seller net sheet that I had drafted from my escrow colleague shows they would be netting over $1.5M hah! They are worried about 2.5%. @@michaelvargas2005
I think that we will see a lot more flat fee listing prices to cut out the higher priced commissions....and why shouldnt someone? I mean it's worth it to me to list 20 houses for 5k flat fees, than it is to sell 20 @ a % rate.
What about condos at 130k? That’s too steep.
Agree with your thinking........The cream will rise to the top as it always does 💯
What you all don’t realize is that seller’s agent doesn’t provide much value either. Once people start looking for homes without an agent people are either going to realize either buyer’s agents provide enormous value they they previously didn’t realize, or they are going to realize they never needed them in the first place. There will a next Airbnb and Uber in real estate.
Example for seller: Old way seller sells $300k home at 6% commission =$18k, buys new home and pays 0% commission to buy there new home total spent $18k to sell and buy a new home......New way seller sells home for 3%= $9k now buying there next home say at $400k at 3% buyer commission fee= $12k. Now seller pays $3k more the new way things may go for sellers. This law suit is going to definitely cost buyers more money but will most likely cost sellers more than the 6% they pay to sell there home in the long run.
Nah, that's a delusional dream. RE commissions are coming down, not up. Only an ignorant consumer would offer 3% commission on either side.
That's how antitrust laws work.
So listing agents will do more of the work at lower commission rates?
Probably not
I really like this optimistic point of view and I agree, it actually helps to eliminate those lousy buyers who believe that can pull around multiple agents at the same time. I've always been an agent who does not work for buyers unless they have signed an exclusive buyer representation agreement. I know a lot of agents out there never bring this up with buyers, even when an offer is about to be written. As someone who does a lot of off-market deals, sellers don't pay commissions in those situations already. Whatever the sellers desired price is, an additional percentage would be paid by the buyers and rolled into their mortgage or paid out directly. So more of this is going to happen, for those who are knowledgable to structure it that way.
*_Remember that anything that is the result of a negotiation is re-negotiable._*
That means that the real estate broker commission is fully negotiable and re-negotiable.
A broker that wants a 5% commission at closing may allow a 30-day (60-day or 90-day) delay in payment, or allow a portion or all of it as a note.
When I meet with a commercial listing broker to view a property, one of my first questions is "If I decide to buy, will you accept a note for your commission?"
The usual answer is something like, "Uh, um, we've done that before."
(He is reluctant to say YES, but he doesn't want to tarnish the relationship by saying NO so early in the discussion.)
If he balks, then I can casually mention that _"I have no problem bringing in my own buyer's broker for half of the commission and I know that my broker will accept a note."_
Then talk about the benefits of a steady income stream from multiple notes.
(This tactic is actually much easier with a residential real estate broker than a commercial real estate broker.)
After NAR giving companies like Zillow and Trulia access to the MLS system back in the day it’s almost like nar did this on purpose?
The only way to really fix this is to have Naar and the MLS systems. Remove all of Zillow privileges pulling listings from the system and companies like Zillow so buyer agents will have a lot of value because they’re the only ones that have access to the MLS.
Completely agree. I think this is going to be the solution to counter the lawsuit.
So as listing agents do we charge buyers for showings on our listings? Do we charge them to write the contract?
I would say, let's charge them the tipical comission split just as transaction agents do.
Fewer buyers will have buyer's agent's in tow. Yes, this means the listing agent will do their work plus work with the buyers to get them to sign a contract. Just like every other industry. New home builders handle this routinely.
@jamesmoore176 a good listing agent won't cheap out his work.
@@jamesmoore176new home builders also have a massive legal team to protect their ass from lawsuits. I as a single broker do not, and playing dual agent is bound to land yourself in a litigation sooner or later
I would love an hourly rate, including for showing, with expenses if applicable. Bill me like a lawyer, but up that skill set.
I've not read into it too in depth (I've been a non-practicing agent for years) but have they considered the fact that if you can negotiate the buyers comm into the sale that will effectively reduce the potential buyer concessions as they are limited to a %? Will concession limits be increased?
What I think will eventually transpire is that Lawyers will become the new buyers agents.... They will do the contract cheaper than a real estate agent. A buyer doesn't need a real estate agent to show them a house. All they need help with is with the contract.
And how much time will that lawyer spend with that buyer? Will that lawyer be available when that buyer has a post midnight panic attack about a forgotten cell phone bill? Now that’s screwing up the mortgage application ?
Agents do a lot of hand holding that lawyers just won’t do
@@emilyfeagin2673 Well for the buyers thet need "hand holding" do you think these buyers are going to pay a 2.5% fee.....
Time to abandon NAR..They caved...This is their settlement not ours...Its time for a national listing site that charges a low fee per listing instead of an annual fee and they can be our lobbyists...With a national platform it would rid us of segmentation of boards and all agents can see any listing anywhere....Your thoughts?
They settled because the damages were gonna be in the billions if they didn't
Having NAR involved in MLS is the incestuous problem. Fortunately i am in a MLS where I'm not required to be a NAR member. I saw this coming years ago when i kicked NAR to the curb. I'm still getting my commission.
I left NAR 14 YEARS ago because I'm disgusted at the lack of ethics by agents who CLAIM to have morals just because they're in the realtor CULT. I hate the organization! Recently our local MLS sold out to a big MLS forcing us to pay double the fees to stay on an MLS. There was no other option for our county. We were FORCED to join NAR as a result. Now fees are a disaster with this cult organization included. And within 1 month, NAR turns on it's members and acts like its doing them a favor! The only thing this settlement did was place NAR at the top for being excused from further lawsuits. They pissed their money away on useless bs instead of fighting for their paying members. They might as well have just said, "You're on your own fkrs! Good luck finding a job!"
What MLS are you in?
You’re so lucky. NAR has been a sham for a very long time.
Yes, I'd like to know which MLS you are in?
@@MrBayAreaRealEstate Nwmls
Listing Agents:
Get ready to negotiate the buying agent's commission with your seller, as it appears that starting in July, it will be included in the purchase agreement.
We have had it in the California Purchase Agreement since Dec of 2022 - must it admit and hasn’t been used much - but it will be soon 😁
Sellers won't lower asking prices just because commission system changed. They will want to pay 3% to listing agent and pocket the 3% buyers agent's commission
In CA, never seen it@@gregboudreau5778
Yup exactly @@michaelvargas2005
You are assuming buyers don't pay their agents in THEIR closing costs. Sure, there could be ways around it, but they haven't said how they are going to implement it yet. There was nothing in any law now that said that commissions are 6% either, and you could already negotiate the rate or change it. So what might really change? MLS for anyone not in the NAR? Buyers pay their agents? No more listing agreements?
I think the most consequential part of the settlement is the requirement to have a written agreement with the buyer who is being represented. That buyer will be confronted with the service and the cost of the service. It remains to be seen what that cost will be and who will pay it, but the buyer will see the cost to them. Some agents will set their fee at whatever the seller is willing to pay, so it is free to the buyer. Then the agent will go to the sellers that they find will pay them an acceptable fee. They will only show those homes that will pay them that fee. Eventually, this will work less and less as buyers will understand the price they pay is reflective of the fee. I foresee videos on RUclips discussing strategies for buyers to see homes and contact selling agents without a buyer's agents fee involved, or buyers paying for the representation by the hour. In the final analysis, there will be far fewer agents selling a few homes per year, they will find other employment.
Home prices will eventually be lower than they would have been.
This isn't how real estate is priced though. The fee is irrelevant, the price of real estate is based on buyer demand. If there's a lot of buyers out bidding each other, the price of real estate goes up as the new sales record raises the average which is used to price the next listing. If there's not enough buyers and the property sits on the market, price is reduced until someone finally makes and offer to buy, then that lower closing price lowers the average.
Too many people really have no idea how real estate pricing works, sellers aren't just going to drop their prices 3%, they're still going to list for every penny they think they can get, and buyers are still going to have to out bid each other to win the deal.
How is not having an agent going to lower the price of the home
Real estate is a commodity. Want home prices to go down? Add more inventory to the market
IMHO I don’t see buyers having to come out of pocket to pay their agent a commission unless they want to in a way to make their off stand out to a seller - I believe the sellers will still end up paying the buyer’s agent’s commission out of their proceeds just like they do today - again just they way I see it shaking out - seller will take the offer that nets them the most - and this will just put that front and center 🤷♂️
Come on now, we all know that the commission has always been built into the selling price, so buyers have always paid both agents commissions.
@@michaelvargas2005 maybe it should be disclosed on the purchase agreement.....because in michigan it isnt.....but it is advertised on the mls. If a client wants to see a house....I show it regardless of the commission schedule....I do a great job....and I get more clients in turn. I think the commission should be still paid by sellers and if not.....then they can show there house and deal with how us realtors just sit on our behinds and collect a check.....smh
@@michaelvargas2005 both parties -?buyers and sellers - share and can argue from a similar perspective - in that they both believe that they are the ones who pay for both of the agents commissions - and from their perspective’s; they are correct - what I am saying is that it’s been baked into the pie for over a century and I don’t see that changing - meaning I don’t see the buyers having to pony up at the closing table to put in more money to pay for their buyers agent as a separate closing cost item to them - unless of course they want to - even with these changes, commissions will still be coming out of the proceeds of the seller - and because of that, commission costs will still be baked into the price of a home - just my humble opinion
@@michaelvargas2005 the selling price is entirely based on buyer demand and has nothing to do with the commission.
Hey Ricky - I 100% concur with you and what you're saying. I'd also like to add potential unintended consequences. Buyers will now have an opportunity to go directly to the Listing Agent to write the offer on their behalf. This will create a Duel Representation and "Double-Ending" the deal. This is illegal in 8 states. What then? Is a Realtor willing to represent a Buyer for 0% commission? I think this is going to spark a chain reaction in law suites from the unintended consequences of the current settlement at hand. Nobody is perfect, including lawyers and courts and I feel they all got this one wrong.
I would think as a buyer for two or 3% out-of-pocket. I would much rather invest in a real estate attorney as it pertains to protecting my legal interest versus a real estate agent?
And in my head, I could see real estate agents working for real estate attorneys
No. Real estate attorneys are NOT PAID to assist buyers in making purchases or negotiating terms, nor do they have experience in selling. They're paid to draw up contracts and cover the legalities-- not show houses and warn you of wetlands, resale value problems, negotiating post inspections, etc. They're lawyers. Not brokers.
@@alouise3557
I would assume the real estate attorney would have more than enough intelligence to fulfill the duties required by agents and could also pass the needed exams required for local and state licensing.
Not saying it would ever come to be just saying when it comes to contractual law. For 3% of a 500k (15k ish) maybe it’s wiser to have a lawyer on retainer Vs a professional salesperson?
It about intelligence. They don’t know the interacted of real rate transactions. And they don’t want to know otherwise they’d be realtors. Two different things. Attorneys have no clue of the details of a real rate transaction, understanding neighborhoods, values, and how to win bids, how to select the best offers, negotiate them, qualify lenders and so on.
@@albundy3929 great conversation.
Let’s continue.
Couldn’t the needed skills be taught/acquired?
Enter Real estate sales consultants
So it might look like this:
Law Firm > Broker > Listing Agent?
Not to mention the changing landscape with AI 🤖.
With more and more transactions occurring online. It seems this, like most other industries, appear to be in the midst of a 21st century Industrial Revolution
Are you trying to be dense? Do you know any real estate attorneys? They handle contract law. They work 9-5 and they often themselves use agents when they handle their own real estate purchases and sales. Majority of them know legal terms. RE agents do a lot more leg work and know a lot more about the market and homes themselves and negotaiting than the attorney does. Attorney applies terms to law/contract law. Period.
@@michaela.7687
Agent here! We can’t wait 5 to 7 years for the buyers to realize they need me lol
Everything else is a great opportunity to learn something new an adjust to the system. 🎉❤
Let’s make more money 💰
There you go. In 5-7 yrs many agents will go out of business. I see a filtering of the agents in the next few years, where the consolidated ones will survive while the others, who aren't good anyway, will exit the arena. The remaining ones will do good after that, moving forward.
@@victorn1321 33% or more will quit in the next 12 month cycle.
I’m about halfway through my pre-licensing course and I’m feeling super discouraged. When I hear “amateurs are out”, I’m like-well shit!
Don't be discouraged, in Real Estate there aren't really any pros or amateurs. Complete noobs can start fresh and crush it. It's all about sales and marketing yourself. I've seen very incompetent realtors be the most successful because they are good with people and promoting themselves. The work itself is easy enough for a teenager to do
@@slashrtjable haha thank you! That actually really helps to hear. 🙌🏼🙏🏼
They say amateurs are out every year. Lazy are out and always have been. Not hard workers.
I am new to the field as well and about to make the leap all in. If you go just know I’m with you.
@@albundy3929I think they say that to thin the competition.
In theory, buyers always paid payed the commission., Yes, the sellers gave us the money, but that money was given to the sellers by the buyers purchase. Ultimately, this will only be more transparent to the buyers by them, knowing that they are paying the commission. In my career there were times that I represented both the buyer and the seller in Colorado. It was called transaction Broker. And both buyers and sellers did not have a problem paying the commission because they knew they were being well represented. I can see this being pushed by Real Estate online companies, I would hope that these online companies were held more accountable for buyer/sellers if things go south on their deals.
RE Buyers calling us when they find a house and want contract help: I worry those buyers will actually end up calling attorneys for contract help, not us.
Yep, and they should!!! They charge much less than your commission for walking around a house and taking the buyers to more expensive houses, so your commission is even bigger.
@@sophiahuber4756the reason why an agent would take you to a more expensive house it’s because you the client is asking for a 4/2 with a 2 car garage with a pool on the lake for $500.
What do you think is going to happen with companies such as Ojo and Opcity? Who provide buyer leads to agents for a fee. Any thoughts on their future approach.
Basically the public wants free or almost free services from Realtors. I’m not playing that game. I am dropping my NAR membership on Monday. Those who are willing to work for greatly reduced commissions and can obtain plenty of property listings will survive on volume. Buyer agency is dead.
The public has always wanted to pay as little as possible for whatever product or service they buy - that just basic human behavior
- but a buyer can’t walk on to the lot of a Mercedes dealership expecting to drive off in a brand new car for the price of a base model Honda
- it just ain’t happening
- you always get what you pay for
And
- there will always be people in this world who know the price of everything and the value of nothing
@@gregboudreau5778yes, but Mercedes brand talks by itself and clients can physically see the extra value. Realtors service value is more abstract to see. The public will want to cheap our work out.
lol imagine an agent telling their seller "hey i had someone who wanted to buy your house but they walked because I was going to charge them 3k to draw the contract you're paying me for already anyway" #fired
The buyer is welcome to write their own contract or hire a lawyer
@@RickyCarruth you mean instead of using the local standardize form it takes about half an hour tops to fill out? No thanks on going under contract with a sellers agent who’s already showing they’d work in bad faith when they think the buyer is uninformed
@modernmillennial must not like the house, but bottom line is...I work for the sellers best interest, not the buyer.
I'm sorry I disagree. It's not going to be fun for most realtors who mainly represent buyers and are going to try to get paid helping people who can't afford them.
It's also not going to be fun for struggling buyers who can't afford representation.
Even listing agents who are now stuck with crazy unrepresented buyers.
Maybe a little fun for listing agents (which I am) who can still charge a higher than 3% fee to list but honestly I think there will be blood in the streets in this industry all around...
Sadly new agents are the ones taking first time home buyers which are already difficult but honestly the most gratifying ones to work with.
But if they can’t afford to pay any commission that sucks. They’re more out of luck now
Higher than 3% to list? Maybe in West Virginia and Mississippi. Not on the west coast (N. Cal) where a starter home can be $3-5 million!
(Never understood why commission rates were uniform 5-6% nationwide, regardless of huge valuation gap).
Our profession will be cheaped out and many realtors will move to another profession.
How is this going to work with rentals? We have to push it to NY standard, where landlords pay one month com and renters pay one month commission to their agents.
christimuoneke399
Because it takes a lot of work to sell a house. No matter the price
Agents have been overcharging customers for too long. Supply and demand. Houses are selling faster than ever, most gone at first showing. Houses in certain cities, regularly go for 1 million. You think an agency deserves $60,000? I don't. Thats ridiculous and should be illegal.
If you don't find a realtor worth it then don't hire them. Or go with a discount agency. Entering into a voluntary transaction should be illegal? If you do your homework which people with million dollar homes tend to do, they go with a good agent at 5% and usually net in their pocket 10% more even after commisions if they didn't use the agent. That's why 95% of home sellers use agents. But please, tell us more how the open market should work.
*The corruption that runs through this administration is getting more scary. I feel for people with disabilities not getting the help they deserved. Anyone who is not investing now is missing a tremendous opportunity. Imagine investing $2000 and receiving $11,300 in 4days.*
How can we generate more revenue during quantitative times? I can't afford to see my savings crumble to dust.
Getting Yetta Cox to help me really helped me clear all my debts. I started with what I have left and it's been the best decision I ever made.
I'm also one of the beneficiaries of Yetta Cox. Relying upon this administration is nothing but a total waste of time. So happy I gave it a trial after being skeptical of the process.
I bought a house and didn't use an agent and I can speak from experience that a buyers agent is best! It's not an easy prosses on your own. If you don't fully understand the prosses you can end up in legal trouble
So much disruption and chaos. Big opportunity. The big question. How will buyers see a listing without buyer agents? Open house? The buyers agent hosts those. How can a listing agent host ten open houses on all of their listings? They need a big team. Mega real estate teams are the winners here. Lots of consolidation coming
Nah
Agents will have to start charging buyers per every showing now that there wont be commission paid from sellers.
The optimism is great! So positive I love it. But in 3-5-7 yrs there will be something out that I’m sure they’re already working on that will make realtors nearly obsolete for the regular guy and a luxury for those who don’t want to deal with the process. It’s happening everywhere.
I love the optimism lol. But I doubt it works out like this. Listing agents win win on dual agreements.
That's if you as listing agent can convince a buyer to pay you the other side of the split
In Maryland, if you have dual agency, the broker has to assign two different agents to represent each side. Listing agents aren't going to be able to collect on buyer commission here. And you might have to pay out a referral fee or negotiate a commission for that dual agent.
It'll be fun, until your first lawsuit when yourt sued by a pissed off buyer. Expect a lot of that
We’re also going to have to make a rule approved by the seller that we can’t show their house without a pre-approval or pof to unrepresented buyers. Otherwise we’ll have to open the house to absolutely everyone or be sued to discrimination. I can’t show my clients house to every person who wants to case it for a robbery.
They are trying to cheap out our profession. And affordability won't ease at all.
Now we can charge buyers before closing for our services by the hour. Like lawyers. You pay them ahead of time for their services doesn't matter if they win for you or not. Start having a set price for contract work, emails, phone calls etc.
😂😂😂
How’s this idea going to work in low-poverty areas? VA & RD? A lot of my clients struggle to have downpayment money.
If they are forced to pay they will forgo representation... I can't see it going any other way without the mortgage business saving the buyer's agent
@@BrianSOLDit unless it's just a flat fee across the board. I put my sign up, its mine to list for the seller, and show to the buyer. Maybe the MLS cooperation will be done? I do think that NAR does kind of have a monopoly going on......however I do believe as a REALTOR that I do have a better education/support system for moral and ethical behavior. It will be interesting how this all pans out
That’s a big concern for me as well.
VA clients are already struggling in my market
The only thing I can think is to write it in asking the seller to pay the fees but will that count against seller assist?
The big winner here is the title companies/Attorneys. Agents aren't needed..saying this as a real estate investor who's wife is a realtor. BUT, would recommend one agent on a majority of RE transactions. Gone are the days of two agents IMO. Keep in mind, it's the attorneys/title agency that does most of the work. Buyers would be better only working with the seller's agent at most AND work with their attorney/title company at a set hourly rate. Some title companies will do it for virtually free of you close with them.
Most buyers are extremely uneducated. This isn't going to allow them to negotiate the commission they pay their agents; it's going to make them think they can't afford a buyer's rep. And they're most likely correct, since using one will mean they'll be forced to pay an extra 3% at closing, even though most buyers can barely scrape together 3% for a down payment as it is. They will be forced to make the biggest purchase of their lives with absolutely zero representation. Most will be like lambs to the slaughter.
Plus, this isn't actually going to bring.the price of homes down. It's shocking how many people don't understand supply and demand economics, but the price of homes is entirely determined by how much buyers are actually offering and paying for homes and 0 to do with the commission.
It may mean the sellers get a slightly larger take home, but buyers are still fked paying prices just as high as ever, and most without representation.
If every offer submitted to a seller includes 3% commission to the buyer agent then sellers will have not choice but to pay, if they want to sell. And this is not to suggest collusion or price fixing but it is something that could happen
I agree. Buyers are going to be shocked. The reality and complexities of the home buying process is going to slap more than a few, which will then change the subject back to let's find an agent to help us.
😂 yet people sell house everyday without an agent, AI will do it for much less
That’s laughable the idea that many buyers can’t see a deal through without an agent. As a multi fams owner I welcome and happy about this news.
There’s no doubt this will represent an opportunity for both sellers and buyers to complete transactions with less going to a middlemen. Win win
I for one am happy about this news. Now the most important person in the deal for me will my awesome lawyer by my side as part of my team. Can do without a buyers agent thank you very much 😅lol
Good luck winning offers if you are competing against a buyer agent and you show up with your lawyer. Sellers will pick the person who wants to close deals and not wreck them.
Many states are attorney states. Agents don't write the contracts
Massachusetts is an attorney state - I was a broker there - agents write contracts there - offers - then the attorneys turn it into a purchase and sales agreement - in California now - we are an escrow state
New Mexico Realtors have all documents from New Mexico Association of Realtors (NMAR). We are deemed transaction brokers no agency. The state is non-disclosure.
I don't understand why it's so difficult to continue charging sellers 5-6%, then negotiate what listing broker will share with buying broker separately, in a separate agreement that has nothing to do with consumers. Essentially the listing broker pays buying broker. It's really that simple. Change the language
Attorneys won twice: this case plus now there will be many more: from screwed buyers
If only someone would sue attorneys for charging 35% fees finally there’d be justice. Oh that’s right attorneys can do whatever they want, they’re a protected class apparently.
For us transaction agents/Realtors, change is NOT happening when we "get both sides" -- we represent both Buyers and Sellers of this transaction.
The more expensive homeownership becomes, the more difficult it becomes to purchase a home, the closer we can be changed into a form of a communist government. There’s a bigger picture going on with all this.
So many people do not see what is going on here. They think that the purpose of this lawsuit(by the DOJ) was because of "Real Estate agents bad". It has everything to do with the attack of owning property. All these "cheerleaders" here are going to hate living in a communist shit hole.
My Buyer's Agent found a home listed in the newspaper and decided not to show it to me because it was a FSBO, and the owner was not offering a commission.
I also found that home in the newspaper and asked my Buyer's Agent about it.
Long story short, I bought that home and directly paid my Buyer's Agent.
I will never use agents again.
Do you think realtors should unionize
It’s all very interesting. I almost never use a agent when selling one of my properties, but I do occasionally use a agent when buying. I have always thought that the buyers agent should never receive compensation of any kind from the seller. I think it’s a conflict of interest for the buyers agent to get any money from the competitor selling the property. I would be all for paying a buyers agent out of pocket to negotiate down prices and get me the cheapest best deal. I think the lawsuit should have made it where the commissions can never be based on the sales price, but on the services provided by the seller agent, or buyer agent. who knows where it ends.
The strong will survive. This will thin the herd and get rid of agents who honestly never should have been agents in the first place.
In fairness, the real estate course takes 2 months, and buying a home takes very little talent. You’ll have the odd dummy who fucks it up and gets sued but buying a home is a pretty simple process if you’ve done it a couple times.
what about access to the MLS to find homes, access to the properties in a timely fashion, who is writing their offers?
I’m part of NWMLS and they’ve always been ahead of the game. They updated their forms to say listing agent, commission, buyer agent commission, and what happens if the buyer is unrepresented. So essentially, you could put in 3% for listing agent, 3% for buyers agent, and 5% to listing agent if there is an unrepresentative buyer. I wonder if other MLS will follow suit. I guess we’ll have to see when the MLS’s update us..
That's great, but NAR is going to remove the "co-op" field from the MLS's.
Our listing agreements in TX are similar.
But the settlement says we can't list cooperative compensation on the MLS, however we're still allowed to do cooperative compensation, but it has to be negotiated at the contract point.
Really the only fundamental change is we can't put the buyers agent compensation on the MLS. Nothing actually prevents still compensating the buyers agent though
Exclusive buyers agreement is great until they close and don’t have the money to pay you .
Bingo. It's already started to happen to some of my colleagues.
Please elaborate @@brianfitzrealty
so true! Also the buyers who think we get paid to be tour guides.....and not purchase.
Not to mention the nay sayers who say to pay agents an hourly fee? That's not going to work either.
@@JaredNealeRealtor I think that having a retainer is a great idea for buyers..........,months of work then they show up at the inspection in a brand new car....lol
Exactly or they will simply cut you off and then lawsuits like the commercial side
If buyers are willing to pay for theirs buyers agent commission do you think they can add that into the loan? They may not want to due to interest, but would that be an option? If you think about it when the sellers payed the commission that money came from the buyers purchase, and that purchase was done in a form of the loan so why couldn’t the buyers apply this “service Charge” to the loan? Idk just a thought.
Sellers are not going to let them in their home witbout a licensed Broker with them. I certainly would not. Buyers Brokers license protects the sellers when their home is viewed by buyers.
How will it change if we are showing our own listings? Often it's the 1st time we meet the buyer - at the property.
You could use that opportunity to capture more buyer clients. Let them know they need to sign a contract prior to showing them anything
To be frank, buyers are m;uch more savvy than you think these days and are perfectly capable of buying on their own. Don't underestimate the intelligence of buyers.
You’d be surprised.
Some, yes.
Most, Absolutely not.
There is so much that goes into a transaction that requires guidance
@@OmarMartinez-u7l I've rarely seen a sale that is straightforward.
What does this mean for Redfin? Sounds very bullish to me!
•A lot of agents not willing to work when pay is slashed by 50%. So many quit. Means less direct competition with Redfin agents who are on w2 salary.
•buyers find their homes directly on Redfin, and can sign an agreement directly with a Redfin agent to do the showing and tell Redfin exactly how much they are willing to pay in advance.
Redfin agents are easily overpowered by pro agents in transactions. Not the best representation for consumers. Not all agents are equal. Agents work at Redfin because they can’t hack it in business otherwise.
@@albundy3929 I don’t care about power when I hire an agent,
We all know all agents just sit in their underwear at home and click a few buttons and send docusign to everyone, so I rather have a Redfin agent do that for me at 1% than a regular agent for 2.5-3%.
@@albundy3929 &:@@@/‘
Flat fee buyer agent companies will pop up. It’s good for buyers in expensive states.
There's already a lot of flat fee businesses, how do you think they are doing? Not very good and also the services is jus the same. Just like anything in life, you get what you pay for. You want to go to a cheap restaurant, expect mediocre food and bad service. You want to save on a hotel, expect a dirty room with bad service. List goes on and on.
Really, good look having those low cost brokers touring you around the city 😂😂😂
Low cost brokers will represent exactly the same low cost airlines represent. LOW QUALITY.
@@michaelvargas2005 amen! It was already a great system that pushed the sale with many agents.....now charge already strapped buyers to come up with more cash!? wtf
Very true , low cost agent will have poor service. But the fundamental of house hunting is see listings online, somehow visit property and submit offer. For a pro buyer who already understands process, poor availability from buying agent and agent who doesn’t look very experienced hardly matters if you save lot of money. I bought expensive SF bay area properly with REX homes, they returned 50% commissions to me as advertised in their company policy. It was huge savings, minor inconvenience don’t matter for that huge savings.
You made me giggle. A standard purchase agreement is easily written, this isn't a complicated contract and the boilerplate is out there. I can get an attorney to work for me for $500 per hour and would need less than 2 hours of their time. Why would a pay a flunkie $3k? I can also run any contract through AI, that hasn't sunk in yet.
great. write it up yourself, I will be happy to present to my client.
Do you guys really think sellers will lower the asking price just because buyers will pay commission now? 😂😂😂. No, they will want it all ! 🎉🎉🎉🎉.
It will just make it cheaper, far more so, to sell a home, may have negligible impact on prices at most, but it will be far cheaper, 30-50% more so, and remove half or more of RE agents in 1-2 years, the vast majority of them buyers agents
What you will see is that most agents left will be listing agents, and buyers agent duties will be flat fee service, somewhat in line with door dash or amazon delivery, re people just talking people inside homes, more or less livery service now
Have had bought directly from sellers agent and saved a little money it was a flip house.
Thinking this new law won’t make any difference if anything buyer will get hit with commission.
Definitely interesting times I plan on talking about this on my RUclips channel preparing my buyers of what’s coming down the pike
What’s your take Robyn, should my sister hold off on buying now she’s in dc
@@SK-le1gmwhy wait? she’s ready to buy so buy. Not ready, don’t buy. Weight the opportunity cost both financial and emotional of buying vs not buying.
@@SK-le1gm I can help get you connected with a good agent there in DC!
@@albundy3929 agreed. we never know what tomorrow brings
I’ve been buying houses going straight to the agent for years. I own 17 homes & I hire an attorney to look over the contract. Done deal!!!
Get those buyers a house before July! LOL
I am planning to call next week all my buyers who are still holding off to buy a house...
I love this comment. Totally agree
Need better rates tho.
@@danielagrozevarealtor3268 See? You are working now!