What does new realtor fees mean for buyers?

[Anonymous]

How will this work? Will buyers have to pay 2.5 percent to their agents out of pocket?

[Anonymous]

FHA and VA borrowers will probably have to pay commissions out of pocket. It remains to be seen what will happen with traditional mortgages. I think there will be low cost, fee only, buyers agents popping up. It's one thing if the commission is rolled into the closing and the buyer never really feels it, but someone looking for their first home has to cut a $12,500 check for a 500k purchase, the will start to question the value of the service.

[Anonymous]

The Redfin model.

[Anonymous]

Anonymous wrote:FHA and VA borrowers will probably have to pay commissions out of pocket. It remains to be seen what will happen with traditional mortgages. I think there will be low cost, fee only, buyers agents popping up. It's one thing if the commission is rolled into the closing and the buyer never really feels it, but someone looking for their first home has to cut a $12,500 check for a 500k purchase, the will start to question the value of the service.

VA borrowers are prohibited from paying agent commissions.

[Anonymous]

Anonymous wrote:The Redfin model.

The Redfin model is that a buyer agent rebates part of the commission to the buyer. If the seller is paying no commission to the buyer's agent, what can be rebated? Or do you think the buyer agent wil ask the buyer to pay a commission of -- say 2.5% -- and then have 1% rebated?

[Anonymous]

Anonymous wrote:

Anonymous wrote:The Redfin model.

The Redfin model is that a buyer agent rebates part of the commission to the buyer. If the seller is paying no commission to the buyer's agent, what can be rebated? Or do you think the buyer agent wil ask the buyer to pay a commission of -- say 2.5% -- and then have 1% rebated?

I think what’s more important about Redfin’s model is that they have a tier of “Associate Agents” who are more entry level and are paid something like ~$60 to $120 for every house tour.

The buyer doesn’t pay that itemized amount (Redfin pays it), but I can see a near future business model where a buyer pays a very junior agent $x per tour, and then pays a flat fee to a more experienced negotiator agent & lawyer when they are ready to make an offer.

That model would work well for more experienced buyers.

[Anonymous]

Anonymous wrote:How will this work? Will buyers have to pay 2.5 percent to their agents out of pocket?

You can pay 50 bucks an hour just like any other profession.

Or

You can pay 5K flat fee.

You can pay whatver is worth the service is for you.

[Anonymous]

How do you pay your plumber, or electrician, or appliance repair-person? You get quotes, and then you pick one. Some of those quotes may be hourly rates, while some may be all-in rates. And of course each person giving you the quote brings different levels of experience and will have a different sales pitch.

So just like with every other service you need, you'll take all this into account and you'll pick one. Or if you feel like you have the skills to handle it on your own, you can do that also.

[Anonymous]

When I first started looking (a few years ago), it seemed that open houses were the norm. But these days you often need an agent just to walk through the house. Will that will change?

[Anonymous]

What new rates?

[Anonymous]

Anonymous wrote:How do you pay your plumber, or electrician, or appliance repair-person? You get quotes, and then you pick one. Some of those quotes may be hourly rates, while some may be all-in rates. And of course each person giving you the quote brings different levels of experience and will have a different sales pitch.

So just like with every other service you need, you'll take all this into account and you'll pick one. Or if you feel like you have the skills to handle it on your own, you can do that also.

Exactly this. It’s a service the buyers will negotiate and pay for - finally. Buyers will need to figure out how much they will need to save based on those estimates.

[Anonymous]

Anonymous wrote:FHA and VA borrowers will probably have to pay commissions out of pocket. It remains to be seen what will happen with traditional mortgages. I think there will be low cost, fee only, buyers agents popping up. It's one thing if the commission is rolled into the closing and the buyer never really feels it, but someone looking for their first home has to cut a $12,500 check for a 500k purchase, the will start to question the value of the service.

I’m sorry but why should realtor commissions be baked into the closing?? And 12,500 is extreme. How many hours and houses did the buyers see? Do you realize how many hours that is? Moving costs can’t be rolled in so I expect realtor costs won’t be either.

I think instead buyers will just use their title company’s real estate lawyer to draft the documents. This is what I’ve done and it was like $1500. Buyers will go to open houses to view and more open houses will be common.

[Anonymous]

Anonymous wrote:When I first started looking (a few years ago), it seemed that open houses were the norm. But these days you often need an agent just to walk through the house. Will that will change?

I think the sellers agent should walk you through. Buyers should take what they see and are told with a grain of salt. They aren’t that stupid.

[Anonymous]

Just don't use a buyer's agent. We're about to sell and we fully expect our realtor to show the home to any buyers and write the contracts for them. This is just basic service and part of her fiduciary duty to us to do everything they can to sell the house.

We don't even use buyer realtors anymore and have never had a problem with the sellers realtors showing us (as buyers) the homes. We can write the contracts but all of them have offered to do this too.

[Anonymous]

Anonymous wrote:When I first started looking (a few years ago), it seemed that open houses were the norm. But these days you often need an agent just to walk through the house. Will that will change?

Think open houses will be more important and the days and times may change. Some agents are already doing open houses on Friday from 4 to 6 pm or 5 to 7 pm depending on daylight. Buyers can walk through the houses without paying an agent and then work directly with the listing agent to write the contract if they don't want to pay a buyer agent. NAR has sold the idea that buyers need an agent to represent them to support the current commission structure, but they really don't. I just wrote a contract for a friend who was buying his neighbor's house. I told him what to do and he did it. Maybe it took 3 hours tops. I am a high volume producer, and my broker gives me lots of leeway to do what I want. Rather than pay me, I asked him to donate $1,000 to a charity I support.