New Commission -3%

[Anonymous]

Anonymous wrote:

Anonymous wrote:How much money do realtors stand to lose now? I seem to know a few realtors in this area who have been making good money for years and it seems their income will be drastically cut

My Facebook friend is a real estate agent in McLean and she has got to be making some plans to adjust their lifestyle. Sold or represented the buyer in over 50 McLean homes in the past 2 years with her team, so some serious cash.

I hope all these real estate agents have been saving. I feel bad for them and hope they can get some retraining.

I agree, but it's better for society if they retrain where they can be of real service. We still need public school teachers...

[Anonymous]

Thank goodness for this change. We are one of the few countries with such high commissions.

The fact a seller has been required to pay for the buyer’s agent is bizarre and messed up. Try explaining that to someone in another western country. HOW does that make sense? It doesn’t.

A buyer should be hiring his or her own agent and welcome to pay whatever it is they want or the agent charges.

[Anonymous]

"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

[Anonymous]

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

OK, so play that out ...

2% is 1% each.

For an agent, that might be equal to 0.44% after a 50/50 split and the 6% haircut the brokers take off the top (agents typically only get 94% of their split).

So you sell your house for $1 million. The agent now pockets $4,400 from that. Out of which they have to pay for any marketing, staging (unless you pay separately for that), and pay taxes and their own license fees etc. So maybe their net is $2,500.

But that's a million dollar house. Now do it on a $500,000 house. Now it's $1,250.

I'll let you tell me if that's a fair amount or not. I guess it depends on how many hours they spend on the sale.

[Anonymous]

Anonymous wrote:Thank goodness for this change. We are one of the few countries with such high commissions.

The fact a seller has been required to pay for the buyer’s agent is bizarre and messed up. Try explaining that to someone in another western country. HOW does that make sense? It doesn’t.

A buyer should be hiring his or her own agent and welcome to pay whatever it is they want or the agent charges.

Actually, sellers of assets having to pay a finder's fee is a pretty common concept.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

What ethical consideration are you talking about? The agent has an ethical obligation to present all offers. The listing agent does not have an obligation to to write an offer for an unrepresented buyer though. Depending upon the state, in some cases the agent cannot represent a buyer and can only do ministerial acts.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

What ethical consideration are you talking about? The agent has an ethical obligation to present all offers. The listing agent does not have an obligation to to write an offer for an unrepresented buyer though. Depending upon the state, in some cases the agent cannot represent a buyer and can only do ministerial acts.

Do you really not understand how dual agency creates ethical issues? How one agent can't really represent both sides in a transaction?

https://www.rockethomes.com/blog/home-buying/dual-agency

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

OK, so play that out ...

2% is 1% each.

For an agent, that might be equal to 0.44% after a 50/50 split and the 6% haircut the brokers take off the top (agents typically only get 94% of their split).

So you sell your house for $1 million. The agent now pockets $4,400 from that. Out of which they have to pay for any marketing, staging (unless you pay separately for that), and pay taxes and their own license fees etc. So maybe their net is $2,500.

But that's a million dollar house. Now do it on a $500,000 house. Now it's $1,250.

I'll let you tell me if that's a fair amount or not. I guess it depends on how many hours they spend on the sale.

The market comprising the consumers of your services decides what your services are worth. If you provide services worth 5K, they are worth 5K. If you provide services worth $1,250, they are worth $1,250. You decide if the compensation is "fair". If not, find a new job.

The point is -- absent NAR cartel-ing the industry -- the real estate industry will function like every other comparable industry driven by macroeconomic forces.

[Anonymous]

Anonymous wrote:Looking to sell my house in Fairfax. It is $1M+ and spoke with a few agents. I have been quoted 3% total commission for buyer and seller agent by 4 different relators. I mean it's great but is this the trend anyone else is seeing as well?

Ask for a total commission of 1.5%. Or 2% max.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

Or offer 2% to the sellers agent and 0% to the buyers agent. At current prices, that’s a lot of money already.

Then I would offer only 1% to the seller's agent. No work, no money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

Or offer 2% to the sellers agent and 0% to the buyers agent. At current prices, that’s a lot of money already.

That works for expensive homes, for entry level homes, you've excluded buyers with VA loans or FHA loans. That may be a plus because those are a pain to deal with or a minus because you narrow the pool of buyers

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

OK, so play that out ...

2% is 1% each.

For an agent, that might be equal to 0.44% after a 50/50 split and the 6% haircut the brokers take off the top (agents typically only get 94% of their split).

So you sell your house for $1 million. The agent now pockets $4,400 from that. Out of which they have to pay for any marketing, staging (unless you pay separately for that), and pay taxes and their own license fees etc. So maybe their net is $2,500.

But that's a million dollar house. Now do it on a $500,000 house. Now it's $1,250.

I'll let you tell me if that's a fair amount or not. I guess it depends on how many hours they spend on the sale.

The market comprising the consumers of your services decides what your services are worth. If you provide services worth 5K, they are worth 5K. If you provide services worth $1,250, they are worth $1,250. You decide if the compensation is "fair". If not, find a new job.

The point is -- absent NAR cartel-ing the industry -- the real estate industry will function like every other comparable industry driven by macroeconomic forces.

And my point is that it will be a while before we see what new compensation model takes the old one's place. But I do think this probably won't play out the way you think -- either transactions may get more rocky or agents will find some different way to get their money. Hourly rates, maybe, but pay-as-you go. Or maybe fee-for-service -- want an open house? That'll be $500... Every trip to the house to let in an inspector? $200/hour. Every e-mail replied to? $200/hour, billed in 8 minute increments like a lawyer... Who knows. Remains to be seen.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
"Now, I bet some shady sellers' agents will try to avoid presenting un-represented buyers' offers"

Why would an agent NOT present an offer from an unrepresented buyer? What would be their motivation to do that?

NP it creates ethical considerations (yes, believe it or not, there are ethics, even regulations governing real estate agents). Dual agency, etc.

Moreover, it creates more work for THEM if they have to handle both the buyer and the seller. There will be even less incentive to do that now.

What ethical consideration are you talking about? The agent has an ethical obligation to present all offers. The listing agent does not have an obligation to to write an offer for an unrepresented buyer though. Depending upon the state, in some cases the agent cannot represent a buyer and can only do ministerial acts.

Do you really not understand how dual agency creates ethical issues? How one agent can't really represent both sides in a transaction?

https://www.rockethomes.com/blog/home-buying/dual-agency

I bought without a buyer's agent many years ago, and I got a good deal because the seller did not have to pay the buyer's agent, and there was NO problem with the seller's agent handling my offer or contract. I don't even recall having to write up a contract. I made the offer, it was accepted, and it went to settlement. Dead easy to buy without a buyer's agent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So we are about to list our house and have a listing agreement (not yet signed) giving our agent 5%, split with the buyer's agent. Should I counter now with 4% in light of this NAR ruling? My inclination is to give 4% and tell her to split it however she wants.

4% is pretty standard even now.

Why are you guys so afraid of your agents? Offer 2% to be split between the buyer and seller agent. At current prices, that's a lot of money already.

OK, so play that out ...

2% is 1% each.

For an agent, that might be equal to 0.44% after a 50/50 split and the 6% haircut the brokers take off the top (agents typically only get 94% of their split).

So you sell your house for $1 million. The agent now pockets $4,400 from that. Out of which they have to pay for any marketing, staging (unless you pay separately for that), and pay taxes and their own license fees etc. So maybe their net is $2,500.

But that's a million dollar house. Now do it on a $500,000 house. Now it's $1,250.

I'll let you tell me if that's a fair amount or not. I guess it depends on how many hours they spend on the sale.

The market comprising the consumers of your services decides what your services are worth. If you provide services worth 5K, they are worth 5K. If you provide services worth $1,250, they are worth $1,250. You decide if the compensation is "fair". If not, find a new job.

The point is -- absent NAR cartel-ing the industry -- the real estate industry will function like every other comparable industry driven by macroeconomic forces.

My in laws sold a million dollar home in the midwest last year. I think they got the commission to 5% (2.5 and 2.5). Their broker told them they needed to stage/paint/move stuff into the garage or storage. He had people who would do it but required my in-laws pay for it (didn't come our of commission). My in laws ended up having family over to move the big furniture and clean the house because they didn't want to pay the fee. We told them they should have had that be part of the contract and commission. The realtor did very little work. He also priced it for below market value (about 100K less than it was worth) because he thought it would drum up more interest. They got 50K above ask, but a neighbor who had a house not as nice or updated sold for even more because their initial ask was the correct price for the home! So sometimes pricing homes low backfire.

Another family friend sold home for 2 mil and staging was part of the commission, but this was probably when commission was 5-6%

Staging, etc will now be another fee you'll have to pay for.