NAR Lawsuit Settlement 2024 - Explained!
Вставка
- Опубліковано 25 чер 2024
- NAR Lawsuit settlement 2024 - Brian Icenhower breaks down the impacts of the National Association of REALTORS on real estate agents.
Enroll in our online courses:
www.ICCOnlineLearningCenter.com
Sign up for coaching:
www.IcenhowerCoaching.com
Join the fastest growing Facebook Group for Top Producers:
/ reagentroundtable
We’ve bought and sold over twenty homes in multiple states since the age of 22. We’ve been around the block in many situations and I believe this will harm especially first time homebuyers. Who will
Represent them and don’t tell me their buying agent because they won’t pay out of pocket for one. The listing agent will become their buyers agent too and we know how that works. Realtors will be fine it’s the home buyers who don’t know what they don’t know. They will get ‘taken to the bank’ on this change.
Does a seller ready requires a listing agent if all these things can be done online via Instagram etc??
There should be an implemented way to educate the buyers. Ok, I know you're a real estate agent and you're trying to protect your pocket..
These were my thoughts as well!
The Wild West of real estate just got Wilder!
This is just going to hurt the consumers more. It’ll start out with an idea of helping but will eliminate buyers agents in the future and it will turn into listing agents increasing their fees because they will be solely responsible for acquiring the buyers and they will charge a premium for that service.
The settlement leaves the VA unprotected. Thank you DOJ! The government wants renters. When you own property, you have power. Tell me how much power does a renter have?
100%. Nice to see someone understand what is going on. There are too many idiots commenting on this subject.
In a democratic state Renters have a lot of power against mom and pop landlords.
The same laws don’t apply to black rock, vanguard, etc
@nychansen lol you are referring to squatters not renters. Democrat things smh
You don't have to much power when your property taxes keep going up !! If you don't paid your property taxes the government take it even if is paid off. . We give up that power when we agree to paid property taxes.
People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.
The government will have no choice but to print more notes and lower interest rates.
Well i think, home prices will need to fall by at least 40% before the market normalizes. If you do not know whether to buy a house or not, it is best you seek guidance from a well-experienced advisor for proper portfolio allocation. So far, that’s how I’ve stayed afloat over 5 years now, amassing nearly $1m in return on investments.
Finding financial advisors like Melissa Rose Francks who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
You can sell your home for 100,000 less than what its worth.. I mean, you can give it away for 5 buck if you want to. The question is will you do it? Do you actually think people will do that? Supply and Demand..
The average consumer purchasing a house tends to be clueless, and they don’t want all of this negotiation of fees. They want the process to be as simple as possible for them. Corporate real estate are more savvy and understand fees.
I think NAR needs to disappear they are not representing or helping realtors. I don’t even know how this lawsuit even came about. The standard 6% was never mandatory. It was always negligible and even if sellers wanted to pay 1% the buyers agent could ask for 2.5 at anytime this should not have been a lawsuit to begin with.
As a real estate trainer and a real estate agent with 25 years of experience, I am surprised, that NAR didn't use the following defense:
"the 6% commission readily shared by the listing agents with agents who bring buyers is a great tool to create much higher exposure of the properties and, thus, selling the properties for much higher prices. Thus, sharing the 6% commission benefits our clients who are the sellers". By not using this point NAR has let its members down.
I have been saying this for weeks, biggest hurdle for buyers- is down stroke/ and adding this additional cost is going to steer buyers to homes where seller's are offering buyer agent concession. Human behavior is very predictable - Many agents (not all of course) but many won't show properties now that offer less % splits than the average in a given geographic area. Lots of conversations for sure!
Surprised that you mention a Real Estate Fee. Any entry level agent is definitely cautioned not to mention any specific marketing fees. Bring up any fee puts you in danger of price fixing. Question your RE experience
@cpmv as an independent contractor- I run my business the way I run my business. I talk about the reality of human behavior, I talk about marketing plans, photos/ads/digital/target markets: I talk about stats- sold home prices-about strategies & yes I talk about my commission & how much I charge to market a home or represent a buyer-what services I provide and what the seller or buyer can expect of me- this has been done in commercial re for years. The buyer paying commission & the seller paying commission- nothing new-
of course I also mention to ALL clients- that they are free to chose an alternative licensed professional to market their home or negotiate their transaction if they don’t feel the value I bring them is worth what I suggest as compensation.
- further for me to run my business and market their home effectively. Does this sound fair to you?
It is ALWAYs the seller/buyer choice to pay commission % amount. It is also my choice to work or not work for that %.
Price fixing is when multiple
Agents in a geographical area get together and decide on what they ALL will charge % wise & that is a no-no. Pro tip- don’t talk to other agents - talk to your clients
I'll add. VA borrowers are forbidden from paying realtor/broker commissions. A small part of the market , but an extraordinarily important one. Worth a video on this subset of this topic alone.
I’ve been commenting on this, too! We are planned late fall buyers who were going conventional. Today, my husband said- fine, we will use our VA.
Plus 80% of loans are owned by Freddie and Fannie and they also forbid any compensation in the loans.
This was the first time I've listened to you. You provided several takes that I haven't heard yet and inspired me to think along a different line.
I think this will be good for the real estate agents that take their job seriously and are not afraid to put in extra work. There are good agents out there and they'll be the ones who stick around. It will be good to widdle down the pool of agents.
Great video and thought provoking.
👍
Thanks for listening!
buyers beware. you know that feeling you get when you go to a dealership to buy a used car(is this overpriced, is it in good condition, are the sellers hiding anything, what questions should I be asking, what does this fine print mean). now it will be the same on your next house you buy
Thanks for summarizing this, really helpful. Loved you in Becker btw!
You're the only one that I've seen that has this correct. I just wrote a piece on my mortgage forum that says exactly this haivng gone through something similar in 2013 on the lender side--then I stumbled on your channel. I've seen dozens of articles/videos since Friday and everyone seems to have gotten this one wrong. I just subscribed to your channel. Good work...
🌸 🌸 🌸 Here you go! Great video. Let’s get started in the “Next Chapter” of the real estate industry…
I like your positive attitude. Hope it helps...
This opens the door for the whole buying/selling process to go fully online, without involving any agent. There will be many websites designed to help buyers and sellers complete the entire transaction online. These websites will have the flexibility of setting their own commission rates.
seriously? like the door to do business online hasn't been around for past 10 years? basically do as much as possible online now as it is.
That will be a bad idea! The buyer has no representation therefore the sellers agent will be working for the seller not the buyer !!
Online presence is definitely the way to brand yourself as a REALTOR®. Consumers are online at least 90% of the time especially on social media. Use online presence to educate and add value to your real estate services. Buyer Agency is not dead! Remember that agency relationships can be created be implied or expressed, it doesn’t necessarily have to be in writing if the consumer thinks they are represented from the actions of the license holder.
@@kelliewen4834they can hire lawyer to bid/review contracts. They have fiduciary responsibility because among other things such as law BAR, they will pay lawyer directly.
@@kelliewen4834 Why would a sellers agent work for the buyer?
Anyone who thinks this is going to reduce housing costs is, to put it politely, naive. To put it more honestly, they're gullible fools. Who will be the big winner? Lawyers. Lawyers have been lobbying for decades to put realtors out of business so that they can swoop in and do the work realtors do at much less cost than a slimy attorney will charge. Yes, their rates will go up, way up. Who else will benefit? Big corporations selling homes. And title companies will up their already hefty fees to make up for the work realtors used to do that title companies will now have to do. The price of a house will not drop a dime. Congrats, Mr. Attorney -- you've consolidated even further the power you and your scummy brethren have over all of us.
I sold my house in SI three years ago. Realtors were not allowed in the house because of Covid restrictions, so I had to sell the house myself. It was sold within two months. I was charged 6% realtor fees. I thought it was so unfair that I had to basically
sell my own home and still paid the 6%!!!
You didn't have to pay 6%. There are already a variety of commission structures and various brokers who charge anything from 1% + . The argument that people are stuck paying 6% these days is simply not true and hasn't been for a long time.
So....Will you be reimbursed??
Nothing will change. The vast majority of home buyers and sellers don't have a clue how any of this works. They barely read the contracts, they skim them at best. Brokers will continue to negotiate commissions they way they always have, and sellers will continue contributing 3 to 5% of their profits towards closing costs and agent commissions. That's just the price of doing business. You buy a home for $200k, turn a around a sell it a few years later for $350k, then you pay at least $11k of the profit to sell it without doing any work yourself, unless you can market the home, find buyers, do all the legal paperwork, and do your own legal tax and title work. Get real.
Thank you for your coverage and explanation about what is going on with Realtors and commissions. It seems so stupid to me. I've as long as I have been in the business of real estate investing I have know that the commissions are negotiable. My first realtor interview taught me that. I'm sad that NAR had to be targeted by whomever did this. I love my realtors!
Sellers complaining and now rejoicing about realtor fee always have had the option to do FSBO. Wonder why they didn't 🤔
I have bought and sold many homes without the representation of a realtor. I have also been told several times by buyers agents that they would not show my home to their clients if I did not have a sellers agent and would pay 2.5% vs 3%. Not sure how their clients would feel about that, but probably not great.
You are the first You Tuber that understands that these changes will not raise selling or buying amounts.
How? It will literally put the burden on buyers to pay their agents (or go unrepresented). The sellers will pocket the extra 3% and leave the buyer holding the bag.
@@bw0081
Buyers agents are not going away and they won’t work for free. The costs to the buyers will be built into the offers. In essence it will be requesting the seller to cover the costs. They of course can reject that request. But if buyers don’t have cash to pay their agent, or don’t want to spend it on buyer’s agents fees, they may just tell their agent they don’t want to see homes that don’t offer to pay buyers agent’s fees. This is something a buyer’s agent can find out in a phone call or by referring to public real estate websites.
The seller does not pay the buyer's agent! The listing broker charges the seller a commission. The listing broker pays the buyer's agent's broker. The buyer's agent's broker pays the buyer's agent.
False
Original poster is correct. @@TamilLatest
All with proceeds from the seller...lol. The seller doesn't physically pay the buyer's agent, but it comes out of their net profit.
The only people who benefit from this are the greedy and unethical lawyers who will collect 30 to 40% of the spoils. It will now be harder for buyers, buyer agents and will reduce the number of buyers willing to bid on a listed property. It will also cause reduced liquidity for sellers and take longer for them to sell their homes. If sellers think this means they will collect more money, they are dreaming. i predict it will have the opposite effect.
Great! The sellers can negotiate the commission or a flat fee. I paid 6% when I sold my house to two agents that didn't deserve those money. One put a stick in front of my house and the other showed up 1 hr late to the meeting. The good and hard working agents will still make money, and this new industry shakeup is a good way of filtering down the bad agents..
You didn’t pay anything! The buyer did! The commission was baked in your listing price.
But you didn't have to pay 6%. There was never any forced commission. At least you likely will not have to pay the crappy buyer agent. If you didn't like the commission your agent was charging you should have dumped your agent. Many offer different rates. The video explains it very well.
@@KAZHE63 That makes no sense...lol. The 6% comes from the seller's end...have you ever bought or sold a house? Yes, the buyer spends the money, but the 6% commission the seller pays reduces their net profit by 6%...how do you not understand that?
False! @@KAZHE63
I agree. There are a lot of bad sellers. Posting stupid dance moves on social media and sticking a sign down isn't really working.
I like the way you've explained this.
I like the way he explains it too but I think he’s wrong in a lot of ways.
Back to "caveat emptor" (buyer beware). The DOJ didn't talk to the CFPB apparently. The buyer will have to pay out of pocket for their agent (albeit probably proper) At the end of the day, it's going to effect the young, first time homebuyer and the poor the most. I think the premise of sellers paying a co broker agent fee was because buyers have additional mortgage fees on top of their down payment, closing, etc. They've been priced out for years now anyway. They should have done away with all the junk transaction fees first. Commission has always been negotiable. Anyway, it's definitely a shake up in the industry. We'll figure it out. As for sellers, when the market turns into a buyers market again, they may choose to offer buyer agent bonuses on top of paying a co-broker commission and buyer closing costs. We'll see, but I hate to see buyer's having to go it alone, especially if they need the guidance. I'm sorry, I love what I do but I'm not going to work for free. So, caveat emptor. Seller's actually could do away with any commission and sell for sale by owner too. So many options
You must be an agent. Get real. Commission has been a standard 5 % to 6% for decades...and if you don't want to pay it...people won't work with you. It has never been negotiable. And you do not need a buyers agent...you do not even need a sellers agent. The seller does not take the pictures...they hire someone. THey do not sell the property...the internet does that. They do not write the contract...lawyers have already done that. They do not make sure the home is free and clear...the title company does that. A sellers agent literally opens the door and lets people in and out and insists the sellers leave. I live on the water...I know my property...the tides...the water depths....what size boat you can safely get in and out of the channels at what tides...everything the buyer needs to know. A seller agent is clueless. Most agents say they are not even for the buyer or seller anymore. They are not fiduciary agents. They are simply "contract specialists" is the new term. Agents are beyond overpaid.
Great post. After yesterdays announcement, I feel all sellers and buyers should just put the brakes on all decesions, until this gets figured out. The time period from now to July will certainly be an interesting one.
@@garrydye2394 "Commission has been a standard 5 % to 6% for decades...and if you don't want to pay it...people won't work with you" big difference between standard and mandatory. Just because someone does not want to do the work for less money than what you want to offer does not mean its not negotiable...agents could always take less, but if they value their time and energy, they may opt not to spend it for compensation below their perceived value, would you work for much less than the value you believe you bring or if it would take up more of your time and energy than the value of the compensation you would get, I would hope not. There are PLENTY of discount options available for sellers who do not want to pay standard service commissions, nothing has or will prevent them from asking a realtor to take a discount and if they wont working with a different option or even For Sale By Owner...part of the job is coordinating all the services so sellers do not have to, but again if that is something you want to do FSBO is for you, but most people do not. They want to pay someone a service fee for doing it correctly.
Delusional. No buyer needs an agent to exclusively represent him.
Sellers will select one firm to act as his exclusive selling agent after meeting with one or more and receiving written offers with a commission of around 1% to 1/14%.
The selling agent will therefore exclusively handle the selling of the home.
Companies not covered by this agreement will need to compete with those who are so rates will need to be competitive.
Any agent who cannot gain an exclusive agreement to sell a home will not have anything to sell, and that is why commissions will be around 1% to 1/14%.
This is how it works in many countries.
We already had that model in this country...what happened?? Buyers sued because they believed it was unfair that they did not have representation. This is also America not Europe. There have universal healthcare & high taxes. People do not need to make as much money to survive so many things are cheaper in Europe.
@@mommom3172 We shall see wont we, but having an exclusive agent selling a home and earning 1 to `11/4%0 works fine elsewhere.
I think most buyers realize the idea of a buyers agent working for a buyer, not for himself first, is ludicrous, they are I think in it for the commission .
Suing for breaching the fiduciary responsibility is almost impossible to do on most purchases, the cost to sue is high, if you could find a lawyer to sue for you, and it would take a year or longer to bring to court. Even if you won the buyers agent if he worked for a larger company could appeal, and that would add to the legal bill.
Europe is also leaning more towards our way currently.
@@IamEricWard Not in matters of Real Estate. they laugh at the system the US has had for years.
@@harrydestaffano565 that is not true. Read up on the structure there and issues they face in markets. Also look at some of the changes they are trying to make. And no, they are not laughing at our system. Don’t forget their economies are no match for ours.
I don’t understand this whole mess. In California the seller pays the listing agent a set commission ie: 6%. If the listing agent finds a buyer the seller pays 6%. If a buyers agent brings a buyer the seller pays 6%. This cash grab for the lawyers is messing with home buyers.
Commissions have always been negotiable. 6% is not set in stone.
@@scottsamuel7595 You're right, which lead more to why this whole thing happened in the first place
You’re exactly right. I don’t understand why they settled. Why should these people win a case where they agreed to the dollar amount? This isn’t the normal class action where the washing machine got moldy for 1000s of people. Everything was transparent and nothing was wrong.
@@usecommonsentz3764 the lawyers from NAR really dropped the ball on this one plus the jury completely ignored facts.
60k on a million dollar home is reasonable to you ? how does that help anyone ? i dont use realtor period . they bring nothing to the table at all . oh there's the toilet , oh there the kitchen , no sh$t we dont use a broker to buy stocks anymore so why are we using a realtor to suck money out of the air
Having sold listings scattered across many platforms or being pocket listings is going to make appraisals more difficult. Trying to get the largest selection of comps to select the most reliable indicators of value for a subject property then determining the details of the transaction and whether it is arm's length is going to take way more time and effort or an imposibility leading to more turn time needed to complete an appraisal and increased fees. Never mind the effort that will be required to pull statistical data from all these platforms for market analysis.
If it becomes the norm that a seller will not pay the buyer's agent commission, what happens in states where dual agency is illegal or in instances where buyers don't want to pay their agent's commission out of their own pocket? Even in states where it is allowed, it's in no one's best interests for dual agency to become the new normal, especially the buyer's. Buyers think they will be saving money by not paying their agent's commission and instead working directly with the listing agent (and buyers working directly with the listing agent is not a new thing); but if the buyer does not have someone representing them who will ask the right questions and really go to the mat for them, they will most likely not get the best price for the home and will actually lose money, even though they will think they are saving $ by not paying a buyer's agent. The bottom line is if sellers stop paying the cooperating broker fee en masse, buyer's agents will become obsolete fast unless buyers are willing to pay their fee, which I don't see happening.
You would save money if you did the legwork to figure out how to represent yourself. It’s screwing buyers into forcing them to either pay and lose money or risk representing themselves and screws buyers agents whose services will be in less demand.
Great infos.
Thank you!
Can someone point me to the language in the settlement that states that there is decoupling happening? I have not seen it...just seen that buyer agent commission can not be in the MLS.
Sellers will have less buyers. Many buyers can't afford to pay a fee to the agents
If this is the case, then prices will drop to the point when buyers can afford to buy and pay the fee. This is how free market works
@@wittttttt agreed. But it will take years to move the price needle significantly enough
This will not be like commercial. Rules on loans are very different with residential mortgages.
Also, the expertise of commercial buyers and their agents and lawyers is a serious level higher in skill and experience.
@@Questionsabout-yv1ks exactly with less protections than typical home buyers. This is going to get messy. Thanks for nothing NAR!!
So as a buyer's agent when do we ask if sellers is paying a commission... when we scheduled to show the property or At the offer?
Then to be sure we get a commission our buyer's agreement must state that if seller isn't paying a commission the buyer will and how much.
Buyer will want to know and if the buyer has to pay the commission upfront as well....if they do will they walk away from the deal?
This is going to be a train wreck!
The way I see real estate prices will come down is like this - consumers can now bring in the price cut into the equation of buyers agent fees.
For example, what I would do if $50k price cut, 40% of that goes to the agent, 60k price cut I wpuld pay 50% of the cut.
So the agent commission still renains 5 or 6% or even higher depending on how much the agent is able to negotiate with sellers agent.
The buyers agent can in turn negitiate with the sellers agent to pay part of it.
Rather ironic that the lawsuit claiming that the industry which wrongfully and automatically billed 6%, was won with representation by an industry which automatically gets 1/3 of the winnings.
Nothing is going to change, sellers will still pay buyer agents 2% - 3% commissions to bring them buyers and 5% - 6% commissions to sell overall. If you pay attention to the details, the only change is that agents cannot list the buyers agents commission in MLS. Listing agents are still able to share the commission they charge sellers and offer buyer agents commission to bring buyers. Nothing has been stated that commissions need to be lowered or that buyers need to pay their own commission, that is not going to happen. The only thing that will change is there will be a new way that listing agents communicate how much commission buyers agents are receiving. That will be the only change. Also New Construction Builders will continue to pay commissions to buyers agent to bring them buyers, so the resale market will need to stay in line and pay buyers agents as well. No major changes will happen.
This is how I read it. Co-brokes can't be listed on the MLS.
Well explained. Thank you for helping people not freak out. It’s no big deal.
That's all speculation; you don't know what will happen. Also, comparing the new-build market to the resale market is like comparing apples to oranges. It will most likely be market and situation-dependent, just like sellers offering closing cost assistance; it will be more prevalent in some markets than others. For example, most sellers may not provide buyer's agent commission in a seller's market. Furthermore, not offering buyer agent commission up front gives the seller more leverage in negotiations. Let's say a buyer can't afford to pay their agent's commission; the seller could offer to pay the commission in exchange for less or no repairs to be done. At a minimum, it automatically allows the seller to either pocket or negotiate roughly 3% somewhere in the deal, which changes a lot. You are right; on paper, not much has changed, but for savvy sellers and unestablished buyers, it has.
@@pinky882 I’m in the Greater Houston Area market which has a ton of builders. These builders pay 3% - 6% commissions for agents to bring them buyers and the business model works. Comparing builders to resale is not apples to oranges. It is literally the same thing, a seller with a home for sale. Many buyers and agent now view both options regularly. As long as builders continue to offer below market rates, closing cost assistance to buyers and pay buyer agents commissions of 3% - 6% the resale market will ABSOLUTELY continue to offer to compensate buyers agents. Some listing agents or sellers may think they can sell a resale home without paying a buyers agent but they will be in for a huge disappointment as No agents will show the home OR offers will come in with agents commissions included, so nothing is changing. Listing agents trying to sell with no buyer agent commission will be like FSBOs who think they can sell on their own, yes maybe a small percentage will find success but the vast majority will quickly see they need to offer up a buyers agent commission to get the home sold. Buyers are not going to be paying their agents commission, it won’t happen. The net effect of all this in a year will be nothing changes. The only change will be how buyers agents find out how much commission is being offered.
@@pinky882 I am in the Greater Houston Texas market where there are a lot of New Construction Builders. These builders pay buyer agents 3% - 6% commissions to bring them buyers, this business model works and won’t be changing. Comparing new construction to the resale market is not apples to oranges, it is literally the same thing, a seller offering a home for sale. Many buyers and agents view both options when shopping. As long as the builders continue to offer below market interest rates, closing cost assistance and pay buyers agents 3% - 6% the resale market will ABSOLUTELY stay in line and continue to offer buyer agent commissions. Some agents or sellers may think they can sell a home without offering a buyer agent commission but they will be in for a huge disappointment when they get no showings and the home doesn’t sell. Buyers aren’t going to be paying their agent to show them homes for sure. If an offer does come in then it will include a buyers agent commission, so nothing is changing. Listing agents trying to sell without offering a buyers agent commission will be like FSBOs, there may be a few success stories but the vast majority will fail and go back to what has worked. Even FSBOs are willing to pay buyers agents the majority of the time to bring them buyers. The only change will be how buyers agent find out what the commission will be. Once all the plays out a year from now, there will be no net change.
Buyers will discontinue using a buyers agent..most won't have money to pay and banks won't finance commissions. He's wrong. I'm in commercial RE. We currently split commissions based on listing agreement.
I think I’m gonna retire. There’s no way I’m gonna take a buyer out and if they don’t compensate me lose so much money and time gas not to mention your knowledge is worth a lot. I think they’ll be a lot of lawsuits down but of course they always contacted Attorney. Not sure if they’ll take them out and show them property or not. I mean if they’re gonna pay Attorney, they might as well pay you
Soms realtors have suggested a commission fee for showing homes and a flat fee negotiated once the deal goes through. It could actually help both sides even though the public thinks this is great news lol. Im not a realtor and i think this isnt goimg to end well for buyers/sellers. It will suck big time for us
@@priusgame1178if I have to pay an agent to take me to a showing, I’m not going to have an agent.
@bw0081 the comedy here is you guys have always had a choice lol. Even commissions can be negotiated, so I'm not really sure what is being celebrated. Lol most people thinking they've finally won a victory will never ever actually buy/sell a home without an agent and actually come here and post. You could actually go with no agent, but you won't really do it. Just like the last 50 years, you've always had the option to go no agent. Let us know hoe that goes
@@priusgame1178I mean it makes all the sense in the world for me to have an agent as a buyer, as they are being compensated by the seller and not me and my wife. However, if it changes to us having to pay 2-3% on top of what we’re already offering for homes, there’s just no way I’m doing that. Especially if I’m paying per house visit. So I’m not certain where the comedy is for you here as I don’t see it being a laughing matter. Buyers are already being squeezed by already outrageous prices and our agents shouldn’t have to be another one.
@bw0081 nothing has changed the last 100 years. You guys have always had the option to have no agent to buy/sell or at the very least negotiate a commission. I'm asking everyone to go ahead and do it and let us know how it goes. Few will do it and instead will cry foul to agents for things all clients have had control over for generations lol
What buyer is going to sign an agreement that says rhey will be responsible for a fee? That's a very big change.
This has been an attorney's money grab. The commercial industry is plagued with commission compensation negotiations and information exchange between all parties that step over the line of ethical client fiduciary responsibilities. Welcome to the era of increased failed transactions as well as reduced exposure for sellers. It seems this will unfortunately lead to more unethical activities for all parties within a transaction.
This is going to bad for the average consumer. Explains why there isn’t much pushback.
will a lot of agents leave the NAR ?
Do you think this will negatively effect home inspection companies? My family's business has been in business for 10 years and I wonder if buyers will try to not use an agent which then may lead to them not being educated on why home inspections are important.
Worse case scenario, buyer’s agent and sellers agent get 1.5% each. Still not bad on a 500k deal.🤷
I drive a toyota and live in a modest middle class home. When I bought and sold 2 previous homes the Agents took 6% and drove up in a BMW Mercedes. Both lived better than I did. Barely spent 40 hours selling my home. 3 of the hours was an afternoon with an open house. Two of my neighbors marketed their own house , did an open house on thier own and did very well. My sister used An agent who only charged 3%'and she did a fantastic job. There are a some newer Agencies that have very low fees.
Commissions were always negotiable. It's just that most sellers didn't know that and now they do
I wonder how first time homebuyers who are real estate agents themselves are going to negotiate this?
How do homeowners file a claim ??
This Kills VA loans , the veteran is screwed again, under a VA loan the buyer cannot pay a commission.......not a easy fix now , that must be changed through legeslation. VETS are done
Listing side now pays 3% to the selling side only, keeps the price the same. Bueyer side gets no pay.
It may be that realtors will have set fees...kinda like everyone else involved in a real estate transaction charges. Not a percentage of the sales price.
If you're a seller commissions absolutely are being slashed.
No one ever talks about Sellers Sub -Agent. On a Co-Broke, there is nothiing wrong with disclosing to a Buyer that I work for the Seller. The Seller is paying my commission. Just like when you buy a car. The person selliing you the car works for the Seller, the dealer. Sub-Agency is still where its at. MLS Services should be allowed to post Seller Sub Agency Compensation.
Add the commission to the purchase price? Seriously?. Inflate the sales price to benefit the buyer's agent? huh! interesting. As an appraiser that will be very easy to identify. I am glad this price fixing will be over.
Is that not already being done since the seller pays all commissions now on properties you are appraising?...The only difference will be the buyer and the agent will have an agreement on how much is being paid to buyer agent for commission and you will check the box in the RPA that says seller agrees to pay buyer's commission in the buyer broker agreement, which will be attached...decoupling and not making commission to buyer agent agreed upon as part of the listing is the only thing that changed. I guess if buyer's agents are going to be okay working harder and taking less, then they will do that but you will start to see many less buyer's agents overtime willing to do the work...
The sales price commission is factored in already presently with the seller's contributing this? Either the home will appraise or it won't, nothing changes that.
What's interesting is the fact that this decision was made in the State of Missouri where buying a home there is one of the cheapest places in America to purchase a home...I am sure the IRS will be changing its rules concerning capital gains etc., to where the Government is the only entity to profit from this cluster F court case.
your forgetting with properties on zillow etc the buyer needs to now find a buyers agent. good luck. and what happens to open houses now? does the buyer then have to ask if there is a fee to buy? what is the motvation to use a buyers agent? and lastly what do the attorneys get paid for this lawsuit?
An estimated 600 million. Google “How much did Michael Ketchmark (the lead attorney) make for winning the NAR lawsuit.” It might have changed a little with these newer settlements, but that’s what the number was when the lawsuit first went in the plaintiffs favor for 1.6 billion. The homeowners will be receiving about $2,000 or so a person.
Since the winnings are awesome, attorneys from around the country have been filing copycat lawsuits. It’s like bitcoin going up in value and everyone starts investing or a booming housing market. This is a niche right now for attorneys to make awesome income and to create a dynasty of financial fortune for their own families. It’s a good gig!
The lawyers are making hundreds of millions and Biden is giving speeches on how he is doing this to drive down the prices of homes. Is it starting to get more clear now?
In the first 2 and a half minutes of this video, he says "for a long time the industry standard was 6%..." Why would a real estate coach use this term? Right there, he misrepresented the industry the same way the media does. There is no "industry standard" and there never has been. It has always been negotiable.
Correct. That's why I never understood the entire premise of the lawsuit. Commission is negotiable and has been for a long time.
@@Jackson_Hts_Mr_Randy_Watson Right, the lawsuit is about the real estate industry conspiring to artificially inflate real estate commissions using the NAR's MLS Commission Sharing Rule, which requires sellers to offer commission to the buyer's agent. Yes, it is negotiable, but it has not and is not generally presented that way. They make it appear that not only is the seller paying the commission required, but 3% to each agent is standard; that is the artificial inflation the lawsuit addresses. Basically, they were accused of conspiracy and fraud. The NAR did not admit any wrongdoing, but they settled. They can try to hide behind the fact that commissions are and have been negotiable, but that doesn't change all the shady high-pressure tactics that have been going on for years, mainly to sellers.
But it's rarely presented that way...that's the whole point. Sellers have been pressured into offering/paying 6% in fees to be competitive for so long that the market has established itself that way, making it essentially non-negotiable in many instances. You can say it's negotiable on paper, but that's not always the case. There's also been retaliation for sellers not offering 6% commission fees.
@@pinky882
Bingo! Its a sneaky unspoken system that realtors never explain in detail to buyers/sellers. This law brings transparency and now realtors will have to explain why they are worth high % commissions on already inflated home prices. Now days buyers are shopping on zillow and providing mls #’s to their agent on homes they are interested in. I’ve also noticed agents drive separately now for showings.
@@pinky882 Non sense. Use google, look up "discount brokers." Interview a few.. Hire the one you like.. Who is "pressuring" anybody at the dining room table? This isn't 1976.
The idea that more openness will cause commissions to stay the same or increase is difficult to justify. The market is already suffering from historic unaffordability. The already-stressed buyer will not have the additional funds to increase commissions paid.
In the near term, sellers will need to move to meet the market. Lowering the price to get a deal will be NO DIFFERENT than any other seller concession. This is basic economics, and not open to debate.
Further, while inventory is constrained in some markets, it is loosening in others. Real estate agents wishing for continued tight inventories to keep prices propped up will find themselves on the wrong side of history, just as many (most?) did in 2007, when the vast majority of agents claimed prices would never go down. Many so-called experts had to eat a lot of crow publically.
I picked the first agent who said "no one knows where prices are headed, we are in uncertain times."
He's been my agent for years. If I want house-price cheerleading, I can get that from the TV set.
I’m fine with the seller paying the listing agent to list. Only. Listing agents will continue marketing the home and working non stop to get the home sold. Also, buyers agents won’t go away. Consumers want representation. What will most likely will happen with buyers agents is that they will be paid a smaller fee (1%) and it will be rolled into a mortgage.
It's always been negotiable.....I think more disclosures will cover the problem....and sellers will pay if they want a competition to sell the house for the most.
1% to the broker and agent’s broker?
@@JannelleCT 1 percent to be quiet honest really isn't worth it representing a buyer unless it's a million dollar transaction. After a split, TC cost, Transaction fees. We're walking away with nickels and dimes. Listing side of things is way easier and homes basically sell themselves in this current market. Assuming best case scenario here.... a 5 million dollar sales volume with a brokerage that offers absolutely no fees, no mls fees, supra fees. You're only walking away with 50k gross for the year. 5 million in volume is a lot of transactions outside of major metropolitan cities. Minimum wage in California is 40k on full time here in the coming years. Interesting times...
Buyers agents working for 1 percent won't begin to justify the work put in. Some estimate that an agent having as many as 4 listings is equal in effort to an agent working with 1 buyer. Buyers agents show the houses and put in much more legwork. Also the buyer assumes the most risk therefore needs quality representation. Because at the end of the Transaction the seller knows what they received, MONEY...While the Buyer HOPES they know what they have In the property. Buyer Beware
Unpopular opinion: This might hit "Real Estate Coaches" the hardest with most newbies and low volume agents leaving lol. Might be another sellers market or 2 before more ppl jump in seeking "ez $"
OPENDOOR will gain markets share . The AI platform they hold and blankets real estate . Many say buying shares in OPEN could be like buying AMZN 20 years ago
Buying a home is nothing like buying shares. I think what you're saying is possible, if people were more trusting, but they're not. Maybe set up an app similar to Airbnb, with buyer's credit card, license, all info.. then use door codes for them to tour the home without realtor, and negotiate price directly with seller. Might work for local buyers and sellers only, not for out of towners.
@@AlcaniZFilms It is happening already the younger generations and people that had a mouse in their hands at age three are all for it . Realtors ( most) never did the right thing and explained the relationship upfront . This can help the industry follow guidelines and do it right . There are many agents that had been bending the rules and having the buyers sign the disclosure before closing when it should be done at the first meeting . It seems to be happening already many are buying OPEN stock knowing it will take off .
Neither home sellers nor buyers will see any cost savings from this change IMO. While such a model might be effective in commercial real estate, it's unlikely to be successful in the residential market. The primary concern here is not about real estate commissions, but rather the potential dominance of large investment firms like Blackrock in the industry. Advancements in AI are rapidly transforming the sector; soon, one could simply input an address, and AI will determine the property's value. If agreed upon, the deal is sealed. AI will also automate various transactional processes, such as financing, title transfers, deed management, insurance, and settlements. This trend is expected to extend beyond real estate, with those developing these systems and major investment firms reaping significant profits.
Zillow says my house is worth 100k more than I could sell it for.
Zillow algo's are childs play compared to where we are with the development of AI; and zillow is not what I am talking about. Most people simple do not understand what is happening; I have been following AI development for 20 years, our entire world is about to change. Thats what this is about. The lawsuits are bullshit. @@JannelleCT
Time for agents to start running corollas , they get mire money than us : the ones putting 💰at risk and doing most if the work .
Are you saying the seller can't offer a commission to a buyers agent?
They can, but they can't advertise it on the MLS.
So it's unknown and the buyer's agent is at the mercy of the seller's agent. So we have to ask before the showing. And also our buyers agreement will have to state what we expect to get paid. If seller's agent doesn't pay the full amount then the buyer pays the difference or all of it.
If not then buyer's agent is at risk for working for free.
But what does this mean for consumers/people buying a home. Does this mean the buyer have to pay buyer agent out of pocket
Its still negotiable you can ask the seller to pay all or a portion.
And I'm not sure the screws over both the seller and the buyer. Mark my words and get back to me in 6 months from now.
Demand to stop paying the buyers agent. They work for the buyer...not the seller. Stop paying it.
yeah you can ask the buyer to contribute to the commissions......but if you showed 2 homes......1 that pays the buyers agent......1 that doesnt....which one will a buyer be more competitive in purchasing? The one that the seller pays the commissions. Commisssions should be disclosed into the pa
@@garrydye2394 They work for the seller because the seller has offered the property for sale, they are broker of the transaction. Seller needs a home sold, list broker offers it on market to other brokers who may help that sale by bringing a buyer to that seller. They help the seller to a desired outcome by representing a buyer's interest in a transaction so a seller can sell the property. Besides the agreement is that they are offering commission to their list broker to sell their property, if the list broker cannot find the buyer then the seller is authorizing the list broker to work with another broker who may bring a buyer to help and split the commission with the other broker.
Going around in circles here
So, who gets the settlement money??
attorneys.
This si going to thin the heard of Realtors by a lot.and the days of 5% of a million dollar property are over.
never made sense why they made so much more money selling a $900k home vs a $300k home. Flat fees make so much sense.
It should be its a racket
So my realtor sold my house 14 months ago..3%x2.Does the lawsuit reimburse???Thank you sir
They sold your home right? I hope you are joking.
@@HulaShack1 they sold it
Consumer will never see a dollar because all the slimy attorney ate up the fee😂😂😂
@@justus1222 really??
They'll move the prices higher and still agree to percentages. Double dip legalized. You don't like the rates negotiate or find another. Also that's their salary nothing else no tips no nothing for most real real estate professional.
I'm not a agent but i think it's going to hurt the consumer more like others have stated.
Its like property manager brokers if you really love your property manager company you will pay the higher rates. If you're paying lower rates you usually get what you pay for imo
A salary? Wow. Obviously you've never worked in real estate. Do you think agent's would hustle and find listings, or help buyers as much as they do if they received a salary? Plus, how are brokers supposed to pay salaries if their agents aren't motivated to find homes to sell or help customers sell their homes? Salaried workers usually sit around a do a lot of nothing.
I hope you're not wrong. For your sake. I do advertising, you can list 2 free RE ads every 48hrs., and we don't use cookies. It's the best I can offer.
REA fees are negotiable FYI. dont let a REA take 6% just for opening a door!!
this is so idiotic, buyers agents are the hardest workers and for them not to be able to see their commission on the mls is simply gonna make their job harder. they deserve to know ahead of time. this is just gonna add a bunch of back and forth preliminary phone calls between the agents which should not be necessary. Buyers agents WILL find out wether they are or aren't wasting their time showing a particular property to their clients or not!
It is sad that these coaches do not know what they are talking about when it comes to the commission.
The commission was what you the listing agent would charge for your service.
There was no coupling of commission.
I do not negotiate the buyer side commission.
I explain if you want lower level trained agents to show your home it is best to offer them a carrot, incase a buyer falls in their lap.
Not coupled and not what I negotiate.
You're paying $418M and nothing is going to change. Ok realtor man.
All sellers should re-negotiate the commission immediately. De-coupling means seller pays 2-3% + 0% for buyers agent. In this market there is no reason at all for the seller to choose a buyer that requires compensation.
sounds great. compliments dual agency and gives no incentive to other listing where sellers have chosen to provide commission. remember, nothing has ever prevented owners from listing on their own.
That is NOT what he is saying , The seller, pays the sellers agent and buyer, pays the buyers agent . BOTH need to be represented by an agent > Why should the seller be represented and leave the buyer in the cold to fend for themselves ???
A lot of agents are willing to list for 1-1.5%.
it has been in fact a value of marketing the property as well as history sfr set by property traded with this very thing. "to produce a willing and qualified buyer" the seller "should" do what they feel is best for marketing their home competitively and in the best light. NOBODY is forcing them to list with an office. Even before this lawsuit they could have said they are only going to list for example 3% related to listing agent. - okay great. welp see how that goes. Not sure if I said this here, I am not with nar or associated and in the past have had friends and family think they can do it on their own in both selling and renting where it was n't even comparable to their 3rd hobby let alone put any real research or time into. Most of the time this came with failure. Everyone is different. All agents and offices different too. @@kelliewen4834
@@kelliewen4834buyer can pay an agent directly since we are in USA, correct?
Well I think you are wrong! I think it will change things a lot. Commissions were always derived from the sale. Buyers will now feel the pain.
The pubic wants free or almost free services from Realtors. I won’t play their game. I am terminating my membership with NAR on Monday. Buyer agency is dead. If you’re willing to work for greatly reduced commissions and can obtain plenty of property listings, you will survive on volume.
The world always needs ditch diggers.
Learn to code.
Buyers should pay for buyer agents. Buyer agents will perhaps eventually be paid hourly like RE lawyers or investment lawyers. Draft offer? - hourly fee. Counter? -Hourly fee. Then probably add a ‘success fee’ that buyer can pay into their closing costs next to the lawyers and title fees etc.
Go online and see what the average agent earns. Then look at all the regulations they are under. Finally, why would an agent show a house for free?
@@JannelleCT The average agent isn't a full time agent. They are millions of agents and most will never make a career out of it. Pick another metric than average salary.
LOCAL boards not needed after this verdict
NOT GOOD FOR CONSUMER!
It is good for them. Bad for useless real estate agents where it’s the end of easy money
The barrier to entry to become an agent is going to fall. The barrier to entry is way too high and should at least match that of an attorney or doctor. That alone should lower the commissions.
What you just said makes zero sense. You said the barrier will fall, said it's way too high, then said it should be way higher, like that of a doctor or lawyer. Right now it is way, way easier to become a realtor than to become a doc or lawyer. What do you mean?
It’s a jab at how low the barrier to entry is but realtors are always comparing themselves to lawyers.
This situation is messed up. Hiding the commissions from the MLS inherently sounds unethical. Everything was transparent and honest before. Now there are secrets!? Right away, you know it doesn’t sound right
Yup, and when do we ask... when you scheduled to show the property or At the offer?
Then to be sure we get a commission our buyers agreement must state that if sellers aren't paying my commission the buyer will. Buyer will want to know and if the buyer has to pay the commission will they walk away from the deal.
The Real Estate process is FOGGY at best. Anything that CLEARS up the fog is welcome by all. Like I tell any agent that I hire. I do not like surprises.
Where is the lawsuit settlement money goes to? I assume the slimy lawyer.
So I can charge 7 % for my self as agent
for trash properties which no one can sell.
Realtors not relators!
Commission is negotiable, so Buyers will pay down payment, Commission to Agent, closing costs etc
Mid July of 24 is “a lot of time”? Silly
A lot can change by that time!
@@glendapettey8501 I expect it to. But to get the industry set by then with these rules that create several other issues is not smart.
Real estate is a perfect job for former sex workers or prostitutes. You you have to see as many clients as quickly as possible. You have to get them in and out as quickly as possible. You have to get the most money as quickly as possible...
Savey Clients will buy this De-Coupling Nonsense , Nope Game has Changed in a Major Way
You mean Savvy?
Be careful! You can't spell savvy and you are going to try to negotiate the single largest purchase in your life with thousands of dollars in jeopardy in escrow if you make a mistake. That's terrifying.
Decoupling?? Sounds like Jada affair when she used the word entanglement?!
This guy deleted one of my comments meant to inform Realtor's what is going on. Take that for what its worth, Yeah I know he left one comment but deleted another. Everything is about to change and its not just real estate.
STOP! STOP! STOP! Stop saying “it is just like in the commercial real estate” Many commercial is off market pocket listings, which means buyer agents introduce the properties to the buyers, not like residential real estate’s are on mls, BIG BIG differences how these two markets function.
Instead of explaining how it impacts the industry why dont you start by explaining what the lawsuit is all about in the first place.
Prices could go down because more sellers willing to list now that it’s cheaper for them to do so while buyers who were on the fence financially just got kicked off this reducing demand. More supple + less demand = building inventories and lower prices
You’re kidding, right?
This will do nothing to prices. Prices are through the roof because 44% of the transactions last year were by institutional money, i.e, Blackrock.
As long as this is allowed, the new home buyer will be priced out.
Sellers should not have to pay for buy commission fees
They never did.
As an economist and renovator, the problem is the huge commissions where sellers and buyers both lost, 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!
“Industry standard was 6 or 5 percent”??? Whoah, talk about price fixing. Learn how to talk about this subject before you try to train agents.
you can have a standard without it being a mandate...industry standard for a cheeseburger is $5 it doe not mean you don't have options or the ability to make your own at home. Don't confuse standard with mandate. Also don't forget that communicates what most agents are willing to do the work for before it becomes not worth doing the job...no one is or was a prisoner here...even these FSBO warriors who think they don't need agents, they always have been able to sell their own houses with no agents, so I am not sure why they are so upset. Most people who have a job and cannot dedicate their lives to selling their own house or don't want the liability are fine with paying agents common rates for compensation or looking for cheaper options which have do and will continue to exist. I don't really like paying $120 per hour shop rate at my mechanic, but he is free to charge what he likes and if I do not like I can try to find a mechanic to provide that service cheaper, or even do it myself, but its not really worth the time and hassle when I can just hire someone to do it right and be on my way with minimal hassle. Realtors provide a service, if people do not see value in that service, do it yourself or find someone to do it cheaper.
a realtor should never ever say "industry standard". they should say "my fee." the former can see construed as price fixing.@@bryanjuell7686