A potential hurdle I could see happening with a buyer's agent submitting a commission agreement along with the offer is that if the seller agrees to the purchase price and disagrees with the commission being requested then the buyer's agent must spend time and energy negotiating for their own interests rather than their client's. And then what happens if the buyer's agent and seller can't come to an agreement on the commission? The agent tells their buyers that the seller agreed to all their terms for the purchase BUT the deal fell through because of a commission disagreement? Of course a buyer's agent needs to be paid but waiting to negotiate that amount while negotiating the terms of the purchase seems like it could get dicey.
The vast majority of buyers know they do not have enough know-how to go it alone. The risk of losing their deposit is too high and many people move from one state to another so they don't really know the laws & customs from one state to thr next. They will engage in a buyer representation agreement because there is no up-front cost to them. So they are agreeing to pay the negotiated fee to their agent for a successful closing. This is part or their closing costs along with transfer taxes, lien searches, loan fees etc. As it stands today, if a buyer made an offer requesting closing costs and the Seller says no, the deal is dead because the buyer couldn't close anyway. It will be the same. Their buyer broker fees are part of their closing costs. If Sellers want to diminish their buyer pool, they are welcome to give that a try and test the market but I doubt it will be successful.
Right! Will a buyer’s agent operating under a Buyer Broker agreement who either loses a deal or, in the mind of a buyer, is unable to secure enough seller concessions/contributions toward the buyer’s costs (which would include the buyer’s agent’s commission) because of a commission “dispute” be found in violation of honoring/delivering fiduciary care? In other words, does a buyer’s agent have to give up part of their commission as part of their fiduciary responsibility?
The best investment one can do right now is investing on real estate though stocks are good but ever since I swapped to real estate, I've seen so much difference.
As a buyer, if I can write my own offer on a house I have found myself, why would I require a seller to accept less money from me? If two buyer's make identical offers but one does not require the seller to pay any commission, whose offer do you think will be accepted? Your first observation was the correct one: there will be fewer agents. You may disagree, but there will also be lower commissions.
I think as a seller, there is value in having a professional on the other side of the process. Think of some of the deals you've saved by working with a pro on the other side. There are going to be DIY buyers who get into a contract they don't understand, and end up walking midway through the process. Now the seller is in lawsuit hell and not selling land. I sense an uptick in specific performance lawsuits on the horizon.
There are so many variables as to why a Seller might favor one offer over another. It isn't always about the price. Is it cash, conventional, FHA or VA? What is your credit score? Will you pass an HOA interview? How large is your escrow deposit? How long is your inspection period? Your closing date? Did they like you when you walked through? Do they feel like you are trying to get your offer accepted just to stab them in the back during inspections? Will you waste their time and then just cancel the contract? These are all conversations I have Sellers when we are reviewing offers. All of these scenarios happen on a daily basis in this field and if you don't have that level of experience, it may be a challenge to get very far on your own in negotiations. If I know the listing agent & have worked with them before, I can probably beat you in a multiple offer situation. 🤷♀️
Buyer’s could have always wrote an offer and not used an agent; however 90% of buyers don’t understand the intricacies and complexity of a real estate transaction so they work with a professional and skilled agent. Sure there are 5% - 10% of buyers who may be savvy enough to buy within an agent, but the majority need representation and sellers will continue to pay commissions. Period.
@@mommom3172 Exactly, and this is why they need an agent because they didn't even think of all the other things that go into it. Many other things effect the bottom line for the seller. Thank you
WA State has already been doing this for over a year. Literally nothing changed, quite the contrary in fact. Our office BAC has in fact increased through this market. It's honestly not a difficult conversation to have. Tons of value opportunity for buyer's agent who can hunt for property.
Hi @tylermcclellan3186. The conversation may come naturally to you, but I am stumbling over my words and I feel terribly awkward - which I am sure does not instill trust in a new client. Other than a script (which I would really appreciate as a guideline) are you willing to jot down a synopsis of how you approach the conversation with a stranger and how you present it? Thank you.
Will a buyer’s agent operating under a Buyer Broker agreement who either loses a deal or, in the mind of a buyer, is unable to secure enough seller concessions/contributions toward the buyer’s costs (which would include the buyer’s agent’s commission) because of a commission “dispute” be found in violation of honoring/delivering fiduciary care? In other words, does a buyer’s agent have to give up part of their commission as part of their fiduciary responsibility?
What has ALWAYS yanked my chain when selling over 50+ properties over the last 10 years is that the commission that I pay my listing agent gets split with the buyers agent just to corner me into concessions and freebies. By the way I turn over great turn key properties. To say the least I am all for the change!
I don't think much will change at all. My husband works commercial which operates the way residential is heading and as the buyer pool gets tighter and the days on the market drag on, sometimes it makes sense to cut a deal with the ready, willing & able buyer and diminish carrying costs and compensate their agent who qualified them & hand holds their client to get the deal closed. On the residential side, most buyers need their hand held to get to the closing table. You can always wait for that very sophisticated buyer who doesn't need a buyer broker to come along. But, how many more months do you have to carry it for that to happen? I think the market will sort this out.
For your information the Buyers Agent DOES NOT QUALIFY the Buyer! The Bank Qualifies the Buyer! And The Title Company takes care of the Title! Agents are Greedy and Overpaid! I don’t need an Agent to hold my hand after I find my own house online!
You mean a buyer's agent should say one of the ways they may get paid is they may LOWER the sales price to encompass the representation of the buyer's agent, correct? Because the coupling structure was what was inflating prices, no? I'm confused about this. Can you please explain how increasing the sales price would help the buyer pay for their agent's commision?
Some really valid points are made here. Again, the buyer- agency agreement has been in play. You don't have to have the seller split the commission with the buyer agency. It will be interesting to see how this "getting back to the basics" plays out.
The NAR lawsuit does not say that we are REQUIRED to have a Buyer client agreement. This is not what it says. It says that the agent has to have a buyer sign a form stating how the agent will be paid and how the buyer will be represented, prior to showing a property. The buyer can still be a buyer client or buyer customer. This is where the confusion is coming from. Please make sure you clear up this misrepresentation. NAR was very clear that all buyers are not REQUIRED to be a client.
I only need to view the house and use standard form to fill out the contract. Does it worth 2.5-3%? My experience with buyer agents are always not good
Because it is very easy to lose your escrow deposit if you don't know what you are doing. If you're experienced and know the rules and obligations on your side of the contract in your state, then you're free to represent yourself. No one owes an agent anything until the transaction closes. All sales positions have compensation that is tied to the value of the asset. If buyers and sellers would like to pay upfront non-refundable flat fees, the model would be different, but I don't see that happening. Both buyers and sellers like the "let the agent work for free and maybe I'll change my mind about buying or selling but if they are successful, I'll pay them model and if I change my mind in 2 weeks, I owe them nothing" model.
Be glad you don't have a yacht or horse to sell because the commissions for those brokers are MUCH higher but thankfully wealthy people understand sales don't "just happen". Someone has to locate a ready, willing & able buyer. It always sounds easy until people try to do it themselves. If you have no life and can commit every waking moment to taking calls and making appointments with unqualified buyers and making sure they don't accidentally sabotage the sale before the transfer, give it a go!
commisions are definitely going to be slashed because the number of closings is going to plummet unless your seller is willing to pay the commision that property is going to have to drop on price to make it worthwhile for a buyer to pay the commission otherwise. this will have a domino effect on the whole market dropping real estate values.
Why would a buyer ever need to pay an agent at all? You can call any title company right now, they will gladly email you all the paperwork you need to fill out, make an offer and close. Just tell your lender unless you are paying cash you are not using an agent. They will gladly get you all the paperwork you need. Nobody needs an agent to sell or buy any house.
@@joelballard4955 You don't NEED an agent but hopefully you get your offer accepted and then don't make a mistake or miss a deadline that causes you to lose your escrow deposit. But you "saved money"! The title agent isnt monitoring your deadlines to "warn" you if you are about to breach a contract. So, I guess you'd find out when the Seller's agent notifes you they intend to take your deposit. 🤷♀️
Little difference when the buyers commission could be wrapped into laterally the SALE amount and ergo the LOAN amount and in many areas in this country buyers dont have that EXTRA $20,000 or whatever-- has no bearing on what the BUYERS agent is worth…is what FUNDS the buyer has…
Well, you are missing the fact that VA, Fannie Mae, Freddie Mac and FHA all have verbiage that do not allow commission to be paid with loan money. So you better rethink your ideas.
How are you going to find out about properties before they go on the market? I've got 6 upcoming listings in my pocket right now. They aren't on the internet. My clients and then the agent with buyers in my brokerage will find out about them and then great agents I have worked with in the past who have buyers BEFORE they make it on the internet...hope they weren't perfect for you! 🤷♀️
This is total misinformation. The listing agent can still negotiate enough of a commission for them and the buyers agent. They can still pay a buyers agent a portion of their commission. It just cannot be listed on the MLS. It Hass to be handled between the listing agent and the buyers agent. That’s it the end.
I feel it's a little too early to get too deep in what the new normal will be since it hasn't been approved yet. But the real question out there is - are listing agents going to still charge (example: 5%-6%) when they take a listing? You say that they aren't going to worry about where the buyer's agent will get paid from but they most certainly should discuss it with the seller if they plan on paying it through the many other NON MLS options like concessions etc. If a buyer's agent signs a buyer agreement at the beginning (for example 2.5%). Then they find a house and call the listing agent to see that they are offering 3% - then the buyers agent is screwed out of 1/2% money left on the table. Also, I would imagine some buyers agents may be inclined with their buyers to rip up the old agreement and sign a new one based on the listing agents offerings. This whole situation is disgusting. Good for the consumer??? Laughable. BAD for real estate.
Agree. ALSO MLS is not the only place to find listings. Good buyer agents are well-networked and find properties before they are on the open market. Buyers would have to decide if they are willing to miss out on those pre-market listings by not agreeing to buyer agency. In my state, the buyer can cancel at any time but if they purchase a property introduced to them by the broker, they owe compensation to the broker through out the protection period. But, they are free to move on and find another property with another broker just as they always have been.
Also, if somehow the plaintiffs (sellers) believed this off-MLS posting of buyer agent commissions would curtail (what I believe is absolutely unfounded) a buyer’s agent “shopping” for the best seller-delivered commission, they are wrong. This will exacerbate that practice. Buyer’s agents WILL almost certainly now “shop” for those higher commissions and concessions when looking for a buyer’s properties. This would be, in practice, in both the buyer’s and the agent’s best interest, no?
I read a Q&A on Inman by one of the lead attorneys for the plaintiffs. It was very apparent he isn't familiar with the real estate at all. Once the dust settles and the market adjusts, just like all the changes in lending in past years, agents who have broker agreements clients may be instructed to not waste time on properties where Sellers are not paying for reimbursing them for their closing costs which BAC will be a part of. This will make properties that ARE offering BAC more desirable. I'm selling a home myself, I'm an agent and I fully intend to pay BAC while my neighbors homes sit on the market. This suit was crafted in thr imaginations of disgruntled sellers and money hungry attorneys. Not in thr best interests of the public. All compensation will now be discussed behind closed doors in private text and calls.
That is nonsense, I have never shown homes to my buyers based on the commission being paid ...there is so little inventory I suggest they tour everything. If they fall in love with a home, it will be up to me to negotiate something that will work for everyone.
As an economist and renovator, the problem is the huge commissions where sellers and buyers both lost, Yes: up to $1,850 per hour, as in the example of a house that recently sold across the street. Take a $750,000 house a $37,500 fee is due even if the house sells in 5 days, as one did across the street last month. Thats more than the house appreciated in the past two years, or $7,500 per DAY of fees due to agents for that 5 days, so if an agent worked 4 hours per day for all of those days, (20 hours total) that's $1,875 per hour. spilt between seller and buyer. Competition is what this is about! Disclosure: I sold my house in Northern Virginia in 6 days for $780,000 with a custom sign that cost $28 a website from a template for $12, and did only four showings. That $40,000 saved realtor fee went towards my new house. Finally, the fee I saved is not taxed, its AFTER TAX DOLLARS meaning if you are in a 25% tax bracket one would save another $10,000, so that would like earning $50,000 tax free, to you for selling your own house. JUST DO IT!
Yes I know how very well how it works, the buyers agent gets 3% and the sellers agent gets 2-3%. If the agent sells their listing without a buyers agent, they get 5-6%. And of course, that various people take their cuts, but the total amount is the same! On the example a $40k outrageous amount of money for minimal work other than participation in a cartel of sorts. Yes $40,000 for 5 days on the market - is what the seller ends up, paying no matter who it goes to.
You guys are hilarious. I love it. Keep preaching your program to misinformed gullible real estate agents who don’t know how to adapt for themselves and therefore are forced to use your “scripts” to prove to their “worth” to potential clients. All this in an effort to keep the same inflated commission structure so you still get paid for your real estate “coaching” business. I would want to choose an agent to represent me that doesn’t need to rely on your coaching in the first place. The whole point of these lawsuits is to combat the undue influence and control NAR has over not only consumers but their own realtors in the real estate market. If nothing changes, this industry will be sued again by attorneys who see blood in the water and have a much better understanding of contract law, agency law, antitrust law, tort law, etc. compared to real estate agents and their real estate coaches. The NAR settlement is the tip of the iceberg, and if the judge (and the DOJ) doesn’t approve it, it’s only because it doesn’t go far enough.
So true! The public is just now realizing the deceptive system that manipulated both buyers and sellers to pay inflated commissions rather than openly negotiate with their agent prior to representation. In the public’s eyes this lawsuit was about cutting commissions and going forward that will be expected. The buyers agent will have to sell themselves to the tune of tens of thousands of dollars before opening the first door. Commissions are going to crumble.
A lot of agents never tell their customers what goes on behind the scenes. I've been f bombed by other players, yelled at, lied to.... I protect my customers from that.
This doesn't make a lot of sense. If you don't have the "buyer commission conversation" until after you receive an offer, what are you telling the buyers agent when they text you asking what the seller will pay before they show? if you say something like, depends on the offer, they probably will pass on the house assuming the seller is not paying a commission so now you have lost a potential buyer (unless buyer is willing to pay full commission which im guessing many will not)
Can we at least wait until the judge reviews this and decides if this is allowed? Are you even aware this is NOT a done deal and it has to be OK'd by a judge. Why is everyone acting like this is already done?
I wish I was an agent with this settlement. I’d see it as a great opportunity. By it being a requirement it makes the conversation very easy and now clients won’t be able to just work with a ton of different agents.
Listing Agents are already using scare tactics to convince sellers they need to offer buys agents’ a percentage. They say buyer’s agents won’t show your home. They say they will let it be known that you are or are not offering the buyer’s agent’s consideration.
Mr Seller -- you're paying me X% for my listing service. I'm going to give X% of my commission you are paying me to any other agent appropriately licensed whatever percentage I'd like from the % you give ME for my service. Nothing has changed except Media gone wild. What else is new. Buyer agents will call me before showing and ask if we are offering commission. I'll let them know how much of my commission I'm willing to share with them to bring their buyer. The only thing that has changed is I'm not putting that on the MLS and I'm having buyer's sign agency agreements.
I’m absolutely depressed that you said that the buyers agent should be paid less if they are not a good agent. Who determines this quality? When is their quality determined? If it is determined by a buyer who has very little experience….then we are being lead by the blind. If it is determined prior to the service has been rendered, then the agent is being judged based on a feeling. Don’t EVER cut your commission and keep our Industry strong and growing! Any agent that reduces their commission is hurting the entire industry.
The Consumer Federation of America study from 2022 shows 89% of Boise ID buyer side commissions were identical...3%. Even higher uniformity in commission in Tennessee. There will be innovation. The process will be less expensive.
That means that the "disrupters" already failed in those markets. Redfin has tried but their reviews speak for themselves and they aren't profitable and will probably be bankrupt this time next year. The lawsuits that will come out of buyers trying to represent themselves and losing their escrow deposits are going to sky rocket...but they "saved" money! 🤷♀️ People really fail to understand the value of something until they try it themselves and fail. I have had the pleasure of assisting so many for sale by owners who gave it a fair shot on their own but realized there is so much more to it than they realized.
It's a shame you don't see the buyer agency commission as a marketing expense. When I asked for my listing fee I tell them that this is also covers the marketing expense which is to entice buyer's agents. Do gentlemen are very smart however I don't think you ever looked at the buyer's agency commission in the MLS as a marketing expense which is exactly what it is
Why should any buyer agree to pay “out of pocket” the buyer’s agent’s commission/fee? If the buyer’s agent is as skilled as they all claim to be, that agent should be skilled enough to negotiate their own compensation as part of the deal. As a buyer, I do not really care how much the buyer’s agent makes, as long as I get the property for the price I want. The benefit for the buyer’s agent is that they have the opportunity to make a nice fee with all the skills they claim to have. It’s a true put-up to shut-up moment for “Realtors,” and I say “Realtors” because real estate agents who are not “Realtors” are not bound by any of this.
This video screams of denial and desperation. Sellers will no longer entertain offers that address let alone require buyers agent compensation. Selllers won’t pay upfront unless it’s tied to performance and that expectation of performance will increase rapidly over time as compensation decreases due to frantic competition among agents. The industry has changed from a lucrative career with low bar of entry to a service job paying just under CPA levels of compensation.
the buyers agent commision was never negotiable to the seller - if you didn't offer 3%, buyer agents would not show your house to the buyers. THIS is why there as a lawsuit. And you're smoking crack if you think commisions are going up, just rediculous.
I've helped buyers buy homes offering as low as 1%. It just tends to be an indicator of how unrealistic an owner is and that they will be difficult to work with. A lot of buyers need to get moved and don't have time to deal with irrational sellers who want to show you their "updated kitchen" from 2005. Just so you are aware, nothing in this suit says Sellers can't offer to pay compensation to the buyers agent. It will just no longer be published in MLS, so now, you'll never know why your home isn't selling and your neighbors sold in 24 hours. Agents will be talking to each other and negotiating via text & email like we always have. 9 out of 10 buyers use an agent so if you want to alienate 90% of the buyer pool from considering your home, go ahead I guess.
@@mommom3172 which is MORE colusion! which is why they were sued in the first place! why as a seller would they prenegotiate a buyers commision before having an offer??? everything you said proves why the lawsuit came about.
No realtor on the planet is worth more than 50 bucks an hour. Realtors should never make more than a ER nurse, or fire fighter, or pilot, or insurance agent. Realtors process paperwork, take pictures, and answer emails. Basically the same as an accounts receivable clerk. I’m all for a flat fee of 2k for a seller agent and 2k for a buyer agent.
I'd be happy to earn 50 an hour. They drive hours, wear and tear on the car, show multiple homes and many clients never buy. They answer calls at night and on vacation. They pay other realtors to show when they are sick. They buy ads, pay for photos, etc. Double social security and full healthcare premiums, legal insurance, licensing, membership, etc. I'd say 3-4k before tax is reasonable.
@@globalfamily8172 so an agent needs to make more than a ER nurse, teacher, firefighter, assembly worker, engineer, and x-ray technician. Interesting. I see a realtor as less value than all of the above.
Sellers don’t need an Agent anymore than the Buyer does. But if a Buyer chooses to be represented by an Agent it’s Against The Law for that Agent to steer their Client away from a property that is For Sale By Owner with no commission offered! Personally I know how to call a Title Company myself and I’m going to use a Real Estate Attorney if I need help. The Buyers Agent doesn’t work for me they work for the Buyer. So as a Seller I’m definitely NOT paying for he Buyers Agent. It should be a Flat Fee or an hourly Fee for Agents compensation.
Fair point, now im just wondering as a buyer what happens when a house is priced at 1,000,000$ based on comps and the homeowner decides only to pay 2.5% only to the sellers agent? The way that I see it is the seller pockets the extra 2.5% commission (which was paid to the buyers agent) and now YOU as the buyer have to pay Real estate Lawyer and title company the extra fees, what happens if you have to submit multiple offers? Do you know how much it costs for a real estate lawyer to charge per transaction? In the end the buyer is going to get screwed over because they have to still pay the extra 2.5$ (which the seller will pocket instead of the buyers agent) as well as you paying the extra cost of the lawyers and etc...
One of the benefits of this settlement will be the "coaches" will be looking for jobs at WalMart. Let's not confuse a "script" with a "lie"...I know...I'm a realtor.
Say the truth. "Correct Mr/Mrs Buyer- the value I add is subjective at best. For $12,000 I'll hold your hand and be an intermediary, delaying answers from the seller, lender, appraiser, title, etc until I get around to asking on your behalf. I will actually know none of the answers, but youll 'feel' better having me 'represent' you."
This is false information based on what my brokerage Compass informed us. My Brokerage confirmed that the commission paid by the seller to the buyer agent can still be in the listing agreement. Additionally, my Brokerage confirmed that the commission being offered to the buyer agents can be listed on any other website, not on the MLS. For example, the brokerage websites will list the commission being paid to the buyer agent.
@@IcenhowerCoachingwatch starting around 22:20 he's saying you no longer will negotiate the buyer agents commission with the seller .. that is false .. the buyer agents competing paid the seller can still be on the listing agreement
I think this is bad advice...You do not want to market a home to only "good agents", who defines that? You want to market your home to every agent. "Bad" agents clients still think they are good, and you want them pitching your home to their clients.
most agents have not been hiding compensation and that it is BAKED into the sales price. shame on you for implying. yes, there are unprofessional people out there as there are in every business. most agents do explain ..but implying that we bake our commissions into the sales price with out explaining is bs.
A potential hurdle I could see happening with a buyer's agent submitting a commission agreement along with the offer is that if the seller agrees to the purchase price and disagrees with the commission being requested then the buyer's agent must spend time and energy negotiating for their own interests rather than their client's. And then what happens if the buyer's agent and seller can't come to an agreement on the commission? The agent tells their buyers that the seller agreed to all their terms for the purchase BUT the deal fell through because of a commission disagreement? Of course a buyer's agent needs to be paid but waiting to negotiate that amount while negotiating the terms of the purchase seems like it could get dicey.
The vast majority of buyers know they do not have enough know-how to go it alone. The risk of losing their deposit is too high and many people move from one state to another so they don't really know the laws & customs from one state to thr next. They will engage in a buyer representation agreement because there is no up-front cost to them. So they are agreeing to pay the negotiated fee to their agent for a successful closing. This is part or their closing costs along with transfer taxes, lien searches, loan fees etc. As it stands today, if a buyer made an offer requesting closing costs and the Seller says no, the deal is dead because the buyer couldn't close anyway. It will be the same. Their buyer broker fees are part of their closing costs. If Sellers want to diminish their buyer pool, they are welcome to give that a try and test the market but I doubt it will be successful.
All compensation will be a flat fee paid to the buyers agent up front and most likely dramatically reduced from today’s level.
Not going to happen
Yep and the buyers agents always considers their interests FIRST. We're on to all the games.
Right! Will a buyer’s agent operating under a Buyer Broker agreement who either loses a deal or, in the mind of a buyer, is unable to secure enough seller concessions/contributions toward the buyer’s costs (which would include the buyer’s agent’s commission) because of a commission “dispute” be found in violation of honoring/delivering fiduciary care? In other words, does a buyer’s agent have to give up part of their commission as part of their fiduciary responsibility?
The best investment one can do right now is investing on real estate though stocks are good but ever since I swapped to real estate, I've seen so much difference.
I have been making a lot profit through real estate which has been the main source of my income.
I’m interested I want to move to real estate investment can you help me ?.
Sounds great! please I will appreciate your assistance on how to go about it, who's your coach and how good is your coach?
STEPHINE KOPP MEEKS is who i work with look her
Thanks for recommending i find her and left her message online
As a buyer, if I can write my own offer on a house I have found myself, why would I require a seller to accept less money from me? If two buyer's make identical offers but one does not require the seller to pay any commission, whose offer do you think will be accepted? Your first observation was the correct one: there will be fewer agents. You may disagree, but there will also be lower commissions.
I think as a seller, there is value in having a professional on the other side of the process. Think of some of the deals you've saved by working with a pro on the other side.
There are going to be DIY buyers who get into a contract they don't understand, and end up walking midway through the process. Now the seller is in lawsuit hell and not selling land.
I sense an uptick in specific performance lawsuits on the horizon.
Buyers have always been able to write an offer and not request commission if capable lol no change
There are so many variables as to why a Seller might favor one offer over another. It isn't always about the price. Is it cash, conventional, FHA or VA? What is your credit score? Will you pass an HOA interview? How large is your escrow deposit? How long is your inspection period? Your closing date? Did they like you when you walked through? Do they feel like you are trying to get your offer accepted just to stab them in the back during inspections? Will you waste their time and then just cancel the contract? These are all conversations I have Sellers when we are reviewing offers. All of these scenarios happen on a daily basis in this field and if you don't have that level of experience, it may be a challenge to get very far on your own in negotiations. If I know the listing agent & have worked with them before, I can probably beat you in a multiple offer situation. 🤷♀️
Buyer’s could have always wrote an offer and not used an agent; however 90% of buyers don’t understand the intricacies and complexity of a real estate transaction so they work with a professional and skilled agent. Sure there are 5% - 10% of buyers who may be savvy enough to buy within an agent, but the majority need representation and sellers will continue to pay commissions. Period.
@@mommom3172 Exactly, and this is why they need an agent because they didn't even think of all the other things that go into it. Many other things effect the bottom line for the seller. Thank you
WA State has already been doing this for over a year.
Literally nothing changed, quite the contrary in fact. Our office BAC has in fact increased through this market.
It's honestly not a difficult conversation to have. Tons of value opportunity for buyer's agent who can hunt for property.
LOL
Hi @tylermcclellan3186. The conversation may come naturally to you, but I am stumbling over my words and I feel terribly awkward - which I am sure does not instill trust in a new client. Other than a script (which I would really appreciate as a guideline) are you willing to jot down a synopsis of how you approach the conversation with a stranger and how you present it? Thank you.
Will a buyer’s agent operating under a Buyer Broker agreement who either loses a deal or, in the mind of a buyer, is unable to secure enough seller concessions/contributions toward the buyer’s costs (which would include the buyer’s agent’s commission) because of a commission “dispute” be found in violation of honoring/delivering fiduciary care? In other words, does a buyer’s agent have to give up part of their commission as part of their fiduciary responsibility?
What has ALWAYS yanked my chain when selling over 50+ properties over the last 10 years is that the commission that I pay my listing agent gets split with the buyers agent just to corner me into concessions and freebies. By the way I turn over great turn key properties. To say the least I am all for the change!
I don't think much will change at all. My husband works commercial which operates the way residential is heading and as the buyer pool gets tighter and the days on the market drag on, sometimes it makes sense to cut a deal with the ready, willing & able buyer and diminish carrying costs and compensate their agent who qualified them & hand holds their client to get the deal closed. On the residential side, most buyers need their hand held to get to the closing table. You can always wait for that very sophisticated buyer who doesn't need a buyer broker to come along. But, how many more months do you have to carry it for that to happen? I think the market will sort this out.
@@mommom3172 most shops in commercial don't split commish.
For your information the Buyers Agent DOES NOT QUALIFY the Buyer! The Bank Qualifies the Buyer! And The Title Company takes care of the Title! Agents are Greedy and Overpaid! I don’t need an Agent to hold my hand after I find my own house online!
@@mommom3172 commercial does not share commish. very few shops do.
@@sTinkerbell101 No one is forcing you to.
You mean a buyer's agent should say one of the ways they may get paid is they may LOWER the sales price to encompass the representation of the buyer's agent, correct? Because the coupling structure was what was inflating prices, no? I'm confused about this. Can you please explain how increasing the sales price would help the buyer pay for their agent's commision?
Thank you for this insightful dialogue!👍👍👍
Confusing for buyers. Really confusing.....
What if the buyers coming to an open house and places and offer with the sellers agent and has no buyers agent?
Thanks bunch… it was very helpful.
Just jumping in early but my initial reaction is, if you add buyer agent to purchase price what happens when the property doesn’t appraise?
If the buyer has an appraisal contingency, they can either cancel the contract, renegotiate terms with the Seller or pay the difference.
Walk away. It takes a very smart agent, listing and buyer to move the number.
Some really valid points are made here. Again, the buyer- agency agreement has been in play. You don't have to have the seller split the commission with the buyer agency. It will be interesting to see how this "getting back to the basics" plays out.
The NAR lawsuit does not say that we are REQUIRED to have a Buyer client agreement. This is not what it says. It says that the agent has to have a buyer sign a form stating how the agent will be paid and how the buyer will be represented, prior to showing a property. The buyer can still be a buyer client or buyer customer. This is where the confusion is coming from. Please make sure you clear up this misrepresentation. NAR was very clear that all buyers are not REQUIRED to be a client.
I’m in South Carolina and what you describe is how it is being done here.
Explain to me what value realtors bring for such a huge commission? It hasn’t been worth it for a long time.
Can you explain why they dont?
I only need to view the house and use standard form to fill out the contract. Does it worth 2.5-3%? My experience with buyer agents are always not good
You can hire a lawyer for less
Because it is very easy to lose your escrow deposit if you don't know what you are doing. If you're experienced and know the rules and obligations on your side of the contract in your state, then you're free to represent yourself. No one owes an agent anything until the transaction closes. All sales positions have compensation that is tied to the value of the asset. If buyers and sellers would like to pay upfront non-refundable flat fees, the model would be different, but I don't see that happening. Both buyers and sellers like the "let the agent work for free and maybe I'll change my mind about buying or selling but if they are successful, I'll pay them model and if I change my mind in 2 weeks, I owe them nothing" model.
Be glad you don't have a yacht or horse to sell because the commissions for those brokers are MUCH higher but thankfully wealthy people understand sales don't "just happen". Someone has to locate a ready, willing & able buyer. It always sounds easy until people try to do it themselves. If you have no life and can commit every waking moment to taking calls and making appointments with unqualified buyers and making sure they don't accidentally sabotage the sale before the transfer, give it a go!
commisions are definitely going to be slashed because the number of closings is going to plummet unless your seller is willing to pay the commision that property is going to have to drop on price to make it worthwhile for a buyer to pay the commission otherwise. this will have a domino effect on the whole market dropping real estate values.
Buyers are NOT going to want to come up with the extra money in their closing cost. How will they pay it?
Why would a buyer ever need to pay an agent at all? You can call any title company right now, they will gladly email you all the paperwork you need to fill out, make an offer and close. Just tell your lender unless you are paying cash you are not using an agent. They will gladly get you all the paperwork you need. Nobody needs an agent to sell or buy any house.
@@joelballard4955 There's more to it than an offer. Inspections, repairs, appraisals, contingencies, disagreements, etc.
@@joelballard4955 You don't NEED an agent but hopefully you get your offer accepted and then don't make a mistake or miss a deadline that causes you to lose your escrow deposit. But you "saved money"! The title agent isnt monitoring your deadlines to "warn" you if you are about to breach a contract. So, I guess you'd find out when the Seller's agent notifes you they intend to take your deposit. 🤷♀️
Thank you, Joel, agents are absolutely worthless
@@shawnp.2084 How old are you?
You guys are incredible people love this message we are lucky 🍀 to have you.
Thanks fellas!
Little difference when the buyers commission could be wrapped into laterally the SALE amount and ergo the LOAN amount and in many areas in this country buyers dont have that EXTRA $20,000 or whatever-- has no bearing on what the BUYERS agent is worth…is what FUNDS the buyer has…
Well, you are missing the fact that VA, Fannie Mae, Freddie Mac and FHA all have verbiage that do not allow commission to be paid with loan money. So you better rethink your ideas.
Flat rates for buyers and sellers agents. Prices for properties should have nothing to do with agents compensation .
Most Buyers use the Internet to find their new home. Agents are going to have to adjust to the fact that the Gravy Train is Over.
Hopefully they don't hit any snags along the way. IE the woods next door are commercial, the septic is on its way out, radon mitigation is $$$, etc.
There's never been a gravy train, if so, all agents would be rich and that's certainly not the case.
that's about 1% of a buyers agents job.
@@globalfamily8172 so true! Or, a major road project has been slated to run through the community! 🤷♀️
How are you going to find out about properties before they go on the market? I've got 6 upcoming listings in my pocket right now. They aren't on the internet. My clients and then the agent with buyers in my brokerage will find out about them and then great agents I have worked with in the past who have buyers BEFORE they make it on the internet...hope they weren't perfect for you! 🤷♀️
This is total misinformation. The listing agent can still negotiate enough of a commission for them and the buyers agent. They can still pay a buyers agent a portion of their commission. It just cannot be listed on the MLS. It Hass to be handled between the listing agent and the buyers agent. That’s it the end.
I feel it's a little too early to get too deep in what the new normal will be since it hasn't been approved yet. But the real question out there is - are listing agents going to still charge (example: 5%-6%) when they take a listing? You say that they aren't going to worry about where the buyer's agent will get paid from but they most certainly should discuss it with the seller if they plan on paying it through the many other NON MLS options like concessions etc. If a buyer's agent signs a buyer agreement at the beginning (for example 2.5%). Then they find a house and call the listing agent to see that they are offering 3% - then the buyers agent is screwed out of 1/2% money left on the table. Also, I would imagine some buyers agents may be inclined with their buyers to rip up the old agreement and sign a new one based on the listing agents offerings. This whole situation is disgusting. Good for the consumer??? Laughable. BAD for real estate.
Agree. ALSO MLS is not the only place to find listings. Good buyer agents are well-networked and find properties before they are on the open market. Buyers would have to decide if they are willing to miss out on those pre-market listings by not agreeing to buyer agency. In my state, the buyer can cancel at any time but if they purchase a property introduced to them by the broker, they owe compensation to the broker through out the protection period. But, they are free to move on and find another property with another broker just as they always have been.
You guys are awesome love ❤️ this training
Also, if somehow the plaintiffs (sellers) believed this off-MLS posting of buyer agent commissions would curtail (what I believe is absolutely unfounded) a buyer’s agent “shopping” for the best seller-delivered commission, they are wrong. This will exacerbate that practice. Buyer’s agents WILL almost certainly now “shop” for those higher commissions and concessions when looking for a buyer’s properties. This would be, in practice, in both the buyer’s and the agent’s best interest, no?
I read a Q&A on Inman by one of the lead attorneys for the plaintiffs. It was very apparent he isn't familiar with the real estate at all. Once the dust settles and the market adjusts, just like all the changes in lending in past years, agents who have broker agreements clients may be instructed to not waste time on properties where Sellers are not paying for reimbursing them for their closing costs which BAC will be a part of. This will make properties that ARE offering BAC more desirable. I'm selling a home myself, I'm an agent and I fully intend to pay BAC while my neighbors homes sit on the market. This suit was crafted in thr imaginations of disgruntled sellers and money hungry attorneys. Not in thr best interests of the public. All compensation will now be discussed behind closed doors in private text and calls.
That is nonsense, I have never shown homes to my buyers based on the commission being paid ...there is so little inventory I suggest they tour everything. If they fall in love with a home, it will be up to me to negotiate something that will work for everyone.
As an economist and renovator, the problem is the huge commissions where sellers and buyers both lost, Yes: up to $1,850 per hour, as in the example of a house that recently sold across the street.
Take a $750,000 house a $37,500 fee is due even if the house sells in 5 days, as one did across the street last month. Thats more than the house appreciated in the past two years, or $7,500 per DAY of fees due to agents for that 5 days, so if an agent worked 4 hours per day for all of those days, (20 hours total) that's $1,875 per hour. spilt between seller and buyer. Competition is what this is about!
Disclosure: I sold my house in Northern Virginia in 6 days for $780,000 with a custom sign that cost $28 a website from a template for $12, and did only four showings. That $40,000 saved realtor fee went towards my new house. Finally, the fee I saved is not taxed, its AFTER TAX DOLLARS meaning if you are in a 25% tax bracket one would save another $10,000, so that would like earning $50,000 tax free, to you for selling your own house. JUST DO IT!
Care to share what year this property sold in?
Did you really think the agent gets the whole commission? you should know better. It's split 4-5 ways before expenses and taxes.
Yes I know how very well how it works, the buyers agent gets 3% and the sellers agent gets 2-3%. If the agent sells their listing without a buyers agent, they get 5-6%.
And of course, that various people take their cuts, but the total amount is the same! On the example a $40k outrageous amount of money for minimal work other than participation in a cartel of sorts. Yes $40,000 for 5 days on the market - is what the seller ends up, paying no matter who it goes to.
@@tylermcclellan3186March 2024 (this month) !
@@JCMasterCraftsman still the lowest fees for asset based sales 🤷♂️
I dunno man.
"Script" ??...you better be careful as disclosing the law of a contract to clients may actually imply that you're a legal expert
You guys are hilarious. I love it. Keep preaching your program to misinformed gullible real estate agents who don’t know how to adapt for themselves and therefore are forced to use your “scripts” to prove to their “worth” to potential clients. All this in an effort to keep the same inflated commission structure so you still get paid for your real estate “coaching” business. I would want to choose an agent to represent me that doesn’t need to rely on your coaching in the first place. The whole point of these lawsuits is to combat the undue influence and control NAR has over not only consumers but their own realtors in the real estate market. If nothing changes, this industry will be sued again by attorneys who see blood in the water and have a much better understanding of contract law, agency law, antitrust law, tort law, etc. compared to real estate agents and their real estate coaches. The NAR settlement is the tip of the iceberg, and if the judge (and the DOJ) doesn’t approve it, it’s only because it doesn’t go far enough.
So true! The public is just now realizing the deceptive system that manipulated both buyers and sellers to pay inflated commissions rather than openly negotiate with their agent prior to representation. In the public’s eyes this lawsuit was about cutting commissions and going forward that will be expected. The buyers agent will have to sell themselves to the tune of tens of thousands of dollars before opening the first door. Commissions are going to crumble.
A lot of agents never tell their customers what goes on behind the scenes. I've been f bombed by other players, yelled at, lied to.... I protect my customers from that.
This doesn't make a lot of sense. If you don't have the "buyer commission conversation" until after you receive an offer, what are you telling the buyers agent when they text you asking what the seller will pay before they show? if you say something like, depends on the offer, they probably will pass on the house assuming the seller is not paying a commission so now you have lost a potential buyer (unless buyer is willing to pay full commission which im guessing many will not)
Can we at least wait until the judge reviews this and decides if this is allowed? Are you even aware this is NOT a done deal and it has to be OK'd by a judge. Why is everyone acting like this is already done?
Because both the plaintiff attorneys and NAR attorneys have both said they feel confident it will be approved.
yes!
I wish I was an agent with this settlement. I’d see it as a great opportunity.
By it being a requirement it makes the conversation very easy and now clients won’t be able to just work with a ton of different agents.
Whistling past the grave yard...
Listing Agents are already using scare tactics to convince sellers they need to offer buys agents’ a percentage. They say buyer’s agents won’t show your home. They say they will let it be known that you are or are not offering the buyer’s agent’s consideration.
Mr Seller -- you're paying me X% for my listing service. I'm going to give X% of my commission you are paying me to any other agent appropriately licensed whatever percentage I'd like from the % you give ME for my service. Nothing has changed except Media gone wild. What else is new. Buyer agents will call me before showing and ask if we are offering commission. I'll let them know how much of my commission I'm willing to share with them to bring their buyer. The only thing that has changed is I'm not putting that on the MLS and I'm having buyer's sign agency agreements.
I’m absolutely depressed that you said that the buyers agent should be paid less if they are not a good agent.
Who determines this quality?
When is their quality determined?
If it is determined by a buyer who has very little experience….then we are being lead by the blind.
If it is determined prior to the service has been rendered, then the agent is being judged based on a feeling.
Don’t EVER cut your commission and keep our Industry strong and growing!
Any agent that reduces their commission is hurting the entire industry.
The Consumer Federation of America study from 2022 shows 89% of Boise ID buyer side commissions were identical...3%. Even higher uniformity in commission in Tennessee. There will be innovation. The process will be less expensive.
That means that the "disrupters" already failed in those markets. Redfin has tried but their reviews speak for themselves and they aren't profitable and will probably be bankrupt this time next year. The lawsuits that will come out of buyers trying to represent themselves and losing their escrow deposits are going to sky rocket...but they "saved" money! 🤷♀️ People really fail to understand the value of something until they try it themselves and fail. I have had the pleasure of assisting so many for sale by owners who gave it a fair shot on their own but realized there is so much more to it than they realized.
It's a shame you don't see the buyer agency commission as a marketing expense. When I asked for my listing fee I tell them that this is also covers the marketing expense which is to entice buyer's agents. Do gentlemen are very smart however I don't think you ever looked at the buyer's agency commission in the MLS as a marketing expense which is exactly what it is
Why should any buyer agree to pay “out of pocket” the buyer’s agent’s commission/fee? If the buyer’s agent is as skilled as they all claim to be, that agent should be skilled enough to negotiate their own compensation as part of the deal. As a buyer, I do not really care how much the buyer’s agent makes, as long as I get the property for the price I want. The benefit for the buyer’s agent is that they have the opportunity to make a nice fee with all the skills they claim to have. It’s a true put-up to shut-up moment for “Realtors,” and I say “Realtors” because real estate agents who are not “Realtors” are not bound by any of this.
This video screams of denial and desperation. Sellers will no longer entertain offers that address let alone require buyers agent compensation. Selllers won’t pay upfront unless it’s tied to performance and that expectation of performance will increase rapidly over time as compensation decreases due to frantic competition among agents. The industry has changed from a lucrative career with low bar of entry to a service job paying just under CPA levels of compensation.
compensation can and still will be discussed with the seller and offered as agreed upon
I have about 5% of my portifolio in AAPL stock, any advice on any other that I can grow my $200 k capital to a million dollars???
I have heard a lot of wonderful things about Andras Bohm on the news but didn't believe it until now
I'm willing to make consultations to improve my situation. What is the most reliable medium to reach him please?
his website appeared right away, You've saved me several hours of research, I appreciate it
the buyers agent commision was never negotiable to the seller - if you didn't offer 3%, buyer agents would not show your house to the buyers. THIS is why there as a lawsuit. And you're smoking crack if you think commisions are going up, just rediculous.
I've helped buyers buy homes offering as low as 1%. It just tends to be an indicator of how unrealistic an owner is and that they will be difficult to work with. A lot of buyers need to get moved and don't have time to deal with irrational sellers who want to show you their "updated kitchen" from 2005. Just so you are aware, nothing in this suit says Sellers can't offer to pay compensation to the buyers agent. It will just no longer be published in MLS, so now, you'll never know why your home isn't selling and your neighbors sold in 24 hours. Agents will be talking to each other and negotiating via text & email like we always have. 9 out of 10 buyers use an agent so if you want to alienate 90% of the buyer pool from considering your home, go ahead I guess.
@@mommom3172 which is MORE colusion! which is why they were sued in the first place! why as a seller would they prenegotiate a buyers commision before having an offer??? everything you said proves why the lawsuit came about.
These guys gave me a headache!! 🤪🤪🤪
No realtor on the planet is worth more than 50 bucks an hour. Realtors should never make more than a ER nurse, or fire fighter, or pilot, or insurance agent. Realtors process paperwork, take pictures, and answer emails. Basically the same as an accounts receivable clerk. I’m all for a flat fee of 2k for a seller agent and 2k for a buyer agent.
I'd be happy to earn 50 an hour. They drive hours, wear and tear on the car, show multiple homes and many clients never buy. They answer calls at night and on vacation. They pay other realtors to show when they are sick. They buy ads, pay for photos, etc. Double social security and full healthcare premiums, legal insurance, licensing, membership, etc. I'd say 3-4k before tax is reasonable.
@@globalfamily8172 so an agent needs to make more than a ER nurse, teacher, firefighter, assembly worker, engineer, and x-ray technician. Interesting. I see a realtor as less value than all of the above.
@@globalfamily8172you are forgetting the stab in the back of the other realtors.
FLAT FEES for all no more % commissions never had to just like you never had to pay a buyers agent.
Sellers don’t need an Agent anymore than the Buyer does. But if a Buyer chooses to be represented by an Agent it’s Against The Law for that Agent to steer their Client away from a property that is For Sale By Owner with no commission offered! Personally I know how to call a Title Company myself and I’m going to use a Real Estate Attorney if I need help. The Buyers Agent doesn’t work for me they work for the Buyer. So as a Seller I’m definitely NOT paying for he Buyers Agent. It should be a Flat Fee or an hourly Fee for Agents compensation.
Fair point, now im just wondering as a buyer what happens when a house is priced at 1,000,000$ based on comps and the homeowner decides only to pay 2.5% only to the sellers agent? The way that I see it is the seller pockets the extra 2.5% commission (which was paid to the buyers agent) and now YOU as the buyer have to pay Real estate Lawyer and title company the extra fees, what happens if you have to submit multiple offers? Do you know how much it costs for a real estate lawyer to charge per transaction? In the end the buyer is going to get screwed over because they have to still pay the extra 2.5$ (which the seller will pocket instead of the buyers agent) as well as you paying the extra cost of the lawyers and etc...
Prices are being slashed in my market right now.. "4 percent increases guaranteed" lies.
One of the benefits of this settlement will be the "coaches" will be looking for jobs at WalMart. Let's not confuse a "script" with a "lie"...I know...I'm a realtor.
Say the truth. "Correct Mr/Mrs Buyer- the value I add is subjective at best. For $12,000 I'll hold your hand and be an intermediary, delaying answers from the seller, lender, appraiser, title, etc until I get around to asking on your behalf. I will actually know none of the answers, but youll 'feel' better having me 'represent' you."
This is false information based on what my brokerage Compass informed us. My Brokerage confirmed that the commission paid by the seller to the buyer agent can still be in the listing agreement. Additionally, my Brokerage confirmed that the commission being offered to the buyer agents can be listed on any other website, not on the MLS. For example, the brokerage websites will list the commission being paid to the buyer agent.
That is exactly what we say in the video too
@@IcenhowerCoachingwatch starting around 22:20 he's saying you no longer will negotiate the buyer agents commission with the seller .. that is false .. the buyer agents competing paid the seller can still be on the listing agreement
Buyers agent commission paid by seller .. typo
Buyers need to think -3% to every offer they make.
I think this is bad advice...You do not want to market a home to only "good agents", who defines that? You want to market your home to every agent. "Bad" agents clients still think they are good, and you want them pitching your home to their clients.
Please rephrase/change your video title, its misleading. There was no actual script discussion. Just a casual talk taking place.
most agents have not been hiding compensation and that it is BAKED into the sales price. shame on you for implying. yes, there are unprofessional people out there as there are in every business. most agents do explain ..but implying that we bake our commissions into the sales price with out explaining is bs.
Scripts and talking points? Why not just tell the truth?
Filling your pockets is over. Cut the BS
I love how you think it's a great way to make money, but you aren't doing it yourself. Why not?