Redfin CEO Glenn Kelman joins 'The Exchange' with CNBC's Diana Olick to discuss the implications of the National Association of Realtors' settlement on the real estate industry, how the settlement could affect Redfin's business, and more.
Listening to a massive corporation owner say he’s “advocating for lower commissions” is bull. He’s advocating for trying to take more of the market for himself rather than letting thousands of independent contractors earn a living. Most realtors sell 10-15 homes a year. They pay a percentage of their commission to their broker, a percentage to taxes, and for marketing, healthcare, etc. Most Realtors don’t make much money. This lawsuit will just serve big corporations and it will make a lot of first time home buyers/lower income individuals completely clueless as good realtors aren’t going to work for free and those people can’t afford to pay them and bring a down payment. Idiots
I feel horrible for all the home buyers out there. Home buyers will naively go unrepresented to save money. I see lawsuits in the future from home buyers.
I can't wait to see how many buyers without representation get screwed out of their escrow deposits left and right because they went directly to the listing agent and or seller. Its sad but this is going to happen alot more now.
No because someone, likely mortgage brokers will take up that side for an additional 500-1000 dollars and make the money on volume. What it does is get rid of the half ass realtors who sell 4 houses a year. Like Commercial real estate it will be a career and not just a part time job for 15k people
So would you rather pay more for your food so that restaurants can cover the added wages? Or would you rather have the option of leaving a less of a tip or no tip at all if the service calls for that? What about when your favorite restaurant can no longer employ service staff who provide the great service to make your dining experience great? You’ll end up with servers with zero incentive to go above and beyond to earn your tip. Their complacency will destroy the industry.
@@Carlos18731 I am asking for for transparency, let the restaurant publish the prices factoring in all their expenses including labor. If they are atrocious, I will stop eating out. I am sure these restaurants are making tons of money. The same meal at home costs 1/10 to prepare, even if you add rents, utilities, labor, miscellaneous they are still making more than 100% on every meal served. They should pay their staff not customers
IMHO Redfin agents always accept buyers commissions when other brokerage’s listing agents place the 2.5 to 6% etc on listings. Not once have heard or read that a Tedfin agents, “Oh no please don’t give thousands of dollars yet please only give me 200 USD like we offer all our Tedfin listings.” Why the double standard? They should get paid what they offer as a company. IMHO
Bingo. Twice in the last 5 years I had buyers who looked at my listing with me, the listing broker, only to bring an offer with RedFin because they kicked back some of the COOP to the buyers.
@@jeffhambro ", they’ll simply be negotiated on a deal by deal basis going forward…" Not only that, but the final purchase price will still include all commissions paid by everyone.
@@jeffhambroThen they’ll be crying racism and discrimination until we beg for more government regulation. This is the vicious cycle to more government control.
@@joshhoward1289How did you manage to bring race into a conversation that has absolutely nothing to do with race? If you want to talk about racism in the housing industry (which this post has nothing to do with), while your already here on RU-vid, search for Redlining created by the FHA, Restrictive Covenants that prevented Black people from buying certain plots of land FOREVER, and Blockbusting practiced by Realtors.
I will say this. After 25 years in this ridiculous industry, I DO NOT, AND *WILL NOT* NEGOTIATE MY FEES. END OF STORY. If you want someone who will protect you, with years of experience and unparalleled integrity, you will pay the price as a buyer in order to not get screwed on the biggest purchase of your life. To my colleagues across the country, *DO NOT STAND DOWN AND DO NOT SETTLE FOR LESS.* So help me God you'll all see eventually that NAR wants nothing but your money. They didnt fight for their members or stand beside them. They EXCUSED THEMSELVES FROM LAWSUITS WHILE SCREWING YOU IN THE MEANTIME.
I’m actually looking forward to buyers freaking out about the lack of transparency about the fee structure and demanding that sellers pay up for their buyer agents anyways.
I didn't lower my fees ... when I struck out on my own I said if i'm just going to be a discount broker then I will go back to a big box brokerage. my average commission is about 2% higher than what the news keeps spouting off as the "standard" .... I also have a flat fee so if you sell a 30k home I make the same as if it was a 200k home ... once you drop below 200k is not longer a % and now the flat fee kicks in.
@@unclejesseandtherippers4047 I've talked more people out of buying homes than I've talked into buying homes. There are colleagues of mine in this industry who would sell their own mothers if the price was right, and they are sleeze with no moral compass. You have no idea how bad you'll be screwed if you don't use an agent/broker who's willing to give up a sale to protect you. I have a 5 star reputation for nearly 25 years in this sesspool of an industry. I'm surrounded by people who should've had their licenses revoked years ago and shouldn't have made a dime on a single deal but they knew exactly how to screw people using the right sales pitches. Do you know why they didn't have their licenses revoked? Because they screw buyers and sellers without them ever finding out. And I'm the one who can smell the rats from a mile away. I am highly, HIGHLY protective of the client, which is why I'm NOT one of the top agents. I'd rather lay my head on the pillow at night with a clean conscience after losing over 100K in a year, due to *talking people out* of disaster. And that is why people like me struggle. The lazy people who would do anything for a dollar are a thorn in my flesh and the very reason I can't wait to retire. So you are correct in saying we have all been offered the same amount on a deal, regardless of our years of experience (or lack of it) and that is hopefully what will now change. Anyone who goes with the "discount" will likely never know how bad they're about to get screwed.
Correct. They'll be only wanting to see homes where sellers are paying the buyer agent commission so the buyer doesn't have to....thus changing nothing.
Good news for Realtors as well! No more working for free with buyers until the close of escrow. A flat fee to represent buyers will probably be the norm.
@@bravehatsYou don't 'need' one, but if you choose not to have one I certainly hope you know the ins and outs of real estate deals, contingencies, how to cover your own ass in a contract and the right people you should involve in a deal. Do you know what to do if the appraisal comes back low? Do you know what an appraisal is? Do you know what all contingencies to include in your offer to protect yourself and how many days each one should be? Do you know good local closing attorneys and what their fees are? Do you have a trusted inspector who won't charge you out the A and do a terrible job? Who can come out the next day if needed? If so, great! Represent yourself! However 99.9% of buyers are absolutely clueless and can get screwed from a contract/purchase having no clue what to ask for or offer. Don't choose a doofus agent, there are plenty that know what they're doing.
Realtors don't get the full 6%, only one side, unless they serve as an intermediary. So, no, they didn't lose half their income. Only on the buyer's side being paid by the seller. It's basically decoupled the Buying / Selling commissions. The ones that suffer are the home buyers.
@@albertoacosta6788 What agent selling the average home gets 20k? The buyer's agent splits it with their broker, which they MUST have by law. 5% is split 4 ways.
Realtors should be compensated a flat fee or an hourly wage. They shouldn’t get stiffed when putting in hours opening doors for a buyer who’s kicking tires.
That's call time investment for getting paid top money at the end. If this is happens than people aren't going to hire realtors specialy we all know how they like lie to get the commission.
@@Light_Workerthat’s a stereotype. I’m a realtor and we have a lot more to lose being dishonest and why would we be? We’re 1099 independent contractors who are only paid when we close a deal. Then we have to account for business costs. If anything the consumers have a duty to make sure they’re informed and working with an agent that operates in complete transparency. I tell people up front how I do business and leave up to them. My time, both personal and professional, is valuable. That’s why I don’t punch a clock and work as a W2. If I’m working with somebody who acts like a person throwing a fit at the Wal-Mart customer service desk I usually just fire them and move on to the next person who’s actually serious about buying a house or selling.
@@ColinPMcEvoy agents should set their rates. The best agents can charge more than the dumbest opportunist rookie looking for a quick buck. The idea they all just get paid 2.5-3% of price is nonsense.
@@ColinPMcEvoy I don’t care how good realtor, they all care about sells and ONLY for themselves. They didn’t become realtors because it’s their dream to help people to find dream home. It is all about money. Therefore I am not getting any realtor in the future ever again due to my trust has been broken by thief. All transaction can be done through lawyer for few thousand K and other money to hire plumber, electrician and inspector and still money left.
The only true statement from this CEO is that prices will not come down because of this new changes. Seller will always want the max value for their home but now they have a greater chance to keep 2% more of what they used to get... Only as long as seller does not pay a buyer's fee.
if i offer $490000 for a $500000 house with no buyers agent and you offer $500000 if the seller pays your agent $12500 . i get the house and the price just came down $10k. plus the comp for the next house in the neighborhood just came down $10k
@@SteveDaniels-vi7zw not that black and white. The value of the home is the value of the home with or without realtors. A good buyers agent is in tune with their local market and can outsmart an unrepresented buyer with the right terms of the offer. Also, low ballers can often come with baggage and the listing agent will be performing double the work if you’re unrepresented
@@LJMarte8 Well innhis case it is. But not in every case and most likely in that exact scenario the buyers agent would take say 7500 instead of nothing
my last 3 closings was with non-represented buyers the buyers paid at least 5% more than the seller was willing to do but all my duty was to the seller to get them the most. I was shocked at what the buyers gave up in negotiations they have no clue about the "hidden cost" but they wanted to be non represented so I was cool with that.
Home prices have gone up 2-300% but realtor commissions ranged between 1-5% of the equation. Media outlets really need to be careful about the narrative that commissions had anything to do with home prices going up.
@@globalfamily8172 translating to your 150k house now costing 300k so IF commissions are scrapped does that mean you'll consider selling your house for lets say $200k?? Most likely not! Sellers will stick to their guns because commissions had absolutely zero correlation to property “values” to begin with.
Might as well go the Redfin route and that all realtors are to be paid hourly. I love working with first time home buyers. But if we’re talking about a drop to 1-1.5 percent commission rates for those transactions. I honestly will probably not take the work and focus on listings. First time home buyers is a lot of work but was the most gratifying. It was fun while it lasted
Platforms like redfin will do to home buying/selling what Abnb and expedia did to travel and vacations. It will actually make the process more efficient and ultimately more income for the players who survive. The future will be services from realtors who charge for things like staging, advisory etc... the whole process will be a la carte and the good realtors will make more money in the end. I know lots of realtors who don't make enough money to make a living because the market is too saturated with realtors. If ppl are willing to buy a car via carvana then buying/selling a home via redfin is a no brainer. think about how painful the car buying experience was via dealers that ppl are willing to buy a car sight on seen... insane... same thing. Too many realtors (NOT all) make the process so painful with their manipulation and intimidation sales tactics. There are many wonderful realtors but more that are terrible at their job. I had a realtor once sue me and send an email to my employer accusing me of crazy stuff because I refused to buy a home after the 3rd showing. The realtor said he doesn't show more than 3 homes because he is so good... since he didn't want to show me any more homes I hired another person for future home visits... I hate the process so much that I found my house on my own via redfin, ask the seller agent to show me the home and told them what I would offer and the seller accepted and deal was done. best experience ever. This is such good news for consumers.
I feel sorry for Realtors, now sellers can list their houses on Zillow and just pay the buyers agent or pay Zillow and Redfin and do the work yourself to sell the house…everything will be online, just click the service you want, inspectors, appraisers. No wonder this guy is soooo happy. Corporate America wins and the realtors lose.
@@narindersandhu8753, yep, the working class takes another blow. I’ll wait and see what happens in states where it’s illegal for the listing agent to represent both parties. The buyers will be left representing themselves.
I'm a retired Florida RE broker. I'd like to see real estate agents get paid like attorneys get paid. Retainer up front, paid by the hour and a percent at settlement. I agree that commissions should be negotiated. At the same time, real estate agents aren't paid until they close on the property, and that needs to change. Before I retired, I had my own discount brokerage firm. This is long overdue, and so is the way real estate agents are paid.
I like the way you think. More skin in the game = more qualified buyers = less wasted time. Buyers can work with a client for months, no pay, and the client at any time can switch agents. Very interesting take
Agreed. Imagine representing a buyer for a couple of months showing them home after home and then decide not to buy or get them into escrow and they end up not closing. No pay day for the agent.
Definitely a lot of misconception on this video regarding the $5000 flat fee, this is only pertaining to the sellers and not the buyers and redfin agents make their money off of an average 2.5% commission of the sales price which is not $5000. I don't think the reporter even knows how redfin is charging for the $5000 fee.
Exactly, Redfin's lowering of commissions has had to deal with primarily the seller's side, not so much the buyer's side. They took the commission in the MLS.
I am a Real Estate Broker in Southeast Florida and sadly this is going to hurt the industry in some way or another, and I have always said when this initial lawsuit started that someone higher up was behind bringing this lawsuit to the stage its in. Meaning that someone is going to benefit from this change and sadly the smirk on Glenn Kelman's face shows how happy he is this lawsuit happened and it will only make his business even stronger in the long run because they can offer lower commissions charged to seller, its competition for sure, real estate agents have to go out and prove to the sellers and buyers why they should work with you as an agent and not someone else. The Strong 🏋will survive just like in any other market or business.
my last 3 deals the buyer insisted on being no represented ... so I collected full commission and made a great deal for my sellers .. I had the buyers pay doc stamps and no pro rated taxes :) on one of them we had the buyer do a $2,000 electric repair before closing .. but the buyers walked away thinking they got a better deal so whatever :) they were happy my sellers think I'm the bees knees ... in honesty I wold say the buyer paid about 5-10% for the purchases by being non-represented " judging by just those 3 deals...because no buyer's agent would have let us present that kind of one-sided agreement.
This is whats going to happen to more and more buyers, if you are a listing agent you need to look out for your sellers best interest and get them the most money in their pockets at the end of the day. I would have done the same exact thing :-) @@christopherknight1890
The buyer already pays for the loan origination fees, appraisal, credit check fee, inspection fee. They pay the down-payment on their loan. Now they have to pay for the realtor too???? Who's going to represent the buyer? The seller???? This is evil!
In California the writing is in big bold letters and it clearly states that the seller is paying their agent a commission. If the sellers agent finds a buyer the seller still pays the same commission rate. Basically the seller pay 6% or 5% regardless if the sellers agent finds a buyer or not.
@@3joewj and then nobody will show the house. thats the whole object of the lawsuit. pay your own realtor or negotiate it in the offer. not the listing
There is no guilt. Just because the justice system doesn't understand that realtors actually already hold a pretty competitive line for commission is not guilty. What people don't understand is that the commission for land and commercial use to be twice as much back in the 90's because prices were so low. Nobody was willing to provide the service because there was no money to be made on land and commercial was considered the big gamer in town.
There are no set commissions since agents are independent contractors..I used to own real estate offices, I couldn't force agents to charge a specific commission..they could charge as high or as low as they want
I don’t really understand this law suit. In the listing agreement between seller and listing agent has a line where total commission will be paid for the listing agent to take the listing and another line where it shows clearly how much of that total commission will be split to the buyers agent. It’s in black and white in the agreement and the seller reads and signs the agreement agreeing that the listing agent will compensate x% of the total commission that seller have agreed to pay for the listing agent to be split to buyer’s agent. Done seller agreed to that the seller was not being misleading
That's exactly what the lawsuit is about. Sellers do not want to pay the coop commission to the buyer's agent. The seller's say, and the courts and the NAR have agreed , that the buyer should pay the buyer's agent. So there will no longer be an offer of compensation for the buyer's agent on the MLS. So why would an agent want to be a member of the MLS or NAR?
@@ArmandoRodriguez-wo6cv Break the association/ break the industry. It’s an attack on the industry and zero f’s given to the consumer.. same seller who doesn’t pay a buyer commission on their sale will pay out of pocket (one way or another) during their purchase. Listing Agents will need to increase $ to cover more expenses in dealing with unrepresented buyers… who now we must educate and insulate ourselves & our clients from frivolous lawsuits.. 😤 Attorneys win.. no one else … agents work more and have the same inflation costs the rest of America does.. but I bet the 32hr work week saves us all! Can’t wait!
@@ArmandoRodriguez-wo6cv "...that the buyer should pay the buyer's agent. " I remember this from RE school "The buyer is the one who pays for everything". And it's true for any transaction for anything. In practice what this will do is that a property will list for a certain price that does not include the buyer agent's commission, but the actual purchase price will include all commissions.
@@RoughNeckDelta What this will do is drastically reduce the number of agents, especially those that don't list much. The NAR may eventually cease to exist. The main reason I've been a member of the NAR and FAR (FL) is to have access to the MLS where I "had" access to listings that I knew I'd be paid if I procured a buyer for a successful closing. That won't exist anymore after July.
That this will end up hurting consumers in the long run. Other countries already do this and it hurts the consumer and they WANT a system like the US has.. not to mention, we USED to have a system where the seller does not pay the buyers agent, and it was terrible and that is WHY the industry adopted cooperative compensation with the MLS to begin with. @@DaleH2o
Hi Samantha, I think you are missing the point and a little tone deaf. I mean no disrespect, you are probably awesome. Most people put realtors in the same bucket as used car salesman. If realtors had not abused the system then this awesome change would not have happened. You may be a great realtor and add value worthy of 5-6% but most are not. The industry only has themselves to blame. Just like the car industry (carvana), travel industry (expedia), lodging industry (Abnb), medical industry (health insurance) and the list goes on and on... when there is abuse, someone comes along and disrupts the system. In this case NAR was so powerful with their abuse and monoply that the gov had to step in. I have bought and sold 7 homes in my long life and there has only been one realtor who I can say has earned his money... I would gladly pay him full commission, the rest are not worthy of the gum on my feet... I was scammed by 2 of the 7 realtors... terrible... my current realtor was supposed to find me a home in FL so that I can use as a rental property when I don't use it and she would only give me properties after she vetted it and didn't want it for herself... WTF... should I not fire her for that... I called many realtors in FL and realized they were all doing that.... one realtor told me, all the good ones will get snatched up by a realtor so there is no way around it. at least he was honest hence I started using redfin only.
This will actually cause huge issues for buyers. Example: 2 buyers going for the same house and approaches selling agent on their own (using no agent). Buyer 1 offers full price (has little money extra to pay commissions), Buyer 2 offers full price and offers to pay agent $10k in commissions through closing cost. Which Buyer do you think the Selling agent will push for? Seller chooses buyer #2 and gives the seller a kick back of $3k as a gift with closing cost. So many other examples where this falls apart and eventually leads back to a similar place where there's an unwritten rule for commissions that everyone plays by.
Any buyer with a competitive disadvantage will have to pay their agent more to handle their transaction becuase it will take more offers and work to get their offer to go. This is any FHA, VA, Credit challenged, the first time home buyer program in california, these buyers will have to pay more to be represented.
honestly, i'm primarily a listing agent, I do work with buyers but I'm very selective... its going to not end well for buyers they truly need someone to help them through the process " finding a home isn't even the hard part " its keeping the deal together for 45 days when no one else involved is doing their job.. a buyers agent is more like a transaction manager so many road blocks along the way
Agent compensation will not be shown on the MLS. Buyers compensation will now be discussed between buyers and agents directly. They will know immediately what they will or will not be getting paid
Long over due, it contributed to the housing price inflation. Every time house is flipped it had to appreciate by 6%+ to cover the commission. Unsustainable.
They were always negotiable, and a seller, as they always have, will have to decide if paying listing agents and buyer's agents helps them sell their house and for more. The same they always have.
You don't understand the process. If you only knew the fires I put out, the comforting of helping someone sell their parents home after they pass away, the intricate detail of dealing with structural issues that arise, the first time homebuyers need for understanding the process and making sure they are not buying something that is too much for them. The countless hours of finding contractors, solving problems, handling negotiations with personal items and what conveys. the issues that arise with surveys, roofs, basements, mechanicals, pools, fencing, encroachments, septic issues, well issues, the list goes on. Dealing with appraisers, lawyers, and mixed in with all of this is emotion, stress, and tears. It is much more than you think and none of it is in a book. It is an ongoing education for life.
*I feel like the more I learn about our country’s low income people, my anger grows.imagine lnvestlng $1,5OO and receiving $9,3OO proflts in 5 days. 😇Thank you Ms Peggy Shawn, the lady you recommended here sometime ago is the best.🇺🇸*
Wow! Nice meeting someone who also work with Peggy shawn, she's the only one I trust, she got me proflts of 11,OOO with a little start up of 2,5OO and ever since she's been good..
Kelman nailed it at the end. No, prices won’t come down even if commissions get reduced. The market will bid to what it will bear and the sellers keep any savings, until buyers get wise to that and demand a return to the current split commission system.
This will lower prices in some instances. Seller A offering no buyers agent compensation can list his house at 490k and make more than his neighbor Seller B, who lists at 500k and is paying buyer agent commission. Obviously assuming it sells at that price. A seller not paying that buyers agent commission can position themselves better, meaning lower price. I think sellers will feel the need to compete. Certainly buyers can drive those prices back up.
@@TheFlounderingAfter the first few months of adjustment to the new rules, there’s no net difference. Seller A offers no buyer side commissions and gets a $500K bid while the buyer pays the $12K commission at the closing. Seller B offers a buyer’s commission and gets a $512K bid and pays the $12K at the closing. Unless the buyer does all or some of the work himself, the amount he pays is the same. Then again, that’s how it goes now with various buyer agents.
@Penny-mk7fvHow would the buyer get a tax deduction? There’s no deduction for transaction fees for buyers unless you’re an investor. So instead of letting the seller take the tax deduction, the buyer pays the same without a deduction. Rather silly to do.
All of these brokers are making false statements regarding how commissions and representation work. Buyers HAVE NEVER been required to pay a commission to a Buyers agent (a Buyer Broker fee). This guy just said that Buyers have never had the ability to negotiate the fee they pay to a Buyer agent. What the heck is he taking about??? You don't need to negotiate something that you don't have to pay for!!
Redfin is garbage The world should’ve supported realtors on this one And should still continue to support realtors A commission was always negotiable It could even be one penny or one dollar There was never a set standard Think about it like this When you go to a restaurant and the servers, not getting a lot of money, they have no knowledge of the food When you go to Walmart, the employees there have no knowledge on how to help you or assist you in the supermarket When you go to a bank, tell her barely even knows about money and financing And what you guys are doing with real estate is one day you will go to buy a house and you will be dealing with somebody that gets paid $30 an hour and they will know absolutely nothing about real estate You are creating a world we’re stupid people get rewarded This is disgusting It should be the people that studied hard and try hard and work extra hard, setting the rules Not all you people that are stingy or don’t understand the process or never took 20 minutes of your day to talk to a realtor to understand
That is another scam from the shark lawyers. I bet the attorneys is getting a lot of money from the law suit and I wonder how much actually the plaintiffs will get
Redfin and companies like it or the real issue. They offer reduce commissions because they buy the homes and drive the prices up and flip them. That’s what driving. The pricing up is large companies buying up all the inventory instead of actual families. This spin that commission is what drove the price up is insane. If it was agents driving, the price up, the homes would never appraise and never be financed in the first place. What’s really driving the price up is companies paying cash whether there is no appraisal in selling it for 100 K more than they paid for it
As a builder and agent, I see you paying the most. You will have DRs of the world offering 3+3 incentives. You tell me that won't steer clients? Builders will inevitably offer the largest concessions. It's already been in my market. 😂
Has anyone noticed the demand in the real estate market lately? That is what is driving up cost. People know they can sell their house for really high prices since people are desperate for houses . There is not much product on the market. I don't see this lowering home prices just hurting buyers that are already hurting trying to find decent houses. Now buyers will have to pay fees up front for a real estate agent to help represent them and traverse negotiations, deadlines, contracts, etc. So as a buyer, why would I deal with a seller that would not help pay for these fees that I eventually will pay for anyways when I buy the house? The seller then loses marketability. You answer, just use an expensive real estate lawyer that charges per hour to negotiate all of these deals. Great if your rich. Bad idea if new buyer or low income. I get it if your familiar with real estate and wealthy but this sucks for low income, new buyers.
Agreed. You can negotiate a deal where the buyer pays you over time like 2-3 years. Markets will adapt, new models will emerge, but one thing is given that buyer side commissions are going to come down overall.
First and most payout goes to the lawyers, and then the class. How does the consumer benefit? This was addressed many years ago, and now some new lawyers decided it was time for another money grab.
This is a pretty horrible decision. It’s only going to result in the following outcomes: Buyers spending MORE money to buy a house. Sellers NOT SELLING THEIR HOUSES FOR MARKET VALUE. Why? Because if buyer’s agents don’t have buyers because the buyers now have to pay more money to purchase the house and they don’t have it the house doesn’t get sold. Also, a listing agent will invest more time and money trying to get a qualified buyer for the house which means less money to their business and a drop in services offered in order to maintain profitability. Or…you get what you pay for. This move will ultimately hurt consumers because it doesn’t factor in how things actually work. It focuses on the perception of realtors getting paid too much to do nothing. Believe me there are realtors that go above and beyond and then they barely make any money and leave the business because of it. This will hurt home sales and the economy in the long term. Get ready, rent is going to skyrocket over the next 10 years to the point that a majority of the country will be renting and housing conditions will go downhill because there will be zero incentive for landlords to maintain their properties because they’ll be making BANK off of slums.
@BhagyaWijewardane Exactly, you forgot to mention that Zillow is acting as a monopoly. They are brokerage agency, use our mls data and sell back to us, owns showtime and dotloop (any real estate agent who use dotloop and showtime are given away all their data, all info of our clients, contracts, everything for free) have anyone wonder why dotloop doesn't have a delete buttom in their system? they use only archive buttom, meaning they never delete these data and nobody say o do nothing
I'm surprised that Zillow bieng a broker in all 50 states with the money they have ....that the lawyers didn't target zillow it has way more $$$ than nar
I think Mr. Kelman's happy-talk is to sooth Redfin investors and keep the stock from further drops (down 15.91% in the past week). Redfin built its business partly on the tactic of "rebating" part of the agent commission to the buyer. As I understood it, the seller still paid the full buyer's agent commission, but part of it got passed through to the buyer. Not a better deal for the seller, and potentially the buyer is only getting back some of the money he financed into his loan. Redfin just announced their "Sign & Save" program rebating 0.25% to 0.5% of the sales price. Not clear where the money comes from or what criteria have to be met, but with seller paid compensation now an unknown variable, it will be interesting to see what the play is here.
I am a Realtor and wow people have no idea how this industry works. 1. Sellers could always negotiate the commission rate 2. Low commission brokerages hire sub par agents where customers get upset with sub par service. 3. Buyers don't pay their agents at all sellers pay the buyers agent and buyers could always ask the agent to lower their commission. 4. This isn't changing much other than giving buyers a say for commission THEY WERE NEVER PAYING FOR AND COULD NEGOTIATE ALREADY. 5. In my area agents were agreeing to 1% commission during the 2021-22 housing craze so commission was already lower for agents to be more competitive with each other. 6. Good luck finding a quality agent who will work with you for little pay, you get what you pay for and you get quality agents by filtering them out.
Selling, outside of pictures and staging (which is outsourced), there isn't any value. Buying, people find their own homes to look out now with redfin and zillow. The only part people are uncomfortable with is negotiating and putting values on repairs. Its become almost as bad a car sales reps. 6% off the top to deal with paperwork is absurd.
based on point 3 you said, you are still dreaming in yesterday's dream! What is this lawsuit about? ALL EXPENSES AND COSTS COME FROM THE BUYERS! Buyers take a big debt of loan, and all agents take CASH out of the transactions! YES, YOU SHOULD KNOW EXACTLY HOW IT WORKS!
Wonder if the buyer is going to be on the hook to pay payroll taxes, gas, E&O, Franchise Fee, MLS fee, Supra Fee, Corporate Tax fee and more off of that 1 deal...
Buyers are not that dumb to just pay their agent a fee. They can freely go to another agent or straight to the seller to make an offer. Get rid of the middle man!!!
You will have thousands of agents leaving the industry & you’ll be left with 25% of the current agent base which will ultimately drive up commissions all as part of the unintended consequences of this action!!
When asked why he robbed banks, Sutton simply replied, “Because that's where the money is.” Buyers have no extra money. The equity in the home is where all the money is. When buyers can’t afford to buy, sellers can’t sell. This is a loose, loose, loose, loose situation. If you want to get a sold sign on your home, sellers will offer to cover the cost of the buyer’s agent. Sold! Same as it always was.
Commissions do NOT drive up the price of a home - it's worth whatever fair market value of it is - the home appraiser does NOT factor in what the seller is paying commissions. FSBO should be outlawed as well with this reasoning.
Sellers do not want to pay the coop commission to the buyer's agent. The seller's say, and the courts and the NAR have agreed , that the buyer should pay the buyer's agent. So there will no longer be an offer of compensation for the buyer's agent on the MLS. So why would an agent want to be a member of the MLS or NAR?
so my real estate board sent an email out that said that you can still pay the coop commission, you just can't advertise it on the MLS. If that's true, then the industry doesn't actually fundamentally change here. I think this is a huge media campaign to make the public think one thing in an effort to change the industry through social change because legally, they didn't actually do away with commission sharing. So, ok, I just call listing agents ahead of time, send them a broker to broker agreement for the split, and everything is as it was before. Seriously, without outright banning commission sharing, this doesn't actually do anything except cause a lot of anxiety
@@easylivingaustin512Then there is no point for the MLS or NAR. The whole point of both is to share information and foster cooperation & transparency. Having to call every listing agent to learn the commission split is stupid af.
He’s so full of crap! Oh you can put it in the offer and the Seller can say no……so now what do we do Mr. Redfin billionaire? Work for free? Oh wait ask the Buyer to pay us when they barely have enough money to get into the home? I can spend 50 hours or more and miles and miles of driving to find Buyer the “right” home for them now we have to do it on a wing and a prayer? Wait they can use the Sellers agent and fail to be properly represented. That’s the ticket sell your soul to the lowest bidder dam be the experience of Buyers agents. The only ones benefiting from this will be all the attorneys who by the way charge 30-40% of any settlement. When will the government step in and talk about their antitrust and collusion issues and make them start charging less. We put this in the MLS in the 90s to protect consumers because of all the issues and inadequate representation so let’s just go back to the failed system. Ridiculous. But we have all the way to July to reinvent an entire system. This guy hasn’t spent a weekend showing properties to clients in years.
The seller will just pocket the difference. Rather than having the 5-6% net out of the sale price, sellers will now pay 2-3% and keep the difference. This is a joke.
This is the dumbest thing ever. The fee that a sellers agent charges the seller has always been negotiable. It’s going to stay 6% because that’s what realtors need to be paid in order to survive. Yes, they are paying the buyers agent 3%.
HUD foreclosures played with different amounts to listing agents and buyers and eventually settled on that amount because the data showed it just worked
Real estate agents may eventually go the way of the travel agent. There will always be agents available for those whom value their service and can afford it. Everyone else can do it themselves or see how good AI is at it.
I agree, some of my best friends are agents but all you need is a good bank and good credit. I would feel really stupid to let someone do my talking for me. I have great communication skills. Buying a home would be a good learning opportunity for so many people. Do it yourself
this settlement offer is a trojan horse crafted by the NAR that keeps the monopoly of higher commissions in place. The only settlement that will fix the problem is the complete decoupling of seller/ buyer commissions. Buyer agent compensation should not be allowed in the listing agreement. if you want to negotiate it in the offer, thats fine. The statement " buyers compensation will not be listed in MLS" is useless.. who cares, do you think realtors don't have phones. "what are you offering on the buyers side. Oh nothing or 1% , never mind, ill show my buyers something else." Then theres the requirement of a "buyer agent/ customer agreement " . Its simply a way of locking a buyer into an out of pocket payment they cant afford, if the realtor doesnt make what he/she wants.
Nothing is going to change, sellers will still pay buyer agents 2% - 3% commissions to bring them buyers and 5% - 6% commissions to sell overall. If you pay attention to the details, the only change is that agents cannot list the buyers agents commission in MLS. Listing agents are still able to share the commission they charge sellers and offer buyer agents commission to bring buyers. Nothing has been stated that commissions need to be lowered or that buyers need to pay their own commission, that is not going to happen. The only thing that will change is there will be a new way that listing agents communicate how much commission buyers agents are receiving. That will be the only change. Also New Construction Builders will continue to pay commissions to buyers agent to bring them buyers, so the resale market will need to stay in line and pay buyers agents as well. No major changes will happen
Commission is always and should always remain fully negotiable. If a seller won't cover the buyer broker commission, it's reasonable for the buyer to be required to cover that cost. It'll be interesting to see how it plays out, but I wouldn't be surprised if seller's agents still encourage sellers to cover the buyer's agent commissions in order to remain market competitive. If not, and the buyer is responsible for their agent's fee, then it will be added into the total purchase price and closing costs and could put downward pressure on home prices because of it, albeit likely minimal.
Sellers are going to see comps which include all commissions paid and will want to list for that price which will not include the buyer agent commission. But the final purchase price will still include all commission paid.
What a mess!?! Ok, we just do advertising, 2 free RE ads every 48hrs., no cookies, very easy to use. Very soon FSBO, realtors, and brokers will need affordable alternatives. We are just getting started and we are happy to help.
Buyers agents are needed. The listing fee isn’t needed in my opinion. Since I own the home I have leverage but I do need help finding a buyer. Now the buyers agent has to work and learn how to analyze comps. The skill is the ability to crunch numbers.
With commission compression comes PRICE COMPRESSION- this preludes what’s to come, volume of inventory- where real estate services will make less, yet making up in volume to move service the next “cycle”.
Commisions have always been negociable .you dont have to be on the MLS .to sell a house .analogy save money on dentist buy pliers lowes and do it your self and see what happens
So funny thay Redfin is weighing in on this topic. They are going to be put out of business! 😂 One of their key offers is a rebate on the buyer agent commission offered on each listing. That is GOING AWAY! How will Redfin make money now? 🤔
That's a joke, this will NOT lower home prices! Sellers will still sell for as much as they can get for their home, and experienced listing agents will be able to effectively communicate to their sellers that buyer's agents will simply request it in their offers. If the seller does not accept the offer, then either the buyer will pay their agent directly per the contract, or they'll just move on to another property in the area.
This will mostly hurt first time and low income home buyers. Most of them don't have money for a down payment and closing costs, so how will they come out of pocket to pay a Realtor?
Why would a seller "lower" the price. This is ridiculous. The issue has always been buyers trying to get into a home. Sellers would just earn/keep more by having to pay less on the buyer side. Make no mistake, the big losers are buyers if they have to pay anything more out of pocket.
I don't understand how this is going to benefit honest people. A buyer, without a good realtor, is likely to sign for a fixer that looks good on the outside, and has tons of issues because he's talked into skipping the inspection process. That's just one reason to have your own realtor. If the seller isn't going to pay for that realtor, the buyer has to pay somehow...that's weird, and most could not possibly do this up front, they are near broke after such a purchase etc.. Someone found a solution to a problem that did not exist IMO.
That’s not the point. In this case, these lawyers worked for years without any compensation, and without any guarantee of payment at all. But they changed the course of the industry for good. so they deserve every penny they get.
Its shocking how bad our education system is since clearly none of these people understand supply and demand economics 🤦♂️ The price of real estate is set based on buyer demand. The commissions are meaningless to setting the price of a home. If I list a home for $500k but then it sells for $575k because all you buyers bid the price up, congrats you just raised the average home price in the neighborhood, and the next similar home to list in the market will price at $575k, not $500k. Why? Because thats how much someone else was willing to pay for the similar house in the neighborhood. My commission could be 1% it could ve 50%, it doesnt matter, its totally dependent on buyers and what they are willing to offer to pay.
List agents still get their money... Most big list agents get 6% and keep out competition they will not change their ways.... Getting rid of the compensation field doesn't get rid of the compensation... Buyers agents typically do all the work, they work with a buyer and take them to hundreds of homes point out any defects or issues (legal or otherwise) negotiate price, coordinate with inspectors, appraisers, (the mom and dad that want to see the house), multiple attorneys and their paralegals, land surveyors, the endless line of people that work for the bank, and the aloof list agents... Often times to hit a dead end and start all over again to head on the road for more showings all without pay.... The compensation was to let buyers agents know if they sell the house they will be getting paid, no one will try and weasel them out of a check after they spent a year and a half working with the clients.... The idea that you would sue to remove pay for the person that works for the best interest of the buyer is insane.
With the technology available today, all any buyer or seller needs is one Realtor involved Period. Change contracts to read different. Lower cost is what it is all about. Agent's don't get it, their taken it the wrong way. Agent's will not lower their fee's on their own so, here you go. Appraisal companies need to be next. No Agent's should be able to talk with a appraisal company. Increasing values for too many reason (buyers closing cost, more commissions, etc.) change, change change we need thank you
So many unrepresented buyers will get screwed by unscrupulous sellers and their agents. The only winners here are the lawyers. I notice they get paid first, and then the plaintiffs. What a shock…
Let's just face it: the buyer broker works for the seller, not the buyer. Otherwise the buyer would pay the broker for their time, not only for the final sale. I think the problem isn't that the brokers can see the offered commission by the seller agent, resulting in 'steering', but that the buyer and seller cannot. That is what's preventing competition. I mean if you can keep negotiations 'amongst yourselves', let the suckers pay, right? Also they probably need to advertise how much they are going to charge for a deal up front, not only once you found the right house, and most of it a fixed price, with only a fraction being percentage commission, at least that would be more competitive if everything was transparent
Funny.....Redfin probably still pays plenty to their "own" agent but want buyers to negotiate with the buyer's agent. The seller's side needs to go down, not the buyer's agent side. You get what you pay for. How's Redfin doing these days? In the end, only the seller wins. The market has always been geared toward the seller.
This Redfin guy is a fake interview. Nobody in their right mind would respond to this situation the way he has. This is a sham to make people believe that something was wrong in the first place and that this is a good thing. I have been a realtor for 40 years and there is a whole host of problems and negotiations that need to be dealt with in every transaction.
True, he can't be happy about this. Redfin is mainly about lowering listing fees. They took the commission in the MLS just like everyone else for buyers. They didn't call up listing agents and tell them to offer less to buyer's agents.
This is going to be such a disaster I have a feeling it will go back to the old system quickly. Especially in a place like Florida where Buyers are moving from out of state, many don’t speak English, don’t know the area. Buyers agents are needed and they won’t work for free.
