CNBC’s Diana Olick and Amy Lessinger, RE/MAX president, join 'Squawk Box' to discuss new rules that will impact how realtors are paid, how the new rules will impact the real estate business, and more.
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A real estate agents job is to get a buyer and a seller together. With the internet and listings you can do the leg work yourself and save 5% to 6% on the sale. The bank will do all the work for you. Once you sign a contract with an agent you are stuck with them per the contract agreement. The biggest piece for any buyer if they plan to get a bank loan is to get pre approval for the amount they qualify for so they are not wasting anyone's time. IE; if you qualify for a 300K loan don't go looking at houses above that price. Putting 20% down will also eliminate the PMI. The bank will not loan you the money without proper inspection of the home before purchasing. Ie; structure, termites, flood zone etc.
@@nickbargas7352 Honestly, it’s ridiculous to pay 3% on a $1 million house to someone who just found those houses on a website, sent you a bunch of emails, and took you to see a few of them. I'm from LA.
She is only clear about one thing -she will not admit realtors are overpaid and will not tell anyone how to use the law to only pay what they are worth.
Not true. She did well. The answers were accurate. You can spend 1 hour+ answering each question with all the details and intricacies. Real estate agents spend hours every day studying these changing contracts. And they will continue to change in the near term with these new laws. Of course - buyers and sellers can navigate this area doing a transaction without a real estate professional. As that has ALWAYS been their right to do so.
@@Mark-ph5nh In Texas, we let high school dropouts to be agents, if they are 18 years old. I don't have a problem with that, since agents are simply door openers. I do have a problem with the heart surgeon rates they've charged for decades.
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she said what was relevant. the agreement is between a buyer/seller and agent. They can negotiate the fees involved with procuring the property. the percentage is no longer explicitly defined. buyers/sellers can get more favorable terms AND the agent has to work for the sale. that's what she basically said.
My experience with buyers agents - they are not looking out for your best interest, they are worried about getting you to buy a home so they can get paid. Real Estate agents are leaches. You have a real estate attorney who represents you in the sale.
Lots of lawsuits coming from buyers against their agents. Realtors are supposed to be advocating in their buyers best interest. So here's a hypothetical situation that will happen often as interest rates come down and things get competitive again. A house has 3-5 offers. The seller will most likely take the offer with the lowest buyers agent commission. The buyers agent will have an ego and say "I only work for 2/3%". The buyer will lose out on the home because their agent wasn't willing to take a 1/1.5% commission on the deal. That buyer will bring their agent to court saying they didn't have their best interest in mind.
That’s exactly what happened with us when we bought our current home. We were one of multiple offers for the house. Our offer was slightly lower than one other offer, but the higher offer required the seller to pay their agent an extra one percent more than the normal commission. This caused their offer to be lower than ours and as a result, that agent cost them the house.
I don’t think it will hold up in court due to the fact that the buyers agency agreement will be signed and outline what duties and costs are owed to the buyer. And the buyer to the buyers agent. and it will be agreed-upon prior to making an offer and looking at homes. just like any other contract. It’s all about prior written consent.
Amy Lessinger (Re/Max President) is not a good representation of a good quality real estate agent that she describes. The goal of both the Seller and Buyer agent is to close the deal and get paid. How about adding a fiduciary standard to the buyer's agreement.
This woman is a perfect example of why RE agents are overpriced/obsolete. She dodged every question -AI could do that for next to nothing! Agents can’t be held responsible -AI can’t be held responsible!
As a tele-sales person, she has a transcript of answers "Real Estate agent add a lot of value" "Prices are negotiable, commissions are negotiable" "Price of property is based on supply and demand" Bull. There's no point paying 2.5 each for buyer and seller agent. I would say pay a max of 5K each and get done with it
@@jayr3053 I suspect you are right. The carpenters did the hard work (building the home). I worked as a carpenter a couple summers for a little over minimum wage. Seeing these agents capitalizing on my hard work, is very annoying.
Tired of agents claims "the commission has alway been negotiable" which is absolute BS. I have purchased 3 homes over my life and just helped my sister close a deal as well and at NO time have I EVER had an agent say their salary was negotiable, it was a flat 2.5 or 3% paid by the seller. Friends and family have bought homes and that was never disclosed…
I live in California. The prices here are nuts though I can’t complain since I choose to live here. if I buy a $2m home and the agent makes 2%, that’s $40k for a few hours of work. Even the most high paid attorneys at white shoe firms on Wall Street don’t charge that much per hour. Sellside agents put in many more hours and still are overpaid using percentage formula. The buyside fee is egregious and was ripe to change for decades. Amazed that it took this long for the MLS monopoly power of agents to be broken up.
Everything in the contracts negotiable and right now we are in the wild West for real estate negotiations and prices there is gonna be no proper answer you’re gonna find online because a lot of it can be localized. Some brokers in areas are still charging 3% and a lesser percentage for lesser services. I’ve seen people charge more also. You literally got a shop around and figure out what you want in a home and how much do you want help in buying a home. Also, for the most part almost every seller still offering commission and there’s other places they can write it up. If you want your home to get sold then your gonna offer a commission because most people still gonna have a buyers agent and they’re gonna want a home that the commissions covered so they don’t have to pay for it.
Realtors provide valuable service. Sure, just not worth $25k in commission if I pick my own house. All other inportant services: inspection, attorney, title, I pay for it myself
Buyers will pay the Buyer Agent's commission, instead of it coming out of the profit from the sale of the house. They will need to negotiate that percentage before the Agent shows them houses. The Seller will pay the Seller's Agent commission.
Lol paying 5 figures for "local expertise" makes me want to throw up. These guys and car dealerships are just professional and branded parasites in society.
I really wish someone else was interviewed on this subject because it is very important everyone is represented but she did not explain properly why. The interviewers as well were very uneducated with their questions.
Perhaps realtors should be compensated with a flat fee, or per-hour basis. Charging a % of transaction value is an arbitrary amount to an overpaid profession. Buying or selling a $1.5 million house is not inherently 3x more difficult than buying or selling a $500k house, yet many agents expect to be paid $45,000 for their half of the transaction. Crazy when so many stick a sign in a yard, have a photographer take some photos, stick it on MLS, and then field a few calls with offers. Ridiculous.
Also, I think that money is going to be pocketed by the listing agent. Say they charged 5% before, 2.5% for listing and 2.5% buyer's agent. But now, they won't have to give half to the buyer's agent. That doesn't mean the listing agent won't continue to charge 5%. I don't think it will lower any prices. Just one person there pockets more. But time will show us.
As a rule, this will make no difference on prices. The theory sounds good but really is mainly just theory. There has already been and should be more movement of using only buyers agents instead of a second seller agent, which confuses the public. I have never paid 3% by the way, always less if a simple residential sale, sometimes more in a difficult market or complex property. Like RESPA it sits on a largely inaccurate theory that people will generally shop around and compare service providers before first looking for a property to buy or to list for sale. Too many other factors come into play that are more important. Similarly, these same types of theorists insist on TILA disclosures and then make them so compound and confusing that consumers can’t reasonably follow all the ins and outs.
My opinion is the Agent should give a potential buyer a website link or document to fill out. I know Ground Breaking thought, buyer would fill out and prioritize what they Need the house to have, what they want, what would be nice to have. Buyer would scan different home styles, layouts, amenities and prioritize what they like best. Buyer would pay a fair negotiated fee/price for a level of service required. I know agents who have spent 6 weeks, 45 plus hours with potential clients and received 0 zero to cover expenses.
If you are a buyer Just go straight to seller's agent and have him/her represent you and they will offer good % since they are on both end of the transaction.
In California, it is law an agent has a fiduciary to their client so their client's best interests come first before an agent's commission. The DOJ has it out for NAR and NAR pretends this is all perfectly normal "we've always done it this way anyway" in 20 states. NAR wouldn't say sh*t if they had a mouthful. A San Diego real estate attorney recently said the new NAR/CAR buyer broker agreement is a trap for lawsuits. He doesn't recommend agents or home buyers to sign one.
Let's do this. We all know nowadays the home buying/selling process has been streamlined these days. I understand the argument of 1st time home buyer may need more help/time to buy a house. Let's make a mandatory for 1st time home buyers to take free community classes to learn about the process, like getting a loan, escrow, etc. Then, the work for a buyer agent will be a lot less, and they should charge a flat fee instead of % of house price.
Real estate agents are not professional real estate appraisers. That is another profession. Get your home appraised or go to the county records for the homes they used to appraise your home if recent. If the buyer agrees with the appraisal they can make an offer. There is too much data available today for the buyer and seller to pay a real estate agent anything but a flat fee. You want them to give their opinion, write the offer and do the paperwork along with negotiating any issues the come up on inspection.
I bought my first home last year. My agent obsoletely didn’t do anything to help me during the inspection/ loan process. In fact he was MIA during last week of my closing. Never returned my calls. He called me a week after I moved in, thanking me for buying the house. His share of the commission was $14k.
BTW, if a Realtor refuses to show you a house for sale unless you sign an agreement, contact the FREC (Florida Real Estate Commission) and file a complaint! If that realtor is found to be guilty after an investigation, their license will be revoked!!! There is NO law in Florida that says you must have a realtor to buy or sell your own home!!! FSBO (For Sale By Owner!)
The Realtor Can be important for first time buyers. Knowing who and what level of financing they qualify for. Recommending Closing/Settlement companies are not all the same (There are a lot of detailed paperwork, that needs to be almost 100% accurate, all taxes, fees, recording at city/county office, escrow, funding received and paid) The Realtor has minimal work in this process. Some experienced, knowledgeable Realtors can be helpful with determining Fair Market Value, Tradesman to provide estimates if home needs work, Days on Market, Things not accounted for with buyer that may increase/decrease the value/price of a home.
She just showed how to avoid answering an honest question with a honest answer. Bad Politician vibes. Basically, Agents have been way OVER Paid for way too long. Now, buyers agent will have to accept way less compensation due to the value of their service. $20k commission for opening doors??? That BS is over unless seller is going to pay it. Rolling that on top of sales price won't work if the appraisal doesn't support it. Bottom line, buyers aren't going to be paying absorbent Buyers Agent commissions out of pocket. Buh Bye unearned Range Rovers 😂
Buyer: It looks like the house needs work possibly a new roof ect. Realtor: Oh no the roof was replaced 30 years ago it still has 20 years left on it. The only person more slimer then a used car salesman is a realtor. 99% of realtors will say anything to make the sell then deny it after closing.
New system will bring more online automated systems for buyers. That will drop buyer 3%. As the buyer commissions will drop, seller’s 3% will also go tru a downfall to match.
What we very well may see is price discovery and competition now. Theres already discount brokers like Redfin who are rock bottom on their commisions. The question will be what equilibrium will be struck between price and value provided. In the short term a lot of realtors whove been contenet to just send you a few links to an mls and collect commisions on sales may be hurting as they now in theory have to compete to show value for their commision.
Over 10 year Real Estate Investor, Home Prices are Not solely determined by Supply and Demand. Sellers urgency to sell, location, home condition, home design and layout (Many Factors) to home price Lady.
What’s the bottom line here from buyer and seller’s perspective? she didn’t answer the most basic question all buyers and sellers are wondering about. Waste of time!
Yes, it's going to be tough for the buyer. If the homeowner wants to sell a home and has a realtor who likes to navigate away from topic just like the broker being interviewed here, sounds like only self interest. Who's going to defend the buyer? Buyer versus two on the other side, mostly greedy
Lady President next time prepare for a national broadcast interview. Think about both sides, people see your Bias and attempts to Inflate a Realtors Value to buyers/sellers. Talk Both sides of the issue
Regurgitating talking points without answering any questions. "You need to be represented by a trusted professional" is about the only she says. Completely self-interested. It also assumes an agent is competent and professional. So many are incompetent, divorced former housewives who need a job when their marriage ends, or total clowns who know about as much as the average person about real estate.
What a shock: a realtor who does nothing but spin and BS. Right above a used car salesman we have these folks. I look forward to having the option to use AI instead of a broker who gets such a sizable commission for doing so little.
If someone is willing to pay me $600,000 for my house I am not going to sell it for less just because i don't have to pay an agent anymore. That's the point. If someone is willing to pay it because of lack of inventory I am not going to lower my price.
Let's see... Buyer's monies to buy prior to this new policy: 1. Down payment 2. Credit report Inspections & Appraisal 3. Closing costs 4. And now agent's commissions? It's funny how this new change has been marketed to seem it's helping the consumer, when in fact the consumer is the buyer and not the seller. If you are a first time home buyer, be sure to be working with a sharp agent to still get the seller to credit your agent's commission, rather than adding an additional cost to your purchase. At the end of the day and when all the smoke clears, the ones that are going to be hit the hardest will be the buyer's agents, since commissions are negotiable and a buyer could tell the agent to take a 1% commission vs 3% or take a walk. The ones well position in this change are the listing agents. If prices start to drop as a result of this, sellers would rather pay a buyer's agent vs taking a bigger loss of their property sits on the market for too long. All in all, it's too premature to determine which way the wind will blow with this change.
Most buyers are useless, Zero benefits to buyer whatsoever. Have an inspection, appraisal, look it over well, it's wood, nails, electrical & plumbing. No biggie. You don't need an agent to buy a house any than an Agent to Buy a Car. Have a RE attorney review documents for a few hundred bucks. No biggie. Especially if these lame Agents can do it, so can anyone. Finding a good loan with a humble Wholesale Broker is more important.
She's a complete liar. Agents will always tell the inexperienced clients that fees are standard and regardless of which side of the transaction you're on seems like they always tell you that the other side pays the fee. It's a total con game.
This entire interaction is completely worthless, on both sides, it's about motivation, a buyer and a seller will pay a middleman if they are getting a predicted result which meets their need, end of story, how much, depends on what's involved and how bad you need the outcome currently and in the future. Could be for your business, family, personal preference, recreation, how bad do you want it, how bad do you need to sell it
simply an ADVERTISEMENT for realtors...worthless. most IMPORTANT is that the premium paid by the BUYER is not allowed to be part of the MORTGAGE and is simply added to the down payment for the buyer in the lender's eyes.
