Posted on 08/17/2023 3:34:27 PM PDT by thegagline
A class-action lawsuit filed by home sellers that would fundamentally change the way houses are bought and sold, and in particular, the way real estate agents are compensated, is catching the attention of local agents.
Currently, no matter how much experience a buyer’s agent has in the real estate industry, they get the same commission from the seller that a seasoned veteran does. A case in Illinois known as Moehrl v. National Association of Realtors would change that if the plaintiffs win.
The plaintiffs filed suit against NAR and several major real estate brokerage companies, claiming the system that splits commissions paid by the seller between buyer and seller agents is anticompetitive. Instead, the plaintiffs argue, homebuyers should pay for their own agents.
One local agent who has more than two decades of experience in Southern Nevada says this will cause buyers to become much pickier and could drive many new agents out of the industry.
“If this lawsuit goes through, it would probably cut the agent count from 1.6 million to about 200,000,” Las-Vegas based real estate agent Steve Hawks told FOX5 Wednesday. “It’s going to impact agents that aren’t experienced.”
Hawks says this lawsuit will take away a big advantage for inexperienced realtors if the plaintiffs win.
“If you’ve been in the business one day or 30 years, when you do a transaction on the MLS (Multiple Listing Services), you’re getting paid the same amount,” he explained.
If the plaintiffs win, Hawks says that even playing field is going away because if buyers alone are on the hook for those fees, they’ll want to work with someone with more experience.
“In the future, when the buyers see that it’s going to cost them money one way or the other with their agent, they’re going to start interviewing their buyer’s agent similarly to how sellers do their listing agent,” he said. *** “Now the buyers’ agents will be compensated based on their experience and knowledge and the buyers will be actually paying them and interviewing them much like a seller does on the listing agent,” Hawks explained.
Hawks predicts Moehrl v. National Association of Realtors will be decided sometime in 2024 ***
When I eventually sell my residence and rental homes, I will market the houses as commission free sales.
split like other states.
I had an absolute flake as the sellers agent, some online low cost sellers referral site. We were lucky to get him to do enough that the title company was willing to go ahead in his absence. I know he was working for a less than normal commission but it still was substantial amount of dollars for plugging it into MLS and forwarding offers.
Seller only realtors that claims to help buyer are unethical. They cannot represent both.
In trying to sell our late mother’s home, we discovered a realtor scam. The people in the realtors’ office were not working hard to show the house because one realtor wanted to flip it, so they were trying to keep the price down.
We’ve made a complaint with the state board, but no word yet.
My Ex-wife was a real estate agent. Her commission was on a sliding scale. The Broker gets the 3% commission and then her share was 60%. As she sold more houses her commission climbed to 95%. Each year started out back at the 60% of the 3%. This encouraged agents to be more active.
Well, yes. Anybody can be a real estate agent by passing few tests and getting registered.
So you, the buyer or seller, must find out and hire a good one!
It is your responsibility!
Capitalism at its best!
Anyway, the agent pay is not written in stone and can be negotiated! Better agent may charge more (or less since he makes it in volume).
I was a friend of an agent.
He told me that most agents really do not make too much. They have expenses and share money with the other agent. So as a matter of fact, they make maybe 1% of the sale in net profits. About $10,000 on million dollars property.
In these parts, seven percent commission.
Half to seller’s agency.
Half to buyer’s agency.
Agencies typically split 50/50 agency/agent.
So each agent ends up with 1 1/2%.
It takes work to list a house. The seller should pay for this work and for relist fees. If the seller is broke and can’t pay upfront, this might be in the form of a lien just as with a mechanic’s lien. Only lawyers authorized by the seller or seller’s agent should be able to see such liens.
It takes work to show a house and to write up an offer. The potential home buyer should pay for this work and also a bonus if the offer is accepted.
The seller might also arrange for bonuses for top-ups for the pending offer or for new & better offers.
Suggested state law:
The seller would have a 72-hours to back out of an accepted offer unless the seller had a lawyer and the listing agent approve the sales contract prior to signing it.
The buyer would have a 72-hours to back out of an accepted offer.
Backing out would cost the party backing out 1% of the assessed market value, unless contracted to be a lesser amount for both the buyer and seller.
If the buyer doesn’t know about homeowner’s association rules or of defects in excess of an amount specified in the sales contract, the 72-hour period would be extended to 24 hours after being informed.
If the seller doesn’t know about homeowner’s association repair demands not also demanded in the sales contract that by professional estimate are excess of 1% the assessed market value, the 72-hour period would be extended to 24 hours after being informed.
“A sole agency agreement (where you instruct just one estate agent) – typical fees 1.2% to 1.8% inc VAT”
https://hoa.org.uk/advice/guides-for-homeowners/i-am-selling/how-much-should-i-pay-the-estate-agent/
Remember for about two decades English house prices were more expensive than the prices on most comparable US houses.
Your home page says you are in Pennsylvania. That 7% was common where I lived near Albany, NY.
In the DC area, the rate was about 6% in the early 1990s.
I would probably refuse to pay more than 3% here in booming Florida. Things are slowing some so it might be 4% in the future.
“Agencies typically split 50/50 agency/agent.”
I’ve never thought that was justified.
read about sliding scale fees:
https://hoa.org.uk/advice/guides-for-homeowners/i-am-selling/how-much-should-i-pay-the-estate-agent/
There are digital code door locks. I think one I looked at allowed for 50 different codes.
Presumably, as you get experience increases, your total compensation will rise because you’re selling more houses.
Some people are just natural salesmen and can pump out their sales like veterans from day one.
That happens all the time.
There is no buyer’s agent when a seller lists his property with a selling agent.
The listing contract should contain the total sales commission as well as the portion of the sales commission which the selling agent must advertise to potential showing agents, and must pay to the successful buying agent. If the selling agent brings the successful buyer then the selling agent does not have to split the commission if that is how the listing contract is written.
The commission agreement is with the seller. If a seller agrees up front that the selling agent is not required to split the commission, or to offer only a reduced commission, then it is up to buyers’ agents to notify and agree with their buyers in writing what commission the buyer must pay.
The smart buyer will offer commissions to both agents through the selling agent, and offer the entire commission to the selling agent if he brings the buyer. This helps ensure motivated agents on both sides of the sale. Something like 80% of all through-agent sales have buyer agents.
In my area buyer agents tend to shy away from showing houses with low commissions advertised.
“Now the buyers’ agents will be compensated based on their experience and knowledge”
Great, who decides that formula ?!
Really dumb idea .
A experienced agent could screw someone over very well.
It’s about ethics as well as experience .
As a mortgage loan officer, I have seen it all.
So, 10% to the big guy?
1 1/2% x 4 = 6%
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.