NAR just KILLED Buyer Agency!! $418M Lawsuit Settlement!! Attorneys laughing on the way to bank. 🤣 

Everything that you listed can ALREADY be done TODAY! There are agents that sell off menus. There are agents that offer flat fee pricing. You can advertise your home for $0 if you want to. Some buyer agents are paid, regardless if their client buys a house or not. While those situations are not widely adopted, they do exist. There are many changes that are coming, none of which will benefit buyers OR sellers. Two years from now when home prices are still appreciating, and total commissions have gone UP, everyone is going to be left wondering "what happened?".

Yes, buyers’ agents should get paid. Buyers make them run around so much and there’s no guarantee a sale will materialize. I had a friend who showed at least 20 houses to a young couple, nothing was good enough for them (oh, the septic is old it’s gonna fail, there’s no room to put a garden in etc.) and they got outbid because the market was crazy 2 years ago. They ended up going with another agent -according to them - they wanted an agent who could tell them how much to offer for a house. Long story short they bought a house that was being sold as is and the septic tank was cracked (mos likely they got credit for that repair but that’s what they didn’t want to deal with) the other agent must have pushed them into buying the first house she showed them.

Awesome. Agree with all of that. And there are millions who think like

It is HUGE! I've seen a bunch of agents leave already. Inventory levels are so low here in the Northeast. It's a real challenge to keep transaction volume up.

Why? The Settlement agrees to simply remove commissions from the MLS thus leaving them in the negotiable position that they've always been. Everyone freak out!!! LOL

​@@LivinginGrandJunctionColorado Did you eat paint as a child?

@@LivinginGrandJunctionColorado as far as I know they have always been negotiable but most areas have a standard for example idaho is 2.5-6 %.

@@alouise3557 nope. And, I know how to read : )

Is it? This will lead to less transparency and total commissions will go UP. That's a great example about stock commissions - guess what happened in that industry - total commissions went WAY UP!! I love how people point to the internet and AI as a solution to everything. I witnessed a homeowner that said they could do it on their own and did not use an agent end up having to spend $200K to lift up their newly purchased 150 year old home to replace the rotted sill plate. They sued the seller and seller agent and lost - the judge said they should have had representation to help discover the material defect prior to purchase. This is going to hurt consumers in the long run, not help them. And of course the attorneys are laughing all the way to the bank. Oh, and there are no "mandated overpriced fees" as you allude to. Everything is always negotiable and the best part, even with the current system, is that if you don't find the value in using a Realtor, you can sell it yourself.

If you think 1 agent in a 1000 would nix a sale for a rotted sill plate even if the seller pointed it out your either a liar or insane. Every thing's always negotiable? Sure ,as long as it's 6 %...no brass like realtor brass@@brianfitzrealty

If you think 1 agent in a 1000 would nix a sale for a rotted sill plate even if the seller pointed it out your either a liar or insane. Every thing's always negotiable? Sure ,as long as it's 6 %...no brass like realtor brass@@brianfitzrealty

If you think 1 agent in a 1000 would nix a sale for a rotted sill plate even if the seller pointed it out your either a liar or insane. Every thing's always negotiable? Sure ,as long as it's 6 %...no brass like realtor brass@@brianfitzrealty

Listing agents will now make as much or more than they did before because they don’t have to deal with a buyer agent commission anymore. So in some cases, they’ll make twice as much as they did before. They’re only hurting buyers agents and buyers.

Sounds like you don't see the value of real estate agents. Great news - you don't have to use one.

Yup, it's all the buyer agents fault. 🤡

It will be a disaster! Buyers are already overpaying for homes.

Those buyers are literally NOT ALLOWED to pay their buyer agent commission. And these are the people that we often want to help the most. Even if the rules change and they are allowed to pay it, they won't be able to afford it. I feel terrible for them. 😔

​@@brianfitzrealty I wonder if buyers will be able to finance these fees as closing costs into their mortgages. This is a fn disaster. There is ZERO CHANCE I'll work for less than what I'm worth. Someone better come up with something extremely fast to help the buyers pay us.

There is no way the bank is going to allow it. The only exception might be if the home appraises for more than sale price. But in this super competitive market where everything decent is selling for 5-10% over list, I don't see that happening anytime soon. I've been focusing all of my energy over the past year on sellers, sellers, sellers in anticipation of exactly this.

If they do finance into the price will the property appraise... If not who pays the offset... @@alouise3557

Not sure what the rules will be around dual agency. If the buyer wants to buy direct and I was the listing agent, I'd assist with the paperwork, but would not advise them on what offer to make. There are a number of brokerages that do not allow dual agency - they may have to rethink that policy in this new environment.

@@brianfitzrealty this will lead to lawsuits in a few years from now saying listing brokers inflated prices to the buyers because the fiduciary duty was to the seller. Just watch

That's always been governed by each state, you'll have to stay tuned to any changes from your state board

Chat GPT assume the role of the buyers agent... 😂😂

@@NateJohnson1337 THAT was awesome. 🤣

This will lead to less transparency and I don't see the DOJ signing off on it as it sits. I think they will leave the option on the table for the seller to directly compensate the buyer's agent if they wish to, but the days of the seller agent sharing their commission are numbered. It will look similar to commercial real estate where commission is negotiated on every deal. We'll have to wait and see I guess.

It's so sad. I don't think they had enough money to fight it.

NAR is a cult! Always has been! They're the ones pushing all the pandering too, trying to tell everyone to stop saying "Master Bedroom". And like a bunch of creepy cult followers, the span of agents and brokers did what they were told like good little boys and girls so they wouldn't get in trouble. Bs! I still call it a Master Bedroom. People need to stop allowing themselves to be controlled by a liberal agenda created by an organization that only wants money!

Too busy diddling the staff.@@brianfitzrealty

I believe they settled or they could have ended up paying billions.

Nope. Settling was self-preservation. NAR is hemorrhaging cash right now with all these legal fees and agents not renewing their membership. If they continued to fight they would have gone bankrupt. And that's the last thing the plaintiffs attorneys want - they wanna get paid! 🤑 This was nothing more than a brilliant cash grab.

​@@brianfitzrealtyno, the lawsuit has merit and standing.

They can do that today! You are not required to use a buyer agent and you are more than welcome to negotiate the deal yourself. Same goes for sellers - you don't need to use an agent. There are all kinds of self-service options available to you. But for the people who do see the value in using agents, this is going to hurt them the most.

Actually I have several and I look at most real estate agents like you as overpaid crybabies. Good luck!

The commissions are not being paid by the seller. That's a fiction designed to hide the commissions in the sale price. The buyer is paying for both realtors as part of the sales price. This is just a way to get the commissions hidden into the financing. If real estate was sold with no commissions, prices would adjust downward proportionally. The seller only cares about the net proceeds, not the gross price.

@@Rickybobby1112 You are in the top 10 percent of people who exist who know the process of people who know anything of buying a home. Most people do not. That other 90 percent is the market for a agent. Its not just about your situation personally.

Yeah, the settlement is lousy, but everyone is playing by the same new rules so it's up to the agent to decide how they want to run their business moving forward. There will be a lot of agents that leave the business because they don't have the skills to negotiate their commission. As a result, the remaining agents will be able to charge more because of less competition. I've said from the beginning that not only are home prices going to continue to go up, but commissions will as well.

The buyer agent business model is definitely going to change. It's still too early to tell what the most effective way to charge for agent services provided, but I do believe there will be more up-front costs for buyers.

Exactly! There was a local attorney here in MA that was caught a few months ago approaching clients directly to offer those types of services. He got roasted online and in agent forums and his business is in the tank from what others have shared with me. I think the bigger threat are sites like Zillow, Redfin, etc. that will allow buyers to transact directly on their sites. Lots of changes coming this year!!

I've said it several times and I'll repeat it again here - once this change takes place, overall commissions are going to go UP! This whole thing was nothing more than a victimless cash grab by a personal injury attorney (albeit a very talented one) out of Missouri. Three years from now when the numbers support my prediction, you'll see headlines asking "why are commissions AND home prices higher than they've ever been"

They did, but it's just a knee-jerk reaction to today's news. Once investors realize the true potential, they will jump back in.

Ya, when everyone stops buying leads they will have to change their business model... buying puts options on Z.. @@brianfitzrealty

In MA, if your broker is part of NAR, all agents have to be part of it, so it's not that easy to just leave NAR. The bigger issue is that as more agents leave NAR, the Code of Ethics go with it. I am ALREADY seeing some overtly shady $hit in my market from agents that were previously REALTORS but are no longer. Real Estate is a self-governing industry and without participation from all agents in an entity like NAR, it falls apart quickly. We'll have to wait and see what the long term effects are, but I can assure you that it ain't good for buyers and sellers.

It certainly feels that way. But it will remain to be seen if buyer agent compensation will still be offered, albeit outside of MLS.

We are required to be part of NAR if our broker is NAR, so that's not an option for me. But I think a lot of people will make the same decision as you. Membership is going to drop significantly this year.

Good question. Not sure what the short term impact will be, but the long term effects are going to be significant. And not in a good way.

Sounds like you don't find the value in using a real estate agent. Great - you don't have to use one - and it's been that way since the beginning. These lawsuits were absolute BS and only serve to enrich the plaintiffs attorneys. A year from now when home prices are higher along with total commissions paid, who will you blame then?

I'm going to do a reaction type video tomorrow using some national news coverage that shows how they are all WRONG. There is so much misinformation out there and these tv personalities have zero clue how markets/industries function.

NAR's defense was awful during the trial. They didn't take it seriously. These plaintiffs were not "harmed" - they all entered into listing contracts on their own will and of sound mind. It is what it is - LOTS of opportunity for those of us that stick around...

The difference is that the listing agent cannot compensate the buyer agent at all. It has to come directly from the seller. In a competitive situation, a seller won’t even consider an offer that includes the buyer agent commission which means the buyer will have to come up with that money out of pocket. There are very few buyers who can afford that so this change effectively kills buyer agency. Now, when the market flips, and eventually it will, that will be a different story. But for now with tight supply and incredible demand, it’s going to be very difficult to be a buyers agent.

I'm most disappointed with NAR in that they did not take these lawsuits seriously enough at the beginning. They did not challenge the plaintiffs "expert" witnesses and did not use actual agents to testify for the defense. The jury saw NAR as cocky and condescending. It's just sad.

They USED to rely on buyer leads. They just launched Showcase Listings a few weeks ago in anticipation of being able to charge agents for listings. About 2 years ago, they turned off the MLS feed for rentals. They are going to do that at some point for listings as well. No more free advertising. And consumer will demand that you, the agent, cover the expense. They are going to make WAY more money with listings than they ever did with buyer leads. What a wild day in real estate!!

@@brianfitzrealty Stock Market doesn't lie.

@@LivinginGrandJunctionColorado Nah, it'll rebound quickly once the dust settles. This is just a knee-jerk market reaction.

@@brianfitzrealty we shall see.

Zillow survives on selling leads to realtors who now will be able to afford them!

ding ding ding, winner! That's exactly why homes that currently do not offer a buyer agent commission sell for less. No agents are steering them, buyers drive the process and since they don't have enough money to pay the agent out of pocket, they avoid those houses altogether. Sigh, if only NAR was able to articulate that in the courtroom, perhaps we wouldn't be where we are today.

MLS will become irrelevant very quickly. I covered this is a video last November. I said sites like Zillow, Redfin, etc are the ones that will benefit the most when this happens. Sure enough, like clockwork, Zillow announced their new agent marketing tool called "showcase listing" a few weeks ago. Without MLS syndication, you, the agent, will have to pay to play on those sites at VERY HIGH prices. Zillow did this with rentals a few years ago as a test run and now it's time for the big one - retail listings. Hang on, it's gonna be a wild ride the next 6 months!!

Why did the stock plummet then ?

In any industry, when there are big changes, there are massive opportunities. So, yes, I would absolutely encourage you to stay with it!

With any change comes massive opportunity. Those of us who recognize those opportunities, will flourish. That's why I'm a bit giddy.

Yeah I hear that saying all over. I will keep doing well because I prepared for this moment. There are a lot of agents and buyers that are going to be hurt by this. I think it’s reasonable to see this in fact will make it difficult for some

You might be right! 🤣 But for those of us that can weather this storm, there will be LOTS of opportunity on the other side.

@@brianfitzrealty it all depends on interest rates. If they keep going up then you have a storm.

@@brianfitzrealtynot at 6% split. 2% split tops. Flat fees most likely. Price discovery is a bitch and collusion is no longer opaque.

You could do a flat fee TODAY. Let's revisit this comment a few years from now and see if my prediction that total commissions go UP is true.

If you haven't sold your house yet, how would you have been "harmed"? Don't worry, you're not missing out on much. The average plaintiff is going to receive a check in the $5 range. Not enough for a cup of coffee in CA. But the attorneys? They are each going to clear MILLIONS. How's that for justice? 🤣 None of these changes go into effect until July, so it will likely be business as usual up until then. And after that, nobody knows what's going to happen.

There are so few buyers who can afford to pay the buyer's agent commission out-of-pocket which will effectively kill buyer agency. Those people will now go direct to the listing agent. The BIG problem with that is they will no longer have proper representation in the deal. The listing agent works for the seller, not the buyer - and buyers will get screwed. Hope that helps clarify.

@@brianfitzrealty Is this the return of net listings?

This new world is definitely going to have an '80's vibe to it 🤣

Plaintiff's attorneys are getting roughly $160M and the plaintiffs should receive ~$5 each. 🤣

And now attorneys want to be real estate agents😡

We had one attorney locally that was caught reaching out to clients well before the settlement and offering buyer assistance. Once the agents found out, he got roasted on social media and his business is suffering massively because of no agent referrals.

@@brianfitzrealtyI’m pretty sure attorneys have always been able to help, but, I bet they charge more. Also , here , house prices are usually set by bank appraisals, not agent fees. This is going to be a mess.

No

There is a HUGE difference. A buyer can ask TODAY for a concession if they want to. This is going to have disparate impact on lower income and first time home buyers who do not have the financial resources to compete with other buyers that can pay their buyer agent out-of-pocket.

The settlement only requires NAR and its affiliates to come into compliance with established law. The big broker franchises are crying because this will put a damper on their exorbitant profits gained from unfair NAR tactics. Antitrust laws exist for a very good reason.

The same thing happened back in November when the guilty verdict was announced. Stock tanked because of shocking news, but came roaring back. Same thing will happen this time once investors figure out that the MLS's are no longer relevant and there will be even MORE eyeballs on Zillow. In addition, Zillow has already started to shift it's focus to the "premium listings" side of the business. All these real estate sites will be pay to play. I talked with the Zillow rep last week about their new Showcase Listings and not only is it VERY expensive, but there are zero caps so eventually everyone will have to pay it if you want your property seen.

@@brianfitzrealty I appreciate the reply, definitely curious to see how everything shakes out.

What if no one pays zillow and uses the MLS... Will the MLS still syndicate to zillow... @@brianfitzrealty

That's not the issue. MLS will continue to syndicate to Zillow. But Zillow may choose to no longer display those listings - unless the agent pays for it. They did this with rentals a few years back and it worked out great for Zillow. They now allow agents to publish a "free" listing, but no one ever sees it. You have to pay $30 for 30 days to get premium placement. They just launched "showcase listings" about a month ago so it's only a matter of time before they turn off the MLS feed and force agents to pay up.

How?

Not Really, this will create countless "solutions" and work arounds, thus consumer confusion regarding who pays what and when.....

How many buyers do you know have extra money laying around to pay not only their down payment, closing costs and inspections but now they also have to come with money to pay an agent. There is SO much involved in purchasing a home, buyers need help navigating timelines and vendors. This only makes it harder for buyers (easier for the wealthy) to purchase. And sellers with less buyers this hurts you too!

@@brianfitzrealtyby not paying you a ridiculous commission, get over it the glory days of agents are over

I'm confused. Who is making you pay a "ridiculous commission"? If you want to sell or buy a home today, you are more than welcome to do it yourself.

Annnnnd, nobodys house will sell : ). It'll never happen. It's already been tried and those companies who tried it are now Bankrupt.

Same thing happened in November and they bounced back quickly. From where I sit, Zillow is in the perfect position to take advantage of these changes. They may decide to KEEP the buyer leads and facilitate the transaction for a flat fee. Lots of unknowns still, but TREMENDOUS opportunity for those that stick around.

@brian You keep mentioning lots of opportunities for those who stick around? Which ones? Can you mention them?

Absolutely - a lot of agents can specialize, and charge separately for, what they are really good at. For example, if you are terrific at finding off-market homes, you can charge a buyer finder fee. If you add value during the home walkthrough, you can charge a fee for that service per visit. Maybe the buyer just wants someone to assist with the negotiation and paperwork - you can charge a fee for that. On the sell side, you can now spell out exactly what you are going to offer and request that they pay some of that expense up-front. Almost like an attorney retainer. If the home sells, those expenses can be deducted from the commission. If it doesn't sell, you're not out thousands in marketing and advertising dollars. Overall, this is going to lead to more candid discussions with buyer and sellers and ultimately, that's a good thing.

@@annab2796 Those who are crushing will continue to crush and Buyers won't pay.

I don't think so. I'm sure they have been in close contact with the plaintiffs' attorneys and came to this mutual agreement. The DOJ is happy because NAR killed the blanket offer of compensation, and Ketchmark is giddy because he just got PAID!

Sellers in the lawsuit are probably making $25.50 attorneys making everything... @@brianfitzrealty

Thanks for your support!

We see that consistently as well. Selling a home is way more work than people realize. I have some colleagues that specialize in assisting FSBO's that didn't sell. As a seller, you expose yourself to tremendous risk in not only the sale itself, but in unvetted strangers wanting to come into your house at all hours. Working with a real estate professional - buying or selling - is worth every penny.

You are so welcome! It's going to be interesting to see how many agents distance themselves from NAR. It's fairly obvious at this point that the bulk of our fees are going directly to the plaintiff's attorneys. We'll have to wait and see how it shakes out over the next few months.

Absolutely! I cannot tell you how many times I've followed someone around an open house that was behaving a bit sketchy. Having a licensed agent at every showing is a must!

Hmm, that sounds problematic. Regardless of compensation, steering is illegal and you can lose your license. Moving forward, you are going to have a conversation with a potential buyer about your compensation before you show them anything. If they can't afford, or don't see enough value in, your services, best of luck to 'em. I see a world in which buyer's agents will have a menu of services for the buyer to choose from and everything will be a la carte. Most buyers will end up purchasing direct from the listing agent.

Initially, yes. But eventually we'll get used to it and continue to serve our clients as best we can. What's comical is that total commissions are actually going to go UP! So many agents are going to leave the business - the good ones that are left will be highly sought after and will command an even higher premium.

For agents. Super for buyers. The lie agents tell buyers that the seller pays will now be considered fraud. Buyers always pay for everything because they're the only one putting money in escrow. Buyer agents will have to tell buyers the buyer must pay. Pretty sure a like of buyers are going to balk at $15,000 for driving me around to see a few houses? Ya know, may be I'll jump on Zillow and see more choices faster and contact the listing agent to see the property. And listing agents might actually have to "sell" properties they list. Oh my, that will be a disaster!!!

So by you saying "what's comical is that total commissions are actually going to up." translation is that you think its funny that this industry is taking peoples hard earned money, and now will be taking more! So you're really a joke being paid an undeserving amount? Relators don't deserve a percentage of the SALE PRICE OF YOUR HOME!! I have something even more comical. An AI program will soon be coming to life, eliminating a large percentage of your career field. Bye bye!

The entire premise of this lawsuit was that all these brokerages were colluding to keep commissions artificially high. So, the remedy should be that commissions will go down, right? But they won't. And THAT is what I find absolutely hilarious.

Exactly what if all the listing agents decide to list at 10% lol@@brianfitzrealty

It doesn’t start until July

I'm not sure what to do either. If they already have an accepted offer, they're probably nothing that needs to be done. But for active listing contracts that haven't hit the market yet, the seller may want to have a conversation. Personally, I don't think anything is going to change until July when agents are forced to change. Otherwise, if you list a property without an offer of compensation and everybody else does, you will not have many buyers interested because they can't pay their buyer agent out-of-pocket. It's gonna be rough for the first 6 months for sure.

There will be NO cooperating compensation. The seller can still offer to pay the buyer agent commission, but only via seller credit, and that will have to be negotiated as part of EVERY deal. If there are multiple offers, all at similar prices, it's unlikely that the one asking for a $20K seller credit will be accepted. As a result, fewer buyers will be use agents and they expose themselves to way more risk in the biggest transaction of their lives.

@@brianfitzrealty this is not true. Read the settlement. "Commissions" CAN BE NEGOTIATED (cooperated) outside of the MLS. "Seller Credits" can be left in. Two completely different topics.

actually it says commissions can't be set by NAR or advertised on MLS, but that commissions can still be paid by listing brokerages share i believe? @@brianfitzrealty

Let's agree to disagree. Cooperating commission is a listing agent agreeing to share a portion of THEIR commission with a buyer agent. A seller credit is directly from the seller to offset buyer expenses (in this case buyer agent commission). Maybe we are saying the same thing, I'm not sure. Either way, the listing agent is no longer going to be able to offer any commission to the buyer agent, it will have to come directly from the seller. And in a hot market, best of luck getting that concession.

@@brianfitzrealty commissions already comes from the Selling side (Brokerage) so, yes, I disagree, There are plenty of other ways to disclose commissions besides in the MLS. So, if that's what you're saying then we agree. Commercial has been doing this for years.

If you are one of the plaintiff's attorneys that is going to make millions while the actual plaintiffs make pennies, ABSOLUTELY! 🤣

@@brianfitzrealty no a seller. Even better. Great news!

@@brianfitzrealty No one gave a crap about the plaintiffs getting money. This case was just one more step in breaking the real estate monopoly and fraudulent practices. You all put that twisted text in listing contracts where the listing agent paid the buyer's agent just so buyer agents could lie to buyers that the seller paid their commission. Buyer deposits $15k into escrow and escrow sends that money to the buyer's agent. With that removed from listing contracts buyer agents face fraud charges. Plaintiff's attorneys deserve every penny. We've been fighting brokers and agents for decades and the fight will continue. I have no doubt listing agents will pressure sellers to offer 3% to buyer agents. But now that con will be a little bit harder to pull off. The fight will continue. The dues you all have to pay NAB to keep your con going is only going to get higher for less results.

@@ebutuoy5088 Better for buyers. Buyers pay every penny for both commissions and all closing costs. No seller has ever put a penny into escrow. Example, dude knocks on my door and offers me $499k for my house. Right behind that buyer is an agent telling me if I list with them I can get $500k and they have a buyer standing there saying "Yes". The agent insists I sign a their purchase contract...6% to that listing agent. Offer 1 nets $499k. Offer 2 nets $470k. Buyer 2 has to offer $532k to beat $499k. Who pays commissions? And it's not just the commission costs that has been killing retail buyers. It's the stress and huge appreciation loss from losing bids to investors. Investors rarely use agents. Investors know they pay the commission and that the listing agent will kick that standard 3% to buyer agent back to them. So investors can afford to bid 3% higher than a retail buyer. When they lose bid after bid their agent says "Oh, the investor over paid." But the person overpaying is the retail buyer giving an agent $15k to be driven around and lied to. I'm a small time flipper. When I sell I always list with I pay all closing costs and pay buyer or buyer's agent 3%. Listing it easy to find an broker who will list for under $1k, so basically FSBO. When I buy I'm knocking on doors, mailing fliers, looking for owners thinking of selling to get them before they sign a listing contract. It's not so much that I save having to pay that 3% but that my offer can be up to 3% more because I don't have to pay it. The owner is in the driver's seat. I still have to offer enough for them to want to sell. And I can offer many more things like staying in the home for 6 months, not fixing anything, no inspections. I'll pay for an appraisal from someone they pick. I can make it a pleasant experience. Once listed the listing agent just makes all that much more difficult or impossible plus it then costs me 3% more which the seller doesn't even get so we both lose.

Sounds like you have a great system! Which you could already do under the existing guidelines. Consumers have tons of choices when it comes to selling their home. Want to sell it yourself? Go for it. Have an entry only company load it into MLS? Yup, can already do that too. Want a full service agent to handle everything? That is also an option. Sellers have ALWAYS had options. This change is going to negatively impact buyers in a big way - especially those that do not have the funds to pay for representation out-of-pocket. Think there's a gap today between the haves and have-nots? Wait and see what happens in 5 years...