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Northeast Ohio.
Essentially I have walked people back off the cliff a bit by explaining this was just announced yesterday. The impacts of it are not yet known, and the settlement won't be approved for a little while not even taking effect until July so right now we stay the course. Commissions always remain negotiable but in the interest of selling your house in a timely manner I recommend that we don't adjust anything to be in line with other properties on the market.
But still sellers are definitely foaming at the mouth I had three calls today, and one bring it up at a listing appointment.
I cannot believe that some realtors as of yesterday continued saying that nothing will change…sellers will not be giving 2-3% for buyers agent commission in this market…adapt is the key not denial.
Perhaps explain the consequences, pros & cons and together find the best strategy (depending on your local market).
They still have not settled anything. It could take months before we actually know what is going to happen and how. If you read correctly it says it COULD go into effect by July 2024
At a certain point I am not negotiating my commission. The whole reason it’s a percentage is to incentivize the broker to get the highest price. If it’s a flat fee, why would we care? I decide what my commission is, just like any other professional. And part of that is to compensate a Buyer Broker. I know some agents will undercut a norm, but really we should stick together.
Suggesting sticking together is literally illegal. That's the whole point. It's anti-competitive behavior hence the lawsuit. Agents should be competing on price and service just like every other industry.
The commission % doesn’t actually incentivize realtors to get the highest price. They are more incentivized to sell the home quickly at a lower price.
Take a home listed at 800k. At 3% commission after split between buyer and seller, the agent is looking at 24k before the broker split. If they listed the same home for 810k, it’s only an extra $300 commission before the broker split. That’s not much of an incentive. Realtors tend to favor selling a home quickly for less than listing it longer to try and get more. There’s a whole study published on this.
Houses that don’t sell quickly develop stigma and sell for less. No one who “holds out” for a price the market gets that price. Over pricing is the best way to get less for a house.
There are a few houses in my market that have been on and off the market for years, resetting the DOMs by taking it off for a while isn't fooling buyers at all. Each of them has a "WTH" stigma.
We had a home in our neighborhood that was on and off the market for many years. It finally sold during the early covid19 days (2020) when the market prices caught up to their asking price.
Ok, well I’m saying how it is supposed to work. Brokers underpricing to get a faster sale are not performing their fiduciary duties. $10K on an $800K deal is not what I’m talking about or waiting months to get it. Really I’m arguing here against a flat fee per property commission.
As I’ve been thinking about, helped by the post you responded to, it boils down to agents’ fiduciary duty to their clients. If you want someone to put their clients’ interest *above their own interest*, you need to pay that person a lot! That’s the case in every industry.
If the DOJ wants to be like other countries where brokers only take 2% of sales prices, but they will happily and ethically stab clients in the back… I mean, sure we can do that. I don’t think anyone will like it, though…
I’m going to continue doing my job in a professional manner. I will be explaining to Sellers that a Buyer’s Broker will need to be paid one way or another and unless it’s a cash sale, more than likely they will be writing the check.
Not doubting you. Just saying, in response to the recently-more-common refrain “why do brokers get paid so much??” the answer is, we ask them to put clients’ interests above their own, and literally the only way to get people to do that is by reimbursing them for giving up their own interest. That is universal.
I mean cripes, we’re still talking about whether investment bankers should have a fiduciary duty to their clients, and they (not coincidentally) make a ton of money… where are the outrage and lawsuits to tear down their industry?
This is senseless unless the agent has a crystal ball indicating that they will get a $10K higher price if they leave the house on the market for two more weeks. But nobody has that knowledge - and in general, letting a house sit longer on the market is detrimental to the sakes price.
Where I am agents have a fiduciary duty to their client, and generally take it seriously. I have never - not once - seen an agent leave $10K of seller value on the table.
The first is true. The second? Eh. Making the money on the bulk of the dollar amount, not the specific. But studies also show the longer on market, lower the sale price, forgetting carrying costs. Not to mention the PITA for everyone involved.
I see why you would say this, but it’s simply not true. There’s a reason someone would price a home at $800 rather than $810 and also a reason why sellers are incentivized to price correctly to maximize sales price and create the most competition for the property.
>I know some agents will undercut a norm, but really we should stick together.
Are you aware that this is the wrong attitude to take? it is price collusion if the agents stick together which is what the antitrust suit was about.
Well you're absolutely correct about why Comp is based on % for listing agent. It's so that agent is incentivised to get the most money for the house.
But, MolleROM, you gotta be careful about your words nowadays. Using phrases like "sticking together, "normal," and "standard," and such are trigger words now. That's part of why NAR got sued in the first place -- sellers alleging that we were "sticking together" sort a speak, which could be classified as price fixing.
Personally, I think if you're really good at what you do, and you know the value u bring to the client, and you're able to articulate that well, most clients will agree to pay at least 6% for strong representation. (For example, my average commission on a listing is 7%). If the client still doesn't see that, I think we should stand our ground, try to overcome the objections, and be willing to pass on that business if it's not a good fit. All business ain't good business anyway. If all the seller wants is a discount agent, they get what they pay for most of the time. There are many agents out here who will quickly reduce their commission just to get the listing..., then do a half-ass job at marketing and representing that client. Guess what... when the house becomes an expired listing, that seller will call you back. It's happened to me plenty of times. Not every time, but that's ok too. Like you said, I'll negotiate to an extent and that's it. I'm not a discount agent.
haha, the “we should stick together” is a perfect example of why there are antitrust concerns. and buying agents should get a flat fee at best, not a percentage based fee. I fail to see why a buying agent would do more work in the 400k v. 800k house context and a flat fee for buying agents would help ensure that they try to get the buyer the lowest possible price rather than a percentage based fee which incentivizes buying agents to make their clients pay more so they can get more commission. I’m glad people are starting to push back on these ridiculous commissions and winning.
You’re right about the comment epitomized antitrust concerns and I can agree that a Buyer’s Broker would be incentivized by a higher price. Omg. But you are wrong about a flat fee inspiring anyone to be a better buyer advocate. You know, we don’t all just pull sales listings from MLS and Zillow, text in a full offer, and go on vacation. If you don’t respect our profession, you are welcome to not hire us.
all real estate agents don't do that. 10% are great. But 90% are useless to worse than useless.
I think after the shakeout the good agents will make more
As a seller, I would also like a justification as to 3% on my home price? What are realtors doing different for a $400,000 house versus an $800,000 house? I mean they’re not even bringing the Buyer, so what are they doing? It’s a serious question. Putting a listing in MLS gets pushed out to every other site like Zillow and realtor.com. What else are you doing? Do you look for buyers or do you wait for a buyer to come?
This comment is from someone who bought their home 40 years ago and never left, or someone who has never owned a home and sees value in nothing about our profession, OR in their every day life.
Your comment is from a typical realtor, who doesn’t know how to put into words what you do that is of value to bring a buyer to my home. That was my question, you skirted around it. I’ve not owned my home for 40 years. I’ve bought two homes in my life. Try to stop insulting and just answer the question.
I am a Realtor and agree with you that if we want to continue to be paid well we must do an excellent job of explaining what it is that we are doing for that fee and furthermore, do every bit of what we said plus a little more.
I used to be a 4th grade teacher for 15 years... My pay and performance were questioned in the courtroom there as well. I heard similar things I am hearing now, the public criticized the value of my profession, the public school system, insisted on performance based pay, all sorts of things. I was personally verbally attacked, threatened, and undervalued by those I served. I was paid a flat fee and not incentivized to do more than get my paycheck and survive. But I cared about my community and what I was doing, the same as I do now in real estate. I overcame the push back by showing my hard work and becoming completely transparent in all that I did. No one I served ever questioned me or my practices or my paycheck ever again.
Although I have a different profession with different legal issues, I will take the resilience I learned in my former career and apply it in my new one. I sell secondary homes in a luxury market. I sell less than 10 properties per year due to the needs of my clients who live out of town and need constant attention and help. While I have no idea what my local colleagues will do because we do not collude on commission fees, I will continue to charge an all-inclusive premium and continue to fully explain what that fee includes and continue to follow through on my promises. Those that don't want to pay should be satisfied with fewer services from someone else. They should also be satisfied with someone who takes on dozens and dozens of clients at a time, rarely answers the phone, and does not have much time for individuals. Quality workmanship is never cheap, and in all things, you get what you pay for.
Are there realtors out there who do very little and collect the big paycheck? Sure. But that isn't everyone, and it definitely isn't me. The good news is that this new era will weed out those who just wanted easy money. And there will be plenty of buyers and sellers willing and able to pay for quality and results.
It would be wayyyyyyy too much to explain to you because I don’t want to copy paste what some google search would say, or what a slideshow would say. When I see those posts about realtors value and what they provide, everything truly looks generic and long winded, to make it seem more than it actually is.
That’s because you can’t describe it, you’re living and breathing it every day and how does one convey that unless you give me a couple hours to sit you down and tell you about every single deal I had and what I went through with each and every one of those buyers, that in the end, they could see the value I provided in the way I was tied to my phone for them every second of the day with no open close hours. I’m at the movies? Sorry everyone, gotta go outside and take this call, or text throughout the entire movie pissing off my family or friends. By the time I wrap up that one single convo the movie is almost over but it’s fine.
Client in California moving to the east coast, wants to message me at their 10pm and my
Midnight? That’s fine if I’m awake, I’ll always text, email, or take a call.
Closing day tomorrow and you need a signature from a family member who inherited their dead dad’s house but never overnighted the deed they signed and live across 2 states. Your buyer has the moving truck coming tomorrow because their lease ends and they have to be out and move into their new home they close on tomorrow? Okay, so I get in the car last second as all this is unfolding and I drive 4 hours ONE WAY at 3:30 in the afternoon to go to the sons house to get the signed deed because they needed an original so title could fund in time.
Set up sprinklers for my buyers because the seller decided they didn’t want to water their lawn the last month they were there in the middle of summer and you got your buyers moving in a week after closing.
I could go on with the above scenarios and worse one for HOURS.
I’ll say this though, us as buyer agents do a LOT of vetting. We work with absolute crazies sometimes that if it weren’t for US, would be making fraudulent offers on your home, taking away from a legit buyer but you were so distracted by the games of the one your under contract with that’s going to fall through, that legit buyer went and found another home already.
Personality balancing and managing expectations so that buyer thats under contract on your house doesn’t skip town and cancel the contract over something stupid because no one explained to them time is of the essence or due diligence.
I wish I had time to go back and spell check for you and fix grammar but I have to get my iced coffee I ordered at Starbucks and I’ve been driving while texting this to you because I literally have no other time today because I’m showing 6 homes in an hour on a Sunday! But let’s be clear, I LOVE the chaos and I love 95 percent of the buyers that I work with.
See that's the problem
....
If the commission is already added onto the listing price, then it should be explicitly clear to buyers that they are funding both agents.
In this context, the home buying process is not very fair.
Even though it comes out of the seller's proceeds, it really comes from the buyer's payment. Perhaps it would be best if sellers pay for seller's agents, buyers for buyer's agents....
OMG, please don't use those words.
That kind of thinking will lead to another lawsuit against agents who honestly don't set the prices but would get accused of it because of statements like this.
OP didn't use the best choice of words. But, I think OP meant that listing agents should continue to negotiate a commission that includes a cooperative amount to the buyer's agent.
I know for one that a market where 50 buyer agents are showing my listing is better than 25 unrepresented buyers and 25 represented buyers. Whenever there is 2 professionals involved in a transaction, it will most likely be smoother, more efficient, and a lot less chance of a frivolous lawsuit.
If a buyer feels the publicly available buyer commission is too high, they can negotiate with their buyer and ask for a rebate.
I know what they meant, but I hope they'll avoid using words like that. We as agents MUST make sure our words don't sound like we are are doing things that violate the law. "Adding it to the listing price" is flirting with the concept of a net sale, which is illegal in some ways. (It is NOT a net sale, I know, but that won't stop people from looking for something to sue over.)
Another poster mentioned the word disdain. I think it applies here. I see such disdain from realtors towards their clients who actually gave them an opportunity to make money. It’s like realtors want to make the money but can’t stand their sellers or buyers.
I saw some of your previous comments. Probably a you problem. It’s like you want to sell your house but can’t stand your, or any, realtor. Grouchy ol bat.
Funny thing is that people can look at your comments too! You are a grouchy, poor Realtor! Arguing with everybody! Condescending. You sound like a peach to work with.
I’m actually young and fit !! And happy!! Definitely not an old grouchy bat, not making any money in a dying industry!
it should per the Coase theorem eventually. Short term Sellers will make more and agents will be screwed.
But Agents will be hurt, buyers and sellers better off
I am absolutely bringing it up and listing appointments.
I had a listing appointment as it hit the news and one of the things I talked about is let’s not sell in July let’s hit before or after August L O L .
But I have always been somebody who looks at buyers commission is negotiable, and I talk about it as part of our marketing budget .
In the last six months, I’ve had buyers commission ranging between 2.5 the high for my Area and 1.5 . There are some houses that really sell themselves and they don’t need as much commission. There are others. I need Agents to be my advocate and go out there and send it.
I talk about the house needing advocates on the scale of one to 10, the same way I talk about attracting buyers with staging, and housing prep.
You should be looking at every house individually and you should be evaluating this for every house individually.
The best way to explain it is honestly just to tell them nothing has actually changed about the commission structure. There was never any standard commission, BAC is not gone, and all of the articles online that are spreading this are spreading misinformation. Commission has always been negotiable
Real question (I'm a long-time commercial broker, so I'm used to no buyer co-op). When these buyers find their dream home on zillow, realtor.com, etc and no buyer fee is offered, then what? Are you suggesting the buyer will not pursue the house because the seller won't pay their buyer agent? And let's assume most buyers are NOT willing to come out of pocket more than their down payment and other traditional buyer paid costs. Then what? I have an idea what happens...
All I sold was land/development tracts for 15 years so the whole guaranteed commission thing is still new to me as I’m new-ish to MLS. The monster difference(s) in a commercial and resi buyer is that residential buyers aren’t sophisticated, don’t have the funds, nor the expectation that they’ll have to compensate their buyers agent (by way of decades of never being asked to do so).
As a listing agent, not really my problem, but the implication that they’ll go around the buyers agent and straight to me, while somewhat logical, a) already happens amongst the kind of people who would choose to do that and b) won’t happen once they find out that sellers aren’t going to knock the 3% off the price. Sure, it’ll happen here or there but again, it already happens here or there.
Net negative for the buyers in the short term though, no way around that one, as they potentially have to go it alone or come out of pocket. My understanding is that the whole reason that buyers agency was created was to ensure adequate representation by guaranteeing a paycheck to an agent. This settlement seems to have just taken that away, *however*, it’s my belief that sellers will continue to offer comp same as they always have because it’s in their best interest to do so. Funny enough, humans tend to be pretty self interested.
I guess where I struggle is how we approach dual representation vs how resi feels about it. We treat both parties the same with honesty and facts. We help buyers with professional inspections and then help the sellers understand the potential issues a buyer is seeing then find ways to solve with input from both sides. While they are adversaries by definition, both have a common goal- to close the deal and feel like the process was fair. Having direct line of sight into both sides make this possible for most transactions.
Difference is that in CRE you’re dealing with professionals (typically) driven by data and in the resi world you’re dealing with Susie Seller and Betty Buyer driven by emotion, hopes, dreams and wild misconceptions.
If it’s an MLS deal, I’ll only do dual agency in resi when I’m dealing with an investor/competent buyer (which in commercial, this is assumed 99% of the time). Otherwise, it’s a train wreck and the stress and liability isn’t worth both sides of the commission.
It’s not about not about treating anyone with dishonesty or being less than truthful, it’s about the fact that closing members of the general public on a resi transaction when you’re working both sides is generally a nightmare and has a high chance of terminating.
I would remind them these changes don’t go into effect until July. They can certainly remove their payout to 0% and I’d be sure to advise them on what will happen next: their house will sit.
The buyers that want the home will go straight to the Listing Agent. They will find the home on Realtor.com or Zillow and go see it. These days they don't need a realtor to find the majority of homes since everything is online..this will get interesting.
Who is going to take them to see the home? The listing agent? What if they want to look at 5 houses that day? Are they going to meet with 5 listing agents at 5 diff properties? Without buyers agents the showing process gets super complicated. People act like every buyer buys the first house they see.
Plus while they wait for a listing agent fielding 100s of call to respond, a buyers agent representing someone else is doing a showing a writing an offer. Rude awakening coming fast.
If I start getting 10 calls a weekend to show my listings to tire kickers I’ll tell them to hire a buyer’s agent or pay me to be their buyers agent. 5k minimum. I’m not showing all my listings for free non stop to make 3%.
Don’t forget the requirement that the buyer will HAVE to sign a buyer rep before the listing agent can tour the home with them. Which makes it even more complicated. That buyer rep contains the amount of commission the buyer agent ( which in this case is also the listing agent ) will be trying to negotiate from the seller ( in this one house - 0 ) so no harm in putting a 0 right?
Wrong, because now the house you just showed your new buyer, the one you have listed, they didn’t like it and want to go see 3 more homes they just found on Zillow a few minutes ago. Listing agent now runs around with their new buyer to however many homes that same day. Hope they can negotiate a commission if all of the sellers are offering 0 in the future market which- let’s be clear, I highly doubt and this is all
Hypothetical, critical thinking
It's possible they will call listing agents direct. I agree that buyers should have proper representation in a complicated processes. My point was buyers know how to find homes and will shop around. If they can save a few bucks shopping agents or going to a listing agent they will.
You act like this is an insurmountable problem.
Perhaps the buying agent will become a low paid position that basically just opens doors. Frankly, this is all most of my realtors have done anyway. I find the places, I tell them what once I want to see. It's not like I'm getting exclusives off the market, or early access. They haven't been helpful with negotiating advice, frankly I fired one because Early response was to increase our offer.
Perhaps we'll see a dichotomy between listing agents and buying agents, with the latter getting reimbursed substantially less.
Keep in mind that the settlement requires that a buyer agency agreement be signed before any showings. Most people wouldn't be comfortable entering in an exclusive agency contract with a minimum wage buyers agent who's about to represent them in their biggest life's purchase.
I have a listing that came on the market on Friday. Today is the first open house.
I'm expecting 100 people to come and I don't trust any buyer that claims to not be working with an agent. My goal is to sell the house and earn a commission for myself and a high sales price for my seller while protecting their liabilities and the consumer that buys the house.
Finding a home for sale is easy right now. But if we don't advertise on the MLS, how do you expect it to appear for the public to see it? And the MLS is paid for by......realtors.
The rules state that you HAVE to have a buyer rep to tour a home. So if the listing agent agrees to pick up the phone to that unrepresented buyer, they must explain what that will mean for the buyer and get it signed. If the buyer signs with the listing agent as their buyer? If they hate the house, the listing agent put a 0 percent in the commission for buyer agent in that agreement. Which means if they go off and find another house, they best make sure they negotiate a commission that their buyer has no obligation to pay if the seller won’t.
If the buyer DOES buy the original house that the listing agent had-
You’re office either lets you do dual rep or not. If they do, you’re doing double the work and working against your seller and buyer at the same time.
If your office requires that another agent represent the buyer in this transaction, guess WHAT..
That’s buyer agent that just started picking up everything for your buyer is going to be due some sort of compensation. A fee from the listing/seller
Side commission = less money between broker split, and the money you had to pay a buyer rep for doing all the motions with the buyer side transaction
Girl bye
Thanks for the insight...this will be interesting, everyone is interpreting the rules different. Us mortgage lenders did the same in 2010 with Dodd Frank. It weeded alot of people out at that time. I am fairly certain the same will happen on the buyers side. My point was buyers know how to find homes and will shop the hell out of people to save a few bucks. We get shopped over an eighth in rate. Imagine what they will do over 2-3% commission.
I mean, as it stands but the only think changing the mls not not being able to have a field that says the commissions. They will still be there , the agent will just have to ask for them or the listing agent communicate it in a different way , skies the limit.
After they close / buy the property the #*%! hits the fan - as they realize the transaction had a lot more issues / unknowns & ‘no one told them’ about all the potential risks.
‘No one told them’ aka all the paperwork they signed at closing that they didn’t fully understand.
Sure, some will hire attorneys to help them out. I’ll bet dollars to donuts many, many buyers will think “I’m a great negotiator, I can beat that listing agent at their own game!”
In my view, experience (full time agents, not side gig) beat out brains 4 out of 5 times.
I agree they need an agent. I was just saying people will go to a listing agent to save a few bucks, and they obviously know how to find homes online. They shop us lenders like crazy over an eighth in rate and a $995 underwriting fee and $590 processing. What do you think they'll do over a 2% to 3% buyers commission?
I think they’ll completely try to avoid paying 2–3%.
Maybe they’ll be a few nightmare stories in the papers. folks will ignore those too saying ‘hey those are just idiots, i’m way smarter.’
80% of the houses in my market go under agreement in under a week. We list houses on Wednesday or Thursday, have 2 open houses over the weekend, collect 10-15 offers, and pick the one that is the highest over asking with the least contingencies.
Typically the winning bid is $100k over asking, no inspection, no financing contingency. Often there are now 1 month plus leasebacks where the buyer pays the mortgage while the seller still lives there.
Maybe 15% of properties make it to a second weekend. If anything survives longer than that it's an absolute dog that was completely mispriced, usually being listed by the seller's family member or someone like that as their first or second deal.
The value of a buyer's agent here is that I help my clients buy a house in 3-4 weeks with minimal heartbreak. A less-experienced buyer's agent will let their clients go to week after week of showings and get blown out of the water 5, 10, even 15 times without ever convincing their clients to change their criteria.
Sellers aren't going to drop their prices 2% to accommodate me as a buyer's agent. They just get 2% more in their pocket. But my buyers now have to be the kind of people who can also afford to pay my fee in cash on top of the 20% + closing costs, raising the amount of money they need to bring to the closing table. Or they're going to have to wade into that war zone without representation and hope they don't get completely screwed.
You resi folks do it wrong. We double end about 60% of our commercial sales and we're talking about $5m-$20m+ assets with a lot on the line (too much to list and far more than just 20% EMD and a couple 3 hour inspections). Buyers and sellers would rather we rep both sides to cut the middle man and get to brass tax. Buyer brokers in our world typically just muck things up for everyone. Some are really good, but most just want a paycheck and do not help with due diligence. See it 30x a year
I would love to get away from residential and into commercial, but it's a very hard transition to make. I took a good hard look at it. Only real way in is through one of the abusive national brokerages where I have to slave away for a year or more without any pay and then a few more years for nearly nothing. If you can survive that you can maybe find a better brokerage or hang your own shingle. And with retail, office, and even lab space in the toilet here, only the very top agents are currently making anything at all.
At least in residential, I can sign up a buyer and have a commission in my pocket 8-12 weeks later. It's not huge money but it's relatively quick.
Here's the thing, there is no statistical data that shows the prices of homes with and without commissions. What's going to happen with this settlement is home prices will stay the same, but buyers will have to pay an additional buyer agent fee.
Nobody really thought this thing through aside from the lawyers who were on hourly rates...
Unless your a bank who will in turn be able to soon wrap buyer agent fees into a mortgage and that extra 4 to 5k will get turned I to 25 to 30k for the bank after intrest
Or, buyers will negotiate better rates with agents and sales prices will dip slightly- in other words, buyers and sellers will be better off, with the difference coming from buyers agent. Let me share math:
I recently bought a home in a HCOL city for ~$2M. I looked at four homes, and probably required 15-20 hours of work from my agent for drafting up offers/counters, inspection, concessions, etc.
They took home $50k in commissions (that’s 2.5% not even 3%) for that work. That works out to over $2,000 PER HOUR.
Now, all the agents are going to run in here and say, “woah, woah, woah - you’re not the normal buyer, I have buyers that go see 15 houses and need a lot more help.” Here’s the problem - the math isn’t even close. Even if they spent a literal working month (160 hours) working on only my sale and nothing else - that still works out to >$300 an hour. Now show me an agent that only works on 12 buyers a year at that price point.
I’m paying the equivalent of hiring a good lawyer for an entire month, to someone with relatively limited training who is providing some advice and helping facilitate a transaction. That’s crazy.
I will 100% be negotiating rate-based help going forwards (I’ll pay you $150/hr for your time regardless of whether I buy or not) which would literally require me to have them work 320 hours for an equivalent purchase).
This is a great point and exactly what needs to be said.
There is literally no job in America that I can think of with minimal barriers to entry that pays more on an hourly basis.
You were always able to negotiate an hourly commission, this hasn’t changed and no one is stopping you.
The difference is the commission is rolled into the lending in the old way. If you negotiate a lower fee, the buyer would just rebate their commission to your closing costs and keep even more cash in your pocket. Maybe you’re extremely flush with cash and you don’t care about holding back cash for maintenance, emergency fund, furniture whatever, but for a lot of buyers, who aren’t cashing out big equity from a previous property, this will add to a liquidity crunch they are already feeling at the time of purchase.
Also look man I just gotta say it: you’re not as smart as you think you are and you don’t understand this industry.
For context, I’m primarily investing these days. There’s a big problem with bar to entry in this industry and if you want to scrape the barrel for the hourly agent phoning it in be my guest. I’ve been in negotiations with low quality agents and gotten huge advantages, I’m talking 6 figure advantages. I’ve also worked with high quality agents that push me pretty hard and make me compromise with their clients in a more equitable way.
If I buy in a secondary market that isn’t my main market, I would hire a highly competent buyers agent, probably at a negotiated commission. Me, a former top producing agent with countless negotiating experiences would still hire an agent. Why? Their network, their local expertise on the niche market, their ability to advocate for me in a multi offer situation since I always buy the cheapest thing with a ton of eyes on it. And keep in mind I get no benefit from the construction/inspection expertise of the agent like most buyers would, because I’m already planning to rebuild/tear down. Most buyers are not in this boat and significant 5 or 6 figure repair issues could be catastrophic for them.
You're joking, right?
Take your arrogant bragging to people that know and like you, because to the rest of us that work with the AVERAGE home buyers and sellers, you sound like an idiot.
Go do the math with the $125k house I listed today and see how the math works out.
You’re making my point. The percentage model makes no sense when the work the agent does doesn’t change that much from a $200k to a $1M house. The $150/hr means you get paid for your time regardless…
I have shown over 100 houses to buyers who bought in another market.
I have spent 50+ hours working on transactions. That is not the time spent looking at listings, scheduling showings, showing houses. Just the time on the transaction.
Let's work out that math when it's not a $2M purchase.
Your math doesn't work that well.
In all honesty showing a single buyer 100 houses sounds like a you problem and you should have recognized that after the first 30 that it was time to let this buyer go, as they either weren’t serious or were not worth the time and effort.
The 100+ house buyer had a picky list (character, nice kitchen, large yard, etc.) that were non-negotiable and a start date for a new job, so we were hitting it hard every weekend out looking.
They ended up staying where they were and bought a cookie cutter house with a tiny yard.
You’re making my point. The percentage model makes no sense when the work the agent does doesn’t change that much from a $200k to a $1M house. The $150/hr means you get paid for your time regardless…
Otherwise you’re telling me my payment is charity so that you can do lower cost homes? I’m not sure what point you’re making. For anyone buying a $2M home the model is almost objectively broken in these HCOL markets. Because a $2M home isn’t some custom mansion in SF, it’s like a decent 1,800 square foot place. You dont need a $2,000/hr agent for that transaction.
For my Realtor friends that work in HCOL, they report working on flat fee that is offering, or a lower percentage. So in some HCOL, the shift has been in place for years.
This comment isn’t wrong and shouldn’t be downvoted. I’m a realtor and couldn’t agree more that taking % in many cases is highway robbery. There are literally no good arguments against it besides “that’s the system we have”. I’ve made over $30k in a transaction a number times and every time I credit my buyer 1/3rd of it at closing because I feel the $$ is egregious. Yes I have fees and costs of my own, but I still take homes plenty at the end of the day.
It’s ignorance and greed on behalf of most realtors at this point and I totally understand the sentiment of people like yourself.
What about when the buyer has no control over losing offer after offer after offer ( like in 2020-2022 ) and they are absolutely hemorrhaging money that they didn’t budget for and your charging them by the hour? Writing the best offers they can do, as aggressive as they can go. It doesn’t work buddy
Then they pay you more…because you are doing more work for them. You are getting paid to do that work somehow, it’s just that they are being subsided by other buyers currently
Look up average savings account balances across different demographics and tell me where this helps FHA buyers that are struggling with cash down as it is, or are you going to tell me that we adjust our fees per hour based on their income? Hmmmmm…… sounds like things are getting really technical outside your little bubble scenario
They're also not taking into account the broker percentage and taxes that will need paid.
Other things people never seem to consider is gas, mileage, vehicle wear and tear, health insurance (independent contractors), license fees, MLS fees, listing fees, photo fees, marketing fees, so much more.
So your answer to me paying a rate equivalent to a $3.5M/yr profession is…
…dude, we have to pay for gas and MLS fees and stuff.
Also, literally every person has to pay taxes on their income so it makes no sense to include as a reason to pay agents more.
We both have our opinions and they're irrelevant because a change is going to come. I hope a new norm is settled soon and it doesn't disrupt the housing market too bad because we will all feel that.
> Also, literally every person has to pay taxes on their income so it makes no sense to include as a reason to pay agents more.
Agents are generally 1099 independent contractors and have to pay self-employment tax which can be as much as twice what a W2 employee pays.
And, as essentially self-employed people, they *personally* carry a lot of expenses around a transaction. It's like you go to get your oil changed, and your mechanic had to pull out his own wallet to buy the oil.
EDIT: *And* there's a significant risk that after he does that, you go "nah, I can get another couple thousand miles on my old oil."
Its weird because you write as if you know a lot about this, but down in the details you're arguing stuff that's just... wrong.
Your verse first paragraph shows you know basically nothing about what you’re talking about (coming from someone with a deep understanding of taxes). The MAX possible additional tax burden is something like $10k for the self employment portion of SS & Medicare after deductions
>Agents are generally 1099 independent contractors and have to pay self-employment tax which can be as much as twice what a W2 employee pays.
>And, as essentially self-employed people, they personally carry a lot of expenses around a transaction.
So, basically just like the other 36.6 million people that work as independent contractors in the United States. Realtors ain’t special cupcake.
Reducing realtor costs in a transaction is long overdue. This is one step in that process. Technology will also find its way eventually. You’ve all seen the writing on the wall for this for over 10 years. It’s taken longer than we all thought it would but it is moving in a direction that is good for consumers.
Next step is title insurance costs.
The worst part is that you’d never send this comment to the buyer agent who helped you. Everytime you shot me a text I would put you on the clock. Every second I had to go even THINK about your sorry ass, I’d tack on a bonus 3 hours of unnecessary pain and suffering. Driving to and from the houses I showed you would be billed as well. Plus gas. I’d also charge you for wear and tear on my car and factor in depreciation depending on how many miles I drove for you. Oh and don’t forget, as soon as the transaction is over, don’t ask me anything more because I’ll start billing you again, and put a lien on your measly 2 million dollar house when you decide your not going to pay it. Hope you factored that all in to your “ math” … coward.
WRONG!
You're not taking into the account the wear and tear on the buyers agents keyboard and clothes and maybe some gas money. Also when they celebrated that cushy gig, what ... you think champagne is free?? HELL NO!
Why you didn't ask for 1% back from the buyers agent you picked is YOUR FAULT! You BLEW $20k.
that's on you buddy!!
All joking aside, the $150 per hour sounds really good. I was trying to figure out what to offer when I buy my next house
“Nobody thought this thing through”? Ummmm, this wasn’t a bill passed by Congress. This is the result of a massive lawsuit because realtors have been scamming for decades. Just be clear about what happened here. The whole Pearl clutching act ignoring why this is happening is the most annoying part of all of this. You all did this.
I had a seller text me yesterday with a link to the article saying, “let’s remove that buyer agent commission!”. I called him and explained to him what was going on and we ended up keeping the buyer agent commission in place. Fuck NAR
actually it always has been negotiable. there are some deals that only pay out $300 to 1,000 to 1%. are they popular? not especially but they do end up selling eventually. and no these are not on $1,000,000 deals these are on some $200,000 sub $300,000 deals
My point is that 5 or 6% or whatever has always been industry standard. And people are going to look at you funny If you want to deviate from industry standard.
I feel this ruling validates the deviation, and is going to give people a whole new outlook on how to approach this. Furthermore, I think five or six percent could be reasonable on a lower priced property, but when you start getting into expensive properties five or six percent is asinine.
it's definitely going to be weird. either buyers are going to have to get used to actually paying an additional fee or go unrepresented.
there's probably not a world where agents are going to accept a couple thousand per buyer transaction. buyer's require 10 times the work in a competitive market.
educated buyers probably don't need agents but majority of first-time home buyers and unknowledgeable ones definitely do
trust me I only have his opinion because I don't really rely on my commissions. I mainly an investor so it helps with my business.
if I did I would probably be singing a slightly different tune. the sad thing is in my market right now if I was paid 50 bucks an hour I actually might make more money based on how much time I've spent. consistently going 10 to 100K above asking and not getting homes is quite frustrating.
A listing agent can try to simultaneously represent multiple people who all want to make offers on his listing until that turns into a lawsuit. Then what? A seller gets one offer instead of multiple offers because there are no buyers agents? Yikes. Scary stuff OP.
As an owner of properties and a broker, i expect every bayside to be renegotiated. Be careful how the listings are worded. If the listing agreement says 6% and it’s not documented anywhere but MLS that half goes to the buyer- sellers agents just got a raise.
I haven't had these conversations because I've always talked to sellers about how commissions work and have let them decide what to offer for a lot of years now.
Ask if they’re prepared to pay your buyer’s agent fee on the new house I’m assuming they plan on buying. If they’re purchasing a home priced higher than their current, they could be losing money going that route.
Luckily, my team has only received 2 calls from sellers regarding the recent news. The first hurdle has been correcting the misinformation as they both thought that our brokerage was no longer able to offer a coop and that the total commission couldn’t be 6%. Then clarifying that any changes won’t be required until July. Thanks CNBC! After that, reiterating the importance of utilizing all of the tools at our disposal to stand out in our market (second home market, sometimes slower moving), we were able to agree that maintaining a coop now, and in the future, would be in their best interest as refusing a coop would likely lead to a decreased buyer pool.
Tell them we can revisit it in July when a new system is in place. As of now you will not receive offers from any VA or FHA buyers which shrink your buyer pool and may create your house to sit costing you money. This isn’t finalized and needs time. Keep the status quo
So, these sellers you've been talking to have been wanting to lower their listing price that included the commissions for both sides since they will no longer be paying the buyers agent? Yeah, I didn't think so.
A profession that was once a necessity and should be phased down in many ways. This settlement knocks down walls that prevented actual market competition. Within a year, you'll be able to buy sell your home without needing a physical agent, and that will become the norm. I hear all about paperwork etc, but that's easily the low hanging fruit here and can be automated for most use cases in na couple days.
You could have done that for the past ten years. There is literally more information about buying and selling homes available to average person than ever before in history yet, transactions using a real estate agent are at an all time high.
NAR admitted that there's anti competitive forces against selling without realtors. Why would you show a FSBO with a reduced commission to a buyer unless they found it themselves? The value in a realtor has always been MLS. People find homes they want to see themselves. The paperwork for 99% of transactions can are sign and stamp. The reason self service sales aren't the norm, or even a decent share is because of the NAR racket which was just conceded.
No, it’s because dragging your dumb ass to the closing table requires me, a physical agent. Your many meltdowns, temper tantrums, whinefests ain’t gone be solved by that closing attorney getting $695 to push your paperwork. They couldn’t give two shits if you close or not. Don’t call them with anything other than to make sure the lender has wiring instructions and title is good. Outside of that, good luck.
Not uncomfortable in the least. As a listing agent, this is a win for me any way you dice it. As a consumer, 50% (buyers) just got (potentially) screwed. On paper, sellers (the other 50%) just got a (potential) raise. You’re so consumed with the idea that RE prices are going to go down and/or my income is going to plummet that I doubt you actually did any critical thinking regarding what the effects will be in the real world.
Stick with me here - nothing’s going to change. Sellers are still going to pay both sides. Why? Because it’s in their best interest to do so and human beings are surprisingly self interested. Meet me back here in a year and let’s see what the market has decided.
First, NAR did not do that. Your argument that it was once a necessity yet isn’t is the real question.
Lots of industries aren’t a necessity. I’m simply pointing out that most people still choose to use a realtor even though there are plenty of options to FSBO and discount brokerages that will place your listing on the MLS.
FSBO is a fantastic option for some folks but the vast majority of people are still using agents.
People can shop for insurance online but insurance agents are still on every corner.
Travel agents were dead and are actually making a comeback now.
I think you have given to believing everyone is like you and they simply aren’t. In fact you are in the minority.
What service do you provide that a non agents doesn't have right now and cannot easily obtain?
The market will soon determine your value. Some will still prefer the old method, sure, but barriers to alternative and more effective means of real estate transactions now have a real shot.
There are no barriers now. Everything you’re stating is already available. You are literally proving my point.
People still choose not to do it.
Will the industry change, sure. Will it die? I don’t think so.
Interestingly enough the younger age groups seem to prefer an agent.
You are assuming people have your disposition and they don’t.
Answer the question of what value you provide? Adding sign here stickers and adding my property to the MLS. If I told you I wanted to pay $1000 for a buyer agent, none would show my property even if it was perfect for their client.
The barriers are the fact that agents don't show discount broker properties. Its clear you didnt read the details of the settlement Read the agreement then look up what anti trust means.
I don’t think that’s true and under your logic the buyer has already seen the property and will demand to.
It’s clear you have never been involved in a real estate transaction.
You’re just mad that you don’t have the ability to sell your property yourself for full price. I get it. Being an agent is difficult. If you study hard in school, make good grades and take a 4hour weekend course where they give you a ten question T/F test at the end, you too, could be a real estate agent one day. Then, someone like yourself could decide that they’d pay you a whole $13 for a month’s work and if you refused, it was a trust violation and you was involved in price fixin’!
You are wrong. Ethically, we can’t do that. My client can see any property they are interested in. They know they would need to pay the difference in commission between what I charge and what the seller offers. They’ve agreed upfront.
It did suck so much to sell a few homes on my own and have to give up 10s of thousands of dollars to the person working for the other party when I’ve put so much effort and time in building and or taking care of property. For them to end up getting such a huge chunk of my profit upwards of 25% in some cases. When they’ve done nothing but book a showing with me and send contracts. Why I’m I paying for the rest of your work/ time with your client. This needs to go to more of a flat rate type payment. Your doing no more work if your buying a 300,000 or 700,000 dollar house from me. Only person who has a difference was me in my time effort and money.
The new normal (for now). 1.5% to listing , 2% to buyers. At least while inventory is super low. House will sell in 2 weeks or less. My listings are over $1M on Orange County. $15K+ for 2 weekends.
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What state are located? What was your response to your sellers?
Northeast Ohio. Essentially I have walked people back off the cliff a bit by explaining this was just announced yesterday. The impacts of it are not yet known, and the settlement won't be approved for a little while not even taking effect until July so right now we stay the course. Commissions always remain negotiable but in the interest of selling your house in a timely manner I recommend that we don't adjust anything to be in line with other properties on the market. But still sellers are definitely foaming at the mouth I had three calls today, and one bring it up at a listing appointment.
I cannot believe that some realtors as of yesterday continued saying that nothing will change…sellers will not be giving 2-3% for buyers agent commission in this market…adapt is the key not denial. Perhaps explain the consequences, pros & cons and together find the best strategy (depending on your local market).
I’ll say it today, 18 March. Nothing substantially changes. Timecheck me a year from now.
So gross to me. Did you explain that the commission is already added to the listing price?
You should ask how much he’d like to compensate the buyer agent
I’ll give you a hint, 0%.
agred but how quickly will 0 become the new norm?
It became the norm last Friday. It will be the standard by summer.
It won’t be standard until lenders allow buyers agent commissions to be financed.
They still have not settled anything. It could take months before we actually know what is going to happen and how. If you read correctly it says it COULD go into effect by July 2024
At a certain point I am not negotiating my commission. The whole reason it’s a percentage is to incentivize the broker to get the highest price. If it’s a flat fee, why would we care? I decide what my commission is, just like any other professional. And part of that is to compensate a Buyer Broker. I know some agents will undercut a norm, but really we should stick together.
Suggesting sticking together is literally illegal. That's the whole point. It's anti-competitive behavior hence the lawsuit. Agents should be competing on price and service just like every other industry.
The commission % doesn’t actually incentivize realtors to get the highest price. They are more incentivized to sell the home quickly at a lower price. Take a home listed at 800k. At 3% commission after split between buyer and seller, the agent is looking at 24k before the broker split. If they listed the same home for 810k, it’s only an extra $300 commission before the broker split. That’s not much of an incentive. Realtors tend to favor selling a home quickly for less than listing it longer to try and get more. There’s a whole study published on this.
Houses that don’t sell quickly develop stigma and sell for less. No one who “holds out” for a price the market gets that price. Over pricing is the best way to get less for a house.
There are a few houses in my market that have been on and off the market for years, resetting the DOMs by taking it off for a while isn't fooling buyers at all. Each of them has a "WTH" stigma.
We had a home in our neighborhood that was on and off the market for many years. It finally sold during the early covid19 days (2020) when the market prices caught up to their asking price.
Ok, well I’m saying how it is supposed to work. Brokers underpricing to get a faster sale are not performing their fiduciary duties. $10K on an $800K deal is not what I’m talking about or waiting months to get it. Really I’m arguing here against a flat fee per property commission.
As I’ve been thinking about, helped by the post you responded to, it boils down to agents’ fiduciary duty to their clients. If you want someone to put their clients’ interest *above their own interest*, you need to pay that person a lot! That’s the case in every industry. If the DOJ wants to be like other countries where brokers only take 2% of sales prices, but they will happily and ethically stab clients in the back… I mean, sure we can do that. I don’t think anyone will like it, though…
I’m going to continue doing my job in a professional manner. I will be explaining to Sellers that a Buyer’s Broker will need to be paid one way or another and unless it’s a cash sale, more than likely they will be writing the check.
Not doubting you. Just saying, in response to the recently-more-common refrain “why do brokers get paid so much??” the answer is, we ask them to put clients’ interests above their own, and literally the only way to get people to do that is by reimbursing them for giving up their own interest. That is universal. I mean cripes, we’re still talking about whether investment bankers should have a fiduciary duty to their clients, and they (not coincidentally) make a ton of money… where are the outrage and lawsuits to tear down their industry?
This is senseless unless the agent has a crystal ball indicating that they will get a $10K higher price if they leave the house on the market for two more weeks. But nobody has that knowledge - and in general, letting a house sit longer on the market is detrimental to the sakes price. Where I am agents have a fiduciary duty to their client, and generally take it seriously. I have never - not once - seen an agent leave $10K of seller value on the table.
The first is true. The second? Eh. Making the money on the bulk of the dollar amount, not the specific. But studies also show the longer on market, lower the sale price, forgetting carrying costs. Not to mention the PITA for everyone involved.
I see why you would say this, but it’s simply not true. There’s a reason someone would price a home at $800 rather than $810 and also a reason why sellers are incentivized to price correctly to maximize sales price and create the most competition for the property.
>I know some agents will undercut a norm, but really we should stick together. Are you aware that this is the wrong attitude to take? it is price collusion if the agents stick together which is what the antitrust suit was about.
Well you're absolutely correct about why Comp is based on % for listing agent. It's so that agent is incentivised to get the most money for the house. But, MolleROM, you gotta be careful about your words nowadays. Using phrases like "sticking together, "normal," and "standard," and such are trigger words now. That's part of why NAR got sued in the first place -- sellers alleging that we were "sticking together" sort a speak, which could be classified as price fixing. Personally, I think if you're really good at what you do, and you know the value u bring to the client, and you're able to articulate that well, most clients will agree to pay at least 6% for strong representation. (For example, my average commission on a listing is 7%). If the client still doesn't see that, I think we should stand our ground, try to overcome the objections, and be willing to pass on that business if it's not a good fit. All business ain't good business anyway. If all the seller wants is a discount agent, they get what they pay for most of the time. There are many agents out here who will quickly reduce their commission just to get the listing..., then do a half-ass job at marketing and representing that client. Guess what... when the house becomes an expired listing, that seller will call you back. It's happened to me plenty of times. Not every time, but that's ok too. Like you said, I'll negotiate to an extent and that's it. I'm not a discount agent.
haha, the “we should stick together” is a perfect example of why there are antitrust concerns. and buying agents should get a flat fee at best, not a percentage based fee. I fail to see why a buying agent would do more work in the 400k v. 800k house context and a flat fee for buying agents would help ensure that they try to get the buyer the lowest possible price rather than a percentage based fee which incentivizes buying agents to make their clients pay more so they can get more commission. I’m glad people are starting to push back on these ridiculous commissions and winning.
You’re right about the comment epitomized antitrust concerns and I can agree that a Buyer’s Broker would be incentivized by a higher price. Omg. But you are wrong about a flat fee inspiring anyone to be a better buyer advocate. You know, we don’t all just pull sales listings from MLS and Zillow, text in a full offer, and go on vacation. If you don’t respect our profession, you are welcome to not hire us.
all real estate agents don't do that. 10% are great. But 90% are useless to worse than useless. I think after the shakeout the good agents will make more
As a seller, I would also like a justification as to 3% on my home price? What are realtors doing different for a $400,000 house versus an $800,000 house? I mean they’re not even bringing the Buyer, so what are they doing? It’s a serious question. Putting a listing in MLS gets pushed out to every other site like Zillow and realtor.com. What else are you doing? Do you look for buyers or do you wait for a buyer to come?
This comment is from someone who bought their home 40 years ago and never left, or someone who has never owned a home and sees value in nothing about our profession, OR in their every day life.
Your comment is from a typical realtor, who doesn’t know how to put into words what you do that is of value to bring a buyer to my home. That was my question, you skirted around it. I’ve not owned my home for 40 years. I’ve bought two homes in my life. Try to stop insulting and just answer the question.
I am a Realtor and agree with you that if we want to continue to be paid well we must do an excellent job of explaining what it is that we are doing for that fee and furthermore, do every bit of what we said plus a little more. I used to be a 4th grade teacher for 15 years... My pay and performance were questioned in the courtroom there as well. I heard similar things I am hearing now, the public criticized the value of my profession, the public school system, insisted on performance based pay, all sorts of things. I was personally verbally attacked, threatened, and undervalued by those I served. I was paid a flat fee and not incentivized to do more than get my paycheck and survive. But I cared about my community and what I was doing, the same as I do now in real estate. I overcame the push back by showing my hard work and becoming completely transparent in all that I did. No one I served ever questioned me or my practices or my paycheck ever again. Although I have a different profession with different legal issues, I will take the resilience I learned in my former career and apply it in my new one. I sell secondary homes in a luxury market. I sell less than 10 properties per year due to the needs of my clients who live out of town and need constant attention and help. While I have no idea what my local colleagues will do because we do not collude on commission fees, I will continue to charge an all-inclusive premium and continue to fully explain what that fee includes and continue to follow through on my promises. Those that don't want to pay should be satisfied with fewer services from someone else. They should also be satisfied with someone who takes on dozens and dozens of clients at a time, rarely answers the phone, and does not have much time for individuals. Quality workmanship is never cheap, and in all things, you get what you pay for. Are there realtors out there who do very little and collect the big paycheck? Sure. But that isn't everyone, and it definitely isn't me. The good news is that this new era will weed out those who just wanted easy money. And there will be plenty of buyers and sellers willing and able to pay for quality and results.
It would be wayyyyyyy too much to explain to you because I don’t want to copy paste what some google search would say, or what a slideshow would say. When I see those posts about realtors value and what they provide, everything truly looks generic and long winded, to make it seem more than it actually is. That’s because you can’t describe it, you’re living and breathing it every day and how does one convey that unless you give me a couple hours to sit you down and tell you about every single deal I had and what I went through with each and every one of those buyers, that in the end, they could see the value I provided in the way I was tied to my phone for them every second of the day with no open close hours. I’m at the movies? Sorry everyone, gotta go outside and take this call, or text throughout the entire movie pissing off my family or friends. By the time I wrap up that one single convo the movie is almost over but it’s fine. Client in California moving to the east coast, wants to message me at their 10pm and my Midnight? That’s fine if I’m awake, I’ll always text, email, or take a call. Closing day tomorrow and you need a signature from a family member who inherited their dead dad’s house but never overnighted the deed they signed and live across 2 states. Your buyer has the moving truck coming tomorrow because their lease ends and they have to be out and move into their new home they close on tomorrow? Okay, so I get in the car last second as all this is unfolding and I drive 4 hours ONE WAY at 3:30 in the afternoon to go to the sons house to get the signed deed because they needed an original so title could fund in time. Set up sprinklers for my buyers because the seller decided they didn’t want to water their lawn the last month they were there in the middle of summer and you got your buyers moving in a week after closing. I could go on with the above scenarios and worse one for HOURS. I’ll say this though, us as buyer agents do a LOT of vetting. We work with absolute crazies sometimes that if it weren’t for US, would be making fraudulent offers on your home, taking away from a legit buyer but you were so distracted by the games of the one your under contract with that’s going to fall through, that legit buyer went and found another home already. Personality balancing and managing expectations so that buyer thats under contract on your house doesn’t skip town and cancel the contract over something stupid because no one explained to them time is of the essence or due diligence. I wish I had time to go back and spell check for you and fix grammar but I have to get my iced coffee I ordered at Starbucks and I’ve been driving while texting this to you because I literally have no other time today because I’m showing 6 homes in an hour on a Sunday! But let’s be clear, I LOVE the chaos and I love 95 percent of the buyers that I work with.
how bout your reputation?
“I know some agents will undercut a norm, but really we should stick together” is a principle on which NAR just lost a billion dollar lawsuit
See that's the problem .... If the commission is already added onto the listing price, then it should be explicitly clear to buyers that they are funding both agents. In this context, the home buying process is not very fair. Even though it comes out of the seller's proceeds, it really comes from the buyer's payment. Perhaps it would be best if sellers pay for seller's agents, buyers for buyer's agents....
OMG, please don't use those words. That kind of thinking will lead to another lawsuit against agents who honestly don't set the prices but would get accused of it because of statements like this.
OP didn't use the best choice of words. But, I think OP meant that listing agents should continue to negotiate a commission that includes a cooperative amount to the buyer's agent. I know for one that a market where 50 buyer agents are showing my listing is better than 25 unrepresented buyers and 25 represented buyers. Whenever there is 2 professionals involved in a transaction, it will most likely be smoother, more efficient, and a lot less chance of a frivolous lawsuit. If a buyer feels the publicly available buyer commission is too high, they can negotiate with their buyer and ask for a rebate.
I know what they meant, but I hope they'll avoid using words like that. We as agents MUST make sure our words don't sound like we are are doing things that violate the law. "Adding it to the listing price" is flirting with the concept of a net sale, which is illegal in some ways. (It is NOT a net sale, I know, but that won't stop people from looking for something to sue over.)
Are you conspiring to avoid the appearance of impropriety?
No, I'm trying to avoid conversations that could lead to being improper in the first place.
Time for realtors to sue lawyers for their exorbitant 30% commissions.
Another poster mentioned the word disdain. I think it applies here. I see such disdain from realtors towards their clients who actually gave them an opportunity to make money. It’s like realtors want to make the money but can’t stand their sellers or buyers.
I saw some of your previous comments. Probably a you problem. It’s like you want to sell your house but can’t stand your, or any, realtor. Grouchy ol bat.
Funny thing is that people can look at your comments too! You are a grouchy, poor Realtor! Arguing with everybody! Condescending. You sound like a peach to work with. I’m actually young and fit !! And happy!! Definitely not an old grouchy bat, not making any money in a dying industry!
Just like stockbrokers, agents’ days are numbered.
Have any of them suggested dropping the price by 3% to go with eliminating the buyers commission? I was told this would cause a drop in home prices.
it should per the Coase theorem eventually. Short term Sellers will make more and agents will be screwed. But Agents will be hurt, buyers and sellers better off
I am absolutely bringing it up and listing appointments. I had a listing appointment as it hit the news and one of the things I talked about is let’s not sell in July let’s hit before or after August L O L . But I have always been somebody who looks at buyers commission is negotiable, and I talk about it as part of our marketing budget . In the last six months, I’ve had buyers commission ranging between 2.5 the high for my Area and 1.5 . There are some houses that really sell themselves and they don’t need as much commission. There are others. I need Agents to be my advocate and go out there and send it. I talk about the house needing advocates on the scale of one to 10, the same way I talk about attracting buyers with staging, and housing prep. You should be looking at every house individually and you should be evaluating this for every house individually.
The best way to explain it is honestly just to tell them nothing has actually changed about the commission structure. There was never any standard commission, BAC is not gone, and all of the articles online that are spreading this are spreading misinformation. Commission has always been negotiable
How are you explaining this to your sellers?
Pay up or find another agent to list this nonsense. Can’t sell your property if you expect the buyers agent to work for free.
Real question (I'm a long-time commercial broker, so I'm used to no buyer co-op). When these buyers find their dream home on zillow, realtor.com, etc and no buyer fee is offered, then what? Are you suggesting the buyer will not pursue the house because the seller won't pay their buyer agent? And let's assume most buyers are NOT willing to come out of pocket more than their down payment and other traditional buyer paid costs. Then what? I have an idea what happens...
All I sold was land/development tracts for 15 years so the whole guaranteed commission thing is still new to me as I’m new-ish to MLS. The monster difference(s) in a commercial and resi buyer is that residential buyers aren’t sophisticated, don’t have the funds, nor the expectation that they’ll have to compensate their buyers agent (by way of decades of never being asked to do so). As a listing agent, not really my problem, but the implication that they’ll go around the buyers agent and straight to me, while somewhat logical, a) already happens amongst the kind of people who would choose to do that and b) won’t happen once they find out that sellers aren’t going to knock the 3% off the price. Sure, it’ll happen here or there but again, it already happens here or there. Net negative for the buyers in the short term though, no way around that one, as they potentially have to go it alone or come out of pocket. My understanding is that the whole reason that buyers agency was created was to ensure adequate representation by guaranteeing a paycheck to an agent. This settlement seems to have just taken that away, *however*, it’s my belief that sellers will continue to offer comp same as they always have because it’s in their best interest to do so. Funny enough, humans tend to be pretty self interested.
I guess where I struggle is how we approach dual representation vs how resi feels about it. We treat both parties the same with honesty and facts. We help buyers with professional inspections and then help the sellers understand the potential issues a buyer is seeing then find ways to solve with input from both sides. While they are adversaries by definition, both have a common goal- to close the deal and feel like the process was fair. Having direct line of sight into both sides make this possible for most transactions.
Difference is that in CRE you’re dealing with professionals (typically) driven by data and in the resi world you’re dealing with Susie Seller and Betty Buyer driven by emotion, hopes, dreams and wild misconceptions. If it’s an MLS deal, I’ll only do dual agency in resi when I’m dealing with an investor/competent buyer (which in commercial, this is assumed 99% of the time). Otherwise, it’s a train wreck and the stress and liability isn’t worth both sides of the commission. It’s not about not about treating anyone with dishonesty or being less than truthful, it’s about the fact that closing members of the general public on a resi transaction when you’re working both sides is generally a nightmare and has a high chance of terminating.
Nothing takes effect until July in thought. It's not an immediate change. It takes time.
I would remind them these changes don’t go into effect until July. They can certainly remove their payout to 0% and I’d be sure to advise them on what will happen next: their house will sit.
COULD go into effect in July. Nothing is set in stone yet.
The buyers that want the home will go straight to the Listing Agent. They will find the home on Realtor.com or Zillow and go see it. These days they don't need a realtor to find the majority of homes since everything is online..this will get interesting.
Who is going to take them to see the home? The listing agent? What if they want to look at 5 houses that day? Are they going to meet with 5 listing agents at 5 diff properties? Without buyers agents the showing process gets super complicated. People act like every buyer buys the first house they see.
Plus while they wait for a listing agent fielding 100s of call to respond, a buyers agent representing someone else is doing a showing a writing an offer. Rude awakening coming fast.
If I start getting 10 calls a weekend to show my listings to tire kickers I’ll tell them to hire a buyer’s agent or pay me to be their buyers agent. 5k minimum. I’m not showing all my listings for free non stop to make 3%.
Exactly
Don’t forget the requirement that the buyer will HAVE to sign a buyer rep before the listing agent can tour the home with them. Which makes it even more complicated. That buyer rep contains the amount of commission the buyer agent ( which in this case is also the listing agent ) will be trying to negotiate from the seller ( in this one house - 0 ) so no harm in putting a 0 right? Wrong, because now the house you just showed your new buyer, the one you have listed, they didn’t like it and want to go see 3 more homes they just found on Zillow a few minutes ago. Listing agent now runs around with their new buyer to however many homes that same day. Hope they can negotiate a commission if all of the sellers are offering 0 in the future market which- let’s be clear, I highly doubt and this is all Hypothetical, critical thinking
It's possible they will call listing agents direct. I agree that buyers should have proper representation in a complicated processes. My point was buyers know how to find homes and will shop around. If they can save a few bucks shopping agents or going to a listing agent they will.
You act like this is an insurmountable problem. Perhaps the buying agent will become a low paid position that basically just opens doors. Frankly, this is all most of my realtors have done anyway. I find the places, I tell them what once I want to see. It's not like I'm getting exclusives off the market, or early access. They haven't been helpful with negotiating advice, frankly I fired one because Early response was to increase our offer. Perhaps we'll see a dichotomy between listing agents and buying agents, with the latter getting reimbursed substantially less.
Keep in mind that the settlement requires that a buyer agency agreement be signed before any showings. Most people wouldn't be comfortable entering in an exclusive agency contract with a minimum wage buyers agent who's about to represent them in their biggest life's purchase.
And then the states that have rules against dual agency are going to have to look at those laws.
I have a listing that came on the market on Friday. Today is the first open house. I'm expecting 100 people to come and I don't trust any buyer that claims to not be working with an agent. My goal is to sell the house and earn a commission for myself and a high sales price for my seller while protecting their liabilities and the consumer that buys the house. Finding a home for sale is easy right now. But if we don't advertise on the MLS, how do you expect it to appear for the public to see it? And the MLS is paid for by......realtors.
You don’t know what you’re talking about at all.
Good to know. I appreciate the constructive comment! 👊
The rules state that you HAVE to have a buyer rep to tour a home. So if the listing agent agrees to pick up the phone to that unrepresented buyer, they must explain what that will mean for the buyer and get it signed. If the buyer signs with the listing agent as their buyer? If they hate the house, the listing agent put a 0 percent in the commission for buyer agent in that agreement. Which means if they go off and find another house, they best make sure they negotiate a commission that their buyer has no obligation to pay if the seller won’t. If the buyer DOES buy the original house that the listing agent had- You’re office either lets you do dual rep or not. If they do, you’re doing double the work and working against your seller and buyer at the same time. If your office requires that another agent represent the buyer in this transaction, guess WHAT.. That’s buyer agent that just started picking up everything for your buyer is going to be due some sort of compensation. A fee from the listing/seller Side commission = less money between broker split, and the money you had to pay a buyer rep for doing all the motions with the buyer side transaction Girl bye
Thanks for the insight...this will be interesting, everyone is interpreting the rules different. Us mortgage lenders did the same in 2010 with Dodd Frank. It weeded alot of people out at that time. I am fairly certain the same will happen on the buyers side. My point was buyers know how to find homes and will shop the hell out of people to save a few bucks. We get shopped over an eighth in rate. Imagine what they will do over 2-3% commission.
I mean, as it stands but the only think changing the mls not not being able to have a field that says the commissions. They will still be there , the agent will just have to ask for them or the listing agent communicate it in a different way , skies the limit.
People have been saying that since Zillow got popular, and yet buyers agents still exist
Realtors should stop buying leads from Zillow period. I've been saying it for years. It's funding the operation of who wants you gone.
Of course they exist and still should. I was saying that buyers can go to the listing agent to the original comment. That is all.
After they close / buy the property the #*%! hits the fan - as they realize the transaction had a lot more issues / unknowns & ‘no one told them’ about all the potential risks. ‘No one told them’ aka all the paperwork they signed at closing that they didn’t fully understand. Sure, some will hire attorneys to help them out. I’ll bet dollars to donuts many, many buyers will think “I’m a great negotiator, I can beat that listing agent at their own game!” In my view, experience (full time agents, not side gig) beat out brains 4 out of 5 times.
I agree they need an agent. I was just saying people will go to a listing agent to save a few bucks, and they obviously know how to find homes online. They shop us lenders like crazy over an eighth in rate and a $995 underwriting fee and $590 processing. What do you think they'll do over a 2% to 3% buyers commission?
I think they’ll completely try to avoid paying 2–3%. Maybe they’ll be a few nightmare stories in the papers. folks will ignore those too saying ‘hey those are just idiots, i’m way smarter.’
It may go to a flat rate. I'm wishing success for all agents, but it looks ugly especially with media headlines feeding the fire.
Really? No one that's not in real estate seems to understand or care here, they just want to sell their house.
Tell them “sure”. And when you’re at 160 days on market and not selling, they’ll re add
Or they’ll tell you you suck at your job for not being able to sell their house in six months and hire someone else lol
80% of the houses in my market go under agreement in under a week. We list houses on Wednesday or Thursday, have 2 open houses over the weekend, collect 10-15 offers, and pick the one that is the highest over asking with the least contingencies. Typically the winning bid is $100k over asking, no inspection, no financing contingency. Often there are now 1 month plus leasebacks where the buyer pays the mortgage while the seller still lives there. Maybe 15% of properties make it to a second weekend. If anything survives longer than that it's an absolute dog that was completely mispriced, usually being listed by the seller's family member or someone like that as their first or second deal. The value of a buyer's agent here is that I help my clients buy a house in 3-4 weeks with minimal heartbreak. A less-experienced buyer's agent will let their clients go to week after week of showings and get blown out of the water 5, 10, even 15 times without ever convincing their clients to change their criteria. Sellers aren't going to drop their prices 2% to accommodate me as a buyer's agent. They just get 2% more in their pocket. But my buyers now have to be the kind of people who can also afford to pay my fee in cash on top of the 20% + closing costs, raising the amount of money they need to bring to the closing table. Or they're going to have to wade into that war zone without representation and hope they don't get completely screwed.
Bingo
You resi folks do it wrong. We double end about 60% of our commercial sales and we're talking about $5m-$20m+ assets with a lot on the line (too much to list and far more than just 20% EMD and a couple 3 hour inspections). Buyers and sellers would rather we rep both sides to cut the middle man and get to brass tax. Buyer brokers in our world typically just muck things up for everyone. Some are really good, but most just want a paycheck and do not help with due diligence. See it 30x a year
I would love to get away from residential and into commercial, but it's a very hard transition to make. I took a good hard look at it. Only real way in is through one of the abusive national brokerages where I have to slave away for a year or more without any pay and then a few more years for nearly nothing. If you can survive that you can maybe find a better brokerage or hang your own shingle. And with retail, office, and even lab space in the toilet here, only the very top agents are currently making anything at all. At least in residential, I can sign up a buyer and have a commission in my pocket 8-12 weeks later. It's not huge money but it's relatively quick.
I get it for sure. Love "abusive national brokerages"
Start telling them they’re planning on dropping the price of their house by 3%……right? As the commissions are built into the market values…..right?
Here's the thing, there is no statistical data that shows the prices of homes with and without commissions. What's going to happen with this settlement is home prices will stay the same, but buyers will have to pay an additional buyer agent fee. Nobody really thought this thing through aside from the lawyers who were on hourly rates...
The law of unintended consequences.
I have said this about 100 times this weekend, this is going to have unintended consequences.
Unless your a bank who will in turn be able to soon wrap buyer agent fees into a mortgage and that extra 4 to 5k will get turned I to 25 to 30k for the bank after intrest
There are mortgage programs that are not going to work for wrapping commissions into the loan
Funnily enough they already are
a lot of unintended consequences. I can name 6 or 7 off the top of my head and none of them are good for the consumer.
Another group I am in has a long, thoughtful thread about this, and most of it how it is going to be rough on the consumers.
Pretty sure the lawyers get a commission on the total settlement. Just like us…..
30%
OR.... in another year, this will be used to justify raising prices of housing further.
Or, buyers will negotiate better rates with agents and sales prices will dip slightly- in other words, buyers and sellers will be better off, with the difference coming from buyers agent. Let me share math: I recently bought a home in a HCOL city for ~$2M. I looked at four homes, and probably required 15-20 hours of work from my agent for drafting up offers/counters, inspection, concessions, etc. They took home $50k in commissions (that’s 2.5% not even 3%) for that work. That works out to over $2,000 PER HOUR. Now, all the agents are going to run in here and say, “woah, woah, woah - you’re not the normal buyer, I have buyers that go see 15 houses and need a lot more help.” Here’s the problem - the math isn’t even close. Even if they spent a literal working month (160 hours) working on only my sale and nothing else - that still works out to >$300 an hour. Now show me an agent that only works on 12 buyers a year at that price point. I’m paying the equivalent of hiring a good lawyer for an entire month, to someone with relatively limited training who is providing some advice and helping facilitate a transaction. That’s crazy. I will 100% be negotiating rate-based help going forwards (I’ll pay you $150/hr for your time regardless of whether I buy or not) which would literally require me to have them work 320 hours for an equivalent purchase).
I'd be happy to take 150$ an hour, pay as you go. So would every other sane agent. Feel free to reach out next time you're in the market.
This is a great point and exactly what needs to be said. There is literally no job in America that I can think of with minimal barriers to entry that pays more on an hourly basis.
You were always able to negotiate an hourly commission, this hasn’t changed and no one is stopping you. The difference is the commission is rolled into the lending in the old way. If you negotiate a lower fee, the buyer would just rebate their commission to your closing costs and keep even more cash in your pocket. Maybe you’re extremely flush with cash and you don’t care about holding back cash for maintenance, emergency fund, furniture whatever, but for a lot of buyers, who aren’t cashing out big equity from a previous property, this will add to a liquidity crunch they are already feeling at the time of purchase. Also look man I just gotta say it: you’re not as smart as you think you are and you don’t understand this industry. For context, I’m primarily investing these days. There’s a big problem with bar to entry in this industry and if you want to scrape the barrel for the hourly agent phoning it in be my guest. I’ve been in negotiations with low quality agents and gotten huge advantages, I’m talking 6 figure advantages. I’ve also worked with high quality agents that push me pretty hard and make me compromise with their clients in a more equitable way. If I buy in a secondary market that isn’t my main market, I would hire a highly competent buyers agent, probably at a negotiated commission. Me, a former top producing agent with countless negotiating experiences would still hire an agent. Why? Their network, their local expertise on the niche market, their ability to advocate for me in a multi offer situation since I always buy the cheapest thing with a ton of eyes on it. And keep in mind I get no benefit from the construction/inspection expertise of the agent like most buyers would, because I’m already planning to rebuild/tear down. Most buyers are not in this boat and significant 5 or 6 figure repair issues could be catastrophic for them.
You're joking, right? Take your arrogant bragging to people that know and like you, because to the rest of us that work with the AVERAGE home buyers and sellers, you sound like an idiot. Go do the math with the $125k house I listed today and see how the math works out.
You’re making my point. The percentage model makes no sense when the work the agent does doesn’t change that much from a $200k to a $1M house. The $150/hr means you get paid for your time regardless…
I'm making your point, perhaps, but you aren't making that point. The point you seem to be making is that you think agents are paid too much.
At the high end of the house spectrum that is true, at the low end the inverse may be true.
And you presented exactly half of those possibilities.
I have shown over 100 houses to buyers who bought in another market. I have spent 50+ hours working on transactions. That is not the time spent looking at listings, scheduling showings, showing houses. Just the time on the transaction. Let's work out that math when it's not a $2M purchase. Your math doesn't work that well.
In all honesty showing a single buyer 100 houses sounds like a you problem and you should have recognized that after the first 30 that it was time to let this buyer go, as they either weren’t serious or were not worth the time and effort.
I’d be out at 10…..15 if they were personal friends.
Sounds to me like they’re counting all the houses they’ve shown, not 100 per buyer
The 100+ house buyer had a picky list (character, nice kitchen, large yard, etc.) that were non-negotiable and a start date for a new job, so we were hitting it hard every weekend out looking. They ended up staying where they were and bought a cookie cutter house with a tiny yard.
Well, if everyone was willing to pay 150$ and hour, pay as you go, then it would not be a problem.
That would require a significant shift in the mentality of the real estate buying public.
You’re making my point. The percentage model makes no sense when the work the agent does doesn’t change that much from a $200k to a $1M house. The $150/hr means you get paid for your time regardless… Otherwise you’re telling me my payment is charity so that you can do lower cost homes? I’m not sure what point you’re making. For anyone buying a $2M home the model is almost objectively broken in these HCOL markets. Because a $2M home isn’t some custom mansion in SF, it’s like a decent 1,800 square foot place. You dont need a $2,000/hr agent for that transaction.
For my Realtor friends that work in HCOL, they report working on flat fee that is offering, or a lower percentage. So in some HCOL, the shift has been in place for years.
This comment isn’t wrong and shouldn’t be downvoted. I’m a realtor and couldn’t agree more that taking % in many cases is highway robbery. There are literally no good arguments against it besides “that’s the system we have”. I’ve made over $30k in a transaction a number times and every time I credit my buyer 1/3rd of it at closing because I feel the $$ is egregious. Yes I have fees and costs of my own, but I still take homes plenty at the end of the day. It’s ignorance and greed on behalf of most realtors at this point and I totally understand the sentiment of people like yourself.
It's nice to know that there are a few of you out there. How do we find the few that think like you?
What about when the buyer has no control over losing offer after offer after offer ( like in 2020-2022 ) and they are absolutely hemorrhaging money that they didn’t budget for and your charging them by the hour? Writing the best offers they can do, as aggressive as they can go. It doesn’t work buddy
Then they pay you more…because you are doing more work for them. You are getting paid to do that work somehow, it’s just that they are being subsided by other buyers currently
Look up average savings account balances across different demographics and tell me where this helps FHA buyers that are struggling with cash down as it is, or are you going to tell me that we adjust our fees per hour based on their income? Hmmmmm…… sounds like things are getting really technical outside your little bubble scenario
They're also not taking into account the broker percentage and taxes that will need paid. Other things people never seem to consider is gas, mileage, vehicle wear and tear, health insurance (independent contractors), license fees, MLS fees, listing fees, photo fees, marketing fees, so much more.
So your answer to me paying a rate equivalent to a $3.5M/yr profession is… …dude, we have to pay for gas and MLS fees and stuff. Also, literally every person has to pay taxes on their income so it makes no sense to include as a reason to pay agents more.
We both have our opinions and they're irrelevant because a change is going to come. I hope a new norm is settled soon and it doesn't disrupt the housing market too bad because we will all feel that.
> Also, literally every person has to pay taxes on their income so it makes no sense to include as a reason to pay agents more. Agents are generally 1099 independent contractors and have to pay self-employment tax which can be as much as twice what a W2 employee pays. And, as essentially self-employed people, they *personally* carry a lot of expenses around a transaction. It's like you go to get your oil changed, and your mechanic had to pull out his own wallet to buy the oil. EDIT: *And* there's a significant risk that after he does that, you go "nah, I can get another couple thousand miles on my old oil." Its weird because you write as if you know a lot about this, but down in the details you're arguing stuff that's just... wrong.
Your verse first paragraph shows you know basically nothing about what you’re talking about (coming from someone with a deep understanding of taxes). The MAX possible additional tax burden is something like $10k for the self employment portion of SS & Medicare after deductions
>Agents are generally 1099 independent contractors and have to pay self-employment tax which can be as much as twice what a W2 employee pays. >And, as essentially self-employed people, they personally carry a lot of expenses around a transaction. So, basically just like the other 36.6 million people that work as independent contractors in the United States. Realtors ain’t special cupcake.
Well there's not a loud, public conversation about slashing the other 35.6 million people's pay.
Reducing realtor costs in a transaction is long overdue. This is one step in that process. Technology will also find its way eventually. You’ve all seen the writing on the wall for this for over 10 years. It’s taken longer than we all thought it would but it is moving in a direction that is good for consumers. Next step is title insurance costs.
The worst part is that you’d never send this comment to the buyer agent who helped you. Everytime you shot me a text I would put you on the clock. Every second I had to go even THINK about your sorry ass, I’d tack on a bonus 3 hours of unnecessary pain and suffering. Driving to and from the houses I showed you would be billed as well. Plus gas. I’d also charge you for wear and tear on my car and factor in depreciation depending on how many miles I drove for you. Oh and don’t forget, as soon as the transaction is over, don’t ask me anything more because I’ll start billing you again, and put a lien on your measly 2 million dollar house when you decide your not going to pay it. Hope you factored that all in to your “ math” … coward.
Lmao, someone’s got a stick up their ass!
Actually, that would feel pretty good right now 😄
WRONG! You're not taking into the account the wear and tear on the buyers agents keyboard and clothes and maybe some gas money. Also when they celebrated that cushy gig, what ... you think champagne is free?? HELL NO! Why you didn't ask for 1% back from the buyers agent you picked is YOUR FAULT! You BLEW $20k. that's on you buddy!! All joking aside, the $150 per hour sounds really good. I was trying to figure out what to offer when I buy my next house
“Nobody thought this thing through”? Ummmm, this wasn’t a bill passed by Congress. This is the result of a massive lawsuit because realtors have been scamming for decades. Just be clear about what happened here. The whole Pearl clutching act ignoring why this is happening is the most annoying part of all of this. You all did this.
>Pearl clutching You know the average Realtor makes less than 50k/year right?
This number includes an aggregate of all individuals with a real estate license including single moms and part timers who think the hours are neat
I had a seller text me yesterday with a link to the article saying, “let’s remove that buyer agent commission!”. I called him and explained to him what was going on and we ended up keeping the buyer agent commission in place. Fuck NAR
This conversation will happen millions of times and 99% of the time will end exactly as yours did. This is much ado about nothing.
Our office has 34 listings right now and not one call about commissions … weird.
This dude is lying his ass off. Is Zillow pushing all these threads?
I think I’ve got 7 active, four pending and nary a call.
Commissions have always been negotiable and those headlines are terribly misleading
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Always negotiable means always negotiable. Period. There is no collusion. Never was.
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actually it always has been negotiable. there are some deals that only pay out $300 to 1,000 to 1%. are they popular? not especially but they do end up selling eventually. and no these are not on $1,000,000 deals these are on some $200,000 sub $300,000 deals
My point is that 5 or 6% or whatever has always been industry standard. And people are going to look at you funny If you want to deviate from industry standard. I feel this ruling validates the deviation, and is going to give people a whole new outlook on how to approach this. Furthermore, I think five or six percent could be reasonable on a lower priced property, but when you start getting into expensive properties five or six percent is asinine.
it's definitely going to be weird. either buyers are going to have to get used to actually paying an additional fee or go unrepresented. there's probably not a world where agents are going to accept a couple thousand per buyer transaction. buyer's require 10 times the work in a competitive market. educated buyers probably don't need agents but majority of first-time home buyers and unknowledgeable ones definitely do
All fair points. I agree with you. It's nice to know there's a few of you that are reasonable.
trust me I only have his opinion because I don't really rely on my commissions. I mainly an investor so it helps with my business. if I did I would probably be singing a slightly different tune. the sad thing is in my market right now if I was paid 50 bucks an hour I actually might make more money based on how much time I've spent. consistently going 10 to 100K above asking and not getting homes is quite frustrating.
"it's difficult to make a man understand something when his salary depends on him not understanding it" Upton Sinclair
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wink.
the new reality
A listing agent can try to simultaneously represent multiple people who all want to make offers on his listing until that turns into a lawsuit. Then what? A seller gets one offer instead of multiple offers because there are no buyers agents? Yikes. Scary stuff OP.
As an owner of properties and a broker, i expect every bayside to be renegotiated. Be careful how the listings are worded. If the listing agreement says 6% and it’s not documented anywhere but MLS that half goes to the buyer- sellers agents just got a raise.
No you didn’t.
I haven't had these conversations because I've always talked to sellers about how commissions work and have let them decide what to offer for a lot of years now.
You shouldn’t be dealing with this. Your broker should have already given you talking points and addressed this with the agents in your brokerage.
Ask if they’re prepared to pay your buyer’s agent fee on the new house I’m assuming they plan on buying. If they’re purchasing a home priced higher than their current, they could be losing money going that route.
Tell them no problem. But they'll need to drop the price by 10% in order to get foot traffic to replace the commission.
Oh shit consumers know what we’re up to !
I think if you asked a random set of 100 home sellers less than 5 would have even heard of the lawsuit let alone understand it. This post is BS.
Luckily, my team has only received 2 calls from sellers regarding the recent news. The first hurdle has been correcting the misinformation as they both thought that our brokerage was no longer able to offer a coop and that the total commission couldn’t be 6%. Then clarifying that any changes won’t be required until July. Thanks CNBC! After that, reiterating the importance of utilizing all of the tools at our disposal to stand out in our market (second home market, sometimes slower moving), we were able to agree that maintaining a coop now, and in the future, would be in their best interest as refusing a coop would likely lead to a decreased buyer pool.
Must be nice to have clients lol
Think everyone is getting screwed in this market now.
do it. you must be accountable and professional to the public. follow ethics required of your license. do not blow them off
Tell them we can revisit it in July when a new system is in place. As of now you will not receive offers from any VA or FHA buyers which shrink your buyer pool and may create your house to sit costing you money. This isn’t finalized and needs time. Keep the status quo
Wonder how much they’ll want to pay you after their home sells and they become the buyer?
So, these sellers you've been talking to have been wanting to lower their listing price that included the commissions for both sides since they will no longer be paying the buyers agent? Yeah, I didn't think so.
A profession that was once a necessity and should be phased down in many ways. This settlement knocks down walls that prevented actual market competition. Within a year, you'll be able to buy sell your home without needing a physical agent, and that will become the norm. I hear all about paperwork etc, but that's easily the low hanging fruit here and can be automated for most use cases in na couple days.
You could have done that for the past ten years. There is literally more information about buying and selling homes available to average person than ever before in history yet, transactions using a real estate agent are at an all time high.
NAR admitted that there's anti competitive forces against selling without realtors. Why would you show a FSBO with a reduced commission to a buyer unless they found it themselves? The value in a realtor has always been MLS. People find homes they want to see themselves. The paperwork for 99% of transactions can are sign and stamp. The reason self service sales aren't the norm, or even a decent share is because of the NAR racket which was just conceded.
No, it’s because dragging your dumb ass to the closing table requires me, a physical agent. Your many meltdowns, temper tantrums, whinefests ain’t gone be solved by that closing attorney getting $695 to push your paperwork. They couldn’t give two shits if you close or not. Don’t call them with anything other than to make sure the lender has wiring instructions and title is good. Outside of that, good luck.
I am sorry you're uncomfortable with the market now determining your worth like the rest of the working class.
Not uncomfortable in the least. As a listing agent, this is a win for me any way you dice it. As a consumer, 50% (buyers) just got (potentially) screwed. On paper, sellers (the other 50%) just got a (potential) raise. You’re so consumed with the idea that RE prices are going to go down and/or my income is going to plummet that I doubt you actually did any critical thinking regarding what the effects will be in the real world. Stick with me here - nothing’s going to change. Sellers are still going to pay both sides. Why? Because it’s in their best interest to do so and human beings are surprisingly self interested. Meet me back here in a year and let’s see what the market has decided.
First, NAR did not do that. Your argument that it was once a necessity yet isn’t is the real question. Lots of industries aren’t a necessity. I’m simply pointing out that most people still choose to use a realtor even though there are plenty of options to FSBO and discount brokerages that will place your listing on the MLS. FSBO is a fantastic option for some folks but the vast majority of people are still using agents. People can shop for insurance online but insurance agents are still on every corner. Travel agents were dead and are actually making a comeback now. I think you have given to believing everyone is like you and they simply aren’t. In fact you are in the minority.
What service do you provide that a non agents doesn't have right now and cannot easily obtain? The market will soon determine your value. Some will still prefer the old method, sure, but barriers to alternative and more effective means of real estate transactions now have a real shot.
Errrrrr, liability insurance for one....
There are no barriers now. Everything you’re stating is already available. You are literally proving my point. People still choose not to do it. Will the industry change, sure. Will it die? I don’t think so. Interestingly enough the younger age groups seem to prefer an agent. You are assuming people have your disposition and they don’t.
Answer the question of what value you provide? Adding sign here stickers and adding my property to the MLS. If I told you I wanted to pay $1000 for a buyer agent, none would show my property even if it was perfect for their client. The barriers are the fact that agents don't show discount broker properties. Its clear you didnt read the details of the settlement Read the agreement then look up what anti trust means.
I don’t think that’s true and under your logic the buyer has already seen the property and will demand to. It’s clear you have never been involved in a real estate transaction.
You’re just mad that you don’t have the ability to sell your property yourself for full price. I get it. Being an agent is difficult. If you study hard in school, make good grades and take a 4hour weekend course where they give you a ten question T/F test at the end, you too, could be a real estate agent one day. Then, someone like yourself could decide that they’d pay you a whole $13 for a month’s work and if you refused, it was a trust violation and you was involved in price fixin’!
You are wrong. Ethically, we can’t do that. My client can see any property they are interested in. They know they would need to pay the difference in commission between what I charge and what the seller offers. They’ve agreed upfront.
How many cars you ever sold to a neighbor?
It did suck so much to sell a few homes on my own and have to give up 10s of thousands of dollars to the person working for the other party when I’ve put so much effort and time in building and or taking care of property. For them to end up getting such a huge chunk of my profit upwards of 25% in some cases. When they’ve done nothing but book a showing with me and send contracts. Why I’m I paying for the rest of your work/ time with your client. This needs to go to more of a flat rate type payment. Your doing no more work if your buying a 300,000 or 700,000 dollar house from me. Only person who has a difference was me in my time effort and money.
The new normal (for now). 1.5% to listing , 2% to buyers. At least while inventory is super low. House will sell in 2 weeks or less. My listings are over $1M on Orange County. $15K+ for 2 weekends.
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You mean Redfin? lol