New Commission -3%

[Anonymous]

Anonymous wrote:

Anonymous wrote:+1

50 hours on average is enough.

Tippy Toppy agents should get 100 bucks an hour and it will be 5K extra frcition cost for a buyer.

Couple of thousands should be enough in most cases just like all other countries. Agents are not doing anything extra in US for charging that high.

Me personally, I’d be fine with it. For every client where I get an easy commission, there are many clients who I have worked with for many hours who don’t buy. Some kind of a retainer upfront where I am making a guaranteed 5k per
client would be just fine with me.

Yes, it will be fair that way because easty clients will pay less and harder clients will pay more. Every body will have cost based on actual work/effort that way. Right now it's tied to nothing.

[Anonymous]

Compensation based on actual effort, not a novel idea. Happens in most profession.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s ideal if you’re selling your house and then buying new construction — not much of a need for a buyers agent with new construction from a builder imo.

As someone who represents clients in new construction, I really cannot tell you how inaccurate this is. I closed a new construction transaction in January where the builder had forgotten to include the fireplace in the specs! The only reason it was caught is because I personally reviewed the final layout and compared it to our purchase contract. I was also able to give the buyer a nice rebate.

As someone who has purchased new construction several times, I can assure you that I most definitely would have realized if a builder were omitting something as significant as a fireplace that I had specified! And I would have done so without needing a real estate agent to assist me.

And I think that’s great for you. Some people are really savvy and smart about this kind of stuff, other people really are not, and they just trust the builder to do the right thing. But if you think real estate agents are shady, let me tell you builders are the shadiest people around. And they will cut corners like nobody’s business in order to make a buck. Another poster commented below. Yeah, that person must’ve been really clueless. Yes, the buyer was pretty clueless. Also, is a larger issue, this is a pretty educated forum, in a high market area, but there are plenty of homebuyers, who are not native English speakers, our first time buyers, are just starting out, and they really do benefit from the guidance of a good Real Estate Agent. I’m not personally worried for me. I have been doing real estate for 15 years and it’s actually a side hustle for me. I’m in Attorney, landlord, and a small scale property developer, and I do it all on the side just because I really enjoy working with people and helping them buy homes, and yes, the money is great. But buyers agency is a lot of work and a lot of investment in my clients. And if the commission isn’t worth my time, I just won’t do it. Overall, it will be good if some of the idiots who are agents are weed out of the industry, and it is good if people are paying less, the fees are exorbitant. However, I do really think that this will impact the representation that Buyers can get, and I think that Buyers are already pretty screwed in this market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s ideal if you’re selling your house and then buying new construction — not much of a need for a buyers agent with new construction from a builder imo.

As someone who represents clients in new construction, I really cannot tell you how inaccurate this is. I closed a new construction transaction in January where the builder had forgotten to include the fireplace in the specs! The only reason it was caught is because I personally reviewed the final layout and compared it to our purchase contract. I was also able to give the buyer a nice rebate.

As someone who has purchased new construction several times, I can assure you that I most definitely would have realized if a builder were omitting something as significant as a fireplace that I had specified! And I would have done so without needing a real estate agent to assist me.

Yeah but checking that spec list was clearly worth $20k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Woo hoo, about time!! I look for real estate listings myself and I contact listing agents myself. Why do I still need to pay someone $60,000 (3% of $1 million) for that service? I was going to do FSBO but if the commission goes down to 1% I might consider using an agent.

NAR will also no longer get exclusive access to MLS.

Just the fact that you wrote this explains how ignorant you are about the process. You will still be paying that 60k. Do you really think that sellers are going to cut their price 60 K for you? The only difference is now you will be paying that baked in commission without actually having an agent.

Also, you could have always paid one percent. The commissions are not fixed and have never been.

Apparently the court did not agree with you!

[Anonymous]

Anonymous wrote:I like how some of the people posting here act like the sky will fall because people won't be locked into high fees anymore. As if there is something so special about a real estate transaction that it can't be allowed to have competitive pricing for broker services.

Exactly. If a buyer’s agent is worth 3%, then good buyers agents can continue to charge and earn 3%. No one is saying a real estate agent can’t charge 3% to a buyer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I like how some of the people posting here act like the sky will fall because people won't be locked into high fees anymore. As if there is something so special about a real estate transaction that it can't be allowed to have competitive pricing for broker services.

Exactly. If a buyer’s agent is worth 3%, then good buyers agents can continue to charge and earn 3%. No one is saying a real estate agent can’t charge 3% to a buyer.

+1

If buyers agent are worth 20K to some one they can pay 20K. If they are worth 2K to some one then they will pay 2K.

Only difference here is that buyers can decide if agents services for 20 hours are worth 2K or 20K.

[Anonymous]

Anonymous wrote:If this settlement goes through it is a big deal and will upend the whole real estate industry. Winner in the end will be Zillow, CoStar/homes.com and other listing portals.

Buyers will be alone and at the mercy of listing agents working for sellers again. We will have lawsuits and more regulation, making it more expensive for everyone to transact real estate. For example, there will likely be the need for “transfer insurance” purchased by the seller to protect themselves against lawsuits from unrepresented buyers (as is the case in many countries abroad.)

Regardless, short term the pain will be felt by Realtors and brokerages. The high interest rates, low volume of transactions and a loss of 50pct of the commission pot, will make more than half the real estate agents leave the industry and let their licenses expire. Buyer agency is dead - nobody but some of the well off will want to pay enough to make it worth it for the agent. The ones that need the buyer agent the most will be the ones least able to afford one.

Agents on this board are understandably frustrated - their current careers are likely over. Hopefully the economy doesn’t go into full recession as well.

Thanks for this tidbit. Listing soon.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If this settlement goes through it is a big deal and will upend the whole real estate industry. Winner in the end will be Zillow, CoStar/homes.com and other listing portals.

Buyers will be alone and at the mercy of listing agents working for sellers again. We will have lawsuits and more regulation, making it more expensive for everyone to transact real estate. For example, there will likely be the need for “transfer insurance” purchased by the seller to protect themselves against lawsuits from unrepresented buyers (as is the case in many countries abroad.)

Regardless, short term the pain will be felt by Realtors and brokerages. The high interest rates, low volume of transactions and a loss of 50pct of the commission pot, will make more than half the real estate agents leave the industry and let their licenses expire. Buyer agency is dead - nobody but some of the well off will want to pay enough to make it worth it for the agent. The ones that need the buyer agent the most will be the ones least able to afford one.

Agents on this board are understandably frustrated - their current careers are likely over. Hopefully the economy doesn’t go into full recession as well.

Thanks for this tidbit. Listing soon.

You know, it is not hard to buy a house without a buyer's agent? We did this more than 10 years ago (before this new policy) and it was easy, and the seller's agent accepted a lower price because she did not have to pay the buyer's agent. Worked out for all parties.

[Anonymous]

The new deal…whatever it will be….. will reduce the number of realtors substantially. For many it is part time work with little expertise needed so if you sold a few houses a year you could make decent money. What will be interesting is if someone comes up with a new model that really revolutionizes the industry the way internet travel sites disrupted the travel agent business.

[Anonymous]

Anonymous wrote:The new deal…whatever it will be….. will reduce the number of realtors substantially. For many it is part time work with little expertise needed so if you sold a few houses a year you could make decent money. What will be interesting is if someone comes up with a new model that really revolutionizes the industry the way internet travel sites disrupted the travel agent business.

Yes, completely agree. I recall a Shark Tank episode several years ago where someone had developed an app that allowed a prospective home buyer to come across a home for sale and, using the app, unlock the lockbox and tour the home without the buyers agent physically there. Barbara (who is a realtor) was dead set against it. I don't think it got a deal. But that's an example of innovation that was stymied because real estate agents wanted to make sure buyers agents weren't being cut out. It's going to be really cool to see how AI and automation change this up.

[Anonymous]

Anonymous wrote:Key Terms from NAR on the proposed settlement:
• Release of liability: The agreement would release NAR, over one million NAR members, all state/territorial and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below from liability for the types of claims brought in these cases on behalf of home sellers related to broker commissions.
o NAR fought to include all members in the release and was able to ensure more than one million members are included. Despite NAR’s efforts, agents affiliated with HomeServices of America and its related companies—the last corporate defendant still litigating the Sitzer-Burnett case—are not released under the settlement, nor are employees of the remaining corporate defendants named in the cases covered by this settlement.
• Compensation offers moved off the MLS: NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs). This change will go into effect in mid-July 2024.
• Written agreements for MLS participants acting for buyers: While NAR has been advocating for the use of written agreements for years, in this settlement we have agreed to require MLS participants working with buyers to enter into written representation agreements with their buyers. This change will go into effect in mid-July 2024.
• Settlement payment: NAR would pay $418 million over approximately four years. This is a substantial sum, and it will be incumbent on NAR to use our remaining resources in the most effective way possible to continue delivering on our core mission. NAR’s membership dues for 2024 will not change because of this payment.
• NAR continues to deny any wrongdoing: NAR has long maintained — and we continue to believe — that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers. They promote access to property ownership, particularly for lower- and middle-income buyers who can have a difficult-enough time saving for a down payment. With this settlement, NAR is confident it and its members can still achieve all those goals.

Warren Buffett's Berkshire Hathaway company with the deep pockets

[Anonymous]

Anonymous wrote:Big benefit for sellers. Huge downside for buyers. Example- I have a west coast client looking “in Arlington and DC”. He was in town last weekend and I showed him 16 properties over two days- from Brentwood to Shaw to Congress Heights. I spent a ton of time assembling and pre screening the properties. Am I going to work with another client like him anymore? Nope. Now he can arrange showings with 16 separate listing agents, and the listing agents can figure out who is going to write his offer and represent his interests.

Or he can hire an agent willing to work hourly. And this will be newer agents who have no clue what they are doing. Trust me I am trying to make a purchase in another state and the agent I was referred to is so useless. So he can pay hourly for his nouveau agent or not have an agent at all.

It’s already hard enough for buyers these days. This is a massive blow to homebuyers.

Oh please. My personal assistant or anyone from task rabbit can do this coordination of showing schedules and thanks to the wonders of technology, how much pre screening are you even doing that I can’t do on my own or someone on my behalf? Most people would get an attorney to prepare and review docs at an hourly rate. So what value do you even add that would come anywhere close to the 3% commission you are accustom to collecting automatically, whether or not you do a poor job or ok job?
I have bought and sold several houses for n different parts of the country and with each transaction, there has been a realtor that has mucked up some part or the deal at the last minute. And still collected a fat commission.
I can’t wait to sell next time with an a la cart or minimal service realtor so that everyone gets a paid more appropriately for the skill and service they provide.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Woo hoo, about time!! I look for real estate listings myself and I contact listing agents myself. Why do I still need to pay someone $60,000 (3% of $1 million) for that service? I was going to do FSBO but if the commission goes down to 1% I might consider using an agent.

NAR will also no longer get exclusive access to MLS.

Just the fact that you wrote this explains how ignorant you are about the process. You will still be paying that 60k. Do you really think that sellers are going to cut their price 60 K for you? The only difference is now you will be paying that baked in commission without actually having an agent.

Also, you could have always paid one percent. The commissions are not fixed and have never been.

Well, there was enough funny business going on with commissions that there was a successful lawsuit over it that is forcing a big change in business practices — as well as a $400+ million settlement. You can’t deny the obvious.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Woo hoo, about time!! I look for real estate listings myself and I contact listing agents myself. Why do I still need to pay someone $60,000 (3% of $1 million) for that service? I was going to do FSBO but if the commission goes down to 1% I might consider using an agent.

NAR will also no longer get exclusive access to MLS.

Just the fact that you wrote this explains how ignorant you are about the process. You will still be paying that 60k. Do you really think that sellers are going to cut their price 60 K for you? The only difference is now you will be paying that baked in commission without actually having an agent.

Also, you could have always paid one percent. The commissions are not fixed and have never been.

Well, there was enough funny business going on with commissions that there was a successful lawsuit over it that is forcing a big change in business practices — as well as a $400+ million settlement. You can’t deny the obvious.

Unfortunately, uninformed buyers don’t know what they don’t know and will forego representation for a perceived upfront savings. They will then deal with a listing agent that is required to be honest, but not fair working on behalf of their principal, the seller. After they realize they don’t get a good deal and didn’t do their due diligence, they will cry wolf and regulation will need to be added. It will be a mess and so short-sighted.