I agree 100%. The bulk of my transactions over 20 years have been immigrants, many non english speaking. Unfortunately, I've found that many agents mistreat their clients. My advantage is that I'm bi lingual and bi cultural. Immigrants don't understand the process, it doesn't exist where they come from. In SA, if I hire an attorney for $xxx, my opposition is likely to pay that attorney under the table so I lose. If an agent or lender tells them that they have to buy a set of pots and pans for $1000 to better their credit, they will do it. Fiduciary duty is a first world word that we speak but don't always practice. Every broker that I've ever worked with has demanded a minimum standard of how much we should charge, and how much we should make. The attorneys prosecuting this case that has been ongoing for almost 5 years are delirious over all those dollars falling on them for our lack of due diligence. Even though 40% of sales are usually first time buyer, they aren't included in this conversation. How are we going to help them?
Tristan, you said this perfectly. I'm in the Midwest, not a big city, and I promise you...your points about who will be affected by changes in the proposed lawsuit settlement is ALL we talk about here. The media absolutely DOES need to tell this story but beating up NAR and REALTORS gets more eyes on their "news" reporting so until the negative results start rolling out (if these changes take hold) nobody in the media will tell that story. My fear is that when they do, it will once again be blamed on REALTORS instead of the regulations and rules forced on us by those who have no idea what we bring to the table in terms of Value, Knowledge, Professionalism and Service provided in our fiduciary towards our buyer and seller clients. Glenn Swick, Designated Managing Broker, Swick Realty
Like everyone else, I agree. I was also wonder what will happen to relocation companies? If commissions go down in the buy side will they ask for larger percentages? Another thing... could you record something to help us sleep at night, you have the most calming voice 😄
Great video thank you so much! I would like to ask Mr. Ketchmark one question. 1.Would he be willing to go on record and tell all of the sellers in his class action lawsuit that they will not increase their liability at all by having an unrepresented buyer purchase their home? In my assessment I have 3 primary jobs when listing a home for sale. 1.Sell the home for top dollar 2.Negotiate the most favorable terms for my seller 3.Minimize my sellers risk of being sued after their home sale is complete.
Another aspect of this lawsuit, in addition to the representation issues, is going to be a disparity in commissions. Homes in the lower price ranges, the ones these demographics will be purchasing, will cost sellers more to sell. Higher priced homes with more affluent buyers who will not need assistance from sellers like the lower priced home buyers will. So in addition to buyers in the lower price ranges not getting representation as they should, sellers will pay a larger percentage of their selling price in order to sell their homes. This lawsuit is yet another tax on the lower middle class.
@@TristanAhumada this is absolutely true as far as the lending side needing to make a few changes and honestly after watching you convo with the Australian Realtor I do t see how that model does any good for the buyers. With litigation in this country being how it is do you see buyers suing eventually due to getting taken to the cleaners because they can’t afford representation and didn’t have any? I would love to have a conversation with you about this .
These are all fantastic points, Tristan. One thing that wasn't mentioned, that is also very prevalent is the fact that it's against VA guidelines for a VA buyer to pay for any real estate agent fees. So, either the seller pays for the buyer to have representation, or VA buyers are being completely neglected from representation altogether.
Tristan, Thank you so much for this. I heard two interviewers on MPR taking about this new settlement that was so very absurd where they had no understanding of why or how this works. You should call MPR and have them interview you! Your covering it beautifully.
Thank you. The challenging part is most of the media doesn’t understand the world that you and I function in daily. And the media has a job of bringing in the most eyeballs to read their news, and they know that absurd and crazy, and fake news attracts the American population as a whole.
And it goes the other way too, I will sell my house pay buyer agent commission, buy my move up house and have to pay my own buyer agent commission. Now I lose paying twice. It’s gonna be goofy until we settle in. Ridiculous.
Oh, I was listening to an NPR interview by two people who are not agents sounded like they had never even purchased a home before and they literally said that NAR has a monopoly because they owns all of the lock boxes in the US. That you can’t even get into a house without NARS approval. Theirs so much misunderstanding
Yeah, we’re finding that a lot of the media is misinformed and doesn’t understand the way that Real estate works. They try to report on it but have no full function of realities.
Tristan you are so so so spot on! My heart bleeds for the Veterans. I had a family last summer who I wrote 13 offers for and they still don't have a house. It was hard enough for them then, now it's almost impossible with a VA loan. Low income, FHA is the same thing. None of this is protecting the BUYERS!
Same here, I’ve been licensed since 1999 and worked mainly with FHA homebuyers for the first 15 years of my career. My heart is breaking. Buyer representation for this group is crucial! Getting into a home now, even with 3 1/2% down payment nowadays is cost prohibitive for so many! It’s just widening the gap.
Once again Tristan, you are amazing. Yes, the first time home buyer and lower income buyer will be short-changed. Thank you for putting this issue to the forefront.
Can't you see the lawsuits from unrepresented buyers who don't understand what they've done & feel taken advantage of, against sellers and their agents?!
this has happened before, and will happen again, and yet again, people will see the need for buyers agents. it’ll be a year or so of lawsuits and then right back to where we are
Great analysis, this is the conclusion that many of us in LabCoat Agents have come to: Blackrock wins, the little guy loses. Even if you have representation, even if you get a great loan program and assistance, with the ability to negotiate each deal what stops big bank from eating it all?
Fantastic video Tristan! You are 100% spot on. Absolutely love that you are bringing these facts to light because I agree with you 1000% that Buyers will ultimately get screwed with this settlement.
Not only that and this is a big one. The lack of representation for first time buyers it's going to give corporations who are buying up to 30% of the inventory to put on the market as leases a huge leg up. They are literally licking their chops, now they know that home ownership is out of reach of FTB's
Residential real estate is now commercial real estate. Now listing agents have a chance of doubling their money and buyers agents are in trouble. Buyers agents actually do most of the work and now they get less pay. The media should be educating the public now to explain that all real estate is written….so that way buyers aren’t surprised that all of the oral statements made by those listing agents don’t add up to a successful lawsuit. But…they didn’t need an agent, right? This settlement has done really nothing to “lower the cost of real estate.” It guts the industry of the bleeding hearts and only leaves the High D, narcissistic agents.
The unintended consequences of this nuisance lawsuit are huge. It will make the consumer experience worse for buyers and sellers in an already consumer unfriendly experience.
I don’t understand something: seller and listing agent agree on a certain % commission. If listing agent brings a buyer (dual agent or designated agent) seller doesn’t have a problem paying the 6 % but if there’s a buyer’s agent and listing agent offers a part of the commission then that’s an issue?
If the listing agent brings a buyer they will need to negotiate the buyer side compensation. Listing agents will negotiate their fee to list and sell a home separately.
Great info! I agree that buyers will get screwed over especially if they are going direct to seller regardless if they are buying for the 1st or 10th time....
Hey Tristan, does it say specifically in the settlement that commissions can't be part of the offer or as part of the financing? Buyer could make a case then that they are only paying for their buyer representation with the offer. Now seller needs to figure out how they pay listing agent, which they then probably take from proceeds. If a hot sellers market probably an issue but it doesn't make much sense.
No, it doesn’t. The settlement just says that commission amount can’t be placed on the MLS and seller doesn’t have to pay a commission to the buyers agent (which didn’t change much from the way it was done before) The thing that was specific about this was at the commission can’t be placed into any buyer, concessions, and loans don’t allow buyers agent commission to be rolled into the financing Because the media made a big deal about this in the wrong way the sellers are now thinking that they shouldn’t offer a commission to the buyers agent, which creates this specific situation. I think over the next few months, the stronger real estate agents will educate the consumer and , we will solve for this in the long run. And I agree with your comment above.
I don’t think it will, I think sellers will relent and resume paying. It’s going to take a few lawsuits and lack of showings for things to go back where they were.
@@TristanAhumada BTW we’ve done buyer agency in our state for decades so it’s not such a hard concept for us. Unrepresented buyer smells like a lawsuit waiting to happen.
The lawsuit is a good example of a solution that had no problem to solve. Sellers RARELY lower their price to accommodate un-represented buyers; builders will often pay buyer agents but do not lower the price if the buyers are UN-represented. Now, can an argument be made that Realtors DO NOT convey their value proposition to buyers very well? Yes, they need to get the buyers to understand how they will protect their best interests within the scope of their license; Sellers often have a representative so the buyers should be represented, as well! And no, RU-vid university is NOT as good as a licensed/well-trained real estate professionals/NAR members!
Buyers will soon understand that the only houses that a buyer agent will show them are houses that the seller is paying a commission, unless the buyer is willing to pay it or add it to the price of the house. It will be interesting to see if the commission the Seller offers has anything to do with the number of prospects they see.
That is one of the major pillars of the lawsuits and That is why BAC is being removed from the MLS. The DOJ and courts consider it steering if an agent or buyer avoid touring a home based on the compensation to an agent. If the DOJ has their way buyers agent compensation will be negotiated between the buyer and their agent and the agent will negotiate their compensation with the seller.
This is what we are all talking about in our offices, this is a nightmare for buyers! When do we get to show our point of view in the main stream media? The "talking points" scripted coverage is so biased it is insane! It should come with a disclaimer: note, no actual real estate agents were interviewed for this story!
If this rule goes through ... VA buyers will be affected because of the "non-allowables". VA and lenders will need to revise their rules and get creative with their lending. Also ... this new rule will expose the buyers ... sellers will now know who's buying their property and redlining will occur
How will buyers be exposed and sellera know who is buying their home? How will it be any different than it is now? I truly don't understand how it will expose a buyer to Redlining if a listing agent writes a contract vs a buyers agent. Let's be honest the overwhelming vast majority of sellers only cares about who is giving them the best price and terms that best fit their needs. .
Thats a stupid response. A buyers problem will soon be a sellers problem when they can't sell their home and their market value plummets. Problem for everyone.
@@annbanos304With the constraints on inventory levels in most marketa sellers will get offers on their house. If it ever changes things might change but that maybe a 5-10-15 years from now.
First of all VA buyers aren't allowed to pay for commissions - so that's going to have to change. I am hispanic as well and work with many first time home buyers and this is going to be really unfair for them. Also this is going to allow more investors buying properties in low-income communities, leaving less opportunities for potential homeowners - no bueno.
Buyers Agency, as we knew it, is over; we will see a rise in Dual Agency, which will open the door to a lot of "conflict of interest" claims. Buyers will be unlikely to pay for the representatives so Buyer Agents are effed as well...
This is a major change that will honestly shake up the industry imo. On another end, It’s truthfully in the hands of how listing agents approach and navigate these conversations with their sellers, they also have a hand in how we, buyer agents will be treated. I have clients on both ends some who have the means to pay me what I’m worth & see the value I bring. However, there are many buyers I work with & it’s takes them a year+ to muster up every penny just to afford their first home. How in the world do I now go to them and explain they are now responsible for my compensation on top of down payment, closing cost, moving expenses etc. or forfeit having proper representation? (Granted I understand we can negotiate for a seller to still compensate, the responsibility and difference in payment still will fall on the buyers) They’re the ones who will be negatively affected the most from this ruling. I can’t help but think what is the greater agenda?
True. What is the real agenda. IMHO, the people making these decisions and rulings have no understanding of the industry that has seem to work fine for almost 100+ years. Are there agents who potentially "steer" unsuspecting buyers away from low co-op. commission? Sure, but again, IMHO, it's so rare, and gets rarer when the inventory is limited. I know personally, I set up searches for clients based on their wants/needs/budget. You can't filter homes by compensation. At least our MLS does not allow that to be a filtered search field preventing agents from doing that. Make that a law to help out if it's not already one for ALL the MLS's. Next, if my client happens to see a home they love, and it's only paying 2% vs. 2.5 or 3, well, then so be it. That's the cost of doing business and I'm not going to dissuade a client away from that home just because I"m getting less than normally expected. Here in GA, when we take a listing, we negotiate the total commission to the sellers and how that commission will be shared so I'm not certain where the so-called lack of transparency is? It's all out in the open, AND, everything is negotiable at all times. If this pass's through "as is", I"m afraid this is going to be giant $$it, $$how. There's already a huge lack of understanding and knowledge about the Real Estate business as it is that we have to educate both buyers and sellers about. This just complicates things X 100...sorry, off my soapbox.
