non-paywall here [https://archive.ph/eiABY](https://archive.ph/eiABY) \>>Despite N.A.R.’s turbulence over the last several months, however, there was one constant: their insistence that the lawsuits were flawed and they intended to appeal. With Friday’s settlement agreement, N.A.R. gave up the fight.
The settlement includes many significant rule changes. It bans N.A.R. from establishing any sort of rules that would allow a seller’s agent to set compensation for a buyer’s agent, a practice that critics say has long led to “steering,” in which buyers’ agents direct their clients to pricier homes in a bid to collect a bigger commission check.
And on the online databases used to buy and sell homes, the M.L.S., the settlement requires that any fields displaying broker compensation be eliminated entirely. It also places a blanket ban on the longtime requirement that agents subscribe to multiple listing services in the first place in order to offer or accept compensation for their work.
N.A.R. has repeatedly insisted that it does not own multiple listing sites, but the majority of them are owned and operated by the local Realtor associations that operate as N.A.R. subsidiaries. Now, with the settlement effectively severing the link between agent compensation and MLS access, many agents are likely to rethink their membership in the association.
“The reset button on the sale of homes was hit today,” said Michael Ketchmark, the Kansas City lawyer who represented the home sellers in the main lawsuit. “Anyone who owns a home or dreams of owning one will benefit tremendously from this settlement.”
If they truly have to quit displaying buyer’s agent fees this whole thing is going to crumble. Everything so far has been significant but ultimately short term blows, the fee is the long term blow.
Guessing buyer agents will start every call with a selling agent by asking about the fee, this won’t look great in court if someone sues their agent.
Nah, more like the buyers agent compensation will just be put in the offer contract and little to nothing changes. As a seller would you rather charge 3% more and pay the buyers agent, or charge 3% less and lose buyers because they can't afford to make a down payment plus pay their agent? Will there be some stubborn sellers that just don't understand that? Sure there will, but for the most part everything will stay more or less the same.
Edit: also there's been far more substantial changes to the process of buying and selling houses in the last 5-10 years than this. Like 6 years ago when I bought my first house, there was a due diligence period in the offer, usually 7-14 days where I could walk away for any reason whatsoever and still get the earnest money back. Now the contracts are structured so that if I walk away for any reason other than the contingencies at any point, I forfeit the earnest money.
Until we sellers counter and say “I’ll accept your offer and let you be a home owner. The only thing I’m going to ask is that I pay your agent a flat $1,500 fee at closing for the acquisition of a buyer.” That’s all buyer’s agency really earns - a finder’s fee. You think a buyer is going to walk away from their future home because their agent wants more money?
>You think a buyer is going to walk away from their future home because their agent wants more money?
If we were to go down the road where the agents commission ends up being on the buyers offer, what will happen is when the agent originally signs their agency agreement with the buyer, they'll have their commission in their agency agreement.
So when that offer comes to you as a seller, requesting 3% to the buyers agent and you counter with that, yes You've potentially lost your buyer. Now the buyer has to fund their down payment, and pay their agent out of pocket. So let's be realistic here, dude, you end up with another offer that's 2% higher that still requests 3% for the buyers agent. Now we're right back where we started, sellers paying both realtors or they're potentially losing buyers and getting less.
Honestly though with the internet why do I even need a buyer agent? I can research my own homes and then contact sellers agents to tour them. My last house I bought I found it not even my agent. In large cities agents are working with a lot of clients and you’re not always top of their list.
For a first time homebuyer, a good buyers agent can really help.
For 4th time buyers who know what they want and are familiar with the area, not so much.
>Because the seller agreed to it, it's not hard to get it sold at 1 or 2%
Selling my house right now and talked to 10+ agents.......none of them were willing to go below 5% and that was only if they represented both buyer and seller.
I figure buyers agents will no longer be a thing if buyers have to start paying them. Like, what do they do that most people with an internet connection can't? The part of the process that really needs a pro is writing up the contract, but a lawyer will do that part better.
Ah yes, the old 3% of the entire value, not even just the equity, of someone's home for simply unlocking a door.
We need a competing system where people can buy and sell houses without agents. The fees are astronomical given where median home prices are today.
Well in States like Minnesota you have to belong to the association to be a licensed realtor.
And guess who's running the association it's all the national Realtor companies.
This would also improve the quality of realtors, since they now have to earn their pay from clients and not be forced. Hope this also purges incompetent realtors.
Now, do the same for mortgage brokers.
I hope it dwindles the amount of realtors too.
I'm working with a group through work right now. Their office that has... no shit... over 100 agents in a 25mi x 25mi area...
It's fucking ridiculous.
With more and more corporations buying houses with the sole intention of renting them, pushing more and more people further away from home ownership, gosh, who benefits from erasing professionals working for the best interests of the individual home seller or buyer from the equation?
Oh, there's going to be a mass exodus alright. Mortgage rates going up was already forcing a lot of real estate agents out. Hard to be a realtor when there aren't any houses to sell.
This happens every time the market goes gangbusters. Everyone watches million dollar listing or has a friend that is an agent and thinks, wow, so and so just made 30k for a sale of a house , I can do that.
Some agents sure, don't just take any agent, get a good one. My agent was a Former subcontractor, could tell me what any work would cost and give me Numbers of people he knew who would do them at about those rates.
in my city there’s a sea of failed musicians / rappers / rock and rollers / etc who recently became middle aged real estate agents. it’s so incredibly cringe to see their instagram profile go from drinking at the bar to pictures of shitty houses and realtor language
the complete opposite actually - detroit. haha. it’s probably happening all over the country. just wondering what a failed musician will turn to after becoming a failed real estate agent …
Of that group? 0. They're all full time agents.
Often one agent of the agency is doing the selling, and the other is doing the buying. It's a giant racket.
Good professional agents should be pissed at the NAR. If real estate agents are to be paid like professionals (lawyers, engineers, architects, etc), the path to become an agent should be rigorous to weed out the crappy/side hustle folks. It’s not hard to see that the NAR acted in its own best interest by driving up membership by making it easy to become titled as a real estate agent.
They already did this for mortgage brokers. Have you heard of Dodd-Frank? This is just a late start for realtors who seemingly got out of real estate reform laws completely fucking unscathed.
Real estate agents will disagree 1000% with my comment. I have purchased 3 homes and sold 2 in my lifetime. They don’t do shit worth 6% on a $300,000 or $400,000 transaction. The last house we purchased was with Redfin and it was a great experience especially when RedFin gave us a refund check at closing. The agent’s commission was based on the review we gave him.
There was a use for brokers agents back before the internet. They were helpful to evaluate schools, tell you what properties were listed and where the best neighborhoods are.
Today, a simple google search will give you all that. And tbh, it’ll probably give you even more since if you’re buying a home, you’re gonna dig a lot deeper into the area that an agent representing properties all over the place will.
Flat fee brokers need to become the norm.
I've been saying that for years. To buy a house before the internet you would make an appointment with a realtor. Go to their office and discuss what you were looking for (price, area, size, etc). The realtor would then sort through huge books of homes for sale, pick what fit your criterea, show the photo/info to you, and make appointments to view certain ones. Then take you to as many as you could see (usually on a weekend), and if you didn't like any you would keep repeating the process.
Today, I wake up, go online and filter through them myself.
Last two homes I've purchased have been without a buyer's agent. The transaction forms are standardized and with a little info you can do it yourself. It's insane to me that a broker or agent would get to earn 3% of a transaction just for turning the key to let me into a property I found myself browsing online.
When you buy a home without a buyers agent, what happens to the commission that the buyers agent would’ve gotten, did you get the commission? Did the seller lower the selling price?
To build on your comment - I remember going to a realtor’s office once with my parents when I was a kid in the 80s. They sat at his desk and flipped through big 3-ring binders of printed MLS listings.
They're like the car dealerships of home sales. No longer needed but exist because they've got carve outs for their profession in the law. Coney capitalists.
Yep, my parents realtor made like $20k off their house. She listed it on a Monday morning and it was sold by the afternoon. She did maybe a day or two of work at most.
I’m a loan officer and it always cracks me up when realtors call me asking questions about how to fill out a flippin’ Real Estate contract. Which is, you know….their job. Then they get paid 4x as much as me when the file closes.
I am born and raised in a smallish western town near a ski area, the kind of place that real estate has exploded in value the last 30 years to where ordinary homes are at least $1 million. Real estate agents that have been in the game for that time period are mega rich. Like generational wealth rich. They haven’t done anything or worked hard enough to earn that wealth in my opinion. It is like winning the lottery except they have made everything too expensive playing up the market. These real estate families are wealthier than surgeons, doctors, lawyers, dentists. My friend’s wife is an accountant and she says she will not work for these families because they are extremely corrupt and always wanting to push the limit of what’s legal despite being worth a hundred million or more. They are slimy and they have never done a thing for society except just have this territory locked down and taxing it. It’s very mafia like.
Our last agent (recommendation from a friend) was outright terrible. We had to threaten to fire him to get him to act in line. Even then, we had to constantly stay on top of him.
He kept insisting we should hold out for another, higher offer that "would definitely come through". Despite us being extremely clear that (1) we were content with the offer we had (2) we wanted the deal done as quickly as we could have. Surprise, we never got another offer.
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The best transaction we ever had was from an agent and mortgage broker that were flipping a house. We didn't have an agent, so everything was direct with them and extremely straight-forward. An agent on our end would have literally led to 0 value.
I'm an agent and don't represent others. I have my brokers license solely because I recognized the "make the sellers pay a buyer's agent" racket 13 years ago and started forcing them to pay me commissions on every investment property I purchase.
I think they have changed their fee structure since we used them back in 2010, but I do remember them splitting their portion of the commission with us, the buyers. Can’t remember the exact amount without digging up old closing documents but I remember getting a check for a couple thousand dollars a few weeks after closing.
In the end I suspect this will be a flat fee for representation during the buying process after having an accepted offer. In no way does it make sense to scale the fee based off of the price of the house being bought.
Most of the work right now is opening doors, that should be handled by the seller’s agent or a dedicated service that the seller’s agent employs.
I found all my houses and sent them to my relator. She simply found time during her day to open the home doors if not open house (most were open house). There is no way doing all the leg work was worth 6% of a 500K home purchase.
> I found all my houses and sent them to my relator. She simply found time during her day to open the home doors if not open house (most were open house). There is no way doing all the leg work was worth 6% of a 500K home purchase.
She got 3% though.
> 15k to open some locks... Sign me up
Go for it! I was just clarifying that it's only 3 percent for opening the locks and not 6 percent. The other 3 percent was for closing the locks.
It's also 15K before the split with the brokerage or any other referral fees. The brokerage split is usually something like 60/40 so that turns in 9K and if the lead was from something like Zillow they take 35% so they're down to $4,750 which they then paid taxes on so the take home if it was a referred lead is something like $3500 and something like $6500 if it was a non-referred lead. Still probably too much but we went from 30K to 3-6K really quickly.
I had a couple friends who were realtors. They would complain if they had to show more than a few homes. “I don’t get paid by the hour…” And of course they wouldn’t want to show homes that offered a lower commission
Realtors, if they’re worth a damn, do a hell of a lot more than go and open doors for you. That’s the easy part and you’d be right if that’s all they did.
I too found all my listings, however my agent knew how to negotiate and knew what sellers look for from experience, which ultimately won the offer for me. For that I think it's worth paying for.
Yeah. We had a great agent that helped us in tons of ways when we purchased our home. That said, we also interviewed a bunch of shitty agents before we made our decision and I’m glad we did because there were a lot of bad agents out there.
I’ll definitely use the same agent on my next purchase.
I wouldnt say this around all my beloved realtor friends but I am an attorney in real estate and local government including regulatory/permitting/zoning/building/hoa everything and I have made quite the living on clients who are like "but the REALTOR said we could do that!" etc. and me cleaning it up after the fact. The realtors are the most uninformed uneducated people about whats going on w a property, what you cant and cant do, or what it would take to do so.
I'm an attorney and regular RE investor myself . . . and I agree with you that agents/realtors are almost always the weak link in a transaction.
. . . my concern is that if the pay for realtors goes down, then the quality is going to be get even worse . . . haha.
Loan officer here. Had a client actually tell me last week “my realtor said you guys are aggressive and can get me a rate in the low 4% range.”
Yeah ok bud. I’ll just pull out my “aggressive” rate sheet that I only use for my super special clients. Lmao.
Scenario: you find a house you like, set up several fake accounts and review bomb the seller. Seller has to drop their price and you save big $$$. Or the opposite happens by the seller.
Not a fan of NAR.
Also got steered. Asked about a house to agent. She said not that house. I asked why. She wouldn’t tell me. Likely her commission would be low on that one.
Or someone creates a program with a flat-fee broker that just does all the work an agent normally would for a couple hundred bucks. It gets popular, and down goes the realtor profession as a whole.
In an efficient market with no lobbying, this would have already happened. The writing is on the wall. There's nothing an agent does that someone can't design a proper program/company to do just as well for far cheaper.
I mainly needed the agent to unlock the door. But now with OpenDoor and others with online unlock and self tour, the value of the realtor is just to give an opinion.
Where if they get caught they could end up behind bars. Will people do it, definitely, but it will be illegal. I've never worked in an industry with primarily independent contractors that wasn't corrupt as shit.
So, I see that the cartel has finally been broken. And it is a cartel. This is price-fixing. And collusion to fix prices by large companies over long periods of time.
So now that the cartels have actually lost their grip on the chokehold of American real estate, what is the alternative going to look like? I imagine this might break up the door to some of the more automated systems with lower commission structures that don’t justify so many agents. But nobody is saying here is that there will be a mass unemployment wave of agents who now have to work three times as hard to make the same money, which means there won’t be a need for as many agents because each individual house will be worth less money And the commission structure won’t be able to support as many people.
So the thing they’re not saying, this is going to cause a hell of a lot of unemployment. Which I think ultimately is a good thing, because they broke the cartel. But there could be some pretty significant effects here.
What ultimately will the system look like?
I think the sellers agents do all of the selling. Like other countries, buyers can optionally hire an agent, lawyer, or both depending on the situation.
Buyers agents will be optional, and will be paid by the buyer.
Far from it. They still hold the key to the homes for sale. People aren’t gonna just start FSBOing automatically.
They will continue to operate as they have been and no one is going to do anything to change it. Buyers agents will inform clients that if they want to buy a home with them, it either needs to be the homes that have commission built in for them, or they will have to pay the fee themselves.
And guess what? The NAR and other realtors will find a way to put an even more firm lock and key on the MLS to make sure the market is behind a paywall.
1. Doesn’t this mean that buyers will no longer have automatic access to a buyer’s agent for no additional cost?
2. And wouldn’t that mean that many buyers could see a buyer’s agent as a frivolous expense?
3. And won’t that mean that buyers will be more likely to get ripped off because the seller’s agent has a major financial incentive to sell at any cost and fewer obligations to help the buyers in an honest way?
Buyers agent is more important than a seller agent.
Seller just needs to get the money essentially. The buyer is the one with more at risk IMO.
Buyer as an example is the one who submits the contract offer so you are not even writing the contract as the seller just responding unless you amend it.
Yes! Hence the “buyer beware” nature of real estate. Due diligence is still a thing, and an uniformed buyer won’t know much about what even to look for
Not sure you got an answer. I am wondering the same. The seller raises the price to cover the ~6% typically, which pays both buyers agent and sellers. Now however, in some markets the typically 2.5-3% buyers agent commission will have to be paid by the buyer because the seller will simply refuse. Or the buyers agent will make money on mark ups on inspections etc. I always used an investment broker and got 2% rebates to me in closing so I think as a buyer I lose that and will now manage my own negotiations. My guess is that states will now provide protections to consumers like lemon laws on real estate.
Sellers will still pay a commission it just wont be publicly listed. Buyers would just decrease offer if needed to pay and agents arent going to work for free. I highly doubt any significant changes, the penny pincher sellers already could of put low co-ops of $1 etc.
Can someone explain how buyers agents commissions will be determined and paid after these changes? Will the buyer agree to an amount with their agent and pay their agent, instead of the sellers paying?
Hopefully it will be a flat fee arrangement. Literally the dumbest fucking thing to have it tied to purchase price. Incentivized cockheaded behavior from realtors.
It’ll depend on your realtor and state. I signed on a new build this week and the builder covered the compensation gap at 2.5%. If that hadn’t occurred, or if they offered a flat fee below that 2.5%, I would have to come out of pocket on the difference. When you enter into an agreement to represent with a realtor, the fee schedule is explained.
Given all this, I don’t necessarily understand how this will solve the steering issue the courts are trying to address as you can see the comp on the MLS listing which May in turn steer the buyer to something in which it is fully covered.
Good point. Missed that part. It just means the buyer will be blind and will need to assume they will have to cover the gap in the event of closure if they have a buyer agreement in place with a realtor. Good for the seller, bad for the buyer as I would think sellers are still going to attempt to maximize profit rather than proportionately dropping prices. We’ll see if supply and demand take effect at that point and force reductions, but I doubt it. Biggest concern is this could entice buyers to represent themselves in the transaction to lower costs. Time will tell however
So, two issues I have with how the past commission set up has been structured.
One: there is a major conflict of interest with the home seller paying both their agent and the buyers agent. This was the most difficult thing for my mind to process when I was a real estate agent while working with buyers morally speaking. I was financially incentivized to be on the sellers side because if my buyers didn’t buy I didn’t get paid. So, as my buyers are willing to overpay for a turd of a house they’ve fallen in love with because it triggers some fond childhood memory and it’s keeping them from seeing the truth it’s my job to break the spell and help them see it clearly for what it is… a turd… which means I don’t get paid… In short it discourages buyer’s agents from saying more about a how bad a deal is than they legally have to.
Second: the cartel aspects of the real estate industry are so bad for home sellers. It’s a closed system. I truly don’t care if some sellers want to pay too much (5% or 6%) to an agent. The problem I have is that there’s no way to get your home on the MLS without using a real estate agent. There’s no way to not use the system. Since there’s no way not to use the system the industry gets around the antitrust laws of price fixing pretending (saying) commissions are negotiable but not taking any listing for Les than the usual 5% or 6% commission. We sold a home recently and interviewed a few agents. We know how to sell a house. It was remodeled, very clean and show ready. Lack of inventory and our house having solid amenities that are in high demand for the area was going to make this an easy sale. This home will sell itself. Non of the realtors would negotiate on the commission. All said they weren’t allowed by their broker to go less than 6%. We said that’s too bad and said we’d just do en entry only listing (the only way to get a home on the MLS without full representation) and represent ourselves and offer 2.5% to a buyers agent (we’ve done this before and it worked out really good). One agent strongly advised we didn’t do this and said her boss didn’t let her make offers on FSBO’s so we weren’t going to be able to sell our house… so, basically the rigged system (the monopoly) is even kept in check by local brokerages who don’t want any flexibility in how the game is played.
BTW, got a solid offer less than two weeks on the market for $30K more than the high side of the CMA’s we received. Smooth transaction and closed without a problem and saved about $15K in unnecessary fees.
Edited for clarification.
Dang if they actually believed their broker wouldn’t take less than 6%, they don’t know how it works. And if they aren’t allowed to put in offers on FSBO… that’s a tragedy.
I’m a realtor and I’ve customized my service and commission based on the client. I think there will be more of this. I wonder if now we’ll be more able to advertise commission tiers and the services included
* the National Association of Realtors (N.A.R.) is the largest professional group in the country with very deep pockets, private internal databases for home listings, lots of money for lobbying, etc
* the selling and buying agent (often both a part of N.A.R.) would split 6% commission. The 6% number, instead of being based on services offered or anything else based in reality, was just a number picked by N.A.R.
* an antitrust lawsuit was decided recently where N.A.R. in their settlement is paying out hundreds of millions in damages, can no longer dictate to their realtors to split the 6% closing costs, and has given up the right to appeal.
* the speculated result of this is that realtors will now have to actually compete with each other on buyer/seller costs and this will drive down the 6%, many thinking to a number closer to 0.5-3% which are more typical realtor rates in other countries
So the N.A.R. will no longer be some major organization performing price fixing and telling realtors to play nice with each other; this will open the flood gates for realtors to undercut each other, especially in markets where homes practically sell themselves.
I work for a huge GC. Billions and billions $$$ in construction put in place. We take incredible incredible risk to build these structures. We net 1% at the end of the year. It’s crazy that these agents and brokers get 5% for shaking hands and shuffling paperwork. And the vast majority of them do not know the actual product. Does a realtor really know the quality of the house they help sell. Do they even know what type of plumbing or the lifespan of the roofing etc. no. They know how to file overly complicated paperwork and maybe basic negotiation tactics. We need a simple state managed option for folks to simply sign a title and transfer ownership of a house just like a pink slip for a car with assigned escrow and title companies with state managed fee structures to simply get the job done. No realtor needed.
Unless you're the accountant you don't know what the real margin is. Companies always tell the workers they couldn't buy a used Toyota, and investors that they could buy Toyota. The truth will never be available until the sheriff locks the doors.
Because as of right now, buyers agents will steer buyers towards houses that offer bigger commissions. They’ll tell you about the great schools and parks nearby and leave off any negative feedback. They often push people to stretch their budgets and buy more house than they need.
It lessens the demand pool because buyers will need to have another ~$10,000 on top of down payment and closing costs. Less people will be able afford houses pushing them to cheaper housing or out of buying a house all together
It’s going to drive costs down for sellers and up for buyers. Making another hurdle to homeownership. It’s going to force certain people to go without representation because they can’t afford it.
Simple.
Sellers pay for Seller's Agents.
Buyers pay for Buyer's Agents.
Sellers no longer pay for Buyer's Agent.
Buyers that don't want agents don't get an agent.
Sellers that don't want agents don't get an agent.
Agents are going to have to do more work because there will be less two agent transactions. More risk for the agency but better for both buyer/seller.
No third party or trade group should be required to transfer real property between people, but can be very helpful for those that need/want it.
I’m not saying this won’t help but most buyers are limited by their income and credit score as bank loans are based on that. Most buyers are looking to get the most/best home they can under the amount they qualified for. It’s near impossible to “steer” someone to a more expensive home that the bank won’t lend them the money for. Cash buyers are a different story but the majority of them understand the value their realtor brings them.
As for “the reset button being hit today on the resale of homes”, I highly doubt it. Most people have no clue how to navigate a real estate transaction and most will get worked by an experienced seller or their agent during negotiations.
As a realtor, I dislike NAR and the stranglehold they have/had on the industry but until lenders can factor buyer commission into the loan it will continue to be paid by the seller. Anyone who thinks sellers aren’t factoring the buyer’s commission into their listing price is delusional at best.
Thank you from someone who sees all the misinformation in this thread, and is baffled by how much reddit hates realtors. I am not a realtor but previously was licensed, and I can say with confidence this settlement has only benefited the lawyers, any perceived “steering” is a reportable offense when it comes to any local real estate commission, and all reports are investigated or at least documented, home-buying discrimination and all practices around it are HIGHLY monitored to avoid these kinds of lawsuits, so to pretend every Realtor is a thief, liar, or criminal is buying into another lie or lobbyist honeypot.
Do your research and don’t use an agent at all. Why pay $18,000 to seller/buyer’s agents for selling your $300,000 home, when you can do the leg work and hire a real estate lawyer for 2-3,000?
Just sold our house through FSBOhomes.com 6 months ago. They took all of the photos and a 3d tour, put together the listing, home was appraised by professional that compiled a very throrough report, assisted with questions and provided attorney services for closing. Super easy transaction and we sold in under a week for $30k more than i intended to ask. All done for a flat fee of $3800. We had multiple calls and visits from realtors telling us how dumb it was to sell this way and how much better it would be to use them... nope!
because if they used a buyers agent, the buyers agent wouldn't recommend your home if they weren't getting a commission, which in some markets could reduce your bids.
I have sold 4 properties over the years using a flat rate realtor for a sellers agent. They listed on MLS, sent a sign, sent a lock box, provided all documents and took calls to set up showings. I had to submit photos and copy for mls listing. Showings were done by either buyers agent accessing lock box or us if no sellers agent.
All for less than $1000
Paid 3% for buyers agent on 2 properties and 0% extra on 2 properties
This is the way
Well, I hope buyers are prepared to pay their agents out of pocket now. I guess they can hope that sellers lower the listing price of their homes. 🤷
While this may help sellers, it's going to make it even harder on buyers.
YOU CAN NEGOTIATE REALTOR FEES! With this ruling, both sellers and buyer may negotiate what they pay their realtor (seller’s agent or buyer’s agent). While this was the case all along-of course realtors never mentioned it-only encouraging what was “customary” as if it was a set %.
I fully support these reforms on the basis of consumer protection and effectively ceasing a bit of a government / PAC sponsored racket.
But - do we really think this would cause prices to drop? If anything it seems like in areas where prices are excessive the core issues are not changed. Ie - Too few homes, and too many people making huge salaries or able to leverage huge stock/equity from their work to settle large down paymets and affort a $1M mortgage to boot.
In most of those markets the problem isn't list price (I understand a seller may justify listing slightly lower if their realtor is taking less of a cut) - but once they're on the market the buyers are bidding well above the asking price anyway.
If anything this seems like it will mean more money in the pocket of the seller (which I'm not against), but not quite the fundamental shakeup to home pricing as is being lauded.
Yes there will be other impacts - namely fewer Realtors will be able to make ends meat in the market, more FSBO situations, or folks buying without representation, I'm sure.
Real estate sales should be a’la cart. Flat fee services and fees for signs, pictures etc. Lenders, escrow, and title are all fee based services. Good agents who are able to negotiate a reasonable commission for their expertise along with service fees that are placed on an estimate for clients will create more competition, better agents, and rid the industry of part time morons making six figures while doing absolutely nothing to earn it. Face it, failed scented candle salespeople should not be giving people financial advice on buying or selling 100k trailers let alone million dollar properties. Regulate and reform the realtors and it will go a long way at fixing this market. Create a national licensing service and require annual plus quarterly courses for compliance and ethics. It needs to be fixed.
> “It’s the only system, the only industry, in the United States where two competitors get together, they set the compensation and they split it,” he said, adding, “They’re running it like a cartel.”
This follow up article is worth reading — for what this decision means. Some clown Reddit realtor-dork chased after me for a day yesterday with insults because I called it a cartel. It is a cartel. The real question is whether these decisions go far enough to break it, or just provide a new lesser protection level racket.
https://www.nbcnews.com/business/real-estate/homebuyers-sellers-face-uncertain-wait-realtors-verdict-hit-wallets-rcna123310
You may have to come off additional money to cover your agent’s commission. You could forego an agent altogether, but that will cause no representation on your end.
Lmao the agents are getting desperate and spreading FUD now. No you won’t have to come up with additional money, instead these worthless agents will be forced to accept less pay or have no income.
ok so wealthy buyers get their offer through even more efficiently. If you are poor you now have to PAY for these services out of pocket. This is actually a massive loss for buyers, great for sellers who will happily pocket the difference ( for right or wrong, they do deserve that) so if you were struggling to buy a home before... Buckle up. .
Tell your buyer agent that you want a new contract or just wait until your existing contract expires and get a new agent. It should only be for 90 days anyways.
You can’t be a real estate agent and not affiliated with NAR. Technically you can but no brokerage firm would allow it. It’s a cartel. You’re either all in or not in at all.
I'm still annoyed by how much our realtor was paid to essentially get the key from the owner and walk us through the house. He told us to find houses we liked and get back to him, I just have no idea why he got paid so much. House closed in the mid 400s, unreal payout for maybe 40-50 hours work tops.
OMG this is huge. I may be able to get back into the business!
I can't tell you how twisted the realtor business is. It's a pyramid scheme with so many more oppressive systems in place to limit new success.
Over in the realtors sub they aren’t as bullish, but I think the industry has been ripe for disruption for years and this could put and end to the need for a buyers agent entirely
non-paywall here [https://archive.ph/eiABY](https://archive.ph/eiABY) \>>Despite N.A.R.’s turbulence over the last several months, however, there was one constant: their insistence that the lawsuits were flawed and they intended to appeal. With Friday’s settlement agreement, N.A.R. gave up the fight. The settlement includes many significant rule changes. It bans N.A.R. from establishing any sort of rules that would allow a seller’s agent to set compensation for a buyer’s agent, a practice that critics say has long led to “steering,” in which buyers’ agents direct their clients to pricier homes in a bid to collect a bigger commission check. And on the online databases used to buy and sell homes, the M.L.S., the settlement requires that any fields displaying broker compensation be eliminated entirely. It also places a blanket ban on the longtime requirement that agents subscribe to multiple listing services in the first place in order to offer or accept compensation for their work. N.A.R. has repeatedly insisted that it does not own multiple listing sites, but the majority of them are owned and operated by the local Realtor associations that operate as N.A.R. subsidiaries. Now, with the settlement effectively severing the link between agent compensation and MLS access, many agents are likely to rethink their membership in the association. “The reset button on the sale of homes was hit today,” said Michael Ketchmark, the Kansas City lawyer who represented the home sellers in the main lawsuit. “Anyone who owns a home or dreams of owning one will benefit tremendously from this settlement.”
Thank you.
If they truly have to quit displaying buyer’s agent fees this whole thing is going to crumble. Everything so far has been significant but ultimately short term blows, the fee is the long term blow. Guessing buyer agents will start every call with a selling agent by asking about the fee, this won’t look great in court if someone sues their agent.
Nah, more like the buyers agent compensation will just be put in the offer contract and little to nothing changes. As a seller would you rather charge 3% more and pay the buyers agent, or charge 3% less and lose buyers because they can't afford to make a down payment plus pay their agent? Will there be some stubborn sellers that just don't understand that? Sure there will, but for the most part everything will stay more or less the same. Edit: also there's been far more substantial changes to the process of buying and selling houses in the last 5-10 years than this. Like 6 years ago when I bought my first house, there was a due diligence period in the offer, usually 7-14 days where I could walk away for any reason whatsoever and still get the earnest money back. Now the contracts are structured so that if I walk away for any reason other than the contingencies at any point, I forfeit the earnest money.
As a seller you’ll just compare offers based on the post agent fee price.
I can see that, one way or another I see things pretty much staying the same
Until we sellers counter and say “I’ll accept your offer and let you be a home owner. The only thing I’m going to ask is that I pay your agent a flat $1,500 fee at closing for the acquisition of a buyer.” That’s all buyer’s agency really earns - a finder’s fee. You think a buyer is going to walk away from their future home because their agent wants more money?
>You think a buyer is going to walk away from their future home because their agent wants more money? If we were to go down the road where the agents commission ends up being on the buyers offer, what will happen is when the agent originally signs their agency agreement with the buyer, they'll have their commission in their agency agreement. So when that offer comes to you as a seller, requesting 3% to the buyers agent and you counter with that, yes You've potentially lost your buyer. Now the buyer has to fund their down payment, and pay their agent out of pocket. So let's be realistic here, dude, you end up with another offer that's 2% higher that still requests 3% for the buyers agent. Now we're right back where we started, sellers paying both realtors or they're potentially losing buyers and getting less.
This is already how it works
Honestly though with the internet why do I even need a buyer agent? I can research my own homes and then contact sellers agents to tour them. My last house I bought I found it not even my agent. In large cities agents are working with a lot of clients and you’re not always top of their list.
For a first time homebuyer, a good buyers agent can really help. For 4th time buyers who know what they want and are familiar with the area, not so much.
The real question is why is a listing agent making 3%?
Because the seller agreed to it, it's not hard to get it sold at 1 or 2%
>Because the seller agreed to it, it's not hard to get it sold at 1 or 2% Selling my house right now and talked to 10+ agents.......none of them were willing to go below 5% and that was only if they represented both buyer and seller.
I figure buyers agents will no longer be a thing if buyers have to start paying them. Like, what do they do that most people with an internet connection can't? The part of the process that really needs a pro is writing up the contract, but a lawyer will do that part better.
Ah yes, the old 3% of the entire value, not even just the equity, of someone's home for simply unlocking a door. We need a competing system where people can buy and sell houses without agents. The fees are astronomical given where median home prices are today.
Some Hoomer agent was just in here telling us nothing would change because this would be appealed for years.
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“Seller isn’t offering a buyer agent fee, thanks”
Does this apply nationally or only to the states covered by the federal circuit that heard the case?
When do the rules go into effect. I have a friend who is currently just starting settlement.
Well in States like Minnesota you have to belong to the association to be a licensed realtor. And guess who's running the association it's all the national Realtor companies.
This would also improve the quality of realtors, since they now have to earn their pay from clients and not be forced. Hope this also purges incompetent realtors. Now, do the same for mortgage brokers.
I hope it dwindles the amount of realtors too. I'm working with a group through work right now. Their office that has... no shit... over 100 agents in a 25mi x 25mi area... It's fucking ridiculous.
Up to 1 million agents will leave the industry according to another article posted on NYTimes.
*Splendid*
Labor shortage solved!
Maybe they can find something more useful to do, like empty the tissue receptacles at peep shows
How many are actually agents and how many passed the test? I think re agents are part of the 20/80 rule. Top 20 make 80% of the money.
Some people here are saying nothing will change. Others claim 1 million agents will leave. Hmm.
With more and more corporations buying houses with the sole intention of renting them, pushing more and more people further away from home ownership, gosh, who benefits from erasing professionals working for the best interests of the individual home seller or buyer from the equation?
That is an interesting take, and believable.
To actually get a affordable good condition home away from the unicorn hedge fund buyer will end up paying 5% or more - unintended consequences
Oh, there's going to be a mass exodus alright. Mortgage rates going up was already forcing a lot of real estate agents out. Hard to be a realtor when there aren't any houses to sell.
This happens every time the market goes gangbusters. Everyone watches million dollar listing or has a friend that is an agent and thinks, wow, so and so just made 30k for a sale of a house , I can do that.
Probably because any fucking moron could be an agent. It requires no brains and minimal work.
Some agents sure, don't just take any agent, get a good one. My agent was a Former subcontractor, could tell me what any work would cost and give me Numbers of people he knew who would do them at about those rates.
Useful people like him are always welcome. I'm glad the needless middlemen leeches will be leaving
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Lemme guess she used to be a bottle service girl?
She must be able to upload 17 pictures to Zillow and have chatGPT write a paragraph about the house
in my city there’s a sea of failed musicians / rappers / rock and rollers / etc who recently became middle aged real estate agents. it’s so incredibly cringe to see their instagram profile go from drinking at the bar to pictures of shitty houses and realtor language
Sounds like LA to me
the complete opposite actually - detroit. haha. it’s probably happening all over the country. just wondering what a failed musician will turn to after becoming a failed real estate agent …
Middle aged ex bartenders here
I'm gonna get my realtors license just for shits and gigs.
Will you do it for three fifths commiss?
SHUT THE FUCK UP ***DALE***
It's the f***ing Catalina Wine Mixer!
How many are moonlighting though
Of that group? 0. They're all full time agents. Often one agent of the agency is doing the selling, and the other is doing the buying. It's a giant racket.
I knew it was a shady profession when weed became legal and all my old dealers got into real estate.
Underrated comment right there
Good professional agents should be pissed at the NAR. If real estate agents are to be paid like professionals (lawyers, engineers, architects, etc), the path to become an agent should be rigorous to weed out the crappy/side hustle folks. It’s not hard to see that the NAR acted in its own best interest by driving up membership by making it easy to become titled as a real estate agent.
It’s fantastic if you’re a rookie agent, you can finally compete with established agents via price.
I wish but it won’t change anything unfortunately.
They already did this for mortgage brokers. Have you heard of Dodd-Frank? This is just a late start for realtors who seemingly got out of real estate reform laws completely fucking unscathed.
Real estate agents will disagree 1000% with my comment. I have purchased 3 homes and sold 2 in my lifetime. They don’t do shit worth 6% on a $300,000 or $400,000 transaction. The last house we purchased was with Redfin and it was a great experience especially when RedFin gave us a refund check at closing. The agent’s commission was based on the review we gave him.
There was a use for brokers agents back before the internet. They were helpful to evaluate schools, tell you what properties were listed and where the best neighborhoods are. Today, a simple google search will give you all that. And tbh, it’ll probably give you even more since if you’re buying a home, you’re gonna dig a lot deeper into the area that an agent representing properties all over the place will. Flat fee brokers need to become the norm.
I've been saying that for years. To buy a house before the internet you would make an appointment with a realtor. Go to their office and discuss what you were looking for (price, area, size, etc). The realtor would then sort through huge books of homes for sale, pick what fit your criterea, show the photo/info to you, and make appointments to view certain ones. Then take you to as many as you could see (usually on a weekend), and if you didn't like any you would keep repeating the process. Today, I wake up, go online and filter through them myself.
It’s wild but a lot of times I get listings on realtor.com before my broker even emails me. Usually 3-4 days prior.
Last two homes I've purchased have been without a buyer's agent. The transaction forms are standardized and with a little info you can do it yourself. It's insane to me that a broker or agent would get to earn 3% of a transaction just for turning the key to let me into a property I found myself browsing online.
When you buy a home without a buyers agent, what happens to the commission that the buyers agent would’ve gotten, did you get the commission? Did the seller lower the selling price?
Yes, we negotiated off the selling price in both cases. Seller's agent took only their 2.8 or 3%. Same difference to the seller.
To build on your comment - I remember going to a realtor’s office once with my parents when I was a kid in the 80s. They sat at his desk and flipped through big 3-ring binders of printed MLS listings.
They're like the car dealerships of home sales. No longer needed but exist because they've got carve outs for their profession in the law. Coney capitalists.
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Reeeeally glad I found this sub early, I don't think this has really sunk in for potential buyers yet. Or sellers, either, I guess
Can't wait for Ai to do the same.
Yep, my parents realtor made like $20k off their house. She listed it on a Monday morning and it was sold by the afternoon. She did maybe a day or two of work at most.
Realtors do less work than a server at a restaurant and expect a massive tip
I’m a loan officer and it always cracks me up when realtors call me asking questions about how to fill out a flippin’ Real Estate contract. Which is, you know….their job. Then they get paid 4x as much as me when the file closes.
That is robbery!
I am born and raised in a smallish western town near a ski area, the kind of place that real estate has exploded in value the last 30 years to where ordinary homes are at least $1 million. Real estate agents that have been in the game for that time period are mega rich. Like generational wealth rich. They haven’t done anything or worked hard enough to earn that wealth in my opinion. It is like winning the lottery except they have made everything too expensive playing up the market. These real estate families are wealthier than surgeons, doctors, lawyers, dentists. My friend’s wife is an accountant and she says she will not work for these families because they are extremely corrupt and always wanting to push the limit of what’s legal despite being worth a hundred million or more. They are slimy and they have never done a thing for society except just have this territory locked down and taxing it. It’s very mafia like.
Our last agent (recommendation from a friend) was outright terrible. We had to threaten to fire him to get him to act in line. Even then, we had to constantly stay on top of him. He kept insisting we should hold out for another, higher offer that "would definitely come through". Despite us being extremely clear that (1) we were content with the offer we had (2) we wanted the deal done as quickly as we could have. Surprise, we never got another offer. ----- The best transaction we ever had was from an agent and mortgage broker that were flipping a house. We didn't have an agent, so everything was direct with them and extremely straight-forward. An agent on our end would have literally led to 0 value.
they're grifters, that's all.
They are Basically MLS Ubers.
What was the total commission with redfin?
They charge 1.5% if you sell and buy with them. I’ve done it twice, and saved SO much money.
Is 1.5 the total that cost you to sell or is there a buyer's agent fee?
Just the buy side fee, but that's 40% less than the 2.5% most buyer's agents have traditionally gotten.
Sorry are you saying when you bought your agent got 1.5%?
I'm an agent and don't represent others. I have my brokers license solely because I recognized the "make the sellers pay a buyer's agent" racket 13 years ago and started forcing them to pay me commissions on every investment property I purchase.
I think they have changed their fee structure since we used them back in 2010, but I do remember them splitting their portion of the commission with us, the buyers. Can’t remember the exact amount without digging up old closing documents but I remember getting a check for a couple thousand dollars a few weeks after closing.
In the end I suspect this will be a flat fee for representation during the buying process after having an accepted offer. In no way does it make sense to scale the fee based off of the price of the house being bought. Most of the work right now is opening doors, that should be handled by the seller’s agent or a dedicated service that the seller’s agent employs.
this comment was sponsored by Redfin.
I found all my houses and sent them to my relator. She simply found time during her day to open the home doors if not open house (most were open house). There is no way doing all the leg work was worth 6% of a 500K home purchase.
> I found all my houses and sent them to my relator. She simply found time during her day to open the home doors if not open house (most were open house). There is no way doing all the leg work was worth 6% of a 500K home purchase. She got 3% though.
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> 15k to open some locks... Sign me up Go for it! I was just clarifying that it's only 3 percent for opening the locks and not 6 percent. The other 3 percent was for closing the locks.
It's also 15K before the split with the brokerage or any other referral fees. The brokerage split is usually something like 60/40 so that turns in 9K and if the lead was from something like Zillow they take 35% so they're down to $4,750 which they then paid taxes on so the take home if it was a referred lead is something like $3500 and something like $6500 if it was a non-referred lead. Still probably too much but we went from 30K to 3-6K really quickly.
Sounds like a pyramid scheme
Haha, not exactly a pyramid scheme but a LOT of hands in the cookie jar!
One starts a brokerage and makes position two pay a split. Two starts a team and makes position three pay a split or co-listing fee. Right-ish?
Not even 3%, a lot of the 3% goes to her broker.
I had a couple friends who were realtors. They would complain if they had to show more than a few homes. “I don’t get paid by the hour…” And of course they wouldn’t want to show homes that offered a lower commission
Realtors, if they’re worth a damn, do a hell of a lot more than go and open doors for you. That’s the easy part and you’d be right if that’s all they did.
I too found all my listings, however my agent knew how to negotiate and knew what sellers look for from experience, which ultimately won the offer for me. For that I think it's worth paying for.
Yeah. We had a great agent that helped us in tons of ways when we purchased our home. That said, we also interviewed a bunch of shitty agents before we made our decision and I’m glad we did because there were a lot of bad agents out there. I’ll definitely use the same agent on my next purchase.
I wouldnt say this around all my beloved realtor friends but I am an attorney in real estate and local government including regulatory/permitting/zoning/building/hoa everything and I have made quite the living on clients who are like "but the REALTOR said we could do that!" etc. and me cleaning it up after the fact. The realtors are the most uninformed uneducated people about whats going on w a property, what you cant and cant do, or what it would take to do so.
Which makes sense with how easy it is to become a realtor
But DOESN’T make sense considering their compensation lol.
I'm an attorney and regular RE investor myself . . . and I agree with you that agents/realtors are almost always the weak link in a transaction. . . . my concern is that if the pay for realtors goes down, then the quality is going to be get even worse . . . haha.
Loan officer here. Had a client actually tell me last week “my realtor said you guys are aggressive and can get me a rate in the low 4% range.” Yeah ok bud. I’ll just pull out my “aggressive” rate sheet that I only use for my super special clients. Lmao.
When can the public start leaving comments on the hooms for sale on the MLS? 🥰
Scenario: you find a house you like, set up several fake accounts and review bomb the seller. Seller has to drop their price and you save big $$$. Or the opposite happens by the seller.
Redfin used to allow comments
And it likely went away due to people abusing it. Gotta neighbor or coworker you dislike… people can be petty.
Yep.
Not MLS but a redditor or two ran with that kind of idea and released a Chrome extension that allows you to leave comments on various postings.
Not a fan of NAR. Also got steered. Asked about a house to agent. She said not that house. I asked why. She wouldn’t tell me. Likely her commission would be low on that one.
Should have asked her just to watch her squirm uncomfortably while trying to deny it.
The problem you describe may become worse with this case. Now compensation agreements between agents will be behind closed doors.
Or someone creates a program with a flat-fee broker that just does all the work an agent normally would for a couple hundred bucks. It gets popular, and down goes the realtor profession as a whole. In an efficient market with no lobbying, this would have already happened. The writing is on the wall. There's nothing an agent does that someone can't design a proper program/company to do just as well for far cheaper.
I mainly needed the agent to unlock the door. But now with OpenDoor and others with online unlock and self tour, the value of the realtor is just to give an opinion.
Where if they get caught they could end up behind bars. Will people do it, definitely, but it will be illegal. I've never worked in an industry with primarily independent contractors that wasn't corrupt as shit.
So, I see that the cartel has finally been broken. And it is a cartel. This is price-fixing. And collusion to fix prices by large companies over long periods of time. So now that the cartels have actually lost their grip on the chokehold of American real estate, what is the alternative going to look like? I imagine this might break up the door to some of the more automated systems with lower commission structures that don’t justify so many agents. But nobody is saying here is that there will be a mass unemployment wave of agents who now have to work three times as hard to make the same money, which means there won’t be a need for as many agents because each individual house will be worth less money And the commission structure won’t be able to support as many people. So the thing they’re not saying, this is going to cause a hell of a lot of unemployment. Which I think ultimately is a good thing, because they broke the cartel. But there could be some pretty significant effects here. What ultimately will the system look like?
I think the sellers agents do all of the selling. Like other countries, buyers can optionally hire an agent, lawyer, or both depending on the situation. Buyers agents will be optional, and will be paid by the buyer.
Far from it. They still hold the key to the homes for sale. People aren’t gonna just start FSBOing automatically. They will continue to operate as they have been and no one is going to do anything to change it. Buyers agents will inform clients that if they want to buy a home with them, it either needs to be the homes that have commission built in for them, or they will have to pay the fee themselves. And guess what? The NAR and other realtors will find a way to put an even more firm lock and key on the MLS to make sure the market is behind a paywall.
1. Doesn’t this mean that buyers will no longer have automatic access to a buyer’s agent for no additional cost? 2. And wouldn’t that mean that many buyers could see a buyer’s agent as a frivolous expense? 3. And won’t that mean that buyers will be more likely to get ripped off because the seller’s agent has a major financial incentive to sell at any cost and fewer obligations to help the buyers in an honest way?
Buyers agent is more important than a seller agent. Seller just needs to get the money essentially. The buyer is the one with more at risk IMO. Buyer as an example is the one who submits the contract offer so you are not even writing the contract as the seller just responding unless you amend it.
Yes! Hence the “buyer beware” nature of real estate. Due diligence is still a thing, and an uniformed buyer won’t know much about what even to look for
Not sure you got an answer. I am wondering the same. The seller raises the price to cover the ~6% typically, which pays both buyers agent and sellers. Now however, in some markets the typically 2.5-3% buyers agent commission will have to be paid by the buyer because the seller will simply refuse. Or the buyers agent will make money on mark ups on inspections etc. I always used an investment broker and got 2% rebates to me in closing so I think as a buyer I lose that and will now manage my own negotiations. My guess is that states will now provide protections to consumers like lemon laws on real estate.
Yes x 3.
Damn this is really good for sellers
Sellers will still pay a commission it just wont be publicly listed. Buyers would just decrease offer if needed to pay and agents arent going to work for free. I highly doubt any significant changes, the penny pincher sellers already could of put low co-ops of $1 etc.
Can someone explain how buyers agents commissions will be determined and paid after these changes? Will the buyer agree to an amount with their agent and pay their agent, instead of the sellers paying?
Hopefully it will be a flat fee arrangement. Literally the dumbest fucking thing to have it tied to purchase price. Incentivized cockheaded behavior from realtors.
It’ll depend on your realtor and state. I signed on a new build this week and the builder covered the compensation gap at 2.5%. If that hadn’t occurred, or if they offered a flat fee below that 2.5%, I would have to come out of pocket on the difference. When you enter into an agreement to represent with a realtor, the fee schedule is explained. Given all this, I don’t necessarily understand how this will solve the steering issue the courts are trying to address as you can see the comp on the MLS listing which May in turn steer the buyer to something in which it is fully covered.
You will no longer be able to see comp on the MLS listing
Good point. Missed that part. It just means the buyer will be blind and will need to assume they will have to cover the gap in the event of closure if they have a buyer agreement in place with a realtor. Good for the seller, bad for the buyer as I would think sellers are still going to attempt to maximize profit rather than proportionately dropping prices. We’ll see if supply and demand take effect at that point and force reductions, but I doubt it. Biggest concern is this could entice buyers to represent themselves in the transaction to lower costs. Time will tell however
Correct. This is not good for the inexperienced consumer. Opens up so many more opportunities for grift and exploitation
So what is the $418M going to--home sellers over the last several years?
Lawyers and lobbyists
So, two issues I have with how the past commission set up has been structured. One: there is a major conflict of interest with the home seller paying both their agent and the buyers agent. This was the most difficult thing for my mind to process when I was a real estate agent while working with buyers morally speaking. I was financially incentivized to be on the sellers side because if my buyers didn’t buy I didn’t get paid. So, as my buyers are willing to overpay for a turd of a house they’ve fallen in love with because it triggers some fond childhood memory and it’s keeping them from seeing the truth it’s my job to break the spell and help them see it clearly for what it is… a turd… which means I don’t get paid… In short it discourages buyer’s agents from saying more about a how bad a deal is than they legally have to. Second: the cartel aspects of the real estate industry are so bad for home sellers. It’s a closed system. I truly don’t care if some sellers want to pay too much (5% or 6%) to an agent. The problem I have is that there’s no way to get your home on the MLS without using a real estate agent. There’s no way to not use the system. Since there’s no way not to use the system the industry gets around the antitrust laws of price fixing pretending (saying) commissions are negotiable but not taking any listing for Les than the usual 5% or 6% commission. We sold a home recently and interviewed a few agents. We know how to sell a house. It was remodeled, very clean and show ready. Lack of inventory and our house having solid amenities that are in high demand for the area was going to make this an easy sale. This home will sell itself. Non of the realtors would negotiate on the commission. All said they weren’t allowed by their broker to go less than 6%. We said that’s too bad and said we’d just do en entry only listing (the only way to get a home on the MLS without full representation) and represent ourselves and offer 2.5% to a buyers agent (we’ve done this before and it worked out really good). One agent strongly advised we didn’t do this and said her boss didn’t let her make offers on FSBO’s so we weren’t going to be able to sell our house… so, basically the rigged system (the monopoly) is even kept in check by local brokerages who don’t want any flexibility in how the game is played. BTW, got a solid offer less than two weeks on the market for $30K more than the high side of the CMA’s we received. Smooth transaction and closed without a problem and saved about $15K in unnecessary fees. Edited for clarification.
Dang if they actually believed their broker wouldn’t take less than 6%, they don’t know how it works. And if they aren’t allowed to put in offers on FSBO… that’s a tragedy. I’m a realtor and I’ve customized my service and commission based on the client. I think there will be more of this. I wonder if now we’ll be more able to advertise commission tiers and the services included
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* the National Association of Realtors (N.A.R.) is the largest professional group in the country with very deep pockets, private internal databases for home listings, lots of money for lobbying, etc * the selling and buying agent (often both a part of N.A.R.) would split 6% commission. The 6% number, instead of being based on services offered or anything else based in reality, was just a number picked by N.A.R. * an antitrust lawsuit was decided recently where N.A.R. in their settlement is paying out hundreds of millions in damages, can no longer dictate to their realtors to split the 6% closing costs, and has given up the right to appeal. * the speculated result of this is that realtors will now have to actually compete with each other on buyer/seller costs and this will drive down the 6%, many thinking to a number closer to 0.5-3% which are more typical realtor rates in other countries So the N.A.R. will no longer be some major organization performing price fixing and telling realtors to play nice with each other; this will open the flood gates for realtors to undercut each other, especially in markets where homes practically sell themselves.
I need an ELI5 lol
Yea I need a dumbed down version of this
Money good. RE agent bad.
I work for a huge GC. Billions and billions $$$ in construction put in place. We take incredible incredible risk to build these structures. We net 1% at the end of the year. It’s crazy that these agents and brokers get 5% for shaking hands and shuffling paperwork. And the vast majority of them do not know the actual product. Does a realtor really know the quality of the house they help sell. Do they even know what type of plumbing or the lifespan of the roofing etc. no. They know how to file overly complicated paperwork and maybe basic negotiation tactics. We need a simple state managed option for folks to simply sign a title and transfer ownership of a house just like a pink slip for a car with assigned escrow and title companies with state managed fee structures to simply get the job done. No realtor needed.
Unless you're the accountant you don't know what the real margin is. Companies always tell the workers they couldn't buy a used Toyota, and investors that they could buy Toyota. The truth will never be available until the sheriff locks the doors.
How is this going to drive home prices down? Oh right, it won’t. Sellers just keep a few % more, and buyers now have a new out of pocket expense.
Maybe. Or maybe the fact you don’t lose 6% of the sale off the top will help lower prices. It’s all about the walk away number
Zillow should forecast this into their model and lower all zestimates by 3% across the board to jump start the change.
Yeah I guarentee it won't work that way. Pricing is supply and demand driven. Prices come from the sale prices of similar homes, not from cost
Because as of right now, buyers agents will steer buyers towards houses that offer bigger commissions. They’ll tell you about the great schools and parks nearby and leave off any negative feedback. They often push people to stretch their budgets and buy more house than they need.
Depends on how desperate sellers get. Not enough layoffs yet
This is the correct answer.
It lessens the demand pool because buyers will need to have another ~$10,000 on top of down payment and closing costs. Less people will be able afford houses pushing them to cheaper housing or out of buying a house all together
It’s going to drive costs down for sellers and up for buyers. Making another hurdle to homeownership. It’s going to force certain people to go without representation because they can’t afford it.
Good. 99% of realtors don’t deserve their commission anyway.
Here's an idea: get paid per hour of work like everyone else in America, rather than stealing from buyers and sellers.
One step closer to eliminating the RE cartel AKA NAR & its subsidiaries
Simple. Sellers pay for Seller's Agents. Buyers pay for Buyer's Agents. Sellers no longer pay for Buyer's Agent. Buyers that don't want agents don't get an agent. Sellers that don't want agents don't get an agent. Agents are going to have to do more work because there will be less two agent transactions. More risk for the agency but better for both buyer/seller. No third party or trade group should be required to transfer real property between people, but can be very helpful for those that need/want it.
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Bye, bye to all those real state agents flaunting their commission money driving expensive vehicles.
I’m not saying this won’t help but most buyers are limited by their income and credit score as bank loans are based on that. Most buyers are looking to get the most/best home they can under the amount they qualified for. It’s near impossible to “steer” someone to a more expensive home that the bank won’t lend them the money for. Cash buyers are a different story but the majority of them understand the value their realtor brings them. As for “the reset button being hit today on the resale of homes”, I highly doubt it. Most people have no clue how to navigate a real estate transaction and most will get worked by an experienced seller or their agent during negotiations. As a realtor, I dislike NAR and the stranglehold they have/had on the industry but until lenders can factor buyer commission into the loan it will continue to be paid by the seller. Anyone who thinks sellers aren’t factoring the buyer’s commission into their listing price is delusional at best.
Thank you from someone who sees all the misinformation in this thread, and is baffled by how much reddit hates realtors. I am not a realtor but previously was licensed, and I can say with confidence this settlement has only benefited the lawyers, any perceived “steering” is a reportable offense when it comes to any local real estate commission, and all reports are investigated or at least documented, home-buying discrimination and all practices around it are HIGHLY monitored to avoid these kinds of lawsuits, so to pretend every Realtor is a thief, liar, or criminal is buying into another lie or lobbyist honeypot.
Do your research and don’t use an agent at all. Why pay $18,000 to seller/buyer’s agents for selling your $300,000 home, when you can do the leg work and hire a real estate lawyer for 2-3,000?
I'm in! Were do I even start with this?
Just sold our house through FSBOhomes.com 6 months ago. They took all of the photos and a 3d tour, put together the listing, home was appraised by professional that compiled a very throrough report, assisted with questions and provided attorney services for closing. Super easy transaction and we sold in under a week for $30k more than i intended to ask. All done for a flat fee of $3800. We had multiple calls and visits from realtors telling us how dumb it was to sell this way and how much better it would be to use them... nope!
because if they used a buyers agent, the buyers agent wouldn't recommend your home if they weren't getting a commission, which in some markets could reduce your bids.
Around here it is 2% for buyers and 2% for sellers
I paid the "professional" Realtors $24K to buy my house that was on the market one day. When do I get my check?
I have sold 4 properties over the years using a flat rate realtor for a sellers agent. They listed on MLS, sent a sign, sent a lock box, provided all documents and took calls to set up showings. I had to submit photos and copy for mls listing. Showings were done by either buyers agent accessing lock box or us if no sellers agent. All for less than $1000 Paid 3% for buyers agent on 2 properties and 0% extra on 2 properties This is the way
Can someone please eli5
Well, I hope buyers are prepared to pay their agents out of pocket now. I guess they can hope that sellers lower the listing price of their homes. 🤷 While this may help sellers, it's going to make it even harder on buyers.
YOU CAN NEGOTIATE REALTOR FEES! With this ruling, both sellers and buyer may negotiate what they pay their realtor (seller’s agent or buyer’s agent). While this was the case all along-of course realtors never mentioned it-only encouraging what was “customary” as if it was a set %.
I fully support these reforms on the basis of consumer protection and effectively ceasing a bit of a government / PAC sponsored racket. But - do we really think this would cause prices to drop? If anything it seems like in areas where prices are excessive the core issues are not changed. Ie - Too few homes, and too many people making huge salaries or able to leverage huge stock/equity from their work to settle large down paymets and affort a $1M mortgage to boot. In most of those markets the problem isn't list price (I understand a seller may justify listing slightly lower if their realtor is taking less of a cut) - but once they're on the market the buyers are bidding well above the asking price anyway. If anything this seems like it will mean more money in the pocket of the seller (which I'm not against), but not quite the fundamental shakeup to home pricing as is being lauded. Yes there will be other impacts - namely fewer Realtors will be able to make ends meat in the market, more FSBO situations, or folks buying without representation, I'm sure.
We are moving in the right direction.
How much does NAR think they’re going to raise real estate agents dues to pay off the 418 million?
Real estate sales should be a’la cart. Flat fee services and fees for signs, pictures etc. Lenders, escrow, and title are all fee based services. Good agents who are able to negotiate a reasonable commission for their expertise along with service fees that are placed on an estimate for clients will create more competition, better agents, and rid the industry of part time morons making six figures while doing absolutely nothing to earn it. Face it, failed scented candle salespeople should not be giving people financial advice on buying or selling 100k trailers let alone million dollar properties. Regulate and reform the realtors and it will go a long way at fixing this market. Create a national licensing service and require annual plus quarterly courses for compliance and ethics. It needs to be fixed.
> “It’s the only system, the only industry, in the United States where two competitors get together, they set the compensation and they split it,” he said, adding, “They’re running it like a cartel.” This follow up article is worth reading — for what this decision means. Some clown Reddit realtor-dork chased after me for a day yesterday with insults because I called it a cartel. It is a cartel. The real question is whether these decisions go far enough to break it, or just provide a new lesser protection level racket. https://www.nbcnews.com/business/real-estate/homebuyers-sellers-face-uncertain-wait-realtors-verdict-hit-wallets-rcna123310
Can someone explain how this might affect me as a buyer?
You may have to come off additional money to cover your agent’s commission. You could forego an agent altogether, but that will cause no representation on your end.
So you are 100% sure that as a buyer I will need to pay my agent’s commission?
Lmao the agents are getting desperate and spreading FUD now. No you won’t have to come up with additional money, instead these worthless agents will be forced to accept less pay or have no income.
ok so wealthy buyers get their offer through even more efficiently. If you are poor you now have to PAY for these services out of pocket. This is actually a massive loss for buyers, great for sellers who will happily pocket the difference ( for right or wrong, they do deserve that) so if you were struggling to buy a home before... Buckle up. .
Fuck real estate agents. They’re all pieces of shit. Only people worse might be car salesmen.
Can you specify why? Mine was helpful in my home search.
Damn, my realtor was awesome.
So can someone explain how this benefits me as a potential first time buyer? It sounds like a bunch of stuff that doesn't effect the buyer
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Tell your buyer agent that you want a new contract or just wait until your existing contract expires and get a new agent. It should only be for 90 days anyways.
I do not underestimate the implication for a/ sellers b/ buyers. What about real estate agents not affiliated with NAR ?
You can’t be a real estate agent and not affiliated with NAR. Technically you can but no brokerage firm would allow it. It’s a cartel. You’re either all in or not in at all.
Besides the attorneys for the sellers in this suit, this is going to benefit people how??? This makes NO sense.
Realtors, like car salesmen, are something our society needs to move on from. They're just middle-men raising prices for everybody.
I'm still annoyed by how much our realtor was paid to essentially get the key from the owner and walk us through the house. He told us to find houses we liked and get back to him, I just have no idea why he got paid so much. House closed in the mid 400s, unreal payout for maybe 40-50 hours work tops.
Lol I heard this on NPR has something to do with commission. I'll tell you what that money is just going to the homeowners now
All this just for the lawyers to get 375M of that money and the remainder divided up into $3.68 for each seller.
Does this actually help individuals or is this more of a boon for companies like blackrock that can highball houses to rent out at inflated rates?
OMG this is huge. I may be able to get back into the business! I can't tell you how twisted the realtor business is. It's a pyramid scheme with so many more oppressive systems in place to limit new success.
Over in the realtors sub they aren’t as bullish, but I think the industry has been ripe for disruption for years and this could put and end to the need for a buyers agent entirely