Question 4 you: If you add that compensation $15,000 on top of $500.000, total now $515,000...doesn't the home NOW have to appraise for that higher amount, $515,000, in order for this scenario to work?
Isn't this what the industry got in trouble for in the first place? They claimed that sales prices were being inflated to cover the buyer agent compensation, for this same reason. The base point is that the commission is no longer commission for the buyers agent. Instead, it is compensation from the seller to the buyer and is up to the buyer to compensate their OWN buyers agent or decide to go through the transaction on their own with no representation. This is going to be disastrous all the way around. Listing agents will either have to show their own listings or buyers will have to sign agreements to see homes and be represented by a buyers agent. Hopefully a buyer will choose the right agent to use - a buyers agent who has incentive programs to cover the expenses so that they can be represented and not be blind sided by a one sided purchase and sales. With the seller having representation on their side and the buyer going in alone, buyers will soon find the value in having a knowledgeable buyers agent to be on their side.
If buyers do it your way, they will be paying taxes and interest on your commission for a long time, and over the life of that loan, it will be thousands of dollars
I would give a counter argument to this, which is the Time Value of Money. Yes paying interest on the buyer agent compensation will cost a buyer the interest on that additional amount borrowed. However, if they instead dipped into savings, retirement, or liquidity fund, they would lose the growth of those assets. If someone's mortgage rate is 6.5% and they could keep that money invested in the S&P 500 (which has averaged about 10% historically), they would be wealthier borrowing at 6.5% and investing at 10%. The bottom line is, there are solutions to pay the buyer agent other than the buyer having to come up with the cash. The worst case scenario is it keeps people out of the housing market and they lose hundreds of thousands of potential future equity build. I would look at it as a cost of doing business and definitely better than not getting the home.
listening to you , you just sound like a car salesman . Focus on the monthly payment to forget the price of the car in the Compensation to price that buyers commission will add up to be $32,958.80 and the compensation to loan $42,198.40 The good news is that there are indeed a few people that would be stupid enough to do this but they will be few and far in between ........You people forget one thing WHAT IS THE VALUE YOU BRING TO THE TRANSACTION ????? THAT WOULD MAKE A BUYER FEELING WARM AND FUZZY TO PAY THIS KIND OF COMPENSATION !!!!!!!!!! IF I have to rate the performance of a realtor I have to say that in my experience only about 2 out of 10 Buyers agents were worth the commission and on the other hand about 75% of the listing agents I worked with were well worth the commission
That's a great point and I totally agree the average buyer agent needs a huge upleveling as it relates to the value they bring to their buyers. I think the NAR settlement will make many good agents up their game to become great agents because for the first time in 30 + years they have to justify their costs. Yes I agree with you if you finance the compensation you have to pay interest on it, but that interest is far less than the amount of equity someone will build up over a decade (or two or three). The worst possible outcome is the buyer doesn't get the home because they cannot figure out how to compensate the agent. This video shows the 4 ways buyers can pay for their agreed upon buyer agent compensation.
Question 4 you: If you add that compensation $15,000 on top of $500.000, total now $515,000...doesn't the home NOW have to appraise for that higher amount, $515,000, in order for this scenario to work?
It does yes absolutely, that's why you might have to move to the lower down payment solution that I outlined in the video as a backup solution.
Banks/ Loan companies will not be allowing people to roll over commission fees into mortgages.
right ... what happens if it does not ! deal could... fail.
Great info Ryan. Thanks for sharing
Thanks for the feedback, glad it was valuable!
Isn't this what the industry got in trouble for in the first place? They claimed that sales prices were being inflated to cover the buyer agent compensation, for this same reason. The base point is that the commission is no longer commission for the buyers agent. Instead, it is compensation from the seller to the buyer and is up to the buyer to compensate their OWN buyers agent or decide to go through the transaction on their own with no representation. This is going to be disastrous all the way around. Listing agents will either have to show their own listings or buyers will have to sign agreements to see homes and be represented by a buyers agent. Hopefully a buyer will choose the right agent to use - a buyers agent who has incentive programs to cover the expenses so that they can be represented and not be blind sided by a one sided purchase and sales. With the seller having representation on their side and the buyer going in alone, buyers will soon find the value in having a knowledgeable buyers agent to be on their side.
If buyers do it your way, they will be paying taxes and interest on your commission for a long time, and over the life of that loan, it will be thousands of dollars
Exactly, all for some lousy agent to get a payday.
It’s criminal and insane to finance your buyer’s commission
I would give a counter argument to this, which is the Time Value of Money. Yes paying interest on the buyer agent compensation will cost a buyer the interest on that additional amount borrowed. However, if they instead dipped into savings, retirement, or liquidity fund, they would lose the growth of those assets. If someone's mortgage rate is 6.5% and they could keep that money invested in the S&P 500 (which has averaged about 10% historically), they would be wealthier borrowing at 6.5% and investing at 10%. The bottom line is, there are solutions to pay the buyer agent other than the buyer having to come up with the cash. The worst case scenario is it keeps people out of the housing market and they lose hundreds of thousands of potential future equity build. I would look at it as a cost of doing business and definitely better than not getting the home.
@@UTPhysicianHomeLoan
I agree with you, and I am ok with it as long as that buyer is fully informed.
@@UTPhysicianHomeLoanWhat is dip?
webcam insert is blocking titles ...
FINANCE the buyers agent commission? Pure insanity!
@@KAZHE63 if I had an agent to suggest such a thing, I would fire them on the spot
That what we been doing all along.
listening to you , you just sound like a car salesman . Focus on the monthly payment to forget the price of the car in the Compensation to price that buyers commission will add up to be $32,958.80 and the compensation to loan $42,198.40 The good news is that there are indeed a few people that would be stupid enough to do this but they will be few and far in between ........You people forget one thing WHAT IS THE VALUE YOU BRING TO THE TRANSACTION ????? THAT WOULD MAKE A BUYER FEELING WARM AND FUZZY TO PAY THIS KIND OF COMPENSATION !!!!!!!!!! IF I have to rate the performance of a realtor I have to say that in my experience only about 2 out of 10 Buyers agents were worth the commission and on the other hand about 75% of the listing agents I worked with were well worth the commission
That's a great point and I totally agree the average buyer agent needs a huge upleveling as it relates to the value they bring to their buyers. I think the NAR settlement will make many good agents up their game to become great agents because for the first time in 30 + years they have to justify their costs. Yes I agree with you if you finance the compensation you have to pay interest on it, but that interest is far less than the amount of equity someone will build up over a decade (or two or three). The worst possible outcome is the buyer doesn't get the home because they cannot figure out how to compensate the agent. This video shows the 4 ways buyers can pay for their agreed upon buyer agent compensation.
Realtor arrogance.