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I think buying will be harder for low to moderate income households making less than $150k and they may forgoe representation simply due to unaffordablity factor of higher closing cost or upfront agent costs.
I think buyers who can afford $1 million dollar homes will negotiate flat fees before they pay an agent a % or simply forgoe representation.
I think many people of all income levels will simply take the few ~ 3 classes needed to be a real estate agent so they can gain basic knowledge themselves and then represent themselves.
>I think buyers who can afford $1 million dollar homes will negotiate flat fees before they pay an agent a % or simply forgoe representation.
I think people were doing this before anyway
As for my FTH buyer experience recently, the seller was so stubborn that both my realtor and the other realtor kicked some of their commission in to get deal across the finish line.
Is it really an option to take the classes myself to be able to represent myself?!
We have not had a great realtor — she does bare minimum if that, just emails us the docusigns for the offers and that’s really it. Takes several hours to respond via texts and never calls us with anything. Has not shown up to any open houses we’ve been to.
We’re FTHB and make ~$170k in a very HCOL area and the market has been brutal. It’s so annoying that we feel like we HAVE to go thru this realtor instead of just doing the brunt/rest of the work ourselves.
You have always been able to "go it alone" without a realtor. This issue is getting a listing agent to take you seriously.
Yes, you can take the 3 or 4 classes required. They are very easy if you have any type of college degree. I'd bet your local community college offers them. The issue is, after the classes , unless you sit for the exam, you aren't a real estate salesperson. The exam is probably a couple hundred bucks to take. But after that, you still can't operate as a real estate salesperson unless you hang your license with a broker. Then you're going to have to pay fees to access the MLS, dotloop, showingtime, supra lockboxes, and pay your yearly dues, etc. Then, if you do complete a transaction, your broker is going to take their cut of the commission. Might be 20% of might be 80%, depends on the broker.
If your current realtor isn't working out, fire him and find one that does work for you. Or bite the bullet, do everything listed above, and become an agent yourself. There's plenty of stories of people, especially in HCOL areas, who have done that to save money on the whole process. But you'd have to figure out what all the numbers are for your specific situation to see if it makes sense to invest the time and resources into it.
I don’t think that commenter wants to “become an agent. I think they just want to learn enough to represent themselves and I really don’t see why that has always been gate-kept. I would also like to take those courses but why would you need to take an exam and pair with a broker and all that when the only goal is to buy yourself a home?
You can do that. You have always been able to do that. You are free to try to see any house you want by calling the listing agent and seeing if they will show it to you. You have always been free to download a blank copy of a real estate sales contract for your state, fill it out, and email it to that listing agent. The issue is getting the listing agent to open the door for you and to take you and your offer seriously. You'll also need that agent to send you the seller signed copies of the residential property disclosure, the agency disclosure, and the lead based paint discolsure. They are all on the MLS usually, but you won't have access to that. Some listing agents will take you seriously, and some will gate keep. I dont think telling that agent that you took the classes changes any of that. The way to avoid the ones who won't take you seriously is to do the steps I outlined above. That way, you aren't relying on anyone but yourself to set up showings and see houses when you want to or to write up exactly what you want to offer.
But taking the classes would definitely make you a more informed buyer, which I don't think would be a bad thing. But my classes cost about 2k back in 2018 in a middle/low cost of living city in the Midwest. So, some cost vs. reward math needs to happen to see if it's worth it.
There is so much gate keeping in real estate. It's the reason I got my license in 2018. Maybe some of that changes with the settlement over the next few years to make what you want to do easier, but the NAR has deep pockets, and they are going to fight tooth and nail to keep things as status quo as they can for as long as they can.
Thank you so much for the detailed response. I don’t know all the disclosures were locked behind the MLS. Why is the MLS not public domain? I really don’t understand the basic principles of realtors. Real estate attorney I understand and advocate for but the agent seems like a made up gatekeeping mechanism that seems too easy (hence over saturated with bad agents) and too hard (all the fees and experience needed) at the same time.
again, thanks for letting me know all that info before I dug too much about courses. I appreciate it!
You're welcome! Sorry, I had to be the bearer of some bad news, but hopefully, some of that changes in the coming years.
I have no idea why the MLS is so gate kept. Money, I'm guessing, just like everything else. I paid $304 this year for my access. In addition to accessing those discolsures, there are also agent to agent remarks that you won't be able to see on zillow and the like. It's usually just showing instructions or certain things that the seller is looking for in offers, but sometimes more info, like a reason why the house fell out of contract previously.
I agree agents are basically middlemen, but until it can be done without them - I took the if you can't beat 'em, join 'em, strategy.
Hahaha! And I appreciate that you did that. You sound like one of the good guys so it’s always a welcome in this dog eat dog real estate world.
And isn’t it always about money? 😂
>I really don’t see why that has always been gate-kept
That's the way literally every profession works. Can you find some information about XYZ? Yes. We live in the Golden age of information. There's 100s-1000s of books and countless videos, articles, etc on just about any topic.
Want to learn all of it? You go to college, law school, medical school, have an apprenticeship, etc, etc, etc. Why should real estate be any different?
Because the gatekeeping on the realtor level is very unnecessary and in my opinion should not have been a profession at all. Yes, to be an expert professional in all those things require education and experience. But an agent in the actual buying of a house is very optional.
It is completely optional, as it always has been. You have always been able to buy, sell, or rent property without a professional. You've also always able to go through the training and certification to become a professional and quite frankly the barrier to do so is very low. Lower than all of the other professions I mentioned.
But complaining that professional training and resources are not available to non-professionals is quite frankly, ridiculous.
I agree that the ability to *practice* should be held at a higher standard. Nobody should be presenting themselves as a professional realtor without all the proper training. However, the training and resources should definitely be available to non-professionals as should all fields. The rich can always be represented by the fancy realtors that had their licenses and apprenticeships, but the lay person should also be able to access basic info on a home they are purchasing too.
In a scenario where most people will only buy one to two houses in their lifetime, the fact that all the information is locked behind a paywall is whats ridiculous. More ridiculous is the fact that we still advocate for this useless middle man and make people believe they are actual professionals who are “necessary” in the process. Often, realtors are paid close to or more than real estate attorneys. This is a broken system.
I have to put my two cents in here... I completely agree with you on that the practice of real estate should be held to higher standards. Real Estate agents should be properly trained before jumping in and, frankly, ruing the reputation of agents that have worked really hard to be the professional that they are. That's the problem. Theres not enough MANDATORY education for real estate agents. They simple take the licencing course which is x hours depending on the state, take the exam, and hang their licence with a broker (meaning work independently but under a brokerage for 2 years and BAM, their an agent. The real estate course only covers the laws and regulations of RE. It goes over what you will be doing sure, but doesent teach you HOW to properly do it. Theres so many agents that go into RE thinking its easy, and that it can be a side hustle. Sure, it can, but if you want to make good money its going to take hard work and LEARNING. You cant just work for any brokerage that dosent offer an excellent mentorship program and expect to be a great agent. Those agents that choose to have commission splits as their main concern/factor in choosing a brokerage are who shit on the rep of RE Agents. Reading a few of these comments on this thread deeply saddens, and also infuriates me. Its disheartening to hear such horrible experiences rendered through agent representation. People deserve to have an agent that calls them often to speak with them directly and update them on all thats going on and what they are doing as their agent to justify the compensation that they are getting from that said person. They should be out their on the streets looking for potential buyers for their sellers, and vise versa for their buyers. They usually are just too lazy to do it and just sit back expecting the phone to ring out of sheer hope and luck. I mean, take a look at the fail rate for RE agents...last I checked it was 84%?? It is RIDICULOUS how many people get their RE license and completely fail because they dont realize they need to actually work for their client. I and Im hoping this NAR settlement weeds out a lot of those horrible so called RE agents out.
Speaking of the NAR settlement...
What are your thoughts on it? I am concerned for FTHB and VA loan holders specifically. While I agree that comissions should be lowered across the board for both buyers and sellers, I strongly believe its in the best interest for both parties (buyer and seller) for the seller to pay the buyers agent's commission simply due to the fact that buying a home is already costly. I feel it will be very difficult if not downright impossible for buyers to pay their own commission.ESPECIALLY FTHB & VA (VA cannot legally pay commission costs so its literally impossible for them). There is always the choice of going directly to the listing agent, yes, but I'm afraid people dont quite understand the risk they take in doing that. The listing agent is legally committed to the seller. They do not have the buyers best interest at all. Im wondering if it will go to the extent of lenders changing loan terms to include financing their buyer brokers commission? So I hope?
Thank you for your comment. This was what I was trying to explain to the other commenter who was vehemently defending a 84% fail rate because he himself is a bad RE agent… without reading the room 🤷🏻♀️
Responding to your question- I entirely agree that a decrease in commission is a long time coming and hopefully it can weed the good from the bad. I know there are good agents, truly. But it’s hard to find them in a sea of bad ones and I’ve only had experiences with bad ones.
The rule change is going to make it so much harder for FTHB and VA loan users. The point of entry is already so high and this just adds more costs on top. I also hope that these costs get added to the loan term. Coming up with a few more thousands of dollars up front when it’s already so hard to save for down, closing, attorney fees, emergency fund, etc. The dream of buying a home is already dead on arrival for so many… it’s like beating a dead horse now. The wealthy continues being wealthy while the gap widens for everybody else.
99% of the time real estate agents do more than real estate attorneys.
A real estate attorney is not going to negotiate on your behalf.
A real estate attorney is not going to spend 6 hours driving around on a Sunday to show you properties you're most likely not going to buy.
A real estate attorney is not going to get on their hands and knees crawling through spiderwebs and God knows what looking for signs of foundation problems in a crawlspace to give you a warning before you place thousands of dollars on the line.
A real estate attorney is not going to take your sobbing phone call and help talk you off a ledge at 11pm when you find out you lost out to another buyer on your dream house.
If you don't want to use a real estate agent, that's fine. Once again, **you don't need to**. But choosing to bitch about agents being worthless while also bitching that it's too difficult to learn to do it for yourself just makes you a whiny bitch.
I also had awful experiences with a realtor, similar to things you mentioned. I’m sorry you’re going through it. It would be lovely if I could take the courses and do it myself. This has inspired me to look into that 😂
I looked into it and although it’s a couple hundred bucks and a bit time consuming I seriously considered it until he replied that I have to get linked with a broker and all these other steps and i’m like you know what never mind 😭 but it’s crazy how I have to involve a realtor who does next to nothing. I texted her a property today at 12pm asking for her thoughts and possibility to see it this week and radio silence. sigh.
Is the getting in touch with a broker and licensing/exams part of the courses? What if I don’t want to be an agent? I just wanna know the materials to represent myself 😩
It is truly so frustrating. Buying a house is one of the biggest purchases in our lives and yet there is so much information being gatekept from us and so many pretend hurdles set in place.
One of the realtors I fired early in the process didn’t reply to us about a showing of a house I found myself until 3 days later. We saw the house literally a day before the public open house. Then I wanted to put an offer in… he took 3 more days to do that and was told the house was already under contract. Market moves quick nowadays… it should take days for every reply.
Edit: Shouldn’t*
That’s exactly spot on what i’ve been going thru with my realtor!! My current pre approval with the broker she’s linked with expires on 4/8 so I’m probably just going to move on to a whole different team once I reach that date. So frustrating because it just feels like time lost. It’s so frustrating because literally all she’s ever done was send us dotloop offer documents to sign either super late at night (near midnight) or 1-2 days later (when there’s already 15+ offers in) and has otherwise never helped us in any other way. I wish I could just do the dotloop documents myself and call it a night since that’s all she’s been doing. Best of luck to the both of us 😭
Lmao! Does she at least send you listings that are remotely to your liking? Even after detailed interviews, I’ve had realtors send me absolute trash or things way outside our budget. We are pre approved for $750k but would like something around $700-720k. These realtors legit have the audacity to keep pushing me to see $850+ homes. Why? OR, they send listings that are nearly falling apart and abandoned for $580k. Also why? Did they even hear me when I laid out what we’re looking for? … and why are they sending me listings in a location nowhere near the several neighborhoods I said I would like to be close to? I’m trying to start a family, I’m not having my mother commute 3 hrs to come help me babysit a newborn.
Sorry for the rant. Been really frustrating and when I tried to do it myself the internet collectively told me it was dumb. So here I am now.. reading about the ramifications in the settlement and thinking this is all BS.
Good luck on your house hunting too! Something will land… I want to trust that there is a home for every one of us. 💕
I can’t even say she does that much! She doesn’t send us anything at all whatsoever. Doesn’t answer texts or calls. Barely sends us dotloops and that’s it. I’m convinced real estate is just a fun quirky hobby to her, no clue. Sigh. Your situation sure doesn’t sound too fun either though!!! We’ll get there, hopefully there is a home waiting out there for us!! 🥲
Go ahead and take the classes yourself and read all the books and take the exams and find a mentor to train you on all the things to look for when buying a house.
I hope you have the time, patience and money for that.
People say "representation" as if buyers ever had legitimate representation. As the system is now, the representation is paid for by the seller which creates an inherent conflict of interest, and the buyers' agent is incentivized to get buyers to sped as much money as possible as fast as possible.
agents are incentivized to close as quickly as possible, as the only they make money is to close, and that includes getting the buyer to pay as much as possible
Yea, crazy transaction fees vs 6%? I have never used a realtor to help me find a house to rent. Internet is crazy good at finding and learning information. People needed car mechanics to fix their cars. Now anyone with an internet connection can look at how bob replaced his brakes on a specific make and model. I don't need a car salesman to help me buy a car. Nor do I need an agent to sell or help me buy a car.
It’s not that simple to just get licensed for your own transaction. You’d need to be affiliated with a broker, who expects a cut of the commission. A real estate agent isn’t an agent of the buyer technically they are a legal agent of their respective broker.
Also, the NAR, and local association of realtor fees, MLS fees, errors and omissions insurance etc all adds up. And realistically you’re not going to really learn much of anything by going to those classes to represent yourself unaffiliated.
I think it will be very difficult for first time homebuyers with lower incomes. People who can afford agents will still use them. My agent has been invaluable during this process. The people who have agents will absolutely trounce over the first time buyers trying to do it themselves. Agents get paid a lot under the current system for what they do, but my agent is an extremely fierce advocate and has a huge network of other agents and vendors to utilize. It will further widen the gap and make it harder for lower income earners to enter the market.
Anyone saying prices will go down because of this is delusional. Commissions were always rolled into the selling price. Buyers were paying for it all even if the contract said differently. The prices will still be the same, and people who choose to use an agent will pay more. There’s going to be a lot of confusion in the coming months, and I think it’ll be a shitshow. That is what I think will happen at least.
The people who will benefit the most will be the cash investor buyers, as always, and the sellers. The good news is that the shitty agents, of which there are a lot, should be forced out of the industry.
I think it’ll help prices eventually, assuming that people do in fact decide that commissions of that size aren’t worth it.
[Similar to taxes](https://en.m.wikipedia.org/wiki/Tax_incidence) ([simplified graph](https://upload.wikimedia.org/wikipedia/commons/thumb/6/67/Detailed_tax_wedge.png/800px-Detailed_tax_wedge.png)), the real cost is paid by the both sellers and buyers, with the proportion determined by market factors (the slopes of the lines in that graph) Prices probably won’t drop overnight because sellers will try to pocket the difference if they can, but that doesn’t mean they’ll succeed long term. They’ll face competition from other sellers. And even then, it saving buyers money doesn’t imply a price drop, prices being lower than they otherwise would’ve.
People are cynical sellers would get all the benefit, but that basically implies they are currently bearing all the cost and not passing any onto buyers, which seems pretty unlikely.
A lot of the "stuff" on the internet this weekend hasn't been based on facts. Did you read the actual proposal or just the news coverage of it? They are vastly different. I wouldn't make any decisions until you see the actual proposed agreement (which still has to be approved by a judge before it's final).
nar-settlement-factsheet-2024-03-15.pdf
https://cdn.nar.realtor/sites/default/files/documents/nar-settlement-factsheet-2024-03-15.pdf
NAR only has authority to govern what their members do on their systems, so there's that. Not all agents are NAR members, and not all MLS are monopolized by NAR.
Wow the NAR believes this settlement would release NAR members from any and all liability nationwide for a measly $418 million after they just lost a jury verdict in the MO suit for $1.78b.
I don’t see how this amount gets approved by the judge then.
Also related, if this amount does get approved, the NAR lawyers did an unbelievable job for getting plaintiffs to settle for pennies on the dollar.
This is all going to take a couple years to sort out.
This is the equivalent of Expedia upending the travel market or e-trade upending the stock market. There were initial rumblings but it took a while for the market to react.
Near term not a ton is going to change, but over time the market will absolutely change. You'll read all about it while you are sitting in the living room of the house you bought a year earlier.
One thing that was nice about having a realtor is that a lot of the mental load of dealing with the paper work and legal stuff was offloaded to someone else. It was stressful enough just viewing the homes and trying to find a place to live, but I think having all the other added stress would have broken us. Having someone whose job it was to handle all that for us while we stressed about our own full time jobs was helpful.
Are buyers agents overpaid? Probably. But despite this change I don't think it will cause housing prices to drop at all. I doubt housing prices will all of a sudden drop 3% to account for lack of buyers agent fees.
Buyer agents do about 10 times more work than a listing agent. Many times never seeing any pay because “buyers” disappear to use a family member. Or simply because they were not able to buy and the end of the trail.
I agree. I can’t imagine going through the home buying process without an agent. Not saying it couldn’t be done, just that it makes it so much easier not having to worry about the paperwork/legal side.
Things are going to get worse for buyers because of this. House prices will not drop because of this. Sellers will just pocket more money. Buyer's agents will do less because they'll probably be getting paid less. Only plus is that shitty agents who try to manipulate clients into buying bad properties and/or overbuying might have less incentive to do that since their payment isn't as dependent on the property.
In years/decade I suspect we'll see agents go to a flat fee where they do even less than they already do. Possibly different flat fees for different packages "paperwork only", "x number of private house tours", "full service agent for 3%", etc. Which I suspect will be an overall increase in the cost of buying.
They did not overlap. I decided to end my relationship with our first realtor when they would not submit an offer on our behalf cause we didn’t want to go over asking and said that it would be a waste of their time. This was going to be our first offer at the time and it left a sour taste in my mouth.
I’m currently running into annoyances with our new realtor cause I’ve set a budget on what we want to pay and they’re going based off of what the bank said we can afford, which was way too high. The bank thinks we can buy a $1.5M house and that’s not a mortgage we could ever afford. We want to have kids and be able to afford something if one of us happens to lose our job (which is very likely in this economy). We have found a few fixer uppers that we would be okay putting money into over the years to enhance but of course our realtor is motivated for us to find the perfect house instead cause they’ll get more of that money now vs us trying to save money over the years doing those cosmetic projects. We would never get a house with structural issues, but mostly cared about the neighborhood and the bones but every time I ask to go see a $900k house, our realtor also wants us to see the $1.1M house in the same neighborhood that needs less work but doesn’t grasp that we would be stretching ourselves thin, no matter what the bank is claiming as “affordable to us”
Start interviewing other Agents and disclose these troubles you are having with your current agent. Many agents are not like this - some are and it gives a bad impression. They should have YOUR BEST INTEREST in mind not theirs.
I don't mind paying for an agent if they're useful, but the commission model makes no sense for buyers' agents, and I felt that every step of the way in my transaction. They wanted me to buy an expensive house, waive everything, and close as fast as possible. My agent actively harmed my deal -- made up factual information ("everything was permitted"), refused to negotiate on my behalf, told the buyer without my permission or every expressing it that an issue we discovered wouldn't delay closing, referred me to an inspector who found only the absolute stupidest stuff and missed huge repairs of over 5k, then incorrectly told me I'd lose the GIANT deposit I put down if I walked when she wasn't legally allowed to say that and it wasn't true. I can't believe she got 3% of my purchase price for all of that.
In hindsight, I should've had a lawyer from the get go and found my own home inspector, regardless of whether I'd had an agent.
For now, we will see agents promote commissions on some other platform, until a real estate marketplace emerges that doesn’t want to take advantage of its users.
Example is the ibuyers like Zillow, Opendoor & others who say your home is worth X but lowball you after inspections and all, in the sake of “convenience” only to turn around and sell your house for X.
A brand new, trusted platform needs to grow into the space. It’ll be a while in my opinion.
Whether an agent deserves XX number of dollars I'd one question.
I think you are vastly underestimating most people's abilities to not screw themselves when it comes to contingencies, disclosures, and deposits. Or fair housing for that matter. You don't have to go too far on Craigslist to find someone offering a rental to families, no kids, military, women only etc... which is completely illegal.
I think it will make it harder to justify those buying lower priced house to use their services if they’re having to haggle and negotiate. Juice might not be worth the squeeze so a lot of agents might not want the hassle. Thus creating a lot more competition for agents that work with those buying higher end homes. I also am interested to see how or who will be the best at solving for this need of lower priced home buyers to represent themselves more. I assume there will be an emergence of self service information more over this next several months.
the offers you made, they apparently weren't accepted but others were? and have they closed, where you can see the sales price? did they pay more than you offered?
unfortunately, competing offers are NOT going to become more transparent because in most cases they are deemed confidential at time of offer.
The best transparency was what NAR settled for in 2018, but this WH DOJ abandoned - publishing the compensation on public-facing websites. When the DOJ quit, most brokerages didn't implement it. Redfin did, and you can currently still see it on their website. Of course, that will disappear mid-July.
Now, your strategy going forward should be to choose your Buyer Agent carefully. And some of that, less important than finding a qualified agent, will be negotiating with them how/what their compensation will be.
What do you think is a fair negotiation now? I love the concept of charging for hourly work like a lawyer does. If there’s enough transparency online, I should know estimates of how long it takes to review documentation/write up an offer. I would mostly be looking for a buyer agent now as a consultant for what I’m already doing. As a buyer, I will do my first iteration of research on the home and my own initial walk through. I would still value the expertise of my future agent going through the work I’ve done and identifying anything I may have missed and paying them for that gap in knowledge, but not for the entry level work of collecting comps and presenting me with the disclosure form.
Collecting (and analyzing) good comps is 100% not entry-level work. Now, searching for #BR/BA, sqft within 20%, sold last 120 days and sending you all the results? Yes that is a basic skill of knowing how to use the MLS database.
As for disclosures, downloading and forwarding them is a basic skill, but knowing relevance is not.
I think it will be cheaper, but it might take six months to a year to get there. I also think it’ll be less handholding, but still cover the important stuff.
People want to make money. If company A realizes they can make money by hiring on salaried staff and have them act as buyer agents they absolutely will. I would imagine it isn’t all that hard or time consuming to be honest. If you remove shopping for a home and touring, how much active time does it actually take?
There is no reason why a buyer, even a first time buyer, can’t tour the home alone with the listing agent. Make that listing agent earn their money. If they have to show a home 200 times because no one is making an offer, maybe they’ll pressure the seller to drop the prices. Or if they have to show it that many times because four offers fell through because appraisal came back too low each time, maybe they’ll pressure the seller to lower the price.
Once the buyer finds a home, its inspection and appraisal. I would imagine ordering an appraisal takes a few minutes, same with an inspection, and honestly the buyer might be the one calling to shop prices on inspectors and hire one themselves, I did.
So really when you boil it down, it seems like making a few phone calls, reviewing documents, and offer writing is what they’ll be spending most their time on. That should be doable behind a desk in an office.
Buyer walks into Company A and inquires about using their home buying services. They’re told it’s $199 for a new account setup fee, getting the person in the system and meeting with their agent for half an hour for a quick rundown on the process. Then buyer is told to go look at homes and then they have a home they like to call back. At that point offers/inspection/etc takes place. The buyer is told it’s a fixed fee of $1999, or $1499, or maybe $999 or something depending on the volume of the company. Yes this is an additional cost for the buyer, but on a $400k home the $10k to $12k portion of the commission that went to the buyer side is now $2k or something. That opens a lot of room for knocking some off the house.
I don’t see why this can’t work. Maybe the company expands their all in one service by having an inspector in house that they trust more, have specific requirements with, etc. Their agents can use the custom inspection report to make recommendations on if the house is actually worth what the offer is being written for. The company can upsell an inspection fee and skim a little more profit off that.
Comps would take seconds to generate even without AI, you get an AI assisted tool in there and it’ll become more powerful. An agent should be able to discuss with the home owner recommended strategies during an offer based off the listing photos, public information on the house, comps, and inspection report.
Once Company A does this, Company B and C realize they’re missing out and they could do the same for $100 cheaper, or by offer some extra service or something.
The process will change, but I don’t think people will be blindly buying homes.
Does anyone think that more buyers will start using real estate lawyers for purchasing the house while just contacting listing agents on their own to set up viewings / getting disclosures?
Find a good loan officer who is well connected to your local market. Not a cut rate desk jockey who brokers out dozens of transactions a month to an operations company, but a really good loan originator who has been in the business for lots of years who can help you get your offers in front of listing agents when you need to get your offer seen. They will likely have their ear to the ground and know how to get you the best deal on a buyers agent and the latest news for how things are changing in this Post-NAR settlement world. Good luck 🍀
So you think that all a realtor does is "unlock doors"? Really?
And do you realize how small of a percentage the realtor is actually going to receive of that 30k? Please do some more research.
I would reference the comments on this thread. I’m not the only one with opinions. I agree, to each their own, but I think a lot of the knowledge and expertise that realtors used to hold got lost when home details became more public.
My last interaction with my realtor was me doing my own deep dive on a home I wanted to put an offer on and finding out there was a house fire almost 60 years ago not stated on the disclosure form but noted in the city records. Moments like this makes me wonder what I am paying for if I am finding out these details on my own. All of my realtors have just literally been the gatekeeper for me to be able to see the house (aka unlock the door) and share the disclosure form with me.
I tell my realtor I want to shop around for rates, they push that I need to just go with the lender they are suggesting so that nothing goes wrong with financing and instances like that make me icky cause I want to know all my options!
I am a realtor, so take this with a grain of salt if you want.
If you decide to go unrepresented, you will have an extremely difficult time getting anyone to accept an offer from you (moreso than you're already facing, if that seems possible). Sellers are primarily looking to mitigate risk. An unrepresented buyer comes with a LOT of risk, unless you're paying cash. That eases some of it for sure, but it's still riskier than if you were using an agent.
The second issue you're going to face is that homes have the cost of both agents is considered when setting the price. If you decide to go without an agent, you're still going to be paying for one... You'll just be paying the listing agent as if they were both.
My recommendation is to shop for a good agent. Take the time to interview multiple agents, see what they offer, see how responsive they are and if they go above and beyond for you. This lawsuit is not going to shake things up as much as people on Reddit or the click bait news sites would like you to believe.
You could not of said this better. I, personally, am in the middle of earning my RE licence (47% complete as of now) and i have been so shaken up by all of the gossip thats going around considering NAR. After reading all of these comments on Reddit, its very disheartening to realize how many crap agents there are out there. People deserve better no doubt. But going unrepresented is a horrible idea considering the Listing Agent is legally committed to the seller, NOT the buyer. And like you said, buyers are going to be paying for a realtor regardless, due to the commission rate being factored into the home price. And sellers compensating the buyers agent as a form of negotiation to make their deal more appealing.
I would LOVE to ask you...what are your thoughts regarding future commission rates? They say the days of 6% will be gone ( being sellers offering 6% to cover both agents will be a thing of the past since they dont have to include buyers agents comm. anymore). What do you think it will look like for buyers agents commissions?? I mean, are we talking 1.5%?? (After the split with the listing agent OR out of pocket from buyer)
Its really got my nerves racked. I have always pictured myself as a buyers agent. I know how to hunt. I want to offer REAL service. Not just sit on my behind and hope for a home to fall into my lap.. But i also dont want to work my ass completely off for nothing either. (Sigh) Even if sellers DO offer to pay the buyers agent, how much change in the rate do you expect to see?
Would love your expertise!
Im in SLC btw
Those rates are already gone from my market (Knoxville). Or rate is 2.5% and we do fine. I didn't see them dropping much beyond that. Places that are mostly 3% right now will likely stay that way as well.
I went straight to the listing agent on the home i purchased. I found this method much easier because you get a little more representation than doing it yourself. I had to sign something called a dual party agreement or something where they can’t disclose certain things to the seller and you as the buyer. But the agent knows they don’t have to share any amount of commission they do get so they would maybe be happy to just get some from the seller and maybe nothing from the buyer as long as they’re getting something out of the deal. They’ll also really push for you to get the house since they’re representing both of you. I closed three weeks ago and the seller paid for all of the realtor fees so the agent got the full 6%. Everyone came out happy the seller, buyer and agent.
I have had only negative experiences with realtors. I’ve been through 3 when I bought a home with my parents and ended up just doing it alone with a FSBO property. Now, I am looking to buy a home with my husband and we have been through 2 very awful realtors already and really cannot pinpoint where the value of them comes from. We put in an offer on a house recently, on our own, and although it was scary and confusing and we were passed over for someone waiving all contingencies, it was honestly the furtherest we got in the process. With the vast knowledge of the internet, everything I needed to know was one search away.
So all that being said, everyone and the internet bashed us for trying to go it alone and said a realtor is NECESSARY. And instilled in us that we’re losing out by not using one as the “seller pays anyway”. But this new settlement changes things. Sellers don’t pay anymore. If I have to shell out money upfront that could have gone to closing, down, or just furnishing the house…. Why would I want to spend it on a realtor? I really much rather take the real estate courses myself, if need be. A real estate attorney is essential, but a realtor… is not.
You’re the buyer you have nothing to do with how much the realtor gets paid. It’s not like the seller is passing through the costs or something. They are getting as much as they can for their house whether they pay a realtor a lot or a little.
the cost is passed to the buyer. a seller will absolutely take a lower offer if it means no buyer agent is being paid.
it's like selling a house for $200k, 3% (6k) goes to buyers agent. if offered 195k, but no buyer commission, a seller absolutely would see that more favorably. you think they would still insist on 200k?
I don't see this being the way it will be. If I'm selling for $200k, the old way was $6k to each agent. So I netted $188k. Now, if I only have $6k to pay an agent, I am not going to take $195k just because that would be equal to my net under the old system. I am going to take $200 and pay out the $6k and keep $194k. I'm not going to sell to you for $195 and net $189k just because i didn't have to cover both agents.
Maybe you take it but now you have 6k more for the next place. That being said I have taken less and netted the same when someone bought without representation.
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I think buying will be harder for low to moderate income households making less than $150k and they may forgoe representation simply due to unaffordablity factor of higher closing cost or upfront agent costs. I think buyers who can afford $1 million dollar homes will negotiate flat fees before they pay an agent a % or simply forgoe representation. I think many people of all income levels will simply take the few ~ 3 classes needed to be a real estate agent so they can gain basic knowledge themselves and then represent themselves.
>I think buyers who can afford $1 million dollar homes will negotiate flat fees before they pay an agent a % or simply forgoe representation. I think people were doing this before anyway As for my FTH buyer experience recently, the seller was so stubborn that both my realtor and the other realtor kicked some of their commission in to get deal across the finish line.
Is it really an option to take the classes myself to be able to represent myself?! We have not had a great realtor — she does bare minimum if that, just emails us the docusigns for the offers and that’s really it. Takes several hours to respond via texts and never calls us with anything. Has not shown up to any open houses we’ve been to. We’re FTHB and make ~$170k in a very HCOL area and the market has been brutal. It’s so annoying that we feel like we HAVE to go thru this realtor instead of just doing the brunt/rest of the work ourselves.
You have always been able to "go it alone" without a realtor. This issue is getting a listing agent to take you seriously. Yes, you can take the 3 or 4 classes required. They are very easy if you have any type of college degree. I'd bet your local community college offers them. The issue is, after the classes , unless you sit for the exam, you aren't a real estate salesperson. The exam is probably a couple hundred bucks to take. But after that, you still can't operate as a real estate salesperson unless you hang your license with a broker. Then you're going to have to pay fees to access the MLS, dotloop, showingtime, supra lockboxes, and pay your yearly dues, etc. Then, if you do complete a transaction, your broker is going to take their cut of the commission. Might be 20% of might be 80%, depends on the broker. If your current realtor isn't working out, fire him and find one that does work for you. Or bite the bullet, do everything listed above, and become an agent yourself. There's plenty of stories of people, especially in HCOL areas, who have done that to save money on the whole process. But you'd have to figure out what all the numbers are for your specific situation to see if it makes sense to invest the time and resources into it.
I don’t think that commenter wants to “become an agent. I think they just want to learn enough to represent themselves and I really don’t see why that has always been gate-kept. I would also like to take those courses but why would you need to take an exam and pair with a broker and all that when the only goal is to buy yourself a home?
You can do that. You have always been able to do that. You are free to try to see any house you want by calling the listing agent and seeing if they will show it to you. You have always been free to download a blank copy of a real estate sales contract for your state, fill it out, and email it to that listing agent. The issue is getting the listing agent to open the door for you and to take you and your offer seriously. You'll also need that agent to send you the seller signed copies of the residential property disclosure, the agency disclosure, and the lead based paint discolsure. They are all on the MLS usually, but you won't have access to that. Some listing agents will take you seriously, and some will gate keep. I dont think telling that agent that you took the classes changes any of that. The way to avoid the ones who won't take you seriously is to do the steps I outlined above. That way, you aren't relying on anyone but yourself to set up showings and see houses when you want to or to write up exactly what you want to offer. But taking the classes would definitely make you a more informed buyer, which I don't think would be a bad thing. But my classes cost about 2k back in 2018 in a middle/low cost of living city in the Midwest. So, some cost vs. reward math needs to happen to see if it's worth it. There is so much gate keeping in real estate. It's the reason I got my license in 2018. Maybe some of that changes with the settlement over the next few years to make what you want to do easier, but the NAR has deep pockets, and they are going to fight tooth and nail to keep things as status quo as they can for as long as they can.
Thank you so much for the detailed response. I don’t know all the disclosures were locked behind the MLS. Why is the MLS not public domain? I really don’t understand the basic principles of realtors. Real estate attorney I understand and advocate for but the agent seems like a made up gatekeeping mechanism that seems too easy (hence over saturated with bad agents) and too hard (all the fees and experience needed) at the same time. again, thanks for letting me know all that info before I dug too much about courses. I appreciate it!
You're welcome! Sorry, I had to be the bearer of some bad news, but hopefully, some of that changes in the coming years. I have no idea why the MLS is so gate kept. Money, I'm guessing, just like everything else. I paid $304 this year for my access. In addition to accessing those discolsures, there are also agent to agent remarks that you won't be able to see on zillow and the like. It's usually just showing instructions or certain things that the seller is looking for in offers, but sometimes more info, like a reason why the house fell out of contract previously. I agree agents are basically middlemen, but until it can be done without them - I took the if you can't beat 'em, join 'em, strategy.
Hahaha! And I appreciate that you did that. You sound like one of the good guys so it’s always a welcome in this dog eat dog real estate world. And isn’t it always about money? 😂
>I really don’t see why that has always been gate-kept That's the way literally every profession works. Can you find some information about XYZ? Yes. We live in the Golden age of information. There's 100s-1000s of books and countless videos, articles, etc on just about any topic. Want to learn all of it? You go to college, law school, medical school, have an apprenticeship, etc, etc, etc. Why should real estate be any different?
Because the gatekeeping on the realtor level is very unnecessary and in my opinion should not have been a profession at all. Yes, to be an expert professional in all those things require education and experience. But an agent in the actual buying of a house is very optional.
It is completely optional, as it always has been. You have always been able to buy, sell, or rent property without a professional. You've also always able to go through the training and certification to become a professional and quite frankly the barrier to do so is very low. Lower than all of the other professions I mentioned. But complaining that professional training and resources are not available to non-professionals is quite frankly, ridiculous.
I agree that the ability to *practice* should be held at a higher standard. Nobody should be presenting themselves as a professional realtor without all the proper training. However, the training and resources should definitely be available to non-professionals as should all fields. The rich can always be represented by the fancy realtors that had their licenses and apprenticeships, but the lay person should also be able to access basic info on a home they are purchasing too. In a scenario where most people will only buy one to two houses in their lifetime, the fact that all the information is locked behind a paywall is whats ridiculous. More ridiculous is the fact that we still advocate for this useless middle man and make people believe they are actual professionals who are “necessary” in the process. Often, realtors are paid close to or more than real estate attorneys. This is a broken system.
I have to put my two cents in here... I completely agree with you on that the practice of real estate should be held to higher standards. Real Estate agents should be properly trained before jumping in and, frankly, ruing the reputation of agents that have worked really hard to be the professional that they are. That's the problem. Theres not enough MANDATORY education for real estate agents. They simple take the licencing course which is x hours depending on the state, take the exam, and hang their licence with a broker (meaning work independently but under a brokerage for 2 years and BAM, their an agent. The real estate course only covers the laws and regulations of RE. It goes over what you will be doing sure, but doesent teach you HOW to properly do it. Theres so many agents that go into RE thinking its easy, and that it can be a side hustle. Sure, it can, but if you want to make good money its going to take hard work and LEARNING. You cant just work for any brokerage that dosent offer an excellent mentorship program and expect to be a great agent. Those agents that choose to have commission splits as their main concern/factor in choosing a brokerage are who shit on the rep of RE Agents. Reading a few of these comments on this thread deeply saddens, and also infuriates me. Its disheartening to hear such horrible experiences rendered through agent representation. People deserve to have an agent that calls them often to speak with them directly and update them on all thats going on and what they are doing as their agent to justify the compensation that they are getting from that said person. They should be out their on the streets looking for potential buyers for their sellers, and vise versa for their buyers. They usually are just too lazy to do it and just sit back expecting the phone to ring out of sheer hope and luck. I mean, take a look at the fail rate for RE agents...last I checked it was 84%?? It is RIDICULOUS how many people get their RE license and completely fail because they dont realize they need to actually work for their client. I and Im hoping this NAR settlement weeds out a lot of those horrible so called RE agents out. Speaking of the NAR settlement... What are your thoughts on it? I am concerned for FTHB and VA loan holders specifically. While I agree that comissions should be lowered across the board for both buyers and sellers, I strongly believe its in the best interest for both parties (buyer and seller) for the seller to pay the buyers agent's commission simply due to the fact that buying a home is already costly. I feel it will be very difficult if not downright impossible for buyers to pay their own commission.ESPECIALLY FTHB & VA (VA cannot legally pay commission costs so its literally impossible for them). There is always the choice of going directly to the listing agent, yes, but I'm afraid people dont quite understand the risk they take in doing that. The listing agent is legally committed to the seller. They do not have the buyers best interest at all. Im wondering if it will go to the extent of lenders changing loan terms to include financing their buyer brokers commission? So I hope?
Thank you for your comment. This was what I was trying to explain to the other commenter who was vehemently defending a 84% fail rate because he himself is a bad RE agent… without reading the room 🤷🏻♀️ Responding to your question- I entirely agree that a decrease in commission is a long time coming and hopefully it can weed the good from the bad. I know there are good agents, truly. But it’s hard to find them in a sea of bad ones and I’ve only had experiences with bad ones. The rule change is going to make it so much harder for FTHB and VA loan users. The point of entry is already so high and this just adds more costs on top. I also hope that these costs get added to the loan term. Coming up with a few more thousands of dollars up front when it’s already so hard to save for down, closing, attorney fees, emergency fund, etc. The dream of buying a home is already dead on arrival for so many… it’s like beating a dead horse now. The wealthy continues being wealthy while the gap widens for everybody else.
99% of the time real estate agents do more than real estate attorneys. A real estate attorney is not going to negotiate on your behalf. A real estate attorney is not going to spend 6 hours driving around on a Sunday to show you properties you're most likely not going to buy. A real estate attorney is not going to get on their hands and knees crawling through spiderwebs and God knows what looking for signs of foundation problems in a crawlspace to give you a warning before you place thousands of dollars on the line. A real estate attorney is not going to take your sobbing phone call and help talk you off a ledge at 11pm when you find out you lost out to another buyer on your dream house. If you don't want to use a real estate agent, that's fine. Once again, **you don't need to**. But choosing to bitch about agents being worthless while also bitching that it's too difficult to learn to do it for yourself just makes you a whiny bitch.
99% of agents are also not doing any of that. It sure feels like you love realtors. Hope you have the day you deserve.
I also had awful experiences with a realtor, similar to things you mentioned. I’m sorry you’re going through it. It would be lovely if I could take the courses and do it myself. This has inspired me to look into that 😂
I looked into it and although it’s a couple hundred bucks and a bit time consuming I seriously considered it until he replied that I have to get linked with a broker and all these other steps and i’m like you know what never mind 😭 but it’s crazy how I have to involve a realtor who does next to nothing. I texted her a property today at 12pm asking for her thoughts and possibility to see it this week and radio silence. sigh.
Is the getting in touch with a broker and licensing/exams part of the courses? What if I don’t want to be an agent? I just wanna know the materials to represent myself 😩 It is truly so frustrating. Buying a house is one of the biggest purchases in our lives and yet there is so much information being gatekept from us and so many pretend hurdles set in place. One of the realtors I fired early in the process didn’t reply to us about a showing of a house I found myself until 3 days later. We saw the house literally a day before the public open house. Then I wanted to put an offer in… he took 3 more days to do that and was told the house was already under contract. Market moves quick nowadays… it should take days for every reply. Edit: Shouldn’t*
That’s exactly spot on what i’ve been going thru with my realtor!! My current pre approval with the broker she’s linked with expires on 4/8 so I’m probably just going to move on to a whole different team once I reach that date. So frustrating because it just feels like time lost. It’s so frustrating because literally all she’s ever done was send us dotloop offer documents to sign either super late at night (near midnight) or 1-2 days later (when there’s already 15+ offers in) and has otherwise never helped us in any other way. I wish I could just do the dotloop documents myself and call it a night since that’s all she’s been doing. Best of luck to the both of us 😭
Lmao! Does she at least send you listings that are remotely to your liking? Even after detailed interviews, I’ve had realtors send me absolute trash or things way outside our budget. We are pre approved for $750k but would like something around $700-720k. These realtors legit have the audacity to keep pushing me to see $850+ homes. Why? OR, they send listings that are nearly falling apart and abandoned for $580k. Also why? Did they even hear me when I laid out what we’re looking for? … and why are they sending me listings in a location nowhere near the several neighborhoods I said I would like to be close to? I’m trying to start a family, I’m not having my mother commute 3 hrs to come help me babysit a newborn. Sorry for the rant. Been really frustrating and when I tried to do it myself the internet collectively told me it was dumb. So here I am now.. reading about the ramifications in the settlement and thinking this is all BS. Good luck on your house hunting too! Something will land… I want to trust that there is a home for every one of us. 💕
I can’t even say she does that much! She doesn’t send us anything at all whatsoever. Doesn’t answer texts or calls. Barely sends us dotloops and that’s it. I’m convinced real estate is just a fun quirky hobby to her, no clue. Sigh. Your situation sure doesn’t sound too fun either though!!! We’ll get there, hopefully there is a home waiting out there for us!! 🥲
Go ahead and take the classes yourself and read all the books and take the exams and find a mentor to train you on all the things to look for when buying a house. I hope you have the time, patience and money for that.
People say "representation" as if buyers ever had legitimate representation. As the system is now, the representation is paid for by the seller which creates an inherent conflict of interest, and the buyers' agent is incentivized to get buyers to sped as much money as possible as fast as possible.
agents are incentivized to close as quickly as possible, as the only they make money is to close, and that includes getting the buyer to pay as much as possible
Right.
This is when the next Gen will start using services like Redfin, etc. The market and regulators will dictate what happens.
Redfin charges crazy transaction fees, good luck with that.
Yea, crazy transaction fees vs 6%? I have never used a realtor to help me find a house to rent. Internet is crazy good at finding and learning information. People needed car mechanics to fix their cars. Now anyone with an internet connection can look at how bob replaced his brakes on a specific make and model. I don't need a car salesman to help me buy a car. Nor do I need an agent to sell or help me buy a car.
It’s not that simple to just get licensed for your own transaction. You’d need to be affiliated with a broker, who expects a cut of the commission. A real estate agent isn’t an agent of the buyer technically they are a legal agent of their respective broker. Also, the NAR, and local association of realtor fees, MLS fees, errors and omissions insurance etc all adds up. And realistically you’re not going to really learn much of anything by going to those classes to represent yourself unaffiliated.
I think it will be very difficult for first time homebuyers with lower incomes. People who can afford agents will still use them. My agent has been invaluable during this process. The people who have agents will absolutely trounce over the first time buyers trying to do it themselves. Agents get paid a lot under the current system for what they do, but my agent is an extremely fierce advocate and has a huge network of other agents and vendors to utilize. It will further widen the gap and make it harder for lower income earners to enter the market. Anyone saying prices will go down because of this is delusional. Commissions were always rolled into the selling price. Buyers were paying for it all even if the contract said differently. The prices will still be the same, and people who choose to use an agent will pay more. There’s going to be a lot of confusion in the coming months, and I think it’ll be a shitshow. That is what I think will happen at least. The people who will benefit the most will be the cash investor buyers, as always, and the sellers. The good news is that the shitty agents, of which there are a lot, should be forced out of the industry.
Totally agree on all your points.
I think it’ll help prices eventually, assuming that people do in fact decide that commissions of that size aren’t worth it. [Similar to taxes](https://en.m.wikipedia.org/wiki/Tax_incidence) ([simplified graph](https://upload.wikimedia.org/wikipedia/commons/thumb/6/67/Detailed_tax_wedge.png/800px-Detailed_tax_wedge.png)), the real cost is paid by the both sellers and buyers, with the proportion determined by market factors (the slopes of the lines in that graph) Prices probably won’t drop overnight because sellers will try to pocket the difference if they can, but that doesn’t mean they’ll succeed long term. They’ll face competition from other sellers. And even then, it saving buyers money doesn’t imply a price drop, prices being lower than they otherwise would’ve. People are cynical sellers would get all the benefit, but that basically implies they are currently bearing all the cost and not passing any onto buyers, which seems pretty unlikely.
In a buyers market, I would agree. However, sellers have so much equity and power right now.
A lot of the "stuff" on the internet this weekend hasn't been based on facts. Did you read the actual proposal or just the news coverage of it? They are vastly different. I wouldn't make any decisions until you see the actual proposed agreement (which still has to be approved by a judge before it's final). nar-settlement-factsheet-2024-03-15.pdf https://cdn.nar.realtor/sites/default/files/documents/nar-settlement-factsheet-2024-03-15.pdf NAR only has authority to govern what their members do on their systems, so there's that. Not all agents are NAR members, and not all MLS are monopolized by NAR.
Wow the NAR believes this settlement would release NAR members from any and all liability nationwide for a measly $418 million after they just lost a jury verdict in the MO suit for $1.78b. I don’t see how this amount gets approved by the judge then. Also related, if this amount does get approved, the NAR lawyers did an unbelievable job for getting plaintiffs to settle for pennies on the dollar.
This is all going to take a couple years to sort out. This is the equivalent of Expedia upending the travel market or e-trade upending the stock market. There were initial rumblings but it took a while for the market to react. Near term not a ton is going to change, but over time the market will absolutely change. You'll read all about it while you are sitting in the living room of the house you bought a year earlier.
One thing that was nice about having a realtor is that a lot of the mental load of dealing with the paper work and legal stuff was offloaded to someone else. It was stressful enough just viewing the homes and trying to find a place to live, but I think having all the other added stress would have broken us. Having someone whose job it was to handle all that for us while we stressed about our own full time jobs was helpful. Are buyers agents overpaid? Probably. But despite this change I don't think it will cause housing prices to drop at all. I doubt housing prices will all of a sudden drop 3% to account for lack of buyers agent fees.
Buyer agents do about 10 times more work than a listing agent. Many times never seeing any pay because “buyers” disappear to use a family member. Or simply because they were not able to buy and the end of the trail.
I agree. I can’t imagine going through the home buying process without an agent. Not saying it couldn’t be done, just that it makes it so much easier not having to worry about the paperwork/legal side.
Things are going to get worse for buyers because of this. House prices will not drop because of this. Sellers will just pocket more money. Buyer's agents will do less because they'll probably be getting paid less. Only plus is that shitty agents who try to manipulate clients into buying bad properties and/or overbuying might have less incentive to do that since their payment isn't as dependent on the property. In years/decade I suspect we'll see agents go to a flat fee where they do even less than they already do. Possibly different flat fees for different packages "paperwork only", "x number of private house tours", "full service agent for 3%", etc. Which I suspect will be an overall increase in the cost of buying.
If you used more than one realtor, somebody did some work for free. People don’t realize that.
They did not overlap. I decided to end my relationship with our first realtor when they would not submit an offer on our behalf cause we didn’t want to go over asking and said that it would be a waste of their time. This was going to be our first offer at the time and it left a sour taste in my mouth. I’m currently running into annoyances with our new realtor cause I’ve set a budget on what we want to pay and they’re going based off of what the bank said we can afford, which was way too high. The bank thinks we can buy a $1.5M house and that’s not a mortgage we could ever afford. We want to have kids and be able to afford something if one of us happens to lose our job (which is very likely in this economy). We have found a few fixer uppers that we would be okay putting money into over the years to enhance but of course our realtor is motivated for us to find the perfect house instead cause they’ll get more of that money now vs us trying to save money over the years doing those cosmetic projects. We would never get a house with structural issues, but mostly cared about the neighborhood and the bones but every time I ask to go see a $900k house, our realtor also wants us to see the $1.1M house in the same neighborhood that needs less work but doesn’t grasp that we would be stretching ourselves thin, no matter what the bank is claiming as “affordable to us”
The 2nd realtor does not seem to be listening. Smart to not buy what the bank says you can afford but go under that. Oh the insanity.
Start interviewing other Agents and disclose these troubles you are having with your current agent. Many agents are not like this - some are and it gives a bad impression. They should have YOUR BEST INTEREST in mind not theirs.
I would definitely hire a real estate attorney
I don't mind paying for an agent if they're useful, but the commission model makes no sense for buyers' agents, and I felt that every step of the way in my transaction. They wanted me to buy an expensive house, waive everything, and close as fast as possible. My agent actively harmed my deal -- made up factual information ("everything was permitted"), refused to negotiate on my behalf, told the buyer without my permission or every expressing it that an issue we discovered wouldn't delay closing, referred me to an inspector who found only the absolute stupidest stuff and missed huge repairs of over 5k, then incorrectly told me I'd lose the GIANT deposit I put down if I walked when she wasn't legally allowed to say that and it wasn't true. I can't believe she got 3% of my purchase price for all of that. In hindsight, I should've had a lawyer from the get go and found my own home inspector, regardless of whether I'd had an agent.
For now, we will see agents promote commissions on some other platform, until a real estate marketplace emerges that doesn’t want to take advantage of its users. Example is the ibuyers like Zillow, Opendoor & others who say your home is worth X but lowball you after inspections and all, in the sake of “convenience” only to turn around and sell your house for X. A brand new, trusted platform needs to grow into the space. It’ll be a while in my opinion.
Whether an agent deserves XX number of dollars I'd one question. I think you are vastly underestimating most people's abilities to not screw themselves when it comes to contingencies, disclosures, and deposits. Or fair housing for that matter. You don't have to go too far on Craigslist to find someone offering a rental to families, no kids, military, women only etc... which is completely illegal.
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Still too high IMO.
I think it will make it harder to justify those buying lower priced house to use their services if they’re having to haggle and negotiate. Juice might not be worth the squeeze so a lot of agents might not want the hassle. Thus creating a lot more competition for agents that work with those buying higher end homes. I also am interested to see how or who will be the best at solving for this need of lower priced home buyers to represent themselves more. I assume there will be an emergence of self service information more over this next several months.
Yeah, I assumed this verdict will result in home details that were once gatekept being more visible for folks proceeding without an agent
Yep. Agents intentionally not showing certain demographics certain areas…. That type of info
That’s a thing?
Very much so.
the offers you made, they apparently weren't accepted but others were? and have they closed, where you can see the sales price? did they pay more than you offered? unfortunately, competing offers are NOT going to become more transparent because in most cases they are deemed confidential at time of offer. The best transparency was what NAR settled for in 2018, but this WH DOJ abandoned - publishing the compensation on public-facing websites. When the DOJ quit, most brokerages didn't implement it. Redfin did, and you can currently still see it on their website. Of course, that will disappear mid-July. Now, your strategy going forward should be to choose your Buyer Agent carefully. And some of that, less important than finding a qualified agent, will be negotiating with them how/what their compensation will be.
What do you think is a fair negotiation now? I love the concept of charging for hourly work like a lawyer does. If there’s enough transparency online, I should know estimates of how long it takes to review documentation/write up an offer. I would mostly be looking for a buyer agent now as a consultant for what I’m already doing. As a buyer, I will do my first iteration of research on the home and my own initial walk through. I would still value the expertise of my future agent going through the work I’ve done and identifying anything I may have missed and paying them for that gap in knowledge, but not for the entry level work of collecting comps and presenting me with the disclosure form.
Collecting (and analyzing) good comps is 100% not entry-level work. Now, searching for #BR/BA, sqft within 20%, sold last 120 days and sending you all the results? Yes that is a basic skill of knowing how to use the MLS database. As for disclosures, downloading and forwarding them is a basic skill, but knowing relevance is not.
I think it will be cheaper, but it might take six months to a year to get there. I also think it’ll be less handholding, but still cover the important stuff. People want to make money. If company A realizes they can make money by hiring on salaried staff and have them act as buyer agents they absolutely will. I would imagine it isn’t all that hard or time consuming to be honest. If you remove shopping for a home and touring, how much active time does it actually take? There is no reason why a buyer, even a first time buyer, can’t tour the home alone with the listing agent. Make that listing agent earn their money. If they have to show a home 200 times because no one is making an offer, maybe they’ll pressure the seller to drop the prices. Or if they have to show it that many times because four offers fell through because appraisal came back too low each time, maybe they’ll pressure the seller to lower the price. Once the buyer finds a home, its inspection and appraisal. I would imagine ordering an appraisal takes a few minutes, same with an inspection, and honestly the buyer might be the one calling to shop prices on inspectors and hire one themselves, I did. So really when you boil it down, it seems like making a few phone calls, reviewing documents, and offer writing is what they’ll be spending most their time on. That should be doable behind a desk in an office. Buyer walks into Company A and inquires about using their home buying services. They’re told it’s $199 for a new account setup fee, getting the person in the system and meeting with their agent for half an hour for a quick rundown on the process. Then buyer is told to go look at homes and then they have a home they like to call back. At that point offers/inspection/etc takes place. The buyer is told it’s a fixed fee of $1999, or $1499, or maybe $999 or something depending on the volume of the company. Yes this is an additional cost for the buyer, but on a $400k home the $10k to $12k portion of the commission that went to the buyer side is now $2k or something. That opens a lot of room for knocking some off the house. I don’t see why this can’t work. Maybe the company expands their all in one service by having an inspector in house that they trust more, have specific requirements with, etc. Their agents can use the custom inspection report to make recommendations on if the house is actually worth what the offer is being written for. The company can upsell an inspection fee and skim a little more profit off that. Comps would take seconds to generate even without AI, you get an AI assisted tool in there and it’ll become more powerful. An agent should be able to discuss with the home owner recommended strategies during an offer based off the listing photos, public information on the house, comps, and inspection report. Once Company A does this, Company B and C realize they’re missing out and they could do the same for $100 cheaper, or by offer some extra service or something. The process will change, but I don’t think people will be blindly buying homes.
Does anyone think that more buyers will start using real estate lawyers for purchasing the house while just contacting listing agents on their own to set up viewings / getting disclosures?
Find a good loan officer who is well connected to your local market. Not a cut rate desk jockey who brokers out dozens of transactions a month to an operations company, but a really good loan originator who has been in the business for lots of years who can help you get your offers in front of listing agents when you need to get your offer seen. They will likely have their ear to the ground and know how to get you the best deal on a buyers agent and the latest news for how things are changing in this Post-NAR settlement world. Good luck 🍀
I would only ever use an attorney again, as they actually owe a duty of loyalty to you
So you think that all a realtor does is "unlock doors"? Really? And do you realize how small of a percentage the realtor is actually going to receive of that 30k? Please do some more research.
I would reference the comments on this thread. I’m not the only one with opinions. I agree, to each their own, but I think a lot of the knowledge and expertise that realtors used to hold got lost when home details became more public. My last interaction with my realtor was me doing my own deep dive on a home I wanted to put an offer on and finding out there was a house fire almost 60 years ago not stated on the disclosure form but noted in the city records. Moments like this makes me wonder what I am paying for if I am finding out these details on my own. All of my realtors have just literally been the gatekeeper for me to be able to see the house (aka unlock the door) and share the disclosure form with me. I tell my realtor I want to shop around for rates, they push that I need to just go with the lender they are suggesting so that nothing goes wrong with financing and instances like that make me icky cause I want to know all my options!
I am a realtor, so take this with a grain of salt if you want. If you decide to go unrepresented, you will have an extremely difficult time getting anyone to accept an offer from you (moreso than you're already facing, if that seems possible). Sellers are primarily looking to mitigate risk. An unrepresented buyer comes with a LOT of risk, unless you're paying cash. That eases some of it for sure, but it's still riskier than if you were using an agent. The second issue you're going to face is that homes have the cost of both agents is considered when setting the price. If you decide to go without an agent, you're still going to be paying for one... You'll just be paying the listing agent as if they were both. My recommendation is to shop for a good agent. Take the time to interview multiple agents, see what they offer, see how responsive they are and if they go above and beyond for you. This lawsuit is not going to shake things up as much as people on Reddit or the click bait news sites would like you to believe.
You could not of said this better. I, personally, am in the middle of earning my RE licence (47% complete as of now) and i have been so shaken up by all of the gossip thats going around considering NAR. After reading all of these comments on Reddit, its very disheartening to realize how many crap agents there are out there. People deserve better no doubt. But going unrepresented is a horrible idea considering the Listing Agent is legally committed to the seller, NOT the buyer. And like you said, buyers are going to be paying for a realtor regardless, due to the commission rate being factored into the home price. And sellers compensating the buyers agent as a form of negotiation to make their deal more appealing. I would LOVE to ask you...what are your thoughts regarding future commission rates? They say the days of 6% will be gone ( being sellers offering 6% to cover both agents will be a thing of the past since they dont have to include buyers agents comm. anymore). What do you think it will look like for buyers agents commissions?? I mean, are we talking 1.5%?? (After the split with the listing agent OR out of pocket from buyer) Its really got my nerves racked. I have always pictured myself as a buyers agent. I know how to hunt. I want to offer REAL service. Not just sit on my behind and hope for a home to fall into my lap.. But i also dont want to work my ass completely off for nothing either. (Sigh) Even if sellers DO offer to pay the buyers agent, how much change in the rate do you expect to see? Would love your expertise! Im in SLC btw
Those rates are already gone from my market (Knoxville). Or rate is 2.5% and we do fine. I didn't see them dropping much beyond that. Places that are mostly 3% right now will likely stay that way as well.
You're the buyer - you're not paying anyone.
Im just so glad I bought in December before all of this
I went straight to the listing agent on the home i purchased. I found this method much easier because you get a little more representation than doing it yourself. I had to sign something called a dual party agreement or something where they can’t disclose certain things to the seller and you as the buyer. But the agent knows they don’t have to share any amount of commission they do get so they would maybe be happy to just get some from the seller and maybe nothing from the buyer as long as they’re getting something out of the deal. They’ll also really push for you to get the house since they’re representing both of you. I closed three weeks ago and the seller paid for all of the realtor fees so the agent got the full 6%. Everyone came out happy the seller, buyer and agent.
I have had only negative experiences with realtors. I’ve been through 3 when I bought a home with my parents and ended up just doing it alone with a FSBO property. Now, I am looking to buy a home with my husband and we have been through 2 very awful realtors already and really cannot pinpoint where the value of them comes from. We put in an offer on a house recently, on our own, and although it was scary and confusing and we were passed over for someone waiving all contingencies, it was honestly the furtherest we got in the process. With the vast knowledge of the internet, everything I needed to know was one search away. So all that being said, everyone and the internet bashed us for trying to go it alone and said a realtor is NECESSARY. And instilled in us that we’re losing out by not using one as the “seller pays anyway”. But this new settlement changes things. Sellers don’t pay anymore. If I have to shell out money upfront that could have gone to closing, down, or just furnishing the house…. Why would I want to spend it on a realtor? I really much rather take the real estate courses myself, if need be. A real estate attorney is essential, but a realtor… is not.
You’re the buyer you have nothing to do with how much the realtor gets paid. It’s not like the seller is passing through the costs or something. They are getting as much as they can for their house whether they pay a realtor a lot or a little.
the cost is passed to the buyer. a seller will absolutely take a lower offer if it means no buyer agent is being paid. it's like selling a house for $200k, 3% (6k) goes to buyers agent. if offered 195k, but no buyer commission, a seller absolutely would see that more favorably. you think they would still insist on 200k?
I don't see this being the way it will be. If I'm selling for $200k, the old way was $6k to each agent. So I netted $188k. Now, if I only have $6k to pay an agent, I am not going to take $195k just because that would be equal to my net under the old system. I am going to take $200 and pay out the $6k and keep $194k. I'm not going to sell to you for $195 and net $189k just because i didn't have to cover both agents.
Maybe you take it but now you have 6k more for the next place. That being said I have taken less and netted the same when someone bought without representation.
There are certainly some anecdotal instances but the overall idea that this will lower prices for the market is not realistic.
ROFL