Seeing a lot of first-time visitors on this one! If we haven’t met yet, I’m Tiffany, a Real Estate Attorney from North Carolina. I’ve got some more videos coming about these changes. Would love to have you subscribe!
People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.
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Finding financial advisors like Annette Marie Holt who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
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As a beginner, educate yourself, Learn the basics of investing and the stock market. There are many resources available online, including books, articles, and online courses. It’s a good idea to diversify your portfolio across different stocks and sectors to minimize risk. I’ve heard of people accruing over $550k during recessions and inflation, its important to do your own research.
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This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation.
We have been desperately trying to buy our first home for years. We finally have not only good credit, but great credit. We have a solid downpayment that we saved up throughout our entire 20s and early 30s. JUST WHEN we are in a good position to try pulling the trigger again in this market after Covid already moved the bar further away, the rates went back up above 7% and NOW we have to pay our agent commission too….That’s even more money that we now have to scrape up just to get our foot in the door. The asking prices are crazy. And we “make too much” to qualify for a FHA loan or first time home buyer grants. Combined we make $121,000 without OT. If this was 2019 we would be looking at getting a modest middle class, decent, and safe home in our area. Today, we are stuck with resorting to these horrible properties in unsafe neighborhoods with minimal land that are located in horrible school districts. The bar keeps moving and it’s breaking my heart. What was the point of all of these years of sacrifice and saving?? We wanted to provide a stable and middle class life for our future kids. So we have been waiting to have them. It feels like that dream is gone.
Even if the seller paid the commission before in reality the buyer pays for everything so you aren't actually paying anything extra that you would have in the first place.
You don't need to use a buyer's agent. Just take your offer straight to the listing agent. That's the way many buyers already bought their homes. Virtually every country in the western world has NO buyer agency involved in a home purchase -- the real estate process in USA is a giant money-milking con! Glad it's been dealt a kick in the teeth. In the UK, the commission at close of sale is typically 1% TOTAL, with NO buyer agent involved at any stage of the sale.
@@lanialost1320 if you dont know anything about houses you can always hire a property inspector your buyers agent doesnt always have your best interests in mind he wants the deal to go through so he gets paid
What you say about how transactions flow depends on the quality of the agents is absolutely true. Thank you for mentioning that. Right now I have a difficult transaction just because the other agent is terrible. He ignores emails and messages, react too late creating problems that would not be there if he knew what he was doing. I wish the clients of this type of agent knew the damage they bring to their own clients. Thanks for the review!
Lets be Honest . Anyone with a brain or who doesn't like to lie knows that the real estate game is extremely prejudice. It's racist. has nothing to do with skill more to do with who The buyer or seller likes and want to share their money with . Most likely it will be with a white person because they own the most real estate. That was purposely done a long time ago.No need to lie about that or ignore it... So I can see the only possible positive thing Is the mandatory buyer's agreement that way A buyer can't get all the information from one agent and then go work with another one ,because they like them for whatever reason.
It is more about the vagueness and problems caused behind the intent of the settlement. The lower end buyers will be without representation. It is now a pay to play world.
Do you really believe a buyers agent represents just their buyer? In my opinion NO they do not because their commission from a sale generally is the ONLY way a buyers agent is reimbursed. A buyers agent has, in my opinion, an automatic conflict of interest ....the buyers agent wants his/her thousands of dollars commission so the buyer is on his own. Before showing a home the Buying Agent will I believe need a legal document signed by the buyer agreeing that they should receive a specific percentage of the purchase price, or a specific amount of money, from the proceeds upon the sale. Not only that, the seller will need to agree in writing to that too. This all needs to be done before showing the home. Maybe the selling agent can have his/her seller agree to allow him/her to sign for the seller, but why should a selling agent agree when he can sell direct. Selling agents I think are going to be competing with more brokers for each and every listing, driving their commissions down. In my opinion the number of realtors is going to fall dramatically and quickly.
@@pia9343 Why should a buyer use a buyers agent? For thousands of dollars maybe tens of thousands, what does a buyer agent offer, especially when they have a conflict of interest because they only get paid if a sale is completed?
@@CeruleanSky1111 Possibly. BA has a choice of what they'd like to do...it will be interesting to see the models that come from this. Sure, a buyer can go unrepresented. Already happens. It's usually a painfully difficult transaction.
The DOJ and these greedy attorneys have disregarded WHY Buyer Agency Representation cane about in the first place. Remember the days of Let the Buyer Beware? What about Low income buyers, FHA buyers, etc. The News and these greedy attorneys are telling them they are going to have to pay for their own agency representation and if they can't afford it and the seller refuses to help ... oh well, let the buyer beware. Sellers who refuse to share will simply have their homes sit stagnant on the market with high days on market and will end up with price reductions equal to or surpassing the amount they think they save refusing to offer compensation not to mention if those sellers need to buy another home they will need to pay their buyer agent fee? Would that not be a total wash? Who benefits from all this? The attorneys and plaintiffs who used Realtors to sell their homes (which sold thanks to the agents). Who loses? Homebuyers who already have been abused by the corrupt federal reserve international banking cartel.
So true. The amount of unlawful dispossessions stemming from fabricated, forged documents fabricated and forged by law firms and attorneys. These docs are filed in our Registries across the country and used for the sole purpose of stealing homes.
I'm a realtor in NC. I've pieved together most of this from other sources but this is BY FAR the best, most comprehensive, and well laid out source of information. Thank you so much for doing this. I really appreciate this video! In North Carolina this is so much of the stuff we already do in practice. It's frustrating to think this is to increase transparency. Removing compensation from the MLS seems to me like the opposite of transparency. While I understand the not allowing for compensation over the agreed upon amount I do think this will work to standardized compensation because agents will not want to miss out on the extra percent so they will most likely write compensation to the highest they can get away with. Once again I really appreciate this video it is by far the best video I've seen on the subject. However I don't think this judgement will help the industry with transparency like it seeks to do.
I know exactly what is going to happen. Buyers who are unwilling to commit to paying any dollar amount toward their agent's commission will not sign a buyer/broker agreement and will attempt to buy a property on their own without represention. This means buyers will contact the listing agent directly to buy the property leaving the buyer's agent without a job.
Exactly! Buyers may just pay for a lawyer if the state does not have promulgated contracts to review and skip the buyers agent totally. The sellers agent does not have to take on dual agency if the buyer represents themselves. We’ve been doing this for years on homes we buy and even selling we have had buyers just make us an offer, we accept it and get everything to our title company and close the deals. It’s been easy.
Yes I agree. And comparatively a lawyer for a several hundred or a thousand dollars brings value not matched by tens of thousands of dollars spent on commissions to agents. 😢
Excellent video! I’ve been a realtor for 16 years and I’m not excited about some of these changes. Thank you for simplifying everything and explaining it so well! I really appreciate your video! One of the best I’ve heard!
So tell me from your perspective do you really think it’s fair that your fellow American pays $18k of there hard earned money on a $300k house to a middle man?
@@jonlj77it's all negotiable, but I've netted my sellers and fsbos more than what they would have realized. If it wasn't for our guidance, sellers unknowingly leave a lot more on the table than they thought.
Next lawsuit: sellers sue nar because they were prohibited from offering compensation, stifling their 1st Amendment, and resulting in lower and/or less offers hurting their net when all is done. They'd actually have a point, unlike sitzer/burnett.
they are not prohibited of offering commissions, everything is negotiable, you can ask in an offer to have the seller pay for the commissions, what is gone is to have the offer in the MLS or any place the commissions that are paid buy the seller to entice buyer agents, that by the way I do not think it was wrong because was there in the open! that is free enterprise. Now it is making more difficult for both seller and buyers. I feel the solution would have been more simple, disclosing both commissions in the contracts....
My Concern is that an agent is working with a Buyer like a Veteran that can NOT pay a REALTOR Commission, and that Veteran does not have the funds to pay an agent, so that means what that the Veterans can only see part of the homes they want to see, unless the agent wants to work for Nothing? How is that fair to either party? Same with First time buyers or any buyers that do not have much money to work with? Who wins then? The market where the people paid way too much for homes, more than they appraised for by a LOT of money is the main reason housing is so OVERPRICED! Has nothing to do with commission, as the property is worth what it is worth no matter if a home owner or a REALTOR sales the home! The appraiser does not look at value based on was it listed or not?
@@sandralenins4094 I think that eventually everything is going to go back to normal becasue nobody is prohibiting the commission been paid by the seller, still is negotiable, the difference is that has to be clear and disclose in the agreements.
My concern is what happens when you have a buyer that CAN NOT pay an agency fee, they want to see 8 homes, 6 will pay me and 2 will pay nothing. So are I expected to work for free if they want to see the 2 homes that there is NO money for? Is that going to be some kind of discrimination? After I have put in my time and effort what stops the buyer from firing me and going to the sellers agent? We are right back to Dual Agency that gives the buyer no representation. My effort to help point them in the right direction for the best loan type, educate them in the whole process, discussing things like Home Inspections, Termite Inspections why they need the well or septic checked, just the whole bunch of things that you do as a buyers agent. We already work for free for many months lots of time. This will just make it worse. ?
great video! we met with a buyer agent the other day and my husband thought she worked for the seller agent because they were saying all the same stuff. Like “the price seems fair”. if i’m going to pay for a buyer agent they are going to need to represent my interest, not the sellers.
Perhaps the comps did show the price was fair. Hence helping you understand that if you want the house , you need to offer more not less. You want your agent to tell you its overpriced , when it isent? Than you offer less and you loose the house?
That is why you walk through each of the comps you go through all of the photos you compare all of the different aspects with the client as they review each of them, they ask questions you answer questions. Ultimately, they can choose for themselves by their own facts and eyes, which property is most similar to the one their purchasing, and what it closed for.
That would be one expensive photo review slideshow, that most people can and would do themselves if they had to pay 3% of the purchase price, meaning they would save $15k on a $500k property if they reviewed the public info themselves.
I've been a broker since 2008. I've been preparing my agents for these changes for 2 years. Not that I saw these specific changes coming but I felt agents needed to add other lines of business to their services. We're all so glad I took these steps so they'd be prepared for these shifts.
@@istandcorrrected2661 representation was not good. It's going to cause more law suits when sellers can't sellers will complain against agents not showing based on commission again. UGH!
Sad that this removes transparency and we will now have these underground discussions of compensation, makes homeownership harder, shrinks buyer pool for sellers and makes an already low inventory market even lower primarily for the low to middle income buyer, FHA, VA and low down payment buyers. The codeword is CONCESSION or CREDIT. Thats the new codeword for compensation which again is removing transparency. WHo is NAR or anyone to tell a seller who owns a asset that they cannot publicly state what they what to offer an agent who brings a buyer. How does that make a seller feel about this being the best vehicle for the sale of their largest asset. This is so poorly thought through and doing the very opposite of what the settlement is saying it is doing.
Let me help your transparency. Talk to your buyer and ask them how much they will pay you because the seller will no longer pay for the buyers agent. This is so simple.
@gabrielahiggins6965 you are correct; the seller can pay for the buyer up to the amount you, the buyer, contracted with your agent. But given the choice, sellers will default to not paying for the buyer's agent. Of course, the buyer can ask for concessions, but the seller paying for the buyer's agent will not be the default. Buyers will soon realize that if they are to become competitive with their offers, they will seek out the lowest-cost buyer's agents. Ultimately, the seller paying for the buyer's agent will become the exception, not the rule. So what I said still stands.
I totally agree with you 100%. This settlement is going to hurt consumers, both buyers and sellers, more than helping consumers in the long because most buyers are not willing to pay agents to represent them. If you don't believe me, ask around among your friends and family; you will find out that over 90% of them will say "NO" to paying a buyer's agent a commission to represent them even if you tell them that " You're worth it" like what the industry is trying to tell agents to say to buyers right now. For the sellers, they will lose dearly on the outcome of the purchase price because this settlement will eliminate a lot of buyers including first-time buyers, FHA, VA and even middle-income buyers if sellers are not willing to pay the buyer's agent commission. Currently and in reality, the buyers set the fair-market purchase price and pay for the commission, NOT the sellers. For the industry, there's no incentive for people to become real estate professionals and therefore, NAR will lose current members and fewer future members. I think NAR did a poor job of defending the industry which has been in practice for over 100 years. NAR did not do anything to protect the image of its members because they were too busy dealing with recent scandals.
Excellent video and description of the settlement. Thank you for this. I agree. Most of this isn’t a huge shift it comes down to agents educating and disclosing.
Can you have open houses or do you have to stop them at the door to sign a buyer's agreement since you can not show a house without it? Unfortunately lower income/ first time buyers and people trying to sell a home will be hurt, hurts fair housing.
An open house is just that, an open house. You don't need representation to view the house. It's often used to capture a buyer. Where a buyers agreement is needed is if a real estate agent is searching out properties and actually opening the door that you don't have access to. Hope this helps.
@@1985youngdre disagree, an Open House IS a 'showing'. The listing agent can't show the home without a buyer's agreement. Yes, the buyer will have to sign at the door or go away.
@melaineanderson6022 I disagree because I have hosted many open houses individually as well as with my team where neighbors, potential clients, friends, family, and mortgage officers have came in to view the house without having a buyers agreement signed. An open house is designed to give property exposure as well as get potential buyers.
THANK YOU for making this informative settlement, as I know there will be SO MANY agents that are naive or not-knowledgeable about how to operate going forward.
Won't be long until IT entrepreneurs put together websites not connected with NAR or MLSs where listing agents can post their buyer Realtor compensation offers. All I see from this ruling is more buyer/seller confusion and more complications for Realtors. Thanks a lot NAR and big RE companies. Your greed hurt the entire industry AND consumers. IMO, it's time to shake up the NAR and get some better people in control.
Wow!! just what I was thinking. 🤔 they say it’s about the Realtor, but the realtor didn’t make the rules in the MLS. It’s falls on the members. Also who’s responsible to pay the settlement in 4 years Also what about dual agency.
@@cliffvictoria3863 But which rules were skirted or ignored? The NAR is nothing more than a trade association. They also lobby on behalf of their membership at all levels of government. They have no legal authority over companies or agents. That is borne by the states. However, what they do well is to encourage a code of ethics amongst their members. Only those agents who are aligned with the NAR and constantly take and pass their code of ethics classes have the right to call themselves "Realtors". If one of its realtors was found to have committed something unethical, through an investigation and review, they could be sanctioned in various ways from re-education, fines and/or expulsion. If illegality was found, they could even refer the findings to the state for further legal review and possible repercussions.
Great video, but I disagree that "not much will change." This is a MASSIVE change in the way transactions will be conducted---MASSIVE. Buyers will be shocked that THEY now have to agree to pay an agent, before they even look at a house. Many will not do that, and many agent will accept SUBSTANTIALLY less than before, because it's either LESS than before, or nothing. (This is the opinion of someone with three decades in the business).
Thanks for this awesome and comprehensive video on the NAR settlement! If I don't practice dual agency, and I do not wish to be a party to a real estate sale with an unrepresented party am I allowed to tell a seller that there is No requirement for them to compensate a buyer's agent but that they will have to find another brokerage to handle their sale, because I'm not willing to incur the additional liability that comes with dual agency or an unrepresented buyer? Thanks for your time, and the great video!
This is a great question and unfortunately one I’m not sure how to answer yet. I think we have a lot more questions than answers from the settlement document alone. I think if your local association doesn’t address this specifically it is an amazing question to pose to your commission to get an official stance.
@@TheRealEstateLawyer Thank you very much. Unfortunately, the 2 real estate agents I have seen debate Mr. Ketchmark regarding this class action lawsuit were both terrible. I wish I could ask Mr. Ketchmark one very simple question... Would he be willing to tell every single seller in his class action lawsuit and all potential home sellers across the country that having an unrepresented buyer when selling their home will not increased the liability they could face after their home sale? I would love to hear him dance around that answer. Oh well thanks again.
Why not take the listing and advise buyers that they must hire and pay their own agent? I'm struggling with this dual agency/unrepresented situation too, and would value your thoughts on this.
@@HomeportResidential Another person on there saying we need 3% + 3% or disaster will result. A buyer can choose to pay for a agent, and there will be many flat fee agents to help out, assuming the buyers have picked the house and the price.
An excellent presentation. By far one of the most clear and really nailing the topic from all sides. I also do agree that the buyers (who were one of the parties actually supposed to be helped here) may end up being harmed inadvertently in the process. I think the buyer agency situation should have been thought through a little better so as to ensure buyers don’t miss out and pass up on potentially amazing buyer agent representation ensuring they close on a property and helped from beginning to end, and now either opting out of that representation and or can’t afford that representation and then getting stuck along the way with no one to help them and worse case even losing a deal.
Most definitely agreements will be worded in such a way that commissions are rolled into the price of the home so it can be financed much like when a buyer rolls closing costs into their offer. Only time will tell if banks and appraisers play along.
@@dpky7333 The only way that Buyers "roll closing cost " into the price of the house most of the time today, is to offer more than listing price and ask for the seller to pay the closing cost and hope it appraises for that extra money. Banks are not going to make loans for more than a home is worth.
It’s good you guys are already so honest and God-fearing in North Carolina (and I believe it!) but I’ve seen all the shenanigans listed and more in Boston and NYC. This was long overdue
I became a broker associate two years ago. Before that, I bought over 10 properties and sold 5 (personal and investment ). During that time I can honestly say I have no recollection of any agent ever telling me that fees were negotiable on either end. That doesn’t mean somebody didn’t mention it in passing. But I have no conscious recollection of the fact that as a buyer or seller that this was negotiable. Maybe I need to be a better listener. But I certainly need to be a better explainer now. After becoming an agent I have had other agents point-blank tell me if I didn’t offer 3% commission on their end they wouldn’t even show the property. So how did we get here? This is how.
Absolutely. A Berkshire Hathaway agent in Pinehurst, NC told me he would not bring a buyer to my home for a 2 % buyer fee - sighting 2% on a $795k home was just not enough. RIP buyers agents fees - finally you are getting what you deserve.
This is the wrong take. A commission rate doesn’t need to be negotiable by any agent in particular. A listing agreement and/or buyer agency agreement simply contractualizes the terms of compensation. An agent has the right to stipulate how much money they are willing to work for. (Sometimes the negotiation looks like this: Seller: “what’s your commission rate?” Agent: “6%” Seller: “will you do it for 5%?” Agent: “no”) Are we going to sue attorneys and doctors because no one told us their fees were negotiable? This hurts the sellers as much as it hurts the buyers. If a seller is unwilling to pay the buyer brokerage fee, they will have a much smaller pool of buyers, which creates less competition and ultimately less offers and lower offers. If sellers want to have their cake and eat it too, home values in the US just lost 3% of their value. This is because a buyer who would have previously paid $200k for a home wherein they had no out of pocket expense for representation will now only value the home at $194k once they factor in the buyers brokerage fee. Dumbest lawsuit ever.
Interesting , that’s exactly why the DOJ is saying commission should be negotiable. What ever was published in in secretive MLS was in in fact CARVED IN STONE. Agents were mining the data base and showing only those homes that met THEIR commission standards.
I am a Realtor in Florida. How are we supposed to find out what the seller is willing to pay on a listing if it is not allowed to be posted. The settlement is a nightmare because it mat allow listing agents not to be truthful about the amounts the seller is willing to pay. When it is in writing, unless changed based on the offer, it is usually written. Now they are going away from disclosure, and not punishing the people who caused the problem.
you have to contact the listing agent and have them send you something in writing. just will take longer now. Your buyer agreement, make sure you have the buyer sign a document (drafted by your real estate attorney) that says he does not want to see any homes where he will have to pay more than x% to you
You’re not working for the seller! Why do they need to pay you at all? You’re working for the buyer. That is who should pay you. Stop ripping sellers out of their equity.
In the NAR handbook, an offer of compensation IS required. "In filing property with the multiple listing service, participants make blanket unilateral offers of compensation to the other MLS participants and shall therefore specify on each listing filed with the service the compensation being offered by the listing broker to the other MLS participants"
The commission was always baked into the cake. And BTW the brokerage takes a HUGE chunk so it is not like the agent gets a $15,0000 check on a $500K sale. But what will happen now is a 300K house that used to offer 6% to pay both sides will now get an offer for 291K since the other 9K has to be paid by the person making the offer - Even if the buyer goes without representation the seller is going to see 3% less so this just makes it more complicated for homebuyers and not going to save anyone money buying a home... just my two cents...
Here’s the problem that agents are having. We aren’t talking about the difference between having a buyers agent or not being a few hundred dollars, at least historically. It’s like you blow out your tire, have a spare in the trunk. If I have AAA, it’ll cost me $20 to get it changed. If I don’t, I have to consider whether it’s worth it for me to pay $450 or do I suck it up and watch a RU-vid video and figure it out myself? Sure, $20 is worth it. But $450? I can do it myself. This is the problem for buyers agents. They aren’t worth what can often be tens of thousands of dollars. Maybe if they are paid a flat rate it may be worth it to some people. I have done it. It’s not that hard.
Well I agree with your paying for the service or doing it yourself and you can also shop around for the best deal. That is exactly what you have always been able to do with Real Estate......Commissions have always been negotiable, you chose the Company/Agent you want to work with, if not happy with what they charge, then go to another one, NO one forced you to work with a certain company or agent. No one even Forced you to work with an agent period. Sale it yourself. Just for the record I work a lot harder, spend more time with buyers than I do Sellers. Buyers look at multiple homes, sometimes for months. It is a business You CHOOSE to use, not like the stuff we have to have and have no choice!.
I’m all for change. I’m ready to see what the future holds, but this whole law suit just feels backwards. I can’t believe NAR settled. I don’t understand why an MLS wouldn’t disclose to participating members if there is a commission being paid. Now this will turn into a sh*t show for buyers and buyers agents. I feel bad for them. There is going to be a lot of uncertainty. Buyers won’t be able to pay a realtor.
This was a wonderful. Here in Los Angeles, I've heard much of what's in this video, but you break it down so simply and clearly. As just one of the vast majority of "good" agents in this business, I'm very grateful for this content. Thanks!
In my humble and experienced opinion, the vast majority of buyers have little available cash to pay commissions and are dependent on seller commission splits with buyer agency. Otherwise, they will be dependent on lenders agreeing to roll such obligations into loans. This settlement represents a revolutionary change in the industry because a significant number of low to middle income buyers will lose representation and protection. Although it may seem easy just to switch the expectation of buyer agency commission from the buyers, that switch has severe financial issues.
@@InvestingWithAdamKonly if it does not exceed what they buyer previously agreed to pay their buyers agent. The buyer can not even make an offer with their agent until they agree on the price they will pay their agent.
As a practicing real estate agent in NC, I would appreciate you producing a video that would walk us through, from start to finish, how a transaction might flow under the potential new rules. Your service to the Realtors of NC is very much appreciated. As a BIC, I recommend that our agents use your RU-vid channel as another resource for sound real estate law and interpretation. Thank you!
Again, how can you agents understand anything when you are asking RU-vid to tell you how to do your job? Please educate yourself. This is why a lot of you will end up quitting the field. You have to be smarter than the next guy.
I would love to have a video of what questions to ask a buyer and seller agent prior to engagement. Or how to spot an incompetent and sometimes lazy agent. As you said if you have a good agent the transaction can go smoothly
No, what you want is a video of the actual steps needed to transact the sale of a single family home. A first-time buyer could do it themself if they had a step by step document from each state.
Sounds like NAR caved! What’s the point of this? We’re going backwards! They admit it’s a lack of education from the agent to the seller so why not just have a form educating the seller and have them read, understand and sign it. I remember my dad had sellers offer a boat in the garage included! Are appliances going to be prohibited in the MLS? NAR needs to fight this not cave. 😡 When do we vote these guys out?
@@InvestingWithAdamK it is not required to use an agent to list a home. Worst case someone can pay a flat fee listing service to pop it in the MLS for them. We’ve used flat fee services. $600 and it’s on the mls the same way as a Realtor would list!
Thank you for this Tiffany; the information you provided here confirms my views on this lawsuit…not much changes in terms of how REALTORS practice except in the perceived value that the buyers agents now need to be able to communicate to their clients as well as the sellers who agree to compensate them in a transaction.
Listing agents come to get your listing and have no intensions of selling your home they know a buyers agent will sell it and they will get a commission and some of the buyers agents comission.Now all the agents will do is call each other or text to find out what the sellers are offering in comissions to decide if they will show the house sterring.Agents are worried that because of these lawsuits more people are going to know that they do not have to pay a buyers agent and agents are going to lose some commission.
wrong. again. buyer agent will have an agrrement with buyer about what their fee will be. buyer agent then calls listing agent and reports to their buyer if any commish coming from seller. buyer then choses to see the house, or not. you have no clue about real estate and you continue to embarr/ass yourself.
Thank you for this! What a great explanation! The sky is not falling, it will just be a different shade of blue. If we all continue to practice the way we have been with just a couple procedural changes the market will not have to change in a huge way.
They really should outlaw the % based fee for buyers agents due to the conflict of interest. Since they should be acting in the buyer’s best interest, shouldn’t the buyer’s agent make more if they do a better job negotiating a lower price?
The buyers get screwed with the new settlement. More money out of pocket if they use an agent. Most will have to go without an agent even if they don't want to. Europe doesn't use buyers' agents, I believe.
The reason it is percentage based is because that agent is gambling on this buyer being ready, willing and able to purchase a house and be on call to assist them should a house come on the market & also spending time looking for pre-market properties for them. If that buyer changes their mind because they got a job offer in another state, they owe NOTHING to that agent. Do you have any idea how many buyers end up not actually buying? A lot. I'm open to a flat-fee, but it would depend on how much time individual clients need from me. Most buyers want unlimited access to their agent & a lot of wasted time seeing homes they have no intention of buying, so a flat-fee paid upfront for me for 6 months - would be a set number of showings per month that do not roll over, a bank of hours per month for consultations, unlimited market research, permit searches, phone calls/texts to other agents on their behalf for information on prospective properties, unlimited offer prepararion, a set number of hours of negotiations, a set number of hours for transaction management & attendance at inspection, walkthrough inspection. Most buyers I have spoken with do not want to pay upfront. So, how do we solve this dilemma of the people who actually do follow through on a purchase having to subsidize the countless hours of free work, gas, tolls and wear & tear on my vehicle that I'm never compensated for? I'm not against buyers paying upfront for services, I just know very few either HAVE the money or are not 100% sure they are going to buy and won't do it. There is a difference between "shoppers" and buyers. Perhaps the new rule requiring the brokerage agreements be signed for buyers will weed out the people who are just "thinking" about buying and allowing them to sit on the sidelines and not waste professional time. They can go to Open Houses and do their own research before interviewing and engaging a buyer agent.
My frustration is that I am a seller going to be selling within the next month and I literally have had multiple agents tell me I have to list with 6%. If I offer less than 3% for the buyers agent that my house won’t have enough buyers and agents won’t sell the house because the buyers won’t want to pay the difference between the amount offered and 3%
I do 4.5%, half to the buyers agent- 3.5% if someone from my team brings a buyer and 1% if the buyer calls you and we still do everything. Commission is always negotiable
Commission can be negotiable, but just as it's up to you to accept a number with the agent, the agent has to be willing to work for that amount as well. If you don't offer a commission to a buyers agent, then that means buyer would have to pay. A majority of buyers don't have more cash to pay for an agent. So, you can, not offer one, but the buyer may choose to look at other homes that do offer it instead of yours. Note I said BUYERS not agent.
I agree with you. I commented to our local page exactly to these points. It certainly will create a better salesperson. Back to old school real estate. I also created a backend compensation website in less than an hour as example. Thanks for the accurate detailed info!
Keep in mind, these new rules will not apply to a buyer's agent who is not a member of both NAR and MLS. This means a buyer's agent could ignore all these new rules and still represent their buyer in purchasing a property as long as he/she is currently licensed in their state and in good standing.
Great video 🎉 You explained it well and got clicks without all the fear mongering I’m seeing from RU-vid agents for clickbait. I would like to say, I see more lawsuits coming for failure to perform, where’s the appliances? I need to get out of my contract!!! type of suits. Some buyers will go it alone and really it won’t be fair to go against a seller AND professional agent guiding them on the sellers side.
That is correct. If you want to save work a low commission because you buy a lot of property as an investor. Probably should have done that already. You’ll have a good agent committed to you. I think people do themselves an injustice thinking reaching out to listing agent saves them
@@InvestingWithAdamK exactly. investors who dont have a trusted agent who works on low commish because of volume and less handholding have no idea what they're doing. even if you allowthe listing agent to take both sides, you pay your buyer agent on the side.
In Maryland you could work directly with the listing agent. A buyer isn’t required to have representation. If a buyer wants to be represented by a REALTOR, they have to enter into a buyer agency agreement before touring the home. The details of this may vary slightly from state to state. Dual agency laws vary from state to state, and it’s important to understand how that works in your state or the state where you want to purchase the property.
but me, myself and I don't need to pay any$$$ to see a property if we don't use a buyers agent. We can always just call up the lister and say "I want to see it, in order to make a possibe offer."
then the listing agent must have you sign a buyer's agent agreement, the listing agent can not show the property without a buyer's agent agreement in place.
the "lister" will then try to make you their client. oh what a fun viewing experience. find a great agent and have them show the homes so you dont hounded by the ten "listers" for the ten houses you view.
Exactly!! We’ve bought and sold many homes in various states and we’ve been ‘told’ “if you want this house sold you must offer the buyers agent 3% no less or else you won’t have showings” we switched to selling now using flat fee listings on the mls to save the sellers agent and have more control over what we choose to offer the buyers agent. We’ve offered 1-2% and had no issues selling the homes.
what no one talks about is that, most buyers don't have sufficient money to even get a loan and pay for closing costs, now another few thousands or $20k+ in commissions to buy for their buyer's agent, everyone is so worried about the agents but its also about the buyers also
@@simi72100 First this is not Germany...I am sure a lot of things are done different in other countries. Well around here Veterans CAN NOT PAY REALTORS Fees, First time buyers have some good options with Down Payment Assistance that they already do not have enough money and with added even $3,000 in a fee agreement may keep many of these people out of the market. REALTORS are a CHOICE to use, not like a doctor, gas, meds, food, we are a CHOICE like going to Wal-Mart of Macy's .........People can choose to use a REALTOR or NOT, they negotiate fees, ALWAYS have, taking away offer in MLS will open a whole new can of worms and NO ONE will benefit!! What commission based business will be next? How about the 30% plus an attorney charges? And that is a person that most of us do not use by choice.
@@TheRealEstateLawyer But you are giving the impression that there was nothing wrong with the old system, and that the listing agents told the sellers that it was totally voluntary if they wished to give anything to the buyer agent. !!! But you must know this cannot be further from the truth, because the sellers were told that paying 2.5% or 3% commision to the buyer's agent was the way to sell their property. Please note that I have nothing against the buyer agents. In Fact, if anything, I think the buyer agents deserves bigger commision than the listing agent, because they are the ones that sell the property. I think there should be a flat fee for the listing agent who puts the property on MLS, and most often is not even present when the buyer agent is showing the property.
@@theowl3756 Good agents already explain that. Some don't, hence why there was a lawsuit. In NC it's very common for Buyer's agents to have a signed Agreement with a buyer prior to even looking at houses outlining the terms. For those agents, the NAR settlement changes nothing. As a closing attorney, in my office we charge a flat fee. Sometimes we do well with it while other times we lose money. Pros and cons to every model. No need to degrade my character behind a keyboard.
@@TheRealEstateLawyer Thank you for explaining your approach to closing, and how the real estate transactions are done in NC. Please note that as an attorney, you are not responsible for the misconducts, and for the games played by real estate agencies and their agents. The bigger issue is why the Sellers and Buyers often resent paying the commision. You may be too close to the issue to fully appreciate the sources of resentment. Please consider the perception of most people about real estate Agents. This is not to say that such perception is always accurate, but it is rather pervasive. The real estate transactions in the U.S. have often been associated with unsavory activities and Ponzi Schemes. Consider the following: 1) In most countries, the commission is around 1-2%. But in the U.S. It was decided to demand 6% commission..!!! Yes, it was always supposed to be negotiable. But in reality, 6% was pushed as the Norm. 2) In the view of many people, the seller and the buyer agents work together to fleece both the seller and the buyer, and share the loot with the Brokers and the Realtors. This encourages collusion among real estate companies to provide sellers and buyers for each other and laugh all the way to the Bank. 3) The game starts with seeking a listing by telling the seller that without a listing agreement the property cannot be posted on multi-listing, and thus trapping the seller into a listing agreement. And to tighten the trap, they encourage some cosmetic work and "staging" for the property and offer $50,000 or more interest free loan for 1-3 months. This set the stage for pushing the seller to lower the original price, or face the additional cost of paying interest. 4) The next step is to ask other agents to visit the property and provide the so-called "Feedback", which is intended to highlight the negative aspects of the property and push the seller to lower the price even further. For every $10,000 reduction in price, the reduction in commission is only few hundred dollars, which the agents are happy to let go to get their money fast.
Having worked for multiple brokers, some are DEFINITELY more ethical than others. One broker that I worked for promised training, but all the training was essentially how to get clients and had essentially no information on how to actually be an effective fiduciary for clients and ensure that you are providing value as an agent. I had to switch to another broker to actually learn how to effectively advocate for my clients, what to do to protect my clients, and to make sure my clients are adequately informed about what is in the contracts they sign. So I can fully see agents not being trained well enough to actually help their clients adequately.
As an MRP designated Realtor, I'm very concerned Sellers will stop accepting VA loans under their terms on MLS. For those who don't know, a VA loan restricts the Buyer from compensating their Agent. In the past I've had issues with sellers not wanting to deal with USDA loan backed buyers and in a few instances FHA, too. I can see it now... sellers on MLS will have to accept all terms: Cash, Conventional, FHA, VA, USDA... and Seller carried. 😉 Even though I'm on the West Coast, I enjoy your content!
VA buyers are terrible buyers for multiple reasons that make them less competitive against other buyers. I won’t even bother explaining because the comment will be removed…..but I don’t using the “poor and disadvantaged” trope is going to work this time. Agents are jumping all over this “poor little VA buyer” angle to deflect from the fact they are just upset their house of cards has fallen.
DOJ will likely completely disallow payment from the seller to the buyers agent. VA buyers won’t be at a disadvantage in that outcome. They’ve stated that complete decoupling is the end goal.
@@No-turboso you are saying VA buyers will have no chance to buy in this situation unless they go to FSBO otherwise who would pay for their commission if neither the seller or buyer?
@@noellecms No, I’m saying that the DOJ isn’t going to accept NAR’s settlement proposal. Their goal is a complete decoupling of commissions ie no payment to the buyers agent from the seller. This will mean the defacto end of buyers agents since no one will have the funds to pay out of pocket. VA buyers will be just like other buyers if buyer agents are gone. The US is the only country in the world where buy side agents are the norm and their goal is to eliminate them to bring us in line w everyone else. Here is their SOI on a smaller case last month and they’ll have another for the NAR case shortly you can be sure. www.justice.gov/d9/2024-02/420087.pdf
The house sells itself. If you have a nice home competitively priced it will sell on its own. No need to pay a middle man. Finally put a stop to this madness.
That’s definitely a misconception I hear a lot, but in my experience, it is not uncommon for sellers who try to represent themselves to end losing more money than they were trying to avoid having to pay a real estate expert.
@@TheRealEstateLawyer Agree to disagree. I have sold 2 homes on my own and it was very easy. I keep hearing this from agents saying the same thing. To me it’s selling snake oil , boogey man’s around every corner type of thing. I get it from a realtors perspective cause it’s scary with your livelihood at stake. But it’s long over due and the country knows it and this is why we are at this crossroads. All that’s needed is a platform to bring buyers and sellers together to do what they gotta do. Provide necessary contracts and documents and everyone’s on the same playing field. It’s happened in every other industry and it’s long overdue. Sorry but people are seeing all the flaws and over compensation and it’s simply unsustainable.
The MLS is that platform that brings buyers and sellers together… It’s nothing more than an exchange.. just like the New York Stock Exchange. If you can come up with a cheaper exchange… then invent one.
@@parkerjoelhansenfulyes the mls is exactly what is needed. Just without the strong hold of the industry. It would work if it was for the public without the restrictions of agents and brokers. It would work in a perfect world, but I think it needs a fresh start. It’ll get there.
If you are happy with how your two sales went, that is great! A counterpoint to consider is that a FSBO may not realize whether they left money on the table through less than ideal pricing strategy and negotiation
I love how she says sellers " May covertly be discrimatory " towards buyers agents. But not acknowledging that realtors were covertly requiring 6%+ commision and covertly requiring the buyers agent fee. She blamed that on lack of education. So can we say the same thing about the discrimatory practices? It will only occur due to a lack of education?
Can’t real estate brokers collectively decide to use another website like Zillow or anything else other than the MLS for listing properties and doing business so as to avoid these NAR settlement rules?
I believe there is a line in the settlement that states brokerages cannot aggregate commissions on any sites. I don't see why individual brokerages can't display the properties they are personally marketing with compensation on their own individual sites though.
No, it states that the MLS and the NAR cannot create websites that allow for the aggregation of this information. There are already independent website owners who are adding this information Jared James talks about it here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-5gXIbHUuBUY.html
Not required is bullshit, of course agents say it's not technically required as if that somehow washes their hands for forcing sellers into "customary " commissions. Name one market where there is actually significant variation in commission rate for the buyers agent for a given home value, as would be the case if the "customary " commission wasn't the de facto standard. To be clear, I'm not saying i disagree with the customary structure, just saying it's very misleading to pretend it's not required.
Still not required, but is obviously in the sellers best interest to offer compensation to buyers. it’s kind of the same Situation that we have right now with for sale by owners. If they're not offering buyers agent compensation, they're significantly limiting their buyer pool is the main reason why the majority of them end up hiring an agent or conceding to offer a commission to a buyers agent if they bring them an acceptable offer. At the end of the day compensation to a buyers agent has never been required. The seller can always say, no even if the listing agent is firm on their price the ability to negotiate a commission does not mean that the seller has to list the price or that the listing agent has to reduce their commission. The seller can say no and go and find someone else that is willing to list without offering any buyers agent commission, but the market will ultimately determine how well that is going to work out for them
Thank you for breaking it down! I had to reread this agreement a few times so this help clarify the verbiage in real words. How will this affect builders in offering compensation and /or bonuses?
This is the beginning of the end for realtors. Been an agent 10 years, awhile back I told my wife... remember travel agents, the only way you could book a flight? well they are all gone for the most part. its only a matter of time before realtors go the way of the dinosaur, its right before our eyes. the only issue I told my wife was safety , letting people into your home, once thats figured out we are all toast. By the way I have been looking for a good summary, this gal nailed it, everything else I have seen even from the experts is total hyperbole and dancing around the issue, Thank you. While I am not a pessimist it's time to look at the next biz opportunity , Good luck to all of you. I am moving on this year. TC
@@TinoTM1986Agree with you 👍🏼 Like she said it’s things we already do but now more upfront. Time to show more value. This looks like it’s helpful to consumers the way the media puts it out there but if anything it’s gonna make it harder in some ways for consumers.
@@albundy3929 Agree with you. This is going to cause more lawsuits between buyer and sellers. Plus agents know they have to be professional and adhere to time frame and processing times. Imagine listing agent having to stay on top of DIY buyer with no rep who sees the timelines as “guidelines”. Benefits seller to have professionals working together for a smooth transaction.
I am really surprised about you insulting me. I am not incompetent and also have plenty of sales. Also was very complimentary in my comment to you and your excellent video. What caused the caustic remark to someone you do not know and was nice to you? Everyone has an opinion
I just talked to a realtor on the phone since I will be selling in two months and they said they are still recommending everyone do the 6% and the 3% for the seller agent at this place isn't negotiable. So sounds like nothing really changed. Only now it is actually known where the money goes. I can tell you when I bought this house 11 years ago I didn't have a clue and it was never talked about.
while the commission is not a requirement, a 5-6% commission was been WIDELY adopted as a norm in the industry. Negotiation is just not really encouraged. I recently asked one agent if he would negotiate the commission if I were to sell my home . He said he can't because he has to share the commission with the buyer's agent and its 5% commission split in half. I asked, "Wait, wasn't this what the whole lawsuit was about?" He said, "yes", and didn't say anything else. A lot of this is coming to light now because these houses practically sell themselves. There's still no inventory in many areas.
Agree we are in the same situation. I feel like agents say it’s negotiable and then turn around and say no it needs to be this percentage. Also how unfair is it that we are working towards negotiating a commission with someone who negotiates for a living and that literally is why we are hiring them
So you are saying commission is not a standard 6% and the negotiation was to reduce commission to 5%. He followed up with basically saying that he is not willing to do ALL THE WORK of marketing and selling your home for less, as he is NOT getting the full 5% and is offering half to the buyer agent. Sounds to me like you want someone to work hard for you for less money. Remember, just like you, people have bills to pay. Just like you Realtors are paying high gas prices and high food prices. Realtors have experience and education on selling properties and abiding by state and federal laws that home owners have to abide by when selling real property. You have a right to figure everything out on your own if you don't want to pay someone to assist you through the legal landmines of selling your real property, let alone managing every other process of selling your home.
@AdventureRVFamily What do you do with the contractor that's going to install your cabinets when he says "I'm not willing to do ALL this work for this small amount of money?" When you tell him you want him to do it for less. You have a right to not hire him and find someone else. But you will find there is a minimum someone is willing to do the work for, on top of it, if you go with the cheapest you are going to get cheap quality installation. How is it any different? You want a Realtor to work hard and do a good job to sell your home to help get you the most money. You want them to do it for pennies?
My take on this is as a buyer I will list my realitor's fee in the initial offer and it is paid by the seller. I will have a buyer contract stating as such. As each counter offer goes, the buyer contract will be updated. So for each new offer, there will be a new buyer contract. If I am the seller, I would go onto zillow and say what buyer fee I am paying. That way it is not part of the MLS system and not associated with my selling agent.
I have a question. I am Goosehead insurance agent from NY and I do a lot of homeowners insurance for closings. If the seller and his agent already have an agreement on compensation set up prior to finding the buyer, and the buyer and his agent now also have an agreement prior to finding the seller, then what happens if the two separate deals aren’t congruent? If the seller has already agreed to pay 6% and the buyer has an agreement to pay his agent say 2%, then shouldn’t there be some ability for the seller to change his compensation arrangement? Maybe I’m not understanding but the mechanics going forward seem a little awkward going forward if sellers can’t communicate the available compensation to the buyer going forward. Does my question make sense?
@@albundy3929 So, if the agreed sales price of the house was $500,000, the buyer’s agent would only get $10,000 and the buyer would get a $5,000 credit toward the purchase?
@@marcschneider2052 yes. However it makes sense for agents to have a variable commission structure based on any predetermined seller payout. It’s only fair for the seller who is trying to attract more offers.
I view realtors like I do car salesman they're simply not needed. Use AI or just legal documents provided to the public for free, heck write the documents at a 5th grade level easy to understand there's just no reason to pay a third party. I should be able to buy a house as easily I can buy a Tesla on the internet. No third party creeps raising up the price. And this is coming from someone who's been a car salesman and a realtor. There's other ways to make money than cheating other people.
Maybe I missed it but the one thing that was left out was, whatever compensation was agreed upon between the buyer's agent and the buyer is what the agent gets paid. For instance if their agreement is for one and a half percent, and the listing agent / seller is offering 2%, the buyer's agent can only get one and a half percent.
I have never had a Real Estate Agent, (ex M-I-L agent included here) voluntarily tell me I was not required to pay the buyer's agent. Never. Now we are led to believe that's always been an option? Sorry. I call BS. It may have been an option, but an option well hidden from sellers. Without a doubt. Now I know the truth. I will never be ripped off again. It's hard to believe home sellers have put up with this greed for so many decades...and it is pure greed.
Collusion, price (commission) fixing, blacklisting, intimidation, misrepresentation. Sure sounds like criminal activity to me. And to the jury as well.
why is this percentage based? Is there really a scale of difficulty to sell a house the more expensive it is. Seems like houses sell themselves these days. We should have a flat fee.
Well, you can do flat fee listings for a few hundred bucks. Always have had that option. The broker lists it on the MLS, and it also goes out to all the websites like zillow, etc. The broker doesn't represent you, and all the calls come to you. You get the same exposure as if you had an agent. It's a good way for a person doing a for sale by owner (FSBO).
Yes. Simple market statistics for your area should be published monthly showing the average days on the market for homes in each price range. And, the buyer pool becomes smaller as you go UP in price. Reaching these buyers and their agents requires time & money getting in front of them and marketing expenses associated with reaching them goes up. Homes were selling quickly in the last 2 years, but that had its own increased workload for both listing AND buyer agents. Listing agents were fielding hundreds of calls, messages and emails in a short period of time and distilling the information in a manner that was easy for a seller to compare their options and buyers agents were on-call 24/7 working with desperate & exhausted buyers submitting dozens of offers and routinely being outbid. Many of those buyers never bought a home and their clients didn't owe them a penny. Name another profession that will work hours and hours on- call and not expect to be paid if you "just give up" & change you mind after 8 months 😂
@@mommom3172Your comments are on point. I believe agents will begin to provide more detailed insight of the amount/type of work that’s really being done to get to the closing table and the financial risk incurred.
Scale of difficulty is based on neighborhood, condition, type of home and price. Example: House A is in a neighborhood with low crime, good schools but the home's condition needs upgrades. House B is in a neighborhood with some crime, low rated schools but the home's condition is new. Home C is a 2 bedroom condo in a building with stairs. Stairs is difficult to sell to disabled and elderly buyers.
I feel like home buyers / sellers will just do “For sale by owner” and bypass all these fees now that’s it’s been outted some of the shady practices that have been at play.. it’s unfortunate for the truly talented and honest agents.. but after hearing all this I have no trust
after this you have no trust? that means you dont understand what just went on. not your fault as tons of misinformation is out there and nar/agents havent educated consumers.
All I see here is lack of protection to Sellers and Buyers. Real estate agents have been untruthful for ever and now they pretend to be innocent of all charges …
The listing agent will just have to sell the listing.Do what they promised the seller when they took the listing advertise take pictures whatever they promised to that seller and they will collect there side of the comission only no buyers agent side because there will not be one.They could give a buyers agent a small portion of there commission agents will just have to start selling what they are listing themselves like they promise in the first place not just throwing it up on the mls and never looking back.
so you want buyers to not have representation? why do you think we have buyer agents...because 40 years ago lawsuits that buyers didnt have representation. get a grip/
If the seller is paying your the buyer’s agent, the buyer’s agent is not really acting on the buyer’s behalf. A buyer's agent should be trying to get the best deal for the buyer, but this setup instead encourages them to act together with the seller's agent to get the highest price to increase their own commission. Some agents say "The sellers DOESN'T pay the agents, the broker pays for the buyer's agent!". If buyers bought a house with a 0% buyers agent commission the buyer isn't getting paid by the broker. If seller agents have the fiduciary duty to do what’s in the best interest of your seller, why haven’t sellers negociate down the buyers agent commission as much as possible or at all? You haven’t, ever, for decades now. Agents say that commissions has "always been negotiable", but never said anything about it until this lawsuit. If buyers agent commission was too low, you will get your sellers listing blackballed or not shown. That's part of the settlement. Buyers compensation is now stricken from listings.
