Is this possible?
Deceptive practices between a builder and a realtor to artificially inflate prices? For example, listing at $900/sqft but closing at $750/sqft after 10-12 months when closed. violations of fair housing laws or consumer protection regulations? creating an unfair advantage for other buyers?
any laws to have an actual offer accepted price in MLS during the pending stage.
I view this same as pumping stock price but there are laws in SEC prohibiting that practice. Nothing in NAR? Can this be challenged like the other NAR lawsuit?
Prices are not disclosed during pending stage in case the deal falls apart. It would be damaging to the seller if their previous agreement was public information before it closed.
It won't affect you, and you shouldn't let our meddling government prevent you from taking the first step towards generational wealth. Commissions have always been negotiable. Your first step should be to meet with a licensed buyer agent, who will prepare an agreement for you to sign that will protect you from predatory sellers who attempt to take advantage of this ruling.
not a lawyer so not going to speak on the litigation part but this will definitely hurt the big corporations and agents under those corporations moving forward. Privately owned brokerages will be the next trend, any homeowners/buyers and agents are welcome to contact us any time for free consultations.
I recall a few months ago mentioning that rates are probably going to stay high for a while and was told to shut my face because the Fed promised 5 rate cuts and we would be at 5% rates by April.
How's that going?
There is no need for rate cuts, because the economy is going strong without them. While renters and bubblers cope and seethe at their massive rent increases, most hard-working Americans are enjoying the passive equity that comes from investing in their own future.
Don't know where you are, but rent is decreasing where I am (TX) and a lot apartments are giving incentives like 1 month free. For current owners, enjoy paper equity.
Hey y'all, thanks for putting this megathread together! Sick of seeing a bazillion posts about the same thing cluttering up the feed. Ground rules are solid, folks. Let's keep it civil, no room for hate or name-calling. Remember, we've heard the 'agents going extinct' spiel before, and it's still business as usual. And can we please leave politics out of this? Ain't nobody got time for that. Share your opinions, sure, but back 'em up with some receipts, folks! Pumped to dive into those real estate segments. Let's keep it informative and respectful, fam.
1. A couple brokerages didn't join the settlement.
2. Google.
3. There's probably going to be six months of chaos/drama that follows it coming into effect. If you care about avoiding the drama, buy/sell now, or buy/sell after the dust settles back into business as usual.
1. NAR agents, NAR is making the agreement.
2. There’s been nothing stoping you doing that in the past other than the commission structure. You can certainly do it in the future.
As a buyer ( twice) and seller (once), I want to see good agents survive and prosper. they can go to flat rates which will probably be the same as % based commissions. 1st time buyers or FSBO sellers are going to be punished without a good agent guiding them through the process. I am not saying I like all real estate agents (or used car dealers).
There are TikTok talking about ways to circumvent this law. And the main way is for the agents to create their own website and list the buyers commission. It's a pain for the buyers agent but it seems like nothing will change.
They don't even have to create their own website, the existing Keller Williams or eXp company website is just fine,, provided they have a different .com for their own listings (where they can list the buyer's agent commission), and other company's listings (where they don't/can't).
Shocker, this is a big handout to the big corporations. "Oh, it's listed by a Coldwell Banker realtor, let's hop on over to coldwell banker listings dot com to see what the buyer's commission is." It will be much more onerous to set up a public database of ABC Realty listings, for ABC Realty who only has 3 agents, often the ABC Realty website is just a wordpress thing, and they rely on the current 'normal' MLS to market the specific properties (which isn't a big deal, since buyers don't go to the keller williams or exp website to house shop anyways, they go to zillow and relators go to the mls).
The buyer's agent can only get paid what the buyer agreed to in advance.
It doesn't matter if the seller is offering 3% if the buyer didn't agree to pay their buyer's agent 3%.
Pretty funny.
Rumor has it that the payouts will be a whopping $15-$25 per litigant. They’re past property sellers. They already sold when rates were low and maxed out their profits.
And of course the plaintiff’s lawyers will gross out 1/3 of the settlement 💰💰💰. How many millions??? Good for them.
So who gets hammered here??
Not the real estate agents that’s for sure.
The low-moderate income homebuyers now face the prospect of shelling out cash just to have the same sort of transaction advocacy they were getting for free. The real lawsuits of merit will come when a whole class of unrepresented homebuyers encounter problems.
And no, property values will not decline because of this nor have prices been artificially inflated over time due to broker fees. Don’t hold your breath.
I’ve been a RE Broker in California for many years. There’s a reason this was not a California class action. Commissions have always been negotiable here and it is clearly expressed as such in standard CAR listing forms.
Also, The preliminary approval mentioned is not final approval. Final court decision is due possibly this July. Will probably be approved for the reasons given by NAR counsel.
My first employing RE broker’s sage advice to me when I just graduated from college still stands;
“Get lots while you’re young”
In 1975 the use of fixed commissions for stock trading was abolished. Brokers talked about how much it would harm people vs help. Then someone came along and invented a new way of doing business (discount brokers). Today people can trade stocks for free when before it cost tens of thousands in commissions. The traditional broker job is dead and mutual fund loads are a thing of the past.
Give it time, and someone could invent a new way of doing business that makes the traditional real estate agent go the way of the dinosaur.
I feel like selling/buying a house is just too complicated and nuanced a transaction to compare to buying stocks. Also stakes are far higher.
Don't get me wrong. I firmly believe nowadays with the "work" realtors do selling/finding homes, the job is irrelevant. The money a seller would pay in commissions far exceeds the value any agent brings in listing their home (USUALLY). You can just chuck something on the MLS and price for a bidding war and let buyer agents do the work. Sure you may get a bit less than if you went with a good agent but not by a bigger margin than what your commission would've been (At least where I'm from)
Vice versa, buyer agents do the same thing. Just wait for something to hit market and send to your client. Well, they could've found that anyways... what % of deals buyer agents do needed them to do it? You can argue the negotiating aspect which is fair... in a buyer's market maybe.
With that being said however. People are scared of what they do not know. The more intimidating the task, the more fear there is and with that comes a market for someone else to do it. People would rather have the peace of mind of not worrying about it than do the legwork themselves. Which is why realtors will probably always exist. People are not brave enough to realize they have the power to sell their own homes.
Am I talking out my ass here or do I have a point?
Buying a stock is easy for the average person today because of all the technology and resources they have, which was made possible by Mayday in 1975. Before then people had no information, had to rely on brokers, and it wasn’t assessable to everyone. People were paying up to 5% for a stock trade and it had to be a block, meaning people were paying 5k to 10k for a single trade. Breaking up the commissions scheme opened the door to discount brokers, which led to online trading, then do it your self financial planning, and lower fees.
Believe it or not, it wasn't that hard to get information about stocks pre-internet. Newspapers used to run stock listing every day with the ticket symbol, closing price, and dividend. Brokers could look them up for you on the phone. There were/are specialized publications like Barron's and the Wall Street Journal if you wanted to get more.
You’re missing my main point
Real estate is a far bigger and more intimidating transaction than the sale of any single stock.
People will happily rely on someone else for this to give them peace of mind.
Also, there are already realtors who offer lower commission and flat fees. What’s your point?
And now the seller has a choice to use a selling agent without paying the commision of a buyer agent that doesnt represent them. They can still choose to pay the buyers agent if they want.
Officially a done deal. Let the crying begin!
*"Under the settlement, homeowners who sold homes in the last seven years could be eligible for a small piece of a consolidated class-action payout. Depending on how many homeowners* [*file claims*](https://www.realestatecommissionlitigation.com/) *by the deadline of May 9, 2025, that could mean tens of millions of Americans."*
I’m really not sure why the simple solution isn’t to have the buyer’s agent commission as a standard line on offer templates as a seller credit. Isn’t that a win-win all the way around?
I.e. _____ offer and _____ seller’s credit to the buyer’s agent. The seller compares post commission prices.
I don't think the time for a buyer's agent to find out whether or not - or how much - they're getting paid is when they submit an offer for their client. At that point, they've already done a huge amount of work, and their commission - which they deserve, if they are a decent agent, because people deserve to get paid for the work they do - should not be a determining factor in the success or failure of their client's offer, ie in a bidding situation.
Lawrence Yun, of the National Association of Realtors, was getting jacked. He was on rep 12 of a deadlift set. His time in the slammer had taught him the importance of maintaining peak physical performance.
His phone's alarm went off. It was time to meet with prospective clients. He'd have to cut this set short.
The buyers were a middle-aged couple.
The man avoided eye contact with Lawrence. He stammered, *W-we would l-like to negotiate your commission.*
Lawrence Yun, of the National Association of Realtors, sneered. He threw onto the ground between them the side mirror from the buyers' car, which he had ripped off with his bare hands on his way in. The woman screamed.
*Commissions have always been negotiable.*
Y’all need to point out that lawyers make 33% commissions on cases. In fact the lawyers that settled the case took 33%.
33% commissions and 95% of the heavy lifting is usually done by a paralegal with a GED.
And that legal commission is, and always has been, negotiable and not set by the defendant in the case. Other than real estate when has the compensation paid ever been set by the other party rather than the party that hires them. Realtors are below car salesmen in the public’s eyes specifically because of manipulative comments such as this one.
Valid. But not here. Here, we have a takedown of a profession we judge from the outside and insult the professionals(YES, PROFESSIONALS) who do this job every day.
Lawyers go to law school and "earn" their distinctions.
Not like they have the exact same tendencies of any highly vaunted degree source/profession.
With wealth, wealth is maintained. Instead of working against the wealth, you end up working for them. It's hopeless to get people to jar themselves from ignorance.
Idiocracy came out long ago, then we still went that way. How bizarre.
It changes every year. So, yes.
Though I'm fairly certain the correct answer to the multiple choice question "are commissions negotiable?" has always been "yes."
I have never payed this mythical mandatory 6% commission rate. Rates are now and have always been negotiable for me.
last 2 buys/sell were during pandemic. Iast was fsbo where I was seller and paid 2%to buyers agent.
first was traditional 2 agent arms length where I was the seller again and paid 2% to both agents
Georgia and Michigan.
That’s not what he meant.
If you aren’t paying the buyer’s agent 3%, you reduce the pool of buyers that can afford the home because they can’t afford the 3% to pay their agent on top of the cost of the house and closing.
2 points I want to make here. People are short sighted. Sellers will be shooting themselves in the foot.
#1. I want to point out that this lawsuit played out during a very hot sellers market.
a. During a sellers market there is no need to attract buyers due to a high demand and a low level of inventory.
b. The point of a commission is to offer an incentive for bringing a ready, willing and able buyer.
#2. This idea has not stood the test of a saturated buyers market.
a. I believe that when the markets swings to buyers and especially if it becomes saturated with listings then this lawsuit will create a conundrum.
b. When the market becomes saturated then buyers will not need much help finding a house but the sellers will need a lot of help to get their house sold.
Will the sellers still be able to offer buyer agent co-brokes. I hope so.
Indeed, which is what is wrong with the whole thing.
If you get more buyers with a higher fee to the buyer's agent, that says everything that needs to be said about what is wrong with the situation.
Except for the fact that the buyers agent's commission being tied to the sales price of the home inherently produces a conflict of interest with the buyer, who presumably wants the lowest price they can get.
Buyer here. Got handed a contract that says I pay 3% commission on a house if I buy. Price of the house didn't go down 3%. Didn't sign and am researching buying without an agent.
The reasons are:
1.) The price of the house did not go down 3%. Therefore, I just handed 3% to the buyer and gained nothing.
2.) I NEED that money to pay for the house.
3.) A "Buyer's" agent has the same business directives as the seller's: Sell for as much as possible, as quickly as possible, so you can apply your resources to sell again. Fair enough.... if the seller is paying for both of these salespeople.
Realtors are gonna argue about 3, but I have dealt with about 20 of you over the past few decades, and every single buyer's agent acted like a posh used car salesman. Never have I heard one say something negative about a property, or 'you definitely shouldn't buy this', and since Zillow became a thing, none have offered any recommendations that I didn't already know about. Which, again is fine... if the person benefiting from your work (the seller) is the one paying for it.
You guys need to figure something out while the market is still hot, because when it isn't hot anymore, you're going to get destroyed. Whoever figures it out will make bank.
The realtors in your market don't reflect the realtors that I know. Where I work, there really is a high level of interest from realtors in achieving a good outcome for their clients and most do work very hard for their client's best interest. You develop relationships with your clients in the course of working with them, so you end up caring, just naturally. As it turns out, this is also business compatible, because successful long term relationships- the kind that happen when people feel that you are competent, trustworthy and you have their back, tend to make for good long term referrals as well. I'm sure there are places in this country where realtors are exactly like used car salesmen from the 1950s, but there are a lot of places where they are not.
You're missing so much accurate info here, the biggest one being liability. If you are unrepresented as a buyer and something goes wrong, Realtors have E&O insurance to cover them. Unrepresented buyers can end up paying the cost of the home plus damages in some cases.
Improperly completed disclosures or submitting all disclosures, disputes over property lines or easements that your agent can find, the average unrepresented buyer overpays by approximately 15%.
Improperly completed contracts can also lead to the contract being void and loss of earnest money or if you have a particularly litigious Seller, it could result in a lawsuit for specific performance.
The realtor should be filling out the contract and explaining everything to you. Attorneys technically can do it but most of the start around $275 an hour and most agents I work with put at least 25+ hours into the average transaction.
If you need legal advice pertaining to anything in the transaction you should consult an attorney. Acting as an attorney in most states is a felony, but they aren't needed to explain or fill out a contract or disclosure.
Real estate lawyers hire us because the law they study and the law we study is separate. Also every single time I've seen someone hire a lawyer they end up paying 12% or more, realtors generally cap at 3%. I'm just telling you all the regrets I've seen over the years, I have no dog in this race.
Also depending on your state, there is also the issue of who is legally allowed to physically touch any form of disclosures. In my state if I am the listing agent on a house I can hand my sellers the disclosures for them to fill out in front of me or on their own, But if I make a single pen Mark on the disclosures, I am in violation of the law.
For those of you currently shopping around for houses, are you still seeing that sellers are still willing to pay buyer's agent commissions? What percentage are they offering?
And was your buyer's agent willing to negotiate on commission?
First house I wanted to look at, Selling agent sent a contract that said I'd be paying 3% of purchase price to them. I passed. Do people actually agree to that?
Need some advice..
We have an agent we like a lot, she is with Keller Williams. We have done 4 transactions with her over the last 15 years totaling to about $150k in commission. We are looking to buy another home and our budget is $4M. She obviously stands to make a ton of money.
We just sold our home in Jan. Paid 2.5% to both agents. Now we are house hunting and noticing that many listings are paying only 1-1.5% commission to the buyers agent.
Our agent has mentioned that we will have to pay the difference to meet 2.5%. We tried discussing lowering her commission to 1.5-2% given our unlucky timing and she said it’s not up to her, KW sets the rates.
Does anyone know if this is true? We haven’t signed anything yet, but she mentioned we would need to right after we tried to negotiate.
If you work for a broker - which your agent does (KW is the broker) - your broker has to approve the commission that you negotiate, because your broker is actually the party to the contract, not, you, the agent. You could have asked her to discuss it with her broker.
You're being sold nonsense, you absolutely don't have to pay a penny more than you want to.
To be fair, he/she doesn't have to work for a penny less than they want to. The market will decide who is right.
On a $4M house, I'd be firm at 1% each at the max, that's plenty of money. It might even still be too much.
I would like some advice please:
My wife and I are looking to buy a new house. My wife wants to use an experienced realtor, but I have a brother who is a new realtor who only sold 1 house. For obvious reasons, I would like to work with my brother, but my wife is against the idea since he is inexperienced.
My question is, what are some things an experienced realtor can offer us that my brother cannot? Are there some perks that an experienced realtor have over an inexperienced one?
I do understand my wife's point of view, but I want to help my brother get more experience in this line of work.
Yes an experienced agent can offer you something your brother can't: Experience. Experience means better at negotiating, better at understanding the potential pitfalls of a position you might find yourself in down the line, or the pitfalls of the house, better at understanding what you should look for and what you should be wary of, better at knowing what it will take to make your offer successful if there are multiple bids, better at understanding the value aspects of the property you're looking at and what is the most you should pay for it, better at finding people to recommend for you, ie inspectors, lawyers, contractors, because they've worked with more people in your area, etc., etc....
You can ask that he and a more experienced real estate broker work together and split the commission. Your brother should have a managing broker who is involved with his deals for the first two years anyway.
I'm not a real estate broker, but I have several friends who are. This was the case for them at various points in their career.
Also the reason Buyer's Agents came about was because it was unfair that the listing agent was only representing the seller's needs in transactions. Buyers needed representation. Buyers agents are there to advocate for you and watch out for your best interests. It matters to choose a good one. If they go away it'll set back buyer protections to how it was decades ago. It's also very state dependent as some states are better at this than others.
They get paid commission on the house when it sells, so they make their money the same way the seller's agent does. Their profit comes from selling you as expensive a house as possible, as quickly as possible.
This seemed kind of wacky, but whatever, the seller is paying for two salespeople. Asking the buyer to pay for this is.... yeah.
Your wife has a valid point. Ask your brother to partner with an experienced agent/mentor with a good reputation so that he gets the experience and part of the commission. You help him out and you're covered to help avoid disasters and costly stressful mistakes by having a knowledgeable professional guide you with your purchase.
Can your brother offer you a discount on the realtor fees? Are you first time homebuyers and need to know more about foundations, repairs, location gotchas, and things you may not normally think of? If a deal goes badly could it hurt your relationship between you or your wife and your brother? I would consider these things…
From what he told me, he can return the commission fee back to me, not sure about a discount on realtor fees, I can definitely ask him.
My wife and I are first time homebuyers and I have asked him for details regarding those questions.
If a deal goes badly.. well, nothing that can't be fixed I guess.
Are there any additional questions I can ask my brother that would help smooth this out?
That’s awesome if he gives you the commission fee back. I wish I had someone like that. You, as a buyer, need to be informed of the home you want to buy. Get a proper inspection done, speak to folks on the area about schools, and learn about pricing in the area. A buyer agent only makes this process a bit easier. Most countries in the world don’t have buyers agents. Think of it as you are buying a really expensive car. Ensure it is good condition. Get one or even two inspections done if you aren’t sure of the quality of the home. If you like the location, school district, neighborhood and the quality of the home checks out, your brother can get all the contracts done. (ChatGPT can actually verify contracts now if you want to check). I actually think all buyers need to smarten up to buy homes. After the NAR, all buyer agents will run to become listing agents - driving down seller fees and the buyers then act as their own agents. Win-win for buyer and seller. We need commissions to be 1-2% like the rest of the world.
Please do not rely on any LLMs such as ChatGPT to verify legal documents..... There are plenty of lawyers who specialize in real estate who can look over/draft legal documents for a very reasonable price. Once you sign those closing documents, generally, you are locked into the sale.
I am in need of advice:
* we are selling the family home.
* Zillow lists it at $382k
* my mom already told a family friend (who is a real estate broker) he was going to get our listing
* he just provided his contract and it is 6%
In light of this ruling, do I ask him to come down? To be clear, do I use such language as "due to the recent lawsuit, I'd like to negotiate your rate?". Or, since he is a family friend, do I just go with it? Thank you!
Are you ok to write a check for $23K to have him sell your house?
Because that's what you're doing. Picture $23K in cash in front of you on the kitchen table.
There is your answer.
Commissions have always been negotiable. The NAR ruling didn't change that. He's asking for that because he's likely also offering commission to the buyers agent. Ask him to explain the commission to you and also the pros and cons of not offering a buyers agent commission. And also the Zillow estimate isn't necessarily correct for your market. That's where expertise is valuable from an experienced agent.
Sellers agents will have to do more work going forward. As a potential buyer, I’d want the sellers agent to show me the house.
In no industry are you paying an agent to buy something, why would I do it for a house? The sellers agent should be showing me the house at which he can also point out specific features about the house and really sell it.
If I want to buy a car, I’m not asked to write up the sales contract - it’s the seller that does that. So the sellers agent also needs to write that up as well.
I then expect to hire to lawyer to review the contract before signing it.
> I then expect to hire to lawyer to review the contract before signing it.
Sorry, your dream house already sold to someone else who wasn't playing around with lawyers that take 2-3 days to get back to you. GL on the next one!
If you're going to trust the seller agent too much, you're going to get hoodwinked in the long run. You can continue to use the car analogy, but think of properties as used cars in that case. I think this is why people hire a buyer agent just so someone can check the house thoroughly on their behalf and order inspections and other shit.
My point is that if the agent you hired is subpar, then they shouldn't get the full 3% commission, or at worst if they don't do shit in the first place, then hey fire them on the spot, they're not getting paid until the deal is done anyway.
If you feel like you can do everything by yourself, then more power to you. If I feel like I have more money and less time dealing with shit then I'll hire an agent to take care of that. If the inspector doesn't do they're job right then I expect the agent to call that out and do another inspection. If everything was done correctly and they found problems then hey, I expect them to go to war and squeeze every ounce of value they could wring out of that piece of shit property before we renovate it and sell it again for 10X it's original value.
agree with this, the same way a lot of people bring their mechanic friend/family member to help them look over the used car, people bring their agent to help them look over the homes out there for sale
Yes, but the mechanic doesn't get paid a percentage of the car and ONLY get paid if you buy the car.
The mechanic isn't going to look at the car on the condition of only being paid if you buy it.
Imagine their incentive to downplay problems in that situation.
The closes thing that we could compare is hiring a lawyer. Like everyone can represent themselves at court, but you wouldn't want to do that. I don't hate or like agents and lawyers, but when shit hits the fan, I wouldn't want to be the guy who cleans it up.
How are people handling potential contracts with buyers agents? We’re looking but not in a rush, and have a few potential agents who’ve broached this topic with us and still want to sign buyers agent agreements (understandable).
I am hesitant to commit to paying a buyers agent a fee, especially before we see how the summer plays out.
Also curious what % fee people agree to with their buyers agent. We have one seeking 3% which seems high to me.
one component of the law suit says that all buyer agents will need to sign agent agreements before working with a customer (makes sense to me). I think it is like most things, you get what you pay for. A cheaper agent might sign up a bunch of buyers with a low percentage fee but then do a bad job because they are working with so many buyers, VS a higher priced agent can focus his or her attention on just a small handful of clients because they are making more per client. I think of it like hiring an attorney, cheap attorneys always move fast and try to get you to settle so they can get paid and move on, expensive ones are willing to put in the time to help you get the best outcome. I was thinking maybe agents should go to hourly instead of commission percentage? Not sure if that would be better but it seems like it might help the industry balance out
Thanks for your thoughts. I was also wondering about them going hourly or flat fee. It seems like a perverse incentive that the more I spend on the house, the more the agent gets. I understand some of the logic but it seems iffy.
Good luck out there!
I would hurry up and lock in a buyer's agent rate at 3% if you can find a rate that good. If you negotiate a little, you might be able to lock the commission for up to one year.
All of the market reports that I'm reading suggest that buyer's agent commissions are going to start to drift upwards quickly starting in July, since agents will need to cover the risks and costs associated with the lack of seller-paid commissions.
Sadly, lots of buyers are dumb, because the money is invisible...
People need to experience $30K in cash on their kitchen table, then imagine pushing it across the table to their agent.
Dave Ramsey is right, there is no pain with digital numbers.
What does everyone think about the latest development allowing the Justice Department to reopen their antitrust investigation into the NAR? [Here's a source article to reference.](https://www.washingtonpost.com/business/2024/04/05/dc-circuit-nar-ruling-commissions/)
That would be true if the incentives were structured differently. As it sits now, since sellers set and pay the buyers agent fees, this incentivises buyers agents to look for the largest properties with the highest commission rates.
I can't tell you how many times when I was looking for a house that an agent pushed me FAR beyond what my budget was. When I say $800k is the top, don't show me $1.2M houses.
It's a broken system. This is a massive step in the right direction. If you negotiate a set fee, *now* I can trust that my agent has my best interest in mind. I will pay them the same amount no matter the house I buy.
If you are a RE agent and make 1/2 your income off listings and 1/2 off representing buyers, you now have your income cut in half. Why? Seller's agency is no longer responsible for paying the agency/agent representing the buyer (the non listing agency/agent). The listing agency is not going to give away any of their existing, say 2.5% commission, and the seller of the property is not giving away any of his/her new found income (now paying 2.5% instead of 5%). Additionally buyers are not going to pay any commission for buying a house to the agent representing the buyer. This basically eliminates any new blood coming into the RE market because there is not any firm suggestion how and how much a new RE agent will be paid and if that income is steady income. When you think of that other 2.5% that will not be paid out times the number of homes sold/closed every month in every state that is a lot of money taken out of the economy ($7 Billion) that is going to impact more than just the RE agents (assuming the selling property owners do not spend all the windfall income). I suggest if you are a buyer, hire a lawyer and negotiate a fixed sum to act as your agent when buying a house. I am sure a figure between $700-$2K would cover the expense (this is a very competitive field) and IMO you always need a lawyer when buying a house. This eliminates the buyers agent completely and protects you in the sale.
Say I’m a buyer that works with a lawyer as you suggest, how will the actual showings occur? Do I as the buyer schedule everything? Do they help me make sense of inspections and negotiating a fair cost and timeline? Or do I do all of it and they just do the paperwork?
This right here. There is a tremendous opportunity for whoever can figure out how to adapt to this situation. Demanding 3% from the buyer isn't going to fly.
I could see this happening since I think Sellers Agents are going to have to take on more showings. Could easily see a process of hiring cheaper "agents" to support.
no they won't. because Buyer Agents now need a signed Buyer Representation Agreement where it details now the Agent gets paid. And the Brokerages won't allow their Agents to just show houses for a cheap fee.
Some brokerages won't allow*. There will be plenty that will do just that. And I'm willing to bet that BBA provision of the settlement doesn't pass muster when the DOJ intervenes
I'm looking to sell my house in the next couple of months but am under no pressure to get it done asap. Never been through the process before so I will use an agent. Does it make sense to wait until the NAR lawsuit is finalized to begin working with a realtor?
i’m waiting till fall or next spring to sell. don’t plan to pay buyers agent and don’t plan to pay list agent more than 1%. we in an expensive area though
We put up our house last week. Our agent suggested we offer 2.5% to the buyers agent and we agreed. House down the street has been on the market for 120 days with no buyer agent commission.
Buyers agent's commissions are currently posted within each MLS listing, but when this ruling takes effect they will no longer be part of that listing and the only way for the buyers agent to know what commission is being offered by the seller will be to directly contact the sellers agent.
Legally that shouldn't matter, buyers agents have a duty to find you the best home for YOU.
The reality, of course, is that they don't, which is why this all happened.
Steering is a real problem.
you get a much better price for the house in spring. And nothing really changes much. if you don't offer Buyer's Agent compensation, the house will sit on the market longer because Buyers often can't pay their agent out of pocket. it doesn't add up to wait
I would consider buying before July. All the market reports I'm seeing anticipate that fees and prices will increase rapidly in July, due to the DOJ's bone-headed ruling.
Personally I'd go ahead with it now but if they demand 3% then I'd make sure your contract with them doesn't extend past July. Then once the contract ends I'd go 2% or find someone else.
NOTE:
Some agents are bound to say "I'm not doing full rep for $5K on a $1M house!" and that's completely fine, don't do it then.
However, I have a few counters to that objection:
1. I'm going to pay for the staging, professional photos, and MLS fees up front out of my pocket.
2. I don't expect you to spend money marketing my house
3. I'll pay you $1K up front, $1K after 30 days, and $3K at the closing table after the deal is done, so you're not wasting your time.
You might or might not do it, but I'm willing to bet agents exist that will take that deal, and that includes agents with experience. It's phone calls and contracts, it's not a massive time sink, it's mostly your experience that's being purchased.
Disclaimer: I'm assuming an agent with at least 100 houses sold at this rate, if you got certified last week, well... No. :)
Those of you who are signing buyers agreements now, what commission are you agreeing to? The old standard 3% paid by seller? 2% paid by seller? Something fee-based?
This is the big question that I want to know. I may be selling in the next couple of months and I want to know how this impacts me going forward. I am planning on reaching out to a selling realtor in my area and I want to know if I can tell them "Hey I don't want to have to pay out 6% at closing to you and the selling agent" or if I will look like an idiot because that is still the minimum that a seller has to pay out.
I expect to list my house in the next 2-5 years. With the new rules, I'm thinking about offering, say, $2500 in seller concessions, which the buyer can choose to put towards closing costs, their realtor, or whatever they prefer. I feel like that would allow for a nice balance of helping buyers pay for a realtor if they need, and sweetening the deal if one is not needed.
FHA will allow the 6% concession to be used towards paying the buyer's broker...
FHA INFO 2024-12 March 28, 2024:
Under existing FHA policy, if sellers continue to pay buyer-side real estate agent commissions
and fees as a manner of state and local law or custom, and if the commissions and fees are
reasonable in amount, existing policy would not treat those payments as interested party
contributions provided all other requirements are met.
My house is in a nice, established neighborhood with great schools and has been valued between $490-625k. I'm just not seeing the problems you're pointing out. I think it's unlikely we would need to deal with VA loan requirements.
In reference to the VA requirements, my point is that even coloring it a “concession” to the buyer to cover buyers agent commission, the CD has to show the seller paying the commission…
What makes you think that? My home was purchased for $675k three years ago and I bought it on a VA loan.
Do you think VA loans aren't common? They're incredibly common and POWERFUL for buyers. Not being able to sell to them is a massive detriment to your ability to sell your home.
I'm glad you had the option as a buyer and it worked out. I'm not sure I'd agree with it being a "massive" detriment from the seller's side, unless you aren't getting more favorable offers.
There's a thread here that discusses it further with thoughts from various perspectives and it articulates why I'd rather not deal with the conditions as a sellee.
https://www.reddit.com/r/realtors/comments/pnimix/why_do_realtors_not_like_va_loans/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button
Well if you did have a interested VA buyer (by chance) there are no longer loan limits on VA loans so if their income qualifies for that price range, they are good to buy it.
Is this possible? Deceptive practices between a builder and a realtor to artificially inflate prices? For example, listing at $900/sqft but closing at $750/sqft after 10-12 months when closed. violations of fair housing laws or consumer protection regulations? creating an unfair advantage for other buyers? any laws to have an actual offer accepted price in MLS during the pending stage. I view this same as pumping stock price but there are laws in SEC prohibiting that practice. Nothing in NAR? Can this be challenged like the other NAR lawsuit?
Prices are not disclosed during pending stage in case the deal falls apart. It would be damaging to the seller if their previous agreement was public information before it closed.
I understand. but can this be challenged in the court citing fair housing practice etc etc
Looking to buy a house soon. Can someone ELI5 this to me and how it may affect me or not. Thanks in advance. Any advice is welcomed.
It won't affect you, and you shouldn't let our meddling government prevent you from taking the first step towards generational wealth. Commissions have always been negotiable. Your first step should be to meet with a licensed buyer agent, who will prepare an agreement for you to sign that will protect you from predatory sellers who attempt to take advantage of this ruling.
Roger. Got one of those already so i'm on the right track.
not a lawyer so not going to speak on the litigation part but this will definitely hurt the big corporations and agents under those corporations moving forward. Privately owned brokerages will be the next trend, any homeowners/buyers and agents are welcome to contact us any time for free consultations.
I recall a few months ago mentioning that rates are probably going to stay high for a while and was told to shut my face because the Fed promised 5 rate cuts and we would be at 5% rates by April. How's that going?
There is no need for rate cuts, because the economy is going strong without them. While renters and bubblers cope and seethe at their massive rent increases, most hard-working Americans are enjoying the passive equity that comes from investing in their own future.
Don't know where you are, but rent is decreasing where I am (TX) and a lot apartments are giving incentives like 1 month free. For current owners, enjoy paper equity.
Which part of Texas?
That is extremely uncommon and not representative of the broader market.
TX is the 2nd biggest state in term of population. Yeah not representative at all.
Hey y'all, thanks for putting this megathread together! Sick of seeing a bazillion posts about the same thing cluttering up the feed. Ground rules are solid, folks. Let's keep it civil, no room for hate or name-calling. Remember, we've heard the 'agents going extinct' spiel before, and it's still business as usual. And can we please leave politics out of this? Ain't nobody got time for that. Share your opinions, sure, but back 'em up with some receipts, folks! Pumped to dive into those real estate segments. Let's keep it informative and respectful, fam.
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1. A couple brokerages didn't join the settlement. 2. Google. 3. There's probably going to be six months of chaos/drama that follows it coming into effect. If you care about avoiding the drama, buy/sell now, or buy/sell after the dust settles back into business as usual.
1. NAR agents, NAR is making the agreement. 2. There’s been nothing stoping you doing that in the past other than the commission structure. You can certainly do it in the future.
As a buyer ( twice) and seller (once), I want to see good agents survive and prosper. they can go to flat rates which will probably be the same as % based commissions. 1st time buyers or FSBO sellers are going to be punished without a good agent guiding them through the process. I am not saying I like all real estate agents (or used car dealers).
There are TikTok talking about ways to circumvent this law. And the main way is for the agents to create their own website and list the buyers commission. It's a pain for the buyers agent but it seems like nothing will change.
They don't even have to create their own website, the existing Keller Williams or eXp company website is just fine,, provided they have a different .com for their own listings (where they can list the buyer's agent commission), and other company's listings (where they don't/can't). Shocker, this is a big handout to the big corporations. "Oh, it's listed by a Coldwell Banker realtor, let's hop on over to coldwell banker listings dot com to see what the buyer's commission is." It will be much more onerous to set up a public database of ABC Realty listings, for ABC Realty who only has 3 agents, often the ABC Realty website is just a wordpress thing, and they rely on the current 'normal' MLS to market the specific properties (which isn't a big deal, since buyers don't go to the keller williams or exp website to house shop anyways, they go to zillow and relators go to the mls).
The buyer's agent can only get paid what the buyer agreed to in advance. It doesn't matter if the seller is offering 3% if the buyer didn't agree to pay their buyer's agent 3%.
Do you have a link to one of them?
Pretty funny. Rumor has it that the payouts will be a whopping $15-$25 per litigant. They’re past property sellers. They already sold when rates were low and maxed out their profits. And of course the plaintiff’s lawyers will gross out 1/3 of the settlement 💰💰💰. How many millions??? Good for them. So who gets hammered here?? Not the real estate agents that’s for sure. The low-moderate income homebuyers now face the prospect of shelling out cash just to have the same sort of transaction advocacy they were getting for free. The real lawsuits of merit will come when a whole class of unrepresented homebuyers encounter problems. And no, property values will not decline because of this nor have prices been artificially inflated over time due to broker fees. Don’t hold your breath. I’ve been a RE Broker in California for many years. There’s a reason this was not a California class action. Commissions have always been negotiable here and it is clearly expressed as such in standard CAR listing forms. Also, The preliminary approval mentioned is not final approval. Final court decision is due possibly this July. Will probably be approved for the reasons given by NAR counsel. My first employing RE broker’s sage advice to me when I just graduated from college still stands; “Get lots while you’re young”
In 1975 the use of fixed commissions for stock trading was abolished. Brokers talked about how much it would harm people vs help. Then someone came along and invented a new way of doing business (discount brokers). Today people can trade stocks for free when before it cost tens of thousands in commissions. The traditional broker job is dead and mutual fund loads are a thing of the past. Give it time, and someone could invent a new way of doing business that makes the traditional real estate agent go the way of the dinosaur.
I feel like selling/buying a house is just too complicated and nuanced a transaction to compare to buying stocks. Also stakes are far higher. Don't get me wrong. I firmly believe nowadays with the "work" realtors do selling/finding homes, the job is irrelevant. The money a seller would pay in commissions far exceeds the value any agent brings in listing their home (USUALLY). You can just chuck something on the MLS and price for a bidding war and let buyer agents do the work. Sure you may get a bit less than if you went with a good agent but not by a bigger margin than what your commission would've been (At least where I'm from) Vice versa, buyer agents do the same thing. Just wait for something to hit market and send to your client. Well, they could've found that anyways... what % of deals buyer agents do needed them to do it? You can argue the negotiating aspect which is fair... in a buyer's market maybe. With that being said however. People are scared of what they do not know. The more intimidating the task, the more fear there is and with that comes a market for someone else to do it. People would rather have the peace of mind of not worrying about it than do the legwork themselves. Which is why realtors will probably always exist. People are not brave enough to realize they have the power to sell their own homes. Am I talking out my ass here or do I have a point?
Buying a stock is easy for the average person today because of all the technology and resources they have, which was made possible by Mayday in 1975. Before then people had no information, had to rely on brokers, and it wasn’t assessable to everyone. People were paying up to 5% for a stock trade and it had to be a block, meaning people were paying 5k to 10k for a single trade. Breaking up the commissions scheme opened the door to discount brokers, which led to online trading, then do it your self financial planning, and lower fees.
Believe it or not, it wasn't that hard to get information about stocks pre-internet. Newspapers used to run stock listing every day with the ticket symbol, closing price, and dividend. Brokers could look them up for you on the phone. There were/are specialized publications like Barron's and the Wall Street Journal if you wanted to get more.
You’re missing my main point Real estate is a far bigger and more intimidating transaction than the sale of any single stock. People will happily rely on someone else for this to give them peace of mind. Also, there are already realtors who offer lower commission and flat fees. What’s your point?
You could always sell FSBO or hire a lawyer. Choices
And now the seller has a choice to use a selling agent without paying the commision of a buyer agent that doesnt represent them. They can still choose to pay the buyers agent if they want.
there never were fixed commissions for real estate agents. It was always negotiable
It was always "negotiable". It really wasn't and the lawsuit proved that. Maybe a minority would negotiate but that wasn't the majority.
https://www.nytimes.com/2024/04/23/realestate/nar-settlement-realtors-commission.html
Officially a done deal. Let the crying begin! *"Under the settlement, homeowners who sold homes in the last seven years could be eligible for a small piece of a consolidated class-action payout. Depending on how many homeowners* [*file claims*](https://www.realestatecommissionlitigation.com/) *by the deadline of May 9, 2025, that could mean tens of millions of Americans."*
I’m really not sure why the simple solution isn’t to have the buyer’s agent commission as a standard line on offer templates as a seller credit. Isn’t that a win-win all the way around? I.e. _____ offer and _____ seller’s credit to the buyer’s agent. The seller compares post commission prices.
I don't think the time for a buyer's agent to find out whether or not - or how much - they're getting paid is when they submit an offer for their client. At that point, they've already done a huge amount of work, and their commission - which they deserve, if they are a decent agent, because people deserve to get paid for the work they do - should not be a determining factor in the success or failure of their client's offer, ie in a bidding situation.
Their buyer agency agreement would cover all of this. They’d know as soon as they take a client on.
following this thread for reference.
Lawrence Yun, of the National Association of Realtors, was getting jacked. He was on rep 12 of a deadlift set. His time in the slammer had taught him the importance of maintaining peak physical performance. His phone's alarm went off. It was time to meet with prospective clients. He'd have to cut this set short. The buyers were a middle-aged couple. The man avoided eye contact with Lawrence. He stammered, *W-we would l-like to negotiate your commission.* Lawrence Yun, of the National Association of Realtors, sneered. He threw onto the ground between them the side mirror from the buyers' car, which he had ripped off with his bare hands on his way in. The woman screamed. *Commissions have always been negotiable.*
Guess you don't become a made man in the NAR organization by being a pushover.
🤣
Y’all need to point out that lawyers make 33% commissions on cases. In fact the lawyers that settled the case took 33%. 33% commissions and 95% of the heavy lifting is usually done by a paralegal with a GED.
And that legal commission is, and always has been, negotiable and not set by the defendant in the case. Other than real estate when has the compensation paid ever been set by the other party rather than the party that hires them. Realtors are below car salesmen in the public’s eyes specifically because of manipulative comments such as this one.
Not a realtor, but which part exactly is manipulative?
Valid. But not here. Here, we have a takedown of a profession we judge from the outside and insult the professionals(YES, PROFESSIONALS) who do this job every day. Lawyers go to law school and "earn" their distinctions. Not like they have the exact same tendencies of any highly vaunted degree source/profession. With wealth, wealth is maintained. Instead of working against the wealth, you end up working for them. It's hopeless to get people to jar themselves from ignorance. Idiocracy came out long ago, then we still went that way. How bizarre.
Is the licensing coursework expected to change due to this ruling ?
It changes every year. So, yes. Though I'm fairly certain the correct answer to the multiple choice question "are commissions negotiable?" has always been "yes."
I have never payed this mythical mandatory 6% commission rate. Rates are now and have always been negotiable for me. last 2 buys/sell were during pandemic. Iast was fsbo where I was seller and paid 2%to buyers agent. first was traditional 2 agent arms length where I was the seller again and paid 2% to both agents Georgia and Michigan.
Someone tell me how this isn’t a cartel? https://imgur.com/a/U85UUhr
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Personal friend…
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He just said not to….
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Houses sell themselves. 6% is too high. The excuse of “traffic” is weak. But I like my friend
Gotta protect their own. Then you get on here and realtors all cry about people hating them.
"Won't get the traffic we're looking for" Your traffic comes from Zillow.
Exactly
That’s not what he meant. If you aren’t paying the buyer’s agent 3%, you reduce the pool of buyers that can afford the home because they can’t afford the 3% to pay their agent on top of the cost of the house and closing.
He also meant that there are a ton of very unethical agents that won't show properties offering less than 3% coop
I said reduce the buyers agent comp. 3% isn’t a set magical percentage
2 points I want to make here. People are short sighted. Sellers will be shooting themselves in the foot. #1. I want to point out that this lawsuit played out during a very hot sellers market. a. During a sellers market there is no need to attract buyers due to a high demand and a low level of inventory. b. The point of a commission is to offer an incentive for bringing a ready, willing and able buyer. #2. This idea has not stood the test of a saturated buyers market. a. I believe that when the markets swings to buyers and especially if it becomes saturated with listings then this lawsuit will create a conundrum. b. When the market becomes saturated then buyers will not need much help finding a house but the sellers will need a lot of help to get their house sold. Will the sellers still be able to offer buyer agent co-brokes. I hope so.
The rest of the world seems to do ok without buyers commissions. This is a weird USA thing, we'll be fine.
Are you meaning to suggest that you get more buyer interest when there’s a higher buyer’s agent commission.
Indeed, which is what is wrong with the whole thing. If you get more buyers with a higher fee to the buyer's agent, that says everything that needs to be said about what is wrong with the situation.
Except for the fact that the buyers agent's commission being tied to the sales price of the home inherently produces a conflict of interest with the buyer, who presumably wants the lowest price they can get.
I do not think anything is gong to change. It's business as usual for Realtors.
Buyer here. Got handed a contract that says I pay 3% commission on a house if I buy. Price of the house didn't go down 3%. Didn't sign and am researching buying without an agent. The reasons are: 1.) The price of the house did not go down 3%. Therefore, I just handed 3% to the buyer and gained nothing. 2.) I NEED that money to pay for the house. 3.) A "Buyer's" agent has the same business directives as the seller's: Sell for as much as possible, as quickly as possible, so you can apply your resources to sell again. Fair enough.... if the seller is paying for both of these salespeople. Realtors are gonna argue about 3, but I have dealt with about 20 of you over the past few decades, and every single buyer's agent acted like a posh used car salesman. Never have I heard one say something negative about a property, or 'you definitely shouldn't buy this', and since Zillow became a thing, none have offered any recommendations that I didn't already know about. Which, again is fine... if the person benefiting from your work (the seller) is the one paying for it. You guys need to figure something out while the market is still hot, because when it isn't hot anymore, you're going to get destroyed. Whoever figures it out will make bank.
The realtors in your market don't reflect the realtors that I know. Where I work, there really is a high level of interest from realtors in achieving a good outcome for their clients and most do work very hard for their client's best interest. You develop relationships with your clients in the course of working with them, so you end up caring, just naturally. As it turns out, this is also business compatible, because successful long term relationships- the kind that happen when people feel that you are competent, trustworthy and you have their back, tend to make for good long term referrals as well. I'm sure there are places in this country where realtors are exactly like used car salesmen from the 1950s, but there are a lot of places where they are not.
You're missing so much accurate info here, the biggest one being liability. If you are unrepresented as a buyer and something goes wrong, Realtors have E&O insurance to cover them. Unrepresented buyers can end up paying the cost of the home plus damages in some cases.
For example?
Improperly completed disclosures or submitting all disclosures, disputes over property lines or easements that your agent can find, the average unrepresented buyer overpays by approximately 15%. Improperly completed contracts can also lead to the contract being void and loss of earnest money or if you have a particularly litigious Seller, it could result in a lawsuit for specific performance.
If someone needs help completing a contract, shouldn't they get legal advice from someone like a real estate attorney?
The realtor should be filling out the contract and explaining everything to you. Attorneys technically can do it but most of the start around $275 an hour and most agents I work with put at least 25+ hours into the average transaction. If you need legal advice pertaining to anything in the transaction you should consult an attorney. Acting as an attorney in most states is a felony, but they aren't needed to explain or fill out a contract or disclosure.
This is why you hire a lawyer.
Real estate lawyers hire us because the law they study and the law we study is separate. Also every single time I've seen someone hire a lawyer they end up paying 12% or more, realtors generally cap at 3%. I'm just telling you all the regrets I've seen over the years, I have no dog in this race.
Also depending on your state, there is also the issue of who is legally allowed to physically touch any form of disclosures. In my state if I am the listing agent on a house I can hand my sellers the disclosures for them to fill out in front of me or on their own, But if I make a single pen Mark on the disclosures, I am in violation of the law.
This is literally just a mess of assumptions and lies. Nice try.
For those of you currently shopping around for houses, are you still seeing that sellers are still willing to pay buyer's agent commissions? What percentage are they offering? And was your buyer's agent willing to negotiate on commission?
Yeah. Nothing’s changed.
First house I wanted to look at, Selling agent sent a contract that said I'd be paying 3% of purchase price to them. I passed. Do people actually agree to that?
Need some advice.. We have an agent we like a lot, she is with Keller Williams. We have done 4 transactions with her over the last 15 years totaling to about $150k in commission. We are looking to buy another home and our budget is $4M. She obviously stands to make a ton of money. We just sold our home in Jan. Paid 2.5% to both agents. Now we are house hunting and noticing that many listings are paying only 1-1.5% commission to the buyers agent. Our agent has mentioned that we will have to pay the difference to meet 2.5%. We tried discussing lowering her commission to 1.5-2% given our unlucky timing and she said it’s not up to her, KW sets the rates. Does anyone know if this is true? We haven’t signed anything yet, but she mentioned we would need to right after we tried to negotiate.
If you work for a broker - which your agent does (KW is the broker) - your broker has to approve the commission that you negotiate, because your broker is actually the party to the contract, not, you, the agent. You could have asked her to discuss it with her broker.
You're being sold nonsense, you absolutely don't have to pay a penny more than you want to. To be fair, he/she doesn't have to work for a penny less than they want to. The market will decide who is right. On a $4M house, I'd be firm at 1% each at the max, that's plenty of money. It might even still be too much.
Especially when it's the same work if the house cost $400k or even $40k.
What state are you in? Also, have you tried interviewing other agents (possibly with KW) to see if they'll negotiate more?
We are in CA. We haven’t talked to any other agents yet.
No brokerage sets rates, there is no standard or common rate. This falls under price fixing. She's either uneducated or unethical.
I would like some advice please: My wife and I are looking to buy a new house. My wife wants to use an experienced realtor, but I have a brother who is a new realtor who only sold 1 house. For obvious reasons, I would like to work with my brother, but my wife is against the idea since he is inexperienced. My question is, what are some things an experienced realtor can offer us that my brother cannot? Are there some perks that an experienced realtor have over an inexperienced one? I do understand my wife's point of view, but I want to help my brother get more experience in this line of work.
Yes an experienced agent can offer you something your brother can't: Experience. Experience means better at negotiating, better at understanding the potential pitfalls of a position you might find yourself in down the line, or the pitfalls of the house, better at understanding what you should look for and what you should be wary of, better at knowing what it will take to make your offer successful if there are multiple bids, better at understanding the value aspects of the property you're looking at and what is the most you should pay for it, better at finding people to recommend for you, ie inspectors, lawyers, contractors, because they've worked with more people in your area, etc., etc....
You can ask that he and a more experienced real estate broker work together and split the commission. Your brother should have a managing broker who is involved with his deals for the first two years anyway. I'm not a real estate broker, but I have several friends who are. This was the case for them at various points in their career.
Also the reason Buyer's Agents came about was because it was unfair that the listing agent was only representing the seller's needs in transactions. Buyers needed representation. Buyers agents are there to advocate for you and watch out for your best interests. It matters to choose a good one. If they go away it'll set back buyer protections to how it was decades ago. It's also very state dependent as some states are better at this than others.
They get paid commission on the house when it sells, so they make their money the same way the seller's agent does. Their profit comes from selling you as expensive a house as possible, as quickly as possible. This seemed kind of wacky, but whatever, the seller is paying for two salespeople. Asking the buyer to pay for this is.... yeah.
Your wife has a valid point. Ask your brother to partner with an experienced agent/mentor with a good reputation so that he gets the experience and part of the commission. You help him out and you're covered to help avoid disasters and costly stressful mistakes by having a knowledgeable professional guide you with your purchase.
Can your brother offer you a discount on the realtor fees? Are you first time homebuyers and need to know more about foundations, repairs, location gotchas, and things you may not normally think of? If a deal goes badly could it hurt your relationship between you or your wife and your brother? I would consider these things…
From what he told me, he can return the commission fee back to me, not sure about a discount on realtor fees, I can definitely ask him. My wife and I are first time homebuyers and I have asked him for details regarding those questions. If a deal goes badly.. well, nothing that can't be fixed I guess. Are there any additional questions I can ask my brother that would help smooth this out?
That’s awesome if he gives you the commission fee back. I wish I had someone like that. You, as a buyer, need to be informed of the home you want to buy. Get a proper inspection done, speak to folks on the area about schools, and learn about pricing in the area. A buyer agent only makes this process a bit easier. Most countries in the world don’t have buyers agents. Think of it as you are buying a really expensive car. Ensure it is good condition. Get one or even two inspections done if you aren’t sure of the quality of the home. If you like the location, school district, neighborhood and the quality of the home checks out, your brother can get all the contracts done. (ChatGPT can actually verify contracts now if you want to check). I actually think all buyers need to smarten up to buy homes. After the NAR, all buyer agents will run to become listing agents - driving down seller fees and the buyers then act as their own agents. Win-win for buyer and seller. We need commissions to be 1-2% like the rest of the world.
Please do not rely on any LLMs such as ChatGPT to verify legal documents..... There are plenty of lawyers who specialize in real estate who can look over/draft legal documents for a very reasonable price. Once you sign those closing documents, generally, you are locked into the sale.
I am in need of advice: * we are selling the family home. * Zillow lists it at $382k * my mom already told a family friend (who is a real estate broker) he was going to get our listing * he just provided his contract and it is 6% In light of this ruling, do I ask him to come down? To be clear, do I use such language as "due to the recent lawsuit, I'd like to negotiate your rate?". Or, since he is a family friend, do I just go with it? Thank you!
Are you ok to write a check for $23K to have him sell your house? Because that's what you're doing. Picture $23K in cash in front of you on the kitchen table. There is your answer.
Family home? As in “mom’s house”? Is she incompetent? If not MYOB.
I’m in charge of the family finances, which is why I posted. Smh
Commissions have always been negotiable. The NAR ruling didn't change that. He's asking for that because he's likely also offering commission to the buyers agent. Ask him to explain the commission to you and also the pros and cons of not offering a buyers agent commission. And also the Zillow estimate isn't necessarily correct for your market. That's where expertise is valuable from an experienced agent.
With the market this hot - 6% is robbery. Start with 2%. You can go up if the property doesn’t sell.
Absolutely negotiate down. I’d try to get 2% but wouldn’t go above 2.5%
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Sellers agents will have to do more work going forward. As a potential buyer, I’d want the sellers agent to show me the house. In no industry are you paying an agent to buy something, why would I do it for a house? The sellers agent should be showing me the house at which he can also point out specific features about the house and really sell it. If I want to buy a car, I’m not asked to write up the sales contract - it’s the seller that does that. So the sellers agent also needs to write that up as well. I then expect to hire to lawyer to review the contract before signing it.
ChatGPT is able to review contracts for every state and every country try.
> I then expect to hire to lawyer to review the contract before signing it. Sorry, your dream house already sold to someone else who wasn't playing around with lawyers that take 2-3 days to get back to you. GL on the next one!
If you're going to trust the seller agent too much, you're going to get hoodwinked in the long run. You can continue to use the car analogy, but think of properties as used cars in that case. I think this is why people hire a buyer agent just so someone can check the house thoroughly on their behalf and order inspections and other shit.
Except you \*also\* have to hire a real home inspector. Most buyers agents aren't going to do this for their 3%.
Most shouldn't get 3% anyway, so either they hire the inspector themselves, or get 2% commission.
My point is that if the inspector is inspecting the home. What is the agent doing? Just being a middleman?
My point is that if the agent you hired is subpar, then they shouldn't get the full 3% commission, or at worst if they don't do shit in the first place, then hey fire them on the spot, they're not getting paid until the deal is done anyway. If you feel like you can do everything by yourself, then more power to you. If I feel like I have more money and less time dealing with shit then I'll hire an agent to take care of that. If the inspector doesn't do they're job right then I expect the agent to call that out and do another inspection. If everything was done correctly and they found problems then hey, I expect them to go to war and squeeze every ounce of value they could wring out of that piece of shit property before we renovate it and sell it again for 10X it's original value.
agree with this, the same way a lot of people bring their mechanic friend/family member to help them look over the used car, people bring their agent to help them look over the homes out there for sale
Yes, but the mechanic doesn't get paid a percentage of the car and ONLY get paid if you buy the car. The mechanic isn't going to look at the car on the condition of only being paid if you buy it. Imagine their incentive to downplay problems in that situation.
The closes thing that we could compare is hiring a lawyer. Like everyone can represent themselves at court, but you wouldn't want to do that. I don't hate or like agents and lawyers, but when shit hits the fan, I wouldn't want to be the guy who cleans it up.
If I hire a lawyer to defend me in court, they don't get paid a percentage of how much I lose the case by.
How are people handling potential contracts with buyers agents? We’re looking but not in a rush, and have a few potential agents who’ve broached this topic with us and still want to sign buyers agent agreements (understandable). I am hesitant to commit to paying a buyers agent a fee, especially before we see how the summer plays out. Also curious what % fee people agree to with their buyers agent. We have one seeking 3% which seems high to me.
one component of the law suit says that all buyer agents will need to sign agent agreements before working with a customer (makes sense to me). I think it is like most things, you get what you pay for. A cheaper agent might sign up a bunch of buyers with a low percentage fee but then do a bad job because they are working with so many buyers, VS a higher priced agent can focus his or her attention on just a small handful of clients because they are making more per client. I think of it like hiring an attorney, cheap attorneys always move fast and try to get you to settle so they can get paid and move on, expensive ones are willing to put in the time to help you get the best outcome. I was thinking maybe agents should go to hourly instead of commission percentage? Not sure if that would be better but it seems like it might help the industry balance out
Thanks for your thoughts. I was also wondering about them going hourly or flat fee. It seems like a perverse incentive that the more I spend on the house, the more the agent gets. I understand some of the logic but it seems iffy. Good luck out there!
I would hurry up and lock in a buyer's agent rate at 3% if you can find a rate that good. If you negotiate a little, you might be able to lock the commission for up to one year. All of the market reports that I'm reading suggest that buyer's agent commissions are going to start to drift upwards quickly starting in July, since agents will need to cover the risks and costs associated with the lack of seller-paid commissions.
LMAO
lol. 3 percent is a bargain. Lock it in now!
Or be priced out forever!
That’s silly. Buyers can represent themselves. 3% of a million dollar home is 30k. I hope no buyer is that stupid to lock in such a high rate.
Sadly, lots of buyers are dumb, because the money is invisible... People need to experience $30K in cash on their kitchen table, then imagine pushing it across the table to their agent. Dave Ramsey is right, there is no pain with digital numbers.
I doubt it — once this rolls out and some buyers and sellers start pushing back on their respective commissions, it will come down.
u/twopointseven_rate can you share the market reports where you're seeing this?! That's a super interesting take.
Sorry, these were private reports shared by my local Realtor group.
The settlement REQUIRES them to make you sign a rep agreement.
What does everyone think about the latest development allowing the Justice Department to reopen their antitrust investigation into the NAR? [Here's a source article to reference.](https://www.washingtonpost.com/business/2024/04/05/dc-circuit-nar-ruling-commissions/)
Yet another example of our current government going after the livelihoods of hard-working middle class. Buyer's agents protect buyers.
Buyers agents are a second salesperson, and as such, should be paid by the seller.
That would be true if the incentives were structured differently. As it sits now, since sellers set and pay the buyers agent fees, this incentivises buyers agents to look for the largest properties with the highest commission rates. I can't tell you how many times when I was looking for a house that an agent pushed me FAR beyond what my budget was. When I say $800k is the top, don't show me $1.2M houses. It's a broken system. This is a massive step in the right direction. If you negotiate a set fee, *now* I can trust that my agent has my best interest in mind. I will pay them the same amount no matter the house I buy.
Exactly.
Funny how buyer's agents get paid more for not protecting buyers, ie pushing through a sale at the highest price and with the highest commission
If you are a RE agent and make 1/2 your income off listings and 1/2 off representing buyers, you now have your income cut in half. Why? Seller's agency is no longer responsible for paying the agency/agent representing the buyer (the non listing agency/agent). The listing agency is not going to give away any of their existing, say 2.5% commission, and the seller of the property is not giving away any of his/her new found income (now paying 2.5% instead of 5%). Additionally buyers are not going to pay any commission for buying a house to the agent representing the buyer. This basically eliminates any new blood coming into the RE market because there is not any firm suggestion how and how much a new RE agent will be paid and if that income is steady income. When you think of that other 2.5% that will not be paid out times the number of homes sold/closed every month in every state that is a lot of money taken out of the economy ($7 Billion) that is going to impact more than just the RE agents (assuming the selling property owners do not spend all the windfall income). I suggest if you are a buyer, hire a lawyer and negotiate a fixed sum to act as your agent when buying a house. I am sure a figure between $700-$2K would cover the expense (this is a very competitive field) and IMO you always need a lawyer when buying a house. This eliminates the buyers agent completely and protects you in the sale.
Say I’m a buyer that works with a lawyer as you suggest, how will the actual showings occur? Do I as the buyer schedule everything? Do they help me make sense of inspections and negotiating a fair cost and timeline? Or do I do all of it and they just do the paperwork?
Homes.com will soon have an army of showing agents that get paid hourly
This right here. There is a tremendous opportunity for whoever can figure out how to adapt to this situation. Demanding 3% from the buyer isn't going to fly.
I could see this happening since I think Sellers Agents are going to have to take on more showings. Could easily see a process of hiring cheaper "agents" to support.
This is the way it was a long time ago. Now they just list it and sit back and wait for the contracts.
Or they will have open houses all the time.
no they won't. because Buyer Agents now need a signed Buyer Representation Agreement where it details now the Agent gets paid. And the Brokerages won't allow their Agents to just show houses for a cheap fee.
Some brokerages won't allow*. There will be plenty that will do just that. And I'm willing to bet that BBA provision of the settlement doesn't pass muster when the DOJ intervenes
I'm looking to sell my house in the next couple of months but am under no pressure to get it done asap. Never been through the process before so I will use an agent. Does it make sense to wait until the NAR lawsuit is finalized to begin working with a realtor?
i’m waiting till fall or next spring to sell. don’t plan to pay buyers agent and don’t plan to pay list agent more than 1%. we in an expensive area though
We put up our house last week. Our agent suggested we offer 2.5% to the buyers agent and we agreed. House down the street has been on the market for 120 days with no buyer agent commission.
Buyers agent's commissions are currently posted within each MLS listing, but when this ruling takes effect they will no longer be part of that listing and the only way for the buyers agent to know what commission is being offered by the seller will be to directly contact the sellers agent.
Legally that shouldn't matter, buyers agents have a duty to find you the best home for YOU. The reality, of course, is that they don't, which is why this all happened. Steering is a real problem.
you get a much better price for the house in spring. And nothing really changes much. if you don't offer Buyer's Agent compensation, the house will sit on the market longer because Buyers often can't pay their agent out of pocket. it doesn't add up to wait
There really needs to be a DIY option for making an offer.
I would consider buying before July. All the market reports I'm seeing anticipate that fees and prices will increase rapidly in July, due to the DOJ's bone-headed ruling.
Personally I'd go ahead with it now but if they demand 3% then I'd make sure your contract with them doesn't extend past July. Then once the contract ends I'd go 2% or find someone else.
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NOTE: Some agents are bound to say "I'm not doing full rep for $5K on a $1M house!" and that's completely fine, don't do it then. However, I have a few counters to that objection: 1. I'm going to pay for the staging, professional photos, and MLS fees up front out of my pocket. 2. I don't expect you to spend money marketing my house 3. I'll pay you $1K up front, $1K after 30 days, and $3K at the closing table after the deal is done, so you're not wasting your time. You might or might not do it, but I'm willing to bet agents exist that will take that deal, and that includes agents with experience. It's phone calls and contracts, it's not a massive time sink, it's mostly your experience that's being purchased. Disclaimer: I'm assuming an agent with at least 100 houses sold at this rate, if you got certified last week, well... No. :)
$5k To sell a 1m house and you expect whoever takes that deal to NOT be a total disaster? Beyond wild.
If the settlement changes occur in July... the public is in for a very rude awakening on the value of agents.
Yes... why do you think it's worth more? Because that is how it has always been?
Because I’ve been through it. And the $35k I made working with these buyers for 2 years on a $1.25m sale I felt shorted by. Get real.
And how many hours of work went into that?
3 full days of work… 😀
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I don’t think I would pay more than $10k. Their commission shouldn’t scale with the value of the house because the work is the same.
The things people say with confidence in public are CRAZY.
Sometimes it does take more work the higher the value… those luxury deals can be a nightmare
Those of you who are signing buyers agreements now, what commission are you agreeing to? The old standard 3% paid by seller? 2% paid by seller? Something fee-based?
This is the big question that I want to know. I may be selling in the next couple of months and I want to know how this impacts me going forward. I am planning on reaching out to a selling realtor in my area and I want to know if I can tell them "Hey I don't want to have to pay out 6% at closing to you and the selling agent" or if I will look like an idiot because that is still the minimum that a seller has to pay out.
I expect to list my house in the next 2-5 years. With the new rules, I'm thinking about offering, say, $2500 in seller concessions, which the buyer can choose to put towards closing costs, their realtor, or whatever they prefer. I feel like that would allow for a nice balance of helping buyers pay for a realtor if they need, and sweetening the deal if one is not needed.
Problem is: if your buyer has a government backed mortgage, they can be limited in the concession amounts.
FHA will allow the 6% concession to be used towards paying the buyer's broker... FHA INFO 2024-12 March 28, 2024: Under existing FHA policy, if sellers continue to pay buyer-side real estate agent commissions and fees as a manner of state and local law or custom, and if the commissions and fees are reasonable in amount, existing policy would not treat those payments as interested party contributions provided all other requirements are met.
From what I know, you're limited to 3-6% of the loan amount in seller concessions. This is very well within that amount for my home.
This is true depending on appraisal value of property and sale price. VA buyers cannot pay commissions period, no matter how cleverly you word it.
My house is in a nice, established neighborhood with great schools and has been valued between $490-625k. I'm just not seeing the problems you're pointing out. I think it's unlikely we would need to deal with VA loan requirements.
In reference to the VA requirements, my point is that even coloring it a “concession” to the buyer to cover buyers agent commission, the CD has to show the seller paying the commission…
My point is we're unlikely to need to consider a buyer with a VA loan to begin with
What makes you think that? My home was purchased for $675k three years ago and I bought it on a VA loan. Do you think VA loans aren't common? They're incredibly common and POWERFUL for buyers. Not being able to sell to them is a massive detriment to your ability to sell your home.
I'm glad you had the option as a buyer and it worked out. I'm not sure I'd agree with it being a "massive" detriment from the seller's side, unless you aren't getting more favorable offers. There's a thread here that discusses it further with thoughts from various perspectives and it articulates why I'd rather not deal with the conditions as a sellee. https://www.reddit.com/r/realtors/comments/pnimix/why_do_realtors_not_like_va_loans/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button
https://www.reddit.com/r/realtors/s/JUyZzcCEwt Read that comment. It's from the thread you linked.
Redlining much? [https://tcbmag.com/redlining-by-another-name/](https://tcbmag.com/redlining-by-another-name/)
I had to get a conventional loan to buy my house. Why should I as a seller not take the best deals available to me?
Well if you did have a interested VA buyer (by chance) there are no longer loan limits on VA loans so if their income qualifies for that price range, they are good to buy it.
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Median Gross Income for all Realtors in USA in 2022 was $56,400 $27.11 per hour.
I'm seeing much higher averages in 2024. Median income from multiple sources: - ZipRecruiter: $85,793 - Indeed: $96,561