Posted on 11/08/2023 6:23:49 AM PST by where's_the_Outrage?
The recent $1.8 billion jury verdict against the National Association of Realtors and several top brokerage firms highlights mounting legal and market pressures on real estate commissions.
A recent Keefe, Bruyette & Woods analyst report estimated that the $100 billion paid in real-estate commissions annually could be cut by 30%, with as many as 1.6 million agents losing their source of income.
Commissions are already negotiable, but buyers agents are likely losers as homebuyers are more likely to bypass them, or in the least, negotiate for lower fees.
A recent jury verdict against the National Association of Realtors and large residential brokerages could upend the residential real estate industry.
The real estate compensation model is at the heart of the issue. Plaintiffs contend that commission rates are too high, buyer brokers are being overpaid, and NAR rules, along with the corporate defendants’ practices, lead to fixed pricing. By contrast, NAR contends the rules promote competition and efficient, transparent and equitable local broker marketplaces.
NAR, whose CEO left shortly after the landmark court loss, is appealing the $1.8 billion jury verdict, so it could be several years before the case — which covers the Missouri markets of Kansas City, St. Louis, Springfield and Columbia — is resolved. But coupled with similar lawsuits that are in process, the potential for policy changes that could impact realtors’ pocketbooks is palpable.
The impact on the market continues to spread. Shares of Re/Max Holdings, for example, were down over 8% on Tuesday amid fears of litigation, even though it had settled with plaintiffs before the recent NAR case verdict.
(Excerpt) Read more at cnbc.com ...
I sold my last house on zillow so no commission fees, and bought another house FSOB, was very smooth without any agents.
Don't worry, with more "Bidenomics" no one will be buying any homes.
And there is enough info on-line so things like credit checks, appraisals, etc, will be done instantly with algorithms or even AI. If the system makes an occasional mistake, there is enough money being made that those losses are easily absorbed.
Well you’re right if you know what you’re doing. I used to be a realtor for awhile and owned my own mortgage brokerage firm for 17 years and my best friend is a closing attorney so I don’t need a realtor either. I use a company called Simply Sell where I act as the listing agent and pay a 3% commission to the selling agent. It saves money but I’m not tied to the house trying to show it.
BTTT
Need to look into Simply Sell ...
My wife and I have bought and sold quite a few properties over the years, my wife was a Bankruptcy Attorney, she sold hundreds of properties over the years, having said all that, if I were going to purchase a property in a market I’m not familiar with, I would use a buyer’s agent for things other than price negotiation and closing.
If I were interested in a rural piece of property in another part of Florida, I would use a buyer’s agent for zoning laws, septic tank requirements, well requirements, trends in local development that might impact me, etc., basically things that I’m not familiar with in the area.
We sold our last home through a flat fee broker and saved thousands in commission. Our house sold in less than 24 hours after hitting the listings.
Also called Simply Select I believe.
This is being appealed and will be over-turned on appeal...
Here in Alabama a buyers agent can split the commission with the sellers agent. Paying a separate commission to a buyers agent is legal because it is negotiable with the buyer. I personally would just go to the seller’s agent and eliminate the buyers agency all together.
We just purchased a rural property in N GA last year and we used a buyers agent. He was also the listing agent. He did a very good job as it was somewhat complicated by us and the seller agreeing to survey off an acre of the property we didn’t want. There was no additional commission other than the normal 6% which the seller paid.
Just because the commission is cut back doesn’t mean agents lose their jobs.
The retard that wrote the article claims loss of revenue equates directly to a loss of jobs by taking the total commission losses and dividing by the average commission.
This cutback really only means instead of $15,000 commission checks, agents might get $10,000 or $7,000.
If it sold in 24 hours, you probably could have asked for a decent amount more money.
If you are purchasing property in an area, you are not familiar with, it would be wise to use a buyer’s agent for things like surveys, easements, local laws, development plans in the area, etc., yes, you can do these things yourself, except the possibility of making a big mistake is much higher.
If you are purchasing property in an area, you are not familiar with, it would be wise to use a buyer’s agent for things like surveys, easements, local laws, development plans in the area, etc., yes, you can do these things yourself, except the possibility of making a big mistake is much higher.
If you are purchasing property in an area, you are not familiar with, it would be wise to use a buyer’s agent for things like surveys, easements, local laws, development plans in the area, etc., yes, you can do these things yourself, except the possibility of making a big mistake is much higher.
Here’s how I think it should work:
- Seller and agent agree on a price the house should sell for.
- If the agent is able to sell the house for a higher price, he/she gets a higher commission.
- If the agent is only able to sell the house for a lower price, he/she gets a lower commission.
My wife and I are brokers in Cal. Cal is a very litigious state. I don’t try to talk people out of doing their own deal, but many people are in over their heads and a mistake can cost you tens of thousands.
In the last century, the 1940s, the contract was 1 page. now it’s dozens of pages and every one needs to be examined closely. That’s what a good agent can do. Keep you out of court.
BTW our market is tough, high prices and high interest rates. My wife and I charge 4.5% and we pay the buyer’s agent (a long standing Cal practice). If we sell and bring the buyer, we charge 3.5. We have to represent both, which can be done ethically of you know what you’re doing.
My wife and I own two properties in Florida, a home in a gated community and a vacation condo also in Florida.
If we ever decided to sell either one, I would use an agent for the home and hire a title company to handle the condo closing because I would do a FSBO on the Condo.
I have heard the east and the former colonies use the old english system with lawyers. I bought two lots near Ft Bragg in NC and there was lawyer managing the process. Circa 1994. Does the title company take care of all that. We have escrow in the west.
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