Posted on 03/22/2024 9:18:35 PM PDT by where's_the_Outrage?
The way people buy and sell homes in the U.S. may be about to change, following a landmark settlement proposed by the nation’s top real-estate-industry group.
But that may not make things easy for home buyers, one mortgage-company CEO says.
The settlement proposed by the National Association of Realtors, which will go into effect in mid-July if it’s approved, would require that listings on the NAR-run Multiple Listing Service — a database of homes for sale — no longer have a field showing how much buyer’s agents will earn in commissions on the sale.
In other words, buyer’s agents won’t be offered compensation up front.
Although fees for real-estate agents are technically negotiable, they typically run from 4% to 6% of a home’s sale price, depending on local market customs. Home sellers traditionally pay these commissions, which are typically split between the buyer’s and seller’s agents.
The outcome of the settlement, if approved, would “be pretty disruptive,” said Greg Schwartz, CEO and co-founder of Tomo, a digital mortgage lender. “I’m concerned about first-time home buyers that are cash-strapped,” he told MarketWatch in an interview.
(Excerpt) Read more at marketwatch.com ...
The MLS is a monopoly which is why there hasn’t been a market evolution.
The problem now is buyers are really really going to get hosed on deals in buyer beware states. They’re going to think they’re saving money but will run into title issues, things that could be corrected on addendums, disclosures they should have been aware of, undiscovered liens, easements on property etc.
If you’re willing to negotiate your own deal super. Don’t cry when you think buying your house is like getting a Slurpee and nothing can go wrong.
I don’t think buyers are going to walk away from agents in large numbers. I just think there’s inevitably going to be downward pressure on commissions and a migration to fixed fees — just like we saw with stock sales.
A house sells itself if price, location and condition are favorable… then the real expertise begins, getting it to the closing table. First, negotiating the contract, buyers and sellers are like oil and water. Then there are home inspections, (I always recommended structural engineers to my buyers) then, termite, gas lines, well and sewer, radon, etc. If problems are found, new negotiations begin. Buyers acquiring financing, bank appraisals.
So I say, good luck to buyers and sellers who believes a Realtor isn’t necessary and doesn’t earn their commission.
I’ve bought and sold 6 properties since 2018 and only personally used a relator once, and that was because the seller listed with an agent.
Had a problem with a home inspection on a house I was selling, but it was a major issue and I fixed it without argument.
I tried to sell a 7th property using a realtor as it was out of state, it didn’t sell so I just rented it.
Can’t say that using a realtor made things easier on me.
Me, being an attorney, to sell my house to a relative, still had to pay some ridiculous amount for “title insurance” even though there were no title issues and I had owned the place for 28 years. There was no real estate agent, however.
Realtor. Some people do pronounce it relator, but the word is realtor, two syllables.
In 2018 I bought a for sale by owner home. I had a real estate agent and she was pissed I didn’t negotiate a commission for her. I told her you did not find that house nor did you show it to me, what makes you believe you are entitled to a commission? Moreso there was no buying agreement in writing.
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Let me query you this? Who got the paperwork together? You? If she had anything to do with getting the paperwork together, doing the title search, etc. she should have been paid something.
I can’t recall when we’ve paid 6% realtor fees. Most often, our realtors have volunteered to take a smaller percentage.
Seriously glad to hear that, but you are the exception. Lots of bad stories of Realtors, some earned, most not. I have had many calls from buyers and sellers who had horrible experiences when they DID NOT use a Realtor. They wasted time and money thinking they could navigate it themselves. Many bought homes that had significant issues because they didn’t know their rights to inspections, neighborhood values, HOA rules, etc. Sellers would wait weeks for the buyers to obtain financing they didn’t qualify for and could not get a loan.
A few observations:
1) The constant destruction of past traditions of doing things such as realtors
2) There are so many regulations regarding selling a house that that is all realtors focus on. Making sure they keep their license.
3) Very few are agents, representing buyers and sellers. They have no negotiation skills.
4) There is a small group of “in realtors” that meet every week and pre buy and sell to each other and their “friends”.
5) My experience with realtors is not good. I will not use them.
Mortgage Lender says.
In the old days a lot of financing was local with individuals and true local banks.
The outcome of the settlement, if approved, would “be pretty disruptive,” said Greg Schwartz, CEO and co-founder of Tomo, a digital mortgage lender. “I’m concerned about first-time home buyers that are cash-strapped,” he told MarketWatch in an interview.
Also the actual agencies do not necessarily work in the buyers/sellers interests. For example I made the mistake of is using an agency that had support companies where they’d push using their title/mortgage/home inspection company. In my current home we ended up having 2 title companies at closing.
When we bought our rural property several years ago the selling agent offered to act as a buyers agent also for free. It was part of the sales contract. I didn’t care one way or the other because I’m a retired mortgage broker and was a realtor and mortgage underwriter but for a first time homebuyer its a good desl.
When we sell a property I use Simply Select which allows me to act as listing agent which I pay $395 to Simply Select for that and then offer a 3% commission to the selling agent. I saved $9,300 on the sale of my Moms house.
The laws regarding home sales are also more complex than they used to be. I am pretty sure the list of what most be revealed to buyers keeps growing. I may be wrong but I do believe closings are no longer as straightforward as they were years ago. So common sense may not be the savior of the hour in this instance.
This scrutiny upon the so-called ‘real estate industry’ lit a fuse on the Ponzi scheme.
Let’s set it alight at BOTH ends.
Real estate agents are a racket. They make a LOT of money for the minimal work they do. The 6% commission is especially been egregious in a market where high 6 and 7 figure houses were selling in a matter of days.
In a time when buyers can quickly search all the local listings and request appointments to see a home online, agents are obsolete. A whole new system of online listings, buyer qualifications and view schedules can be created to facilitate home sales at a small fraction of what realtors make now.
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