NAR Lawsuit Explained: What Does This Mean for Real Estate?
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- Опубликовано: 7 ноя 2023
- NAR Lawsuit Explained: What Does This Mean for Real Estate? #realestate #realestateagent
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I don't understand why they accepted the buyer's offer if they were not happy with the amount. Did their agent explain that the commission is based on a percentage of the sale price? meaning the less they sell the house for, the smaller the commission... this makes no sense to me lol
Right?! Everybody's a victim these days.
I was a Realtor in the 1980's just before buyer's agents started. At that time, all Realtors worked for the seller. There was a line in the purchase and sales agreement that stated that, and we had to point it out to the buyer and have them initial it. Also back then, commissions were negotiable and that was stated in the listing agreement and had to be initialed by the seller. Commissions didn't double when buyer's agents started because the "usual" commission was 5 or 6 percent back in the 80's.
It all needs blown up. Home prices are inflated 6% for the commissions so the buyer is stuck paying the 6% commissions to both agents through the mortgage. NAR is absolutely deserving of this lawsuit. I just hope things are better when the dust settles.
How much should agents get paid?
@@albundy3929 buyers agents should get paid whatever they are worth to the buyer. Simple. If a buyer doesn't want to pay your fee, that's their peragotive, they can find another agent who may be cheaper and better. There is no entitlement.
The Buyers Agent's primary concern is collecting their commission and that means the higher the price the higher the commission. Good riddens I will look out for my best interest
I really wanted to watch this but the background music was too much to handle
Thanks for the feedback
If there is value on what buyer’s agents offer to the consumer, buyers will pay for it. Or it could be that this type of service was overpriced and it could be resolved with a flat fee. Time will tell.
Time will tell
I think agents are needed but the comission percentages have to come down.
The seller spent years of their lives in their homes, thousands of dollars of upkeep.
Agents Yes they do work to help sell the home, yes they drive a lot, but they dont actually build the homes, they dont actually fix the homes, they dont actually know the infrastructure issues (gas, electric, plumbing, etc) to guide you.
With all of that known for the agents to take $15K or more from your hard earned equity seems really unfair.
If so easy then go make those easy big bucks commissions!!! When you get a dose of reality you won’t say this any longer.
@@albundy3929 you must be a realtor. Suck it up buttercup bc changes are coming.
As a full time realtor we always have to adapt to change and things don’t always go our way. This is game changing but that also means we have to change with the game and continue to be the active problem solvers that we are.
Thanks captain obvious
Where does the 1.5billion go?
A buyers agent is only needed to open the door which the sellers agent can do. Don’ 3:19 t need an agent to buy a car and people are getting ripped off everyday. The buyers agent is a way for another realtor to cash in for writing a legally binding contract but the agent isn’t a lawyer. The so-called protection are already requirements by the lenders. Where we’re the protectors when purchases were made with no inspection, no contingency, no appraisal, above asking
price and the buyers agent saying if you buy now you can refinance later? So much for your argument. The whole thing is a scam along with the B.S. insurance that goes along with it.
Spot on! We had a horrible experience and my opinion of realtors couldn't be much lower. IMO they're right up there with bankers and stockbrokers for being limpets on society.
If you read the best seller book, Freakonomics it describes in detail, how a pimp in Chicago brings more value to its customers, a.k.a. prostitutes, then a realtor.
@@sing10278 😅
If you think buyer agents only open doors, then you're spot on. Realtors generally don't get to show their value until a property goes under contract. This is when the real work begins.
Silly. If so easy become a realtor and make all of that easy money! People saying goofy things that have no clue.
This verdict makes me happy
Me too. I'm a class member. $$$$$$$$$$$$$$
That makes one of us!
Losers are happy at bad decisions. Buyer and sellers will get screwed because of this. Nothing renters like you have to worry about though.
It was greedy listing agents fault, because sellers found out that they pick up the deal and the end the surprise. Listing agent picking up the full 6%… So they where negotiating the 6 to share to the buyer agent but at the end picking up everything…The good is that now the other 3 in not in control of listing agent. Then is good for sellers.. no more double dipping surprise 😂😂😂
I believe they are going to wrap the commissions into the loans
Exactly. More interest.
We'll see. I don't believe that will happen though.
@@RealEstateDisruptors Isn’t Fannie Mae and Freddie Mac already working on something like this though?
Why would lenders wrap it into the loan if it creates more risk for the lender? If they do, they charge higher rates and fees. Buyer screwed. And seller screwed
Because now less
Buyers and lower offer. Agents still make their x percent.
@@albundy3929 it will be a buyer concession. “We will give you X more if you agree to give us X back to pay our buyers agent
I’m in KCMO and have a friend that is part of the lawsuit against the NAR. I’m 100% against the NAR, and the entire Realtor pyramid scheme. No realtor is ever worth 10,15,20k in commission. In my opinion they are non value added. Will see what happens. The thought is that buyers will pay a buyers agent out of pocket a hourly or set fee if they choose to use one, and sellers will pay agents out of pocket either a hourly or set fee and NO money can be mixed between buyers and sellers.
They fought so hard for consumer protection now they will have zero protection. Letting people who have never seen a contract in their life write one is crazy. Let the lawsuits begin.
Let the lawsuits begin to claw back the unfair commissions you earned over the years.
@@sing10278unfair, how so?
unfair, howso?@@sing10278
You are so right. Buyers will suffer with poor or no representation, and the lawyers will make more money from all the chaos and resulting lawsuits. This was a huge mistake. You did great job explaining how the commission structure evolved and why it worked the way it was. Too bad you weren't in the courtroom.
Most buyer agent I met were crooks trying to talk me into buying more expensive property. The idea of buyer representation is good in theory, but in practice these are people who do not care about a buyer. They are there to make money and they are happy to screw up a buyer just because they have access to personal information.
Sorry to hear that.
@@EdgeTradingFX-
I never found a good agent. I had to fire a couple. People were doing their dirty business, trying to talk me into selling my house for peanuts. Threatening that nobody will want my house. As a result, my house was sold even before it opened for showing. The customer asked to show them house earlier. The other realtor tried to sell me properties more expensive that I wanted. He was hiding more affordable options. No one ever educated me about high radon gas exposure that needs to be checked. Anyway, these people never cared about me. They cared about making money out of me. They were not there to represent me, they were there to screw me up to get the most money.
This business is done on the word-of-mouth. Reputations rules, so while I can believe that you may have run into bad agents, I find it illogical that all are like that and I don't believe you experience can be generalized.
That's right. Most of the buyer's Agents are not doing good job for their clients. They don't really negotiate on your behalf. They are only interested in their commission or fees. They try to sell you at a higher price so that their commissions will be higher As an investor, l have fired a lot of them. Now, don't get me wrong, there are very FEW of buyer's Agents that are EXCEPTIONALLY good. They help you to save money,, give you best advice. Thank God, l have one of them today. Your buyer's Agent must be able to protect your interest, no matter what. I feel SORRY for the lazy ones among them that are NOT ready to burn their gas for you, but to stay in the office or at home & tell their clients go & have a look of the house; if you love the house from the street, then, we will set an appointment when you are to see it. Lol. NONSENSE. The lazy ones among them will OUIT very soon. I really love what's happening now. IT'S AN EYE OPENERS TO THE BUYERS & EVEN TO THE SELLERS TOO. Let both Listing & Buyer's Agents do their jobs thoroughly. Make them work hard for the money. I guess the best thing to do as a seller, is to pay $400---$500 and list your house in MLS/FMLS and pay whoever that brings the buyer 31/2% to 4% U bet OR Rather, let the seller pay his/her listing Agent and the buyer do the same---that's the buyer will also pays his Agent. Those are the 2 options SELLERS can save lots of money. The 1st option I mentioned will be very---very good if the Seller's property is located in a HOT neighborhood where the house can be sold within 30 to 40 days in the mkt.
Fake story
A listing agent should get a flat fee...once you put the property into the MLS database you never hear from them again...the buyer's agent should only get MAX 3% of the sales price. Problem solved. People find their own properties to buy via the other real estate aggregator websites. Most, I say MOST, buyer's agents don't do anything other than write the purchase offer / contract and schedule the inspection and then make sure the deal closes so they can get paid.
What are you talking about?! Your statement that the listing agent is never seen after signing, or the buyers agent isn’t seen after writing the contract is ignorant. I’m a listing agent and work my asssss off from start to finish. I’m in that families life a lot for a month. As a buyers agent, I’m spending gas and my time for weeks or months sometimes finding the best home. Then the time we get in escrow I’m helping them ensure the home is good for them and that they don’t get caught off guard with repairs. All of my hard work is appreciated and my clients tell me how do I do it?! I’m by referral because of my attention to detail. Many agents are like me! You making it sound like we’re lazy and just collect a check cannot be farther that the truth. Are you a renter that’s never had this experience?
Beyond laughable & loud & WRONG! 😂
We bought 2 homes and sold one, our agent showed us at least 20 houses before we decided on one. That’s a lot of work imo.
I asked a listing agent why she doesn’t do open houses. Her response was that’s too much work as most houses sell themselves once she puts them on MLS.
@@erlindaengstrom3507 and showing houses is just where their job begins. Thanks for seeing the value in our work
What’s interesting about the NAR lawsuit is that the sellers are almost never bringing money to the closing table anyway. The buyer’s funds cover everything for the seller: liens, taxes, closing costs, loan payoff, commissions, etc. So the argument that sellers shouldn’t have to pay a commission to a buyer agent is baffling to me. Maybe sellers should have to start covering their agent’s commission and other fees up front so the buyer doesn’t have to finance so much money to cover both sides and can continue to pay their own representation. 🤷
I feel bad for the agent who got stuck with these A-holes. They didn’t “loss” $10k on their sale. Clearly they didn’t get a better offer. You got what your house was worth. The market decides what the house is worth.
Totally agreed
Really, it is the transaction that funds the commissions on both sides. One perspective is the seller, another it is the buyer, since he is the one BRINGING THE MONEY TO THE TABLE!
Yes this is a concept that many who typically are emotionally tied to there homes fail to remember. In fact is you think about the lawsuit IS a bit misrepresented by the law firm and should have been aimed at the seller agent NOT the buyer's agent if that was their argument.
I agree that the market decides what the house is worth. But using that same logic, shouldn't the market also determine how much realtors are worth? The most efficient way of achieving this is to simply have buyers pay their own agents.
@@mattsohn3442= less buyers for sellers = less offers on their house = less money net for sellers
Sellers should pay the buyers agent that got them $100K-$500K over asking then. It’s very common in California
Incremental steps to “you’ll own nothing and be happy..”
too bad so sad
Nobody is saying you can't have a buyer's agent. The ruling merely dictates that the buyer pays their own agent's commission, which is exactly the way is should be.
Hurts buyers. Hurts sellers because less buyers.
How many buyers have you worked with in the past year?
@@albundy3929 I dont know how you arrive to the conclusion that this will result in less buyers. People need homes, that is not going to change.
I believe we will end up seeing buyer agents working for hourly or flat rates.
wrong again. yes, less buyers. look up why if you really care about the answer and are not set on a narrative. also, there are many flat rate and discount agents. there have been for decades. they all go away or change their business model because it doesnt work.@@TomTom-bh2wf
The sole purpose of the MLS was to allow cooperation between brokers. With no buyer broker payout, there is no reason to keep up the costly maintenance and policing of MLS. Aggregators such as zillow lose their property feeds from MLS that no longer exists, so buyers will need to go directly to broker websites.
Those aggregators will functionally become the new MLS imo. Listing agents will now pay to list their clients homes on those sites to maximize exposure. Buyers will reach out directly to listing agents. Consumers love the likes of Zillow etc. they aren’t going away. I think they’re the real winners in all of this.
@brycecontreras-dm1vg maybe. I don't think agents will pay to list. It might be more like when we paid to advertise in the newspaper. Ocassional exposure but not not continual exposure. Large brokers will control certain markets with their inventory.
@@CraigKammanMN I think agents are going to have to go to where the buyers are and the buyers are on Zillow. Consumers aren’t going to put up with navigating multiple broker websites and bouncing from Keller Williams to Remax to Caldwell Banker or whoever they may be to find a home. Not when there is a perfectly good product that already exists that fulfills their every needs. This is of course, pure speculation and have no idea what’s in store.
@brycecontreras-dm1vg good points. None of us know. I don't see agents spending that money. Maybe the commissions will remain where they are at and MLS stays intact. Just buyers won't get representation.
@brycecontreras-dm1vg NAR membership requires cooperation on the MLS unless seller opts out. Zillow doesn't have that influence.
If the Seller agrees to pay you 6%, are you saying as a listing agent you can’t offer any of the 6% to Buyer’s agent to incentivize them to show the house?
Very good point! Since the seller agreed to pay 6% to the listing agent, it's none of their business and shouldn't care what the listing agent does with the commission money. Those funds are divided and paid in different ways to differnt parties for various reasons. If the seller was not happy from the beginning with 6%, they shouldn't have agreed to it and should have shopped around to find a lessor listing rate.
Nobody will pay you 6% when they know you are going to all of it. The justification of 5 to 6% is I have to split this with the buyers agent but that won’t exist. You won’t be able to charge the seller 6% then.
@@sing10278wrong. If you also rep the buyer the agents gets the whole commission. Double the work after all.
@@muellerdmthe seller should be clearly informed how much the listing agent is offering the buyers agent because with you offer only 1% then that will result in less offers because many agents don’t work for 1%. Only the bad inexperienced agents do that.
If I sell my house there is no way I will be paying 6% to the listing agent anymore. It is going to be about 3% here on out. And yes, the listing agent has every right to give a buyer agent some of that but I highly doubt it.
The real estate grift is coming to an end.
I'm sorry but buying and selling a home is not that complicated I have purchased all my homes without representation. I have also sold all my homes without representation. Buying and selling homes does not take a rocket science degree as they would like you to think. The standard contracts are only a few pages long at least in Florida. I can't speak for the rest of the country however. I'm not giving a realtor 6%. The job simply doesn't warrant that.
I’ve had 💩 buying agents in the past so not going to oppose it. The buyer can reach into their own pockets if they want an agent.
That's unfortunate. And sadly too common.
Maybe be better at hiring a professional. Solved. Bad agents should be pushed out of real estate.
Sellers are ok paying the Listing Agent(s) a 6% commission so long it is for the listing agents
But if a listing brokerage wants to split that 6% commission then all of a sudden the seller has a problem if the listing broker wants to split it with the buyer's agent??
This only hurts the 1st time buyers home don't have for a down payment and rely on down payment assistance or even if they had a down payment they can't afford a buyer's agent who can represent in a fiduciary duty.
It's sad how the courts allow for these frivolous lawsuits to when all or most people who sell their house know that commissions are negotiable as it states in the contract or listing agreement
As a real estate agent who represents buyers most of the time, it is going to affect me but luckily I am working on my NMLS license until the appeal occurs
Thanks for the video.
Church!!
In regards to buyer’s agents: most people has no idea how much time an agent spends to make a deal happen. Also, the buyer’s agent can spend months and months working with a buyer and the buyer may not buy a house. In this case, the commission is ZERO. Selling homes is a costly business and can’t be paid with a 1 1/2 percent per transaction. The average house is about $350,000.00 in most markets, not 1 million dollars.
Agents are not working for months spending 40 hrs a week on a single deal. Stop glorifying and justifying the money grab. Jury saw right thru it and came up with a verdict in less than 3 hrs.
Eventually, this will become a profession for full-time people. Part time realtors making hundred K with 3-4 transactions per year. Those days are history and should be.
Most people have no idea how true your statement is
@@sing10278if so easy, then become a realtor and make all that easy money!
Exactly!
It seems obvious that buyers will be able to finance commissions in this new world. If commission were decoupled, it’s not like buyers can’t or won’t get representation. If buyers are as aware as you say they are today that commission is negotiable, then uncoupling commission, so long as it can be financed, should have absolutely no impact on agents. However, it will have an impact on agents because many, but not all, are not providing as much value as they get in commission, and have no accountability to their buyer to provide that value.
And a lot of mortgage companies might actually employ realtors who could provide representation to the buyer. Unfortunately, those realtors will have to do an honest days work which they are not used to. They might have to work on 100 closings per year for the salary of $80,000 (that’s what realtors claim the average salary of a broker is 😂).
It may be obvious to you. It's been talked about, but I don't see it happening. For a VA loan, the bank is already financing 100% of the purchase price. Will they now finance 103% of purchase price putting a veteran upside down before they even own the home? FHA will lend 96.5% of purchase price. Will the bank lend 99.5%? Time will tell.
@@RealEstateDisruptors It’s simple. As the buyer, tell the listing agent your offer includes X% commission for your agent to be paid by the seller at closing. It should be equally likely to appraise given 99% of offers today *already assume* commissions paid the seller, which are effectively included in the offer amount.
Why would lenders finance the commission? It’ll count against dti and the lender assumes more risk. More risk will require higher rates and fees. Buyer gets shafted.
@@albundy3929 Just increase the headline price by the commission amount and include commission payouts in closing. Effectively the same as today where commission is de facto included in the price.
Why does the seller have to pay the buyer's commission? The buyer should pay for their own commission. The buyer wants the seller to pay for their closing costs and they want help with other fees. The whole process needs to be rectified. People are being put in homes that they can not afford by mortgage companies that do not do a good job in qualifying people because they only look at their commissions. I have had to deal with realtors who are worried about a buyers concerns when they are being paid by me the seller.
No, you as the seller, agreed to pay your listing agent a percentage to sell your house. If your agent procures the buyer, he earns the whole commission. If a buyer's agent brings in the best offer, your agent splits his commission with the buyer's agent. The fee you agreed upon to sell your house doesn't change.
The buyer should pay for the buyers agent thats why it is called a buyers agent
They do. It’s in the price of the house. Lesson over.
Honestly agents are borderline pointless anyway, completely unnecessary.
Wrong
I think having the commission built into the buyers loan will be something that loan providers will do. But as an investor if you list your new renovated property on the market I would be happy to pay the commission to both sides. That I will get most eyes on the property. This will then lead to multiple offer situation.
They're looking into that. Maybe that's what happens, but I don't know if the bank will increase the loan amount and increasing their risk on the loan.
As an alternative to paying for both buyer and seller realtor commission, you could give the buyer commission amount to the party buying the property at closing and let them choose to pay for a buying realtor with that money, or use that money towards the down payment, or whatever they choose. You could attract more buyers that way and see a higher ROI than just defaulting to paying the buyer realtor commission.
@@Mx4xwhat. Buyer to chooses to pay or not pay for someone who provided a professional service?
I'm still a little confused. I'm looking to buy a house within the next couple months. Would it be better to wait it out after July or buy before this happens?
Don’t wait if youre ready. This will make it harder on buyers once implemented.
Buy when you are ready to buy!
Greed caused this. Commissions are way too high especially in this insanely overinflated housing market. 60k commission on a $1M house is INSANE and a $1M house today was around 550k 2 years ago. It's wrong and now everyone will lose because of greedy agents.
You're right: enormous amounts of GREED and INSANITY. The system has been rigged for decades. Finally, due to the lawsuit WIN, we're heading in the right direction.
Commissions are negotiable. Nobody requires you to pay $60,000 on a $1M home.
@@RealEstateDisruptors Ever heard of steering? It's when your co-conspirators (buyer's agents) steer away from homes where the seller negotiated a better (lower) rate (lower than $60,000 in your example).
I'm sure you've done that. It's a crime; violation of the Sherman Antitrust Act. Are you still doing that? I think the DOJ is about to come out with regulations that will stop this illegal act.
@@EdgeTradingFX- Not possible if you've already moved to your new city.
@@EdgeTradingFX- Not possible if I've already moved to my new city.
This is great! The current model is outdated and needed to go!
That's happening...
What’s a better alternative to the current imperfect system?
Agreed, Henry. The current system is a grift.
What's coming will be a flat rate system(or hourly fee), and will force the agents to be competitive and bring their fees down to reality.
that already exists. try again.@@TomTom-bh2wf
Great breakdown Steve. A money grab. I was looking into buying a property in Bimini. Extremely difficult without a buyer agent.
Thank you, yea with no buyer agent things will get difficult
So hire a buyer agent and pay them. Who is stopping?
Doesn’t have to be 3-3.5%. Flat fee of 5-10k…. Max
@@sing10278lol, no, not for a good agent. There are agents who do that now so why the hand wringing?
At the end of the day. Those sellers, being grown adults and the buyer, (also grown adults), signed the offer and agreed to it.
Exactly! And received a professional service!
Can't you still hire a buyer's agent and negotiate commissioned representation?
Yes you can. A good amount of people will be okay. My heart hurts for first time homebuyers. Those that are finally ready to buy a home and pursue the American Dream. And now they're cut out AGAIN! They won't have enough money for down payment, closing costs, and buyer agent commission.
The seller will still lose in this as well if this holds. The only one benifiting from this is the law firm. Maybe law firms filing these lawsuit should be sued using the same reasons they used in this cause they charge WAY more "commision/fees" in these suits than agents would ever charge even on a fee bases. These flat rate companies tyipcally do very little for the seller, Mainly just getting on MLS along with some minor paper work mostly stuff you would have to regardless. They typically don't much more than than that. Are there some that do yes, but they still charge quite a bit tyically. granted not much more than or a bit under 1 to 1.5% realitive commision. You kinda of get what you pay for. I still think the firm and the case should be investigagted cause this feels a bit like gross misrepresentation on the lawy firms part. As why some brokerages settled is beyond me. If I were an agent with those firm I would consider leaving cause I am not sure they have your or your clients best interest in mind.
For what they do, I think agents should be paid an hourly rate. Making even 0.5% of the selling price of a property is ridiculous for what they do.
Have to be honest. I dont see the need for them. Everything he mentioned regarding what an agent is good for, that info can be found online. Tge real estate market is messed up beyond repair. 400k for average home now, seriously. I believe real estate as we know it is over. Which is a good thing.
In a perfect world, yes, buyers can find out all their info online. In my experience, their research is incomplete. They still need somebody to verify their research.
@@RealEstateDisruptors yeah. But its not rocket science. People want what they want and its easy to find out. When we were buying our house or even when interested in investing, the only use was setting up time to go see a property, literally nothing else. Honestly, i didnt expect much, but just thought in the middle of the process, literally everything the agent told me i could easily find out myself
It’s only RE agents who are upset about the verdict. Good…Starbucks needs more baristas and Walmart cashiers, cause that’s about the skill level of an average agent
Outside of the USA (UK, Aus, NZ), it's common for a "legal representative" (attorney/lawyer/solicitor) to check chain of title, taxes, liens, Land Information Memorandum (LIM Report) etc, and for the buyer to obtain a builders inspection before buying. Rarely do we have any issues using this system, and both come at a lot lower cost than the $17,700 these guys paid for their buyers rep. Usually Legal and Builders Inspection come in around US$1,500 - US$2,000 (in 2023) & gets the job done. The buyer can hold either responsible if there are any problems within a "reasonable" time-frame of moving in to the property. Our Consumers Protection Act also may provide us with a 'comeback" against these professionals in the event of issues with the work they perform on the buyers behalf.
That is also done for the most part here, and can be negotiated against the commision, though not always. As for your lawyer fees, that sounds WAY cheaper than what lawyers here in America would charge especially if the agent was not involed i.e they do all the work. Closing costs and attorneys fees at closing can cost more than that here. My attorney fee alone for my closing was over $1k then you had an inspection $300-500 plus and closing fees which can include the the lawyer fee but not always can run 1-3% of the value of the home. Honestly if there are fingers to be pointed for most cost issues here I would LAWYERS the unfurtunate necessary evil here in the US. Hell, almost half if more than half of are politicians ARE lawyers, soooo...
Nothing changes in Texas, there has always been negotiable commissions. Buyers agents sign contracts with clients agreeing to a commission price that will be paid by either a seller & or the buyer to buyers agent in Texas, depending on the payout terms. If a seller is not paying the buyers agent then the clients pay buyers agent at closing as part of closing costs or finds another home. Although buyers prefer to find another home where seller is paying the buyers agent.
It should be be one charge commission and if there is an buyer and seller agent in the sale. Than that commission is split in half.
That's not a bad idea
@@RealEstateDisruptors average house sale in America is 430k I believe. 6% on that is 25k. Split in half, it's still a great payday. I know all this is negotiable but the 5-6 % commission rate is pretty standard.
@@ibuyhouses9624how does that payday get split. And what are the costs incurred by agents. What is the net to everyone?
This was great bro. Thanks.
Thank you Jason!
What am I missing? The buyer pays their agent a commission. How come this is not being mentioned?
That's the direction we're headed. That hasn't always been the case when you buy your home.
You get what you paid for.
If you can’t afford your buyer agent don’t hire them and take risk
OR
Hire them hourly for their advice. Some buyers agent 20-30 thousand dollars for a weeks work and who pay them.
Not buyer but seller.
That’s ridiculous
That's fair
Buyer agents in no way "represent" the buyer. If any serious problem with the contract an agent has to advise "get a lawyer" because agents are in no way shape or form trained or licensed to give any kind of legal advice. The contracts agents use are created by lawyers in NAR/Brokerages. Agents are only trained to have people sign in correct places.
Agents are not lawyers. No duh! They get the deal done. Lawyers can’t do that. Just like lawyers aren’t accountants. Even different lawyers focus in different fields. Take that real estate law question to a family lawyer and see what happens.
No needs for agents now. We all have access to a lot of information. All you need is real estate attorney to look over contract if needed. 6% of a house sale over the life of a house just keeps inflating the house price for normal Americans. Agents only need 1 1/2 percent each side that’s enough. 80% of agents are not knowledgeable anyway. A 3 month class doesn’t make you an expert.😂😂😂😂
In regards to buyer’s agents: You have no idea how much time an agent spends to make a deal happen. Also, the buyer’s agent can spend months and months working with a buyer and the buyer may not buy a house. In this case, the commission is ZERO. Selling homes is a costly business and can’t be paid with a 1 1/2 percent per transaction. The average house is about $350,000.00 in most markets, not 1 million dollars.
Let me know when was the last time a realtor worked 40 hours a week
@@elcypereira7392that is why buyers agent will not be needed so we won’t waste their time.
Simply the listing agent can do all that since it’s their listing!
Honestly tho I do hate that the seller has to pay buyers agent commission.
Most agents are lazy they will now have to work for their commissions! Negotiate and all they will have to start learning marketing and sales.
Access to information doesn't make you smarter. Just look around society today...
@@sing10278 I see it all the time
Not truly seeing the big deal with losing a buying agent. If I'm buying a house, wouldn't I have to pay for an inspector, an appraisal, etc.? Wouldn't I be wise to go drive around the neighborhood and look to see if it's in a flood zone, the insurance costs, etc? Why would I want to pay someone else for doing what I could do myself?
To answer your question, buyers would pay someone else to do the things you mentioned on their behalf because most buyers are busy all day working and don't have the time. Also, they may be interested in several properties and their agent would be able to do the research on them before submitting an offer.
Not busy enough once they find out that they will have to pay 15,000 out of their pocket. Right now they think it’s free. Even though essentially, they’re paying for it over the life of the mortgage.
Humans used to to do everything by themselves, from growing their own food to making their own tools to sewing their own clothes. Unfortunately, no time was left to doing higher function jobs that could advance the technology and the society to lift everyone's standard of living. It wasn't until we've learned to specialize that the human race started to make progress. And the more we were able to specialize, the faster the progress has become and the higher the standard of living has risen.
NHD report tells you flood zone. lol at driving around to see flood zone.
What about people who offered way above asking even though there were no other offers? Shouldn't "their" agent get them the best price they can? I think this is the lawsuit that should be heard. Agents colluding to overinflate values.
collusion is already against the law. If there is collusion, it's between individual agents and they should be punished individually.
Example? This makes no sense. Sometimes best price isn’t what the clients wants. Most of the time the client wants the house. If they see the house is underpriced then you pay over before there is competition. If house is overpriced then it will not appraise.
When a seller list their home and does not sell after 6 months, believe me, the sellers will pay the buyer’s commission
If seller priced right he will sell. Buyer agent can’t produce buyer.
Exactly
Logically accurate. Doesn't always work out that way though. @@russulpeter8724
Agree. But 80-90% of the homes sell quickly. No need to get robbed by agents on both sides to the tune of tens of thousands of dollars in those situations.
The buyer agent gets pay more if I buy a million dollar regret than a $500k ideal fit, are you telling me that out of the kindness of their hearts, they'll advocate for me to buy the 500k property?
In my experience, a Realtor would prefer you buy a home than not buy a home. Trying to maximize the price is not as prevalent as the general public suspects.
Scenario that never happens. Never. Like never.
Great video! When will all these changes happen?
It's already happening in New York! Effective Jan 1, buyer agents can't get paid by listing agents anymore!
It’s Johnny Fabius Steve and I guarantee, they will be able to pay a buyer agent and put it on the back end of the loan up to a certain amount soon.
Why would lenders do that? More risk.
@@albundy3929 how so?
I disagree. Most people don’t need a buying agent or get value from having one in today’s time. For those who want buying representation, they should pay for it because they are the party benefiting from the service. Realtor’s current cost to benefit ratio is the worst out of any service available. That’s because realtors have united with each other to keep the commission rates stagnant. People who list with lower commissions are blackball from the market which is exactly why this much needed lawsuit happened. Looking forward to seeing the changes this brings!
How long have you sold properties.
I am unaware of the blackballing. Maybe AZ is different. I've been licensed for 16 years and have never witnessed blackballing companies for commissions.
Are the buyers going to find an escrow agent, do their own title work, negotiate their mortgage/financing, find their own home inspectors, come up with cash for their own agent? Perhaps YOU can do that stuff but even the most successful and intelligent people I know would prefer to pay a broker for their expertise in the home buying process.
The current situation is confusing and the prospect of changing a long standing paradigm understandably generates many questions. I’m not an oracle with all the answers but rather want to provide reasonable counterbalance to spin and fear being provided by some. I’m not a realtor. I’m an engineer who designs products and services that supports our nation’s economy, security, and provides life for some. I have invested in real estate for multiple decades and study ethics and law for hobbies.
I don’t believe realtors offer no value but rather their cost to benefit is extremely disproportionate. The last property I purchased, I found the property on my own and contacted the selling agent directly. The selling agent provided a showing and I made a fair offer during the showing that was accepted before I left the property. That agent ended up getting both the selling and buying side of the commission. Just the buyer side commission was $18k which mostly should have been money going back to the seller or to myself. Although there could have been some relatively small clerical services provided behind the scenes, I suspect almost everyone would agree that the cost for these services was not justified.
I believe an average homebuyer is capable of managing escrow, finding the best mortgage rate, hiring an inspector, and a title lawyer. It’s not common practice to do so currently but these are tasks that can be learned with no formal education. If people want assistance doing these tasks then they should pay for them and presumably that cost could be rolled into their financing. If someone doesn’t want assistance doing these tasks then they should have the option to do so and pocket the associated costs. Like most, I see value in outsourcing work that saves time but only when it makes sense to do so. Successful and intelligent people have even more to save as the properties they buy are proportionally more expensive. Since buyer compensation is a current requirement of MLS then of course most people will opt to use a buyer realtor regardless of the level of success and intelligence a person has because it’s a free service to them directly. What will be the real test is who decides to pay for these services and how much are they willing to pay when it’s possible they could do them on their own. Most successful and intelligent individuals have the habit of not wasting money and I believe it is reasonable to conclude that they will not be willing to pay 3% on the purchase price to outsource these tasks. If everyone sees value in what services a buyer realtor performs and believe it’s truly worth 3% then the amount of utilization will remain the same. With the current requirement to pay buyer’s commission in order to list on the MLS, no check and balance on the buyer’s commission rate exists but rather a conflict of interests as higher commissions are more favorable and sought after.
It’s hard to prove on an individual bases that higher commission listings are being pushed but recent statical analysis has shown this to be true. Although, it should be clear that the current structure creates a conflict of interest. I have tested the market on the same property with back to back listings first starting with a lower commission rate and then moving to a standard commission rate. In this flawed test, the standard commission saw much more action and sold the property. However, it just makes sense that realtors want to push the better paying listings even if that means not putting the buyers needs first. The National Association of Realtors points to their antitrust policy and code of ethics but having a policy doesn’t stop people from putting their own interests above their clients interests intentionally or unintentionally.
Perhaps some realtors have acted entirely in good faith and truly believe the system acts in the client’s best interests but the court ruled against this assumption. The court ruling which still needs to go through appeals, found that realtors colluded to artificially inflate commissions violating antitrust laws stealing money from clients. The decision was reached using valid arguments and supporting evidence.
Current realtors have been fortunate to have served in a time where a cartel has enabled them to recieve extra commission at their client’s cost and it’s long overdue for a correction balancing adequate pay for services rendered.
I agree. Every other consumer transaction (car, insurance, etc) we don’t need this hand holding (buyers agent). It’s just not worth the cost. If you’re scared or not sure you are probably not ready to buy a home
The buyer can always contact the listing agent directly. No need for a buyer's agent. MLS is free and accessible to the general public.
MLS is NOT FREE & is not available to the public! Smh
My bad, you can use a flat fee listing service, which allows you to access mls
@@investorfriendlyprobaterea4309
They can. And they will pay for the free information by having no representation. Some people are sophisticated enough to navigate without professional help. Most aren't, though. That's the problem.
Most of these seller agents today are wholesalers or working with investors to lowball your property.
That's interesting
Wrong
I just listed my house with a realtor. I asked her about commissions and she did that it was 6%.. She NEVER stated that it was NEGOTIABLE. That's the exact reason NARS lost this lawsuit. It's the lie. Also, as a seller,I shouldn't have to pay for the buyers agent. If the buyer can't pay for their representation then they can't AFFORD a home.. They have to do as the rest of had to do.. go back and save more money in order to afford to buy a home! I don't mind paying the listing agent because they work for me. I contacted my agent today and the commissions and she still lied to me!
Your contract says it’s negotiable in bold letters. Someone selling something doesn’t have to say it’s negotiable. Her commission may not be negotiable. Your realtor is under no obligation to reduce their fee. You can ask or find another agent who may or may be as skilled as this one. How many agents did you ask?
I guarantee they go after wholesalers harder now
yup! I was speaking to my business partner specifically about what you just stated...
@thejollyredgiant5714 Who's going to go after wholesalers, and in what way?
@@briansheedy9837 So if buyers agents start to quit they will have a very easy pivot to wholesaling, NAR will lose money and see that wholesalers are doing more volume, they will then push harder for legislation against wholesaling.
AND/OR
Buyers agents are going to be more competitive and going for less commissions which means more agents will try to be sellers agents. The smart ones will start to do more marketing and prospecting for people wanting to sell their house which will increase the amount of cold calling and other acquisitions strategies that wholesalers use. This means that more people will be angry about cold calling and we will see laws put in place to limit some of our core marketing channels. NAR will also see that we are now competing with agents in our marketing which means less money for them which means they will try to kill wholesaling or force us to get licenses.
As much as I dont like the NAR, this verdict is just going to hurt everyone involved.
There is an outcome where everything stays the same and they wrap the buyers agent fees into the loan but then you have the issue of people still not wanting to pay 3% to the buyers agent.
There is also an outcome where sellers still pay buyers agent commissions which I think could happen BUT then you have agents trying to pitch that to sellers when they are trying to get their business and sell their home. Then other agents come come in and say “well I can get you more money by not having to make you pay that” and then we run back into the competition aspect of it.
It’s not good for the health of real estate as a whole.
@@gabequezada2066 Lots of different outcomes that could happen, and the majority of them are not good for real estate as a whole, its even worse because it will eventually put a target on our back as wholesalers.
They may try. I'm hopeful for the wholesaling world!
Buyer agents literlaly just walk people through properties LOL. Always wondered why people need a buyers agent to walk a property haha
Yes that's why buyer agents need to go because they just " Walk around and show homes " that's what they all do right?
Ignorant people like you smh. Don't dip your toe into the pool and think you are under the water
Buyer's agent will go to the same place travel agents went: extinction.
buyer agent serves a purpose, it's not just showing properties, is not that simple. buyers need to be prequalified for income, other whys they don't know what they qualify for. @@larryjones9773
Yes, that is one thing they do. There's a little more to it though...
Opening doors is .01 percent of the what buyers agents do. If so easy become a realtor and make all that easy money.
Who are these ppl having problems selling or renting property without a buyer's agent? Ignorance made me use middle-men once 5%
Thanks to my landlord neighbor who warned me about middle-men (agents) thanks to flat-fees, the Internet and title companies I avoided getting robbed again
Yeah very theoretical. But do you really think the average buyers agent has ANY value to start with? You may have value. But what percentage of realtors even know about the airport, the soil, the train tracks, etc. VERY small percentage.
Agents are middle-men. The Internet and title companies eliminates them altogether.
If a buyer can't afford to pay an agent. Then a buyer can't afford to buy a house
The internet and title companies have been around for a long time and have yet to eliminate real estate agents. All developers, investors and high net worth individuals usually list their properties with an agent…that should tell you all you need to know about an agents value.
And if you don’t want to use an agent? Great! You don’t have to! No one is forcing anyone to hire a listing/buyers agent.
That's fair. But it's just one more time that the disadvantaged will continue to stay disadvantaged.
@@lawrencetracy17I couldn't have said it any better. The more knowledge you have the less you have to pay others
Great video!!!!
With anything new it’s going to be an adjustment period but with technology and ingenuity, this won’t be a huge issue. The information about the market is readily available now so my prediction is buyers will be more informed than before. Either way as an agent these are the times that separate the weak from the strong
Thank you! There's a lot of assumptions that buyers will be more informed. In my experience, being informed doesn't translate to good decisions. If knowledge meant we'd be smarter, I'd suggest you look around society...
yes, there shouldn't be any agents, or it should be optional. wait, it is. duh
Exactly.
Pure propaganda. For buyers who want to hire an agent, but can't afford it: this means they can't afford to buy a home. We don't want people buying homes who can't afford them. This is what caused the 2008 stock crash.
Your industry is rigged. Focus, on unrigging your industry and stop 'worrying' about the poor buyer.
Reality: tech firms will come up with highly efficient processes for buying and selling homes and quickly put the Burnett v. NAR, et al defendants out of business. Today's process is horribly inefficient and illegal.
It's definitely inefficient. Illegal sounds pretty strong, though.
@@RealEstateDisruptors The verdict for the Burnett v. NAR et al, was GUILTY.
GUILTY = ILLEGAL!
The Burnett case was civil (no jail time). This doesn't mean the DOJ can't charge criminal charges in the near future. Criminal charges can include jail time up to 10 years is prison. Antitrust violations are serious.
It needs to just stay the way it is. Don’t get me wrong I dont like paying 6% when selling a flip but it is the industry standard and the cost of doing business. What needs to happen is they need to have standard rates. If you invite competition like this then the “ethics” agents love to claim they have will go out the window. If they have standard rates for different price points then it would make it consistent and standardized. What is the purpose of having a license when you start to become unethical because your industry became hyper competitive and you now have to worry about providing food for your family because you now are competing at a 1% commission.
Hopefully this made sense but this verdict has a lot of potential to hurt a lot of people and businesses.
The Internet and title companies will change everything. It's now how I buy and sell property.
Having said that I do agree that rates should be based on the price of the property and how much work is involved
There is no industry standard. Commissions are negotiable.
@@johntrotta6936 Right, it should be a standard rate
Commissions are negotiable, as long as they are above 5% 😂
A standard rate would be interesting. What's funny is how many people believe that there are standard rates today...
Bro you are fear mongering. Buyer agents will still exist, they will make less money because the public at large won’t pay 3% to use them. Buyer agents haven’t been negotiable, the buyer hadnt been even privy to that conversation. The seller is coaxed by their listing agent to offer the most to a buyer agent, a bribe, to bring a buyer. If they don’t no one will show their home. The carrot is dangled from the seller to get a buyers agent to convince a buyer to buy that home. Buyers agent should be directly working for the buyer to find the home that suits the buyers, not who is going to pay the most for the agent. The industry is not transparent.
There are even hidden bonuses to buyer agents, in fields hidden from the public in MLS. The only time buyers find out about them is when they go to closing and see it on the closing statement.
Realtors are salesmen, not all of them are shady but these are highly unethical practices, and for these reasons the general public doesn’t trust them. transparency is 🔑
I think it’s the idea of making less money or working harder is whats freaking most of the people out here. Just like any industry change is inevitable and people will have to adapt.
I could never understand how they make so much money for what they do. They act like they built the house when they just showing it to you. That’s too high of commission stop basing it on home prices and pay flat commissions on volume.
Kinda like lawyers, I mean they didn’t make the laws either. They understand the law but they didn’t make them. Darn them💀
There is no law to get paid $30,000 for opening a few doors. It’s the rigged price fixing system created by the cartel of NAR that has been ripping the customers off for decades now.
If you don't understand, perhaps you should try being a Realtor. If it's so easy, you could make a lot of money really fast!
So easy huh? Become an agent and make that easy paycheck. Get rich right?
bc you can't look at a toilet yourself.
Hi sir
You need attractive thumbnail designer?
Hi, do you have any examples?
@@RealEstateDisruptors yes please check your ingm
I hate realtors.
Foreal man they are stingy about 20% of them are cool
A lot of people do.
20% might be generous. @@juan_ctzz
@@RealEstateDisruptors haha yes honestly.
I’ve met so many and all are the same most think they lay golden eggs or even say they won’t move a property for less than 10k lol I cold call agents all over Texas about 20% or less would actually be decent.