Posted on 03/18/2024 8:40:46 AM PDT by where's_the_Outrage?
The powerful National Association of Realtors last week agreed to settle a big lawsuit and change the way real estate agents get paid — from a standard commission to something truly negotiable.
Why it matters: The deal could open up a tightly controlled market to genuine competition, and create opportunities for new players and business models in a relatively old-fashioned world.
It could do for real estate what the internet did for stock trading — bring down broker fees.
The impact: That'll likely mean lower costs for sellers, who brought the lawsuit as a class action. The impact on buyers is more complicated.
How it works now: Sellers pay a 5%-6% commission on the sale price of their home.
Typically, the seller's agent and buyer's agent split the commission.
It effectively means the buyer's agent is working for the seller — a conflict of interest. (Agents, of course, dispute this characterization and say their reputations depend on them doing a good job for buyers.)
Under NAR rules sellers are required to advertise the buyer agent commission on the Multiple Listing Service, the database where real estate agents put homes for sale.
(Excerpt) Read more at msn.com ...
However, when I sold my home the buyers got an agent, but they paid them.
I know he's exceptional because during the process he had several opportunities to work against my interests -- and he didn't. At one point he even recommended that I should not make an offer on a home that was being listed by another agent in his own company.
Landa may not be happy, idk.
Realtors will tell you that sellers without an agent generally lose money despite the 6%. Realtors not only get them better offers, but more exposure and less hassle on the sellers part. Do you really want unqualified slobs lowballing you and demanding that you carry the note?
Pretty much the same way people trade in their cars rather than sell them themselves.
I can see where a buyer’s agent is sometimes needed like with 1st time buyers that need a lot of assistance in getting the home loan.
I tell sellers to try to sell it yourself 1st, one story I heard was where the realtor was planting the for sale sign and the next door neighbor came over and bought the house.
Most of the earn their fee, imo.
There have always been real estate agents who will agree to less of a commission. I know of some.
“Do you really want unqualified slobs lowballing you and demanding that you carry the note?”
I bought and sold the same house 10 times and found unqualified slobs accept the price.
Yep. Its always been negotiable. You may not get the agent you want, but.....and, as in most economic transactions, you often get what you pay for?
I’ve experienced that where both the selling and buying agent took cuts in their commissions to sell the property, however their parent companies would not accept less.
When I used an agent to buy my current home I already had the loan and insurance lined up, they just handled the negotiation. And buried in that offer contract was an extra $500 to the selling agent (which I had them delete).
The old adage “You get what you pay for” may come into play here.
If I negotiate and low-ball the agent’s fee, they are ethicallly free to consider me as at the bottom of their client list and work for my interests whenever they can get to it and/or choose to.
Yes, if they except my offer, they’d be bound to provide services but, as I see it, the intensity of their effort may be directly proportional my to willingness to bid for their service.
I once put in the selling contract for an additional $1000 to the buyer commission, worked well.
They have a fiduciary responsibility to you. That’s why.
I’m a Realtor®. Commission is never set, nor are we allowed to say anything to the effect that a certain percentage is an “industry standard.” In fact, it’s illegal in most states.
My brokerage disclosure states up front that commissions are negotiable. Now, the listing agent does a lot of work up front and a good agent will get your house sold quicker and for more money. Plus, you won’t get the headache of setting up the closing process, contacting the insurance companies, dealing with last minute issues, etc.
Now, if you’re an experienced real estate investor/purchaser/seller, then you probably don’t need an agent and you can save that money.
I have a fiduciary responsibility to my principle (buyer/seller). I cannot refuse to show someone a house even if I don’t receive any commission. The ethics of a Realtor® dictate that I get my client the best house that fits their desires at the best possible price no matter the commission.
If I’m representing the seller, I’m supposed to get them the most money possible based on fair market value regardless of how much they pay. If the seller accepts a lower offer, I cannot advise they refuse it.
The buyer and seller are in charge. Agents do need to be paid for their expertise and work, just as any other profession.
Which is why I don’t get this ruling. We have agents and brokers all over the place with regard to fees. Most are at 6-7%. But many are less.
People often disregard the value of a good salesperson—and good ones are not as common as bad ones, however there is a reason good ones in most every industry make more than doctors—they will earn every penny most of the time
meh. we looked into moving last year, and the realtor we spoke with wanted us to bring a POD on the property and put all our stuff in it so she could show it better.
Nope. She even hinted at us staying in a hotel, and boarding our dogs.
Nope again.
Every house i’ve ever bought was occupied. I knew their pictures and moose heads on the wall would be gone. It’s not difficult.
So you carry the note and foreclose on them as they are unqualified and cannot pay your mortgage?
What a decent guy you are.
Unfortunately, over the last few years there’s as many or more unqualified slobs IN real estate than outside of the trade.
Not an agent, but in a closely related field. In the last 2 years, I’ve seen 2 agents out-bid their clients on houses. Two more aske me to falsify information on federal grant forms and were dense enough to make that request by email while copying the federal office. Another has failed to disclose serious health and environmental issues at several listed properties after both she and her clients were made aware of their presence.
I’ve overheard one agent tell their customer how to avoid paying me and other trades.
Another 4 or 5 have licensed simply because it allows them first shots at properties to flip (another bottom-feeding creature in the RE market), then pass the seconds on to their clients.
Agents may know location, layout, feng shui etc., but most haven’t the slightest clue when it comes to how a house is supposed to function and are 99.7% resistant to learning about it.
Real estate sales has abysmally low barriers to entry and after about 36 hours of “training”, enter the market with not much more than marginal form sense, hoping a boss babe attitude and a tight blouse will overcome all the rest.
At the end of the day, whether it’s the buyer’s slob or the seller’s slob, both have a vested interest in the property selling for the highest price possible.
You make very good points, but the unqualified slobs I was talking about were potential buyers who couldn’t qualify to buy a dog house.
Any realtor worth a dime will prequalify their potential buyers and will not waste their time, the buyers time, or the sellers time by showing a buyer a property they cannot possibly get a mortgage for.
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