Realtors Association agrees to settlement to eliminate fixed fees
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
Skyline Properties
Realtors Association agrees to settlement to eliminate fixed fees
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2yActually youll likely see upward pressure on commissions due to this settlement. I mentioned this in an Axios article I was interviewed for just last month
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- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
Actually youll likely see upward pressure on commissions due to this settlement. I mentioned this in an Axios article I was interviewed for just last month
District Invest Group545 Reviews - Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes2y
Quote from @Russell Brazil:
Actually youll likely see upward pressure on commissions due to this settlement. I mentioned this in an Axios article I was interviewed for just last month
That's exactly what I think is going to happen as well. Good agents aren't going to work for nothing, and buyer's agents will probably either switch to a combo system (upfront plus commission) or higher rates. Yes, the worst agents will be advertising some low fees on their end.
The thing that makes me laugh the most is the idea that home prices will modulate. If that were true there would already be a booming market FSBO. In reality all that will happen is any fees not taken by the agent & broker will just become part of the seller's profit.
Skyline Properties - Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes2yI could be wrong, I honestly think this is such a systemic change that it’s hard to predict the ripples, but I find it extraordinary hard to believe this doesn’t lead to a substantial reduction in commissions, I’m literally taking with a client in an hour, I like the guy, I suspect he may be a repeat customer and I’m not gonna take any chance I lose him over a few dollars, so I’ll negotiate with him, I suspect other agents will take the same approach, especially given the real risk buyers just walk and go unrepresented, whether that’s a good idea or not l, it will happen. I was getting a quote for a roof a few weeks ago and the owner of the company called me and told me I just want you ti know we want your business & if you get a lower bid, we will match it, now the area I’m investing doesn’t have a glut of roofers or anything but he decided he would rather have my business and make less than get no money, I suspect many realtor will follow that same logic.
Quote from @JD Martin:
Quote from @Russell Brazil:
Actually youll likely see upward pressure on commissions due to this settlement. I mentioned this in an Axios article I was interviewed for just last month
That's exactly what I think is going to happen as well. Good agents aren't going to work for nothing, and buyer's agents will probably either switch to a combo system (upfront plus commission) or higher rates. Yes, the worst agents will be advertising some low fees on their end.
The thing that makes me laugh the most is the idea that home prices will modulate. If that were true there would already be a booming market FSBO. In reality all that will happen is any fees not taken by the agent & broker will just become part of the seller's profit.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes2y
Quote from @Jack Seiden:
I could be wrong, I honestly think this is such a systemic change that it’s hard to predict the ripples, but I find it extraordinary hard to believe this doesn’t lead to a substantial reduction in commissions, I’m literally taking with a client in an hour, I like the guy, I suspect he may be a repeat customer and I’m not gonna take any chance I lose him over a few dollars, so I’ll negotiate with him, I suspect other agents will take the same approach, especially given the real risk buyers just walk and go unrepresented, whether that’s a good idea or not l, it will happen. I was getting a quote for a roof a few weeks ago and the owner of the company called me and told me I just want you ti know we want your business & if you get a lower bid, we will match it, now the area I’m investing doesn’t have a glut of roofers or anything but he decided he would rather have my business and make less than get no money, I suspect many realtor will follow that same logic.Quote from @JD Martin:
Quote from @Russell Brazil:
Actually youll likely see upward pressure on commissions due to this settlement. I mentioned this in an Axios article I was interviewed for just last month
That's exactly what I think is going to happen as well. Good agents aren't going to work for nothing, and buyer's agents will probably either switch to a combo system (upfront plus commission) or higher rates. Yes, the worst agents will be advertising some low fees on their end.
The thing that makes me laugh the most is the idea that home prices will modulate. If that were true there would already be a booming market FSBO. In reality all that will happen is any fees not taken by the agent & broker will just become part of the seller's profit.
Well, you're right in that there's no way to predict for sure what will happen. But I predict higher housing prices to account for the now unknown buyer side.
Skyline Properties - Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes2y
Quote from @JD Martin:
Quote from @Jack Seiden:
I could be wrong, I honestly think this is such a systemic change that it’s hard to predict the ripples, but I find it extraordinary hard to believe this doesn’t lead to a substantial reduction in commissions, I’m literally taking with a client in an hour, I like the guy, I suspect he may be a repeat customer and I’m not gonna take any chance I lose him over a few dollars, so I’ll negotiate with him, I suspect other agents will take the same approach, especially given the real risk buyers just walk and go unrepresented, whether that’s a good idea or not l, it will happen. I was getting a quote for a roof a few weeks ago and the owner of the company called me and told me I just want you ti know we want your business & if you get a lower bid, we will match it, now the area I’m investing doesn’t have a glut of roofers or anything but he decided he would rather have my business and make less than get no money, I suspect many realtor will follow that same logic.Quote from @JD Martin:
Quote from @Russell Brazil:
Actually youll likely see upward pressure on commissions due to this settlement. I mentioned this in an Axios article I was interviewed for just last month
That's exactly what I think is going to happen as well. Good agents aren't going to work for nothing, and buyer's agents will probably either switch to a combo system (upfront plus commission) or higher rates. Yes, the worst agents will be advertising some low fees on their end.
The thing that makes me laugh the most is the idea that home prices will modulate. If that were true there would already be a booming market FSBO. In reality all that will happen is any fees not taken by the agent & broker will just become part of the seller's profit.
Well, you're right in that there's no way to predict for sure what will happen. But I predict higher housing prices to account for the now unknown buyer side.
I kind of think this really won’t have any noticeable effect on prices tbh, and frankly even a 2% reduction in net fees is so minor in the grand scheme of things, I mean 2% movements are basically random statistical noise at this point. I do wonder if I leads to more inventory though, I have for instance another client that this 2.5% might be the difference in deciding to list or not, for sellers without a lot of equity that 2.5% can be the difference between writing and check or not, which in addition to some people not having the money to cut a check is also a huge psychological barrier, there are probably even some people on the margins who have in thier head they will only sell if they can net 100k in profit or some random number like that. So I wonder if this leads to more deals getting done.
It's incredibly hard to tell what will happen.
I do think we see a slight uptick in listings, but it's hard to decipher how much of that is from this ruling. This will consolidate a lot of the real estate teams & agents, you'll see some systematic models and approaches being created like ala carte online tools that you pay as you go with it for a buyer. I just don't see how the entry home buyer is going to be able to overcome this, this is just now another hurdle. Or am I off?
I buy without an agent as is but have a lawyer kind of hold my hand. I would think you'll see automated systems like that, and you pay for what you get in regards to the time/devotion to your pursuit. I just wonder if we see less offers now that the origination of them will likely require a price for most of us.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
I do think we see a slight uptick in listings, but it's hard to decipher how much of that is from this ruling. This will consolidate a lot of the real estate teams & agents, you'll see some systematic models and approaches being created like ala carte online tools that you pay as you go with it for a buyer. I just don't see how the entry home buyer is going to be able to overcome this, this is just now another hurdle. Or am I off?
The buyer doesnt have to overcome that hurdle. The commission will simply be included in each offer, as opposed to listed on the MLS.
District Invest Group545 Reviews - Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes2y
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
I do think we see a slight uptick in listings, but it's hard to decipher how much of that is from this ruling. This will consolidate a lot of the real estate teams & agents, you'll see some systematic models and approaches being created like ala carte online tools that you pay as you go with it for a buyer. I just don't see how the entry home buyer is going to be able to overcome this, this is just now another hurdle. Or am I off?
I buy without an agent as is but have a lawyer kind of hold my hand. I would think you'll see automated systems like that, and you pay for what you get in regards to the time/devotion to your pursuit. I just wonder if we see less offers now that the origination of them will likely require a price for most of us.
I think this is actually good for buyers, but will likely result in lower commissions for agents, I think in some ways the biggest change is the fact that buyer agreements have to be signed day one, that will do a few things open up a conversation about commissions and what a buyer wants to pay (keep in mind the buyer can still ask to have thr seller pay a buyers agent much like asking for closing costs assistance) but in that upfront conversation thier will be a negotiation about how much is to be paid, what services will be provided etc. and I believe both that sellers will potentially talk to a few different agents & even if they don’t the threat of that will lead buyers agents to negotiate, the media coverage of this will also drive seller awareness of the ability to negotiate. But in the end sellers will probably still pay buyers agents just at a reduced cost. A win for everyone except agents and even then, there are aspects of having to have a buyers agreement signed I find appealing.
I read a while ago how the avg/median loan was somthing like 7% down. Its a continuing trend over decades. People don't have the cash to put down more money. Now, they have to put up more money at closing to pay for their realtor? Its going to be like a FSBO as now the buyers will want to recoup that cost via the price of the home.
Investors can talk trash about agents all they want... Its the regular consumer that buys/sells a handful, at most, homes in their lifetime. Many of them, even after a few transactions, still need an agent to help them through the transaction process. I am guessing before the "buyer's agent" was created (around 2000 I hear...), i can see how agents got a bad reputation, and not just because they are sales. The average buyer has no idea how to conduct a transaction, especially if they move from market to market / state to state.
In my market, buyers aren't used to signing anything with a buyer's agent. Now with a mixed compensation system??? I don't get it: I've been reading that the MLS' will no longer be allowed to show the commission. So, how does one know if the buyer has to compensate, be it full or partial, their agent? Are offers now give a range contingent on if the seller is offering a split for the agent?
If we move away from a commission payment system, it puts a serious crimp on the agent / client relationship. Pay by the showing? Pay by the hour? I know Redfin loves this since this is part of their model. I find it rather impersonal, and basically trains new consumers to see agents as just doorpeople, and the advice/transaction is done through a national call center.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Russell Brazil:
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
I do think we see a slight uptick in listings, but it's hard to decipher how much of that is from this ruling. This will consolidate a lot of the real estate teams & agents, you'll see some systematic models and approaches being created like ala carte online tools that you pay as you go with it for a buyer. I just don't see how the entry home buyer is going to be able to overcome this, this is just now another hurdle. Or am I off?
The buyer doesnt have to overcome that hurdle. The commission will simply be included in each offer, as opposed to listed on the MLS.
In less than 24hrs there is articles coming out from Real Estate know-nothings reporting on it declaring there "knowing" on how this will so radically change things, with a narrative as if buyer agency just magically became free, lol.
I have seen major news outlet's with articles saying things as dumb as now real estate transactions will cost only 1-2% in total, lol.
So for those not in the know, in simplest terms what was just done is the function between sellers and buyers has been severed. So now, each side must work more independent of the other. Meaning listing a home for sale will require MORE actions, efforts, energy, intelligence. And a buyers agent will have to also do MORE, be smarter, more experienced, intelligent, AND will have to integrate direct billing.
That = MORE expense, not less. More = MORE, not less.
Less buyers = more work to get the buyers. And the childish notion that prices will plumet is ignorant of fact of sellers CHOICE on what price is worth it to sell at. If sellers don't get a worth-it price, THEY DONT SELL, it's just not complicated people. Less homes for sale does not reduce prices, it holds them UP.
Novice agent's who don't have the chop's for negotiations, who don't comprehend how to negotiate seller concession, there gone baby GONE! So less agent's. Again, less does NOT = cheaper.
And my personal funniest one I read, on how the various discount/flat-fee brokers are gonna win, LMAO. There gonna loose the MOST. There done, this is an extinction level event for discount/flat-fee brokers because there discounted system was reliant on an ocean of ready buyers/buyer agents bringing buyers because that's literally how they could be discount, they just listed on MLS, did the bare minimum.
Now, in a world where listing agent's are doing way more, spending more, interacting more with more people, namely unrepresented buyers, it's not gonna be some big fire-sale of listing fee's.
End of day I see it as a change of some paperwork and that's about it, at least for me. How I do listings changes very minimally, because I already did most of what this change will require. Biggest change will be intaking a lot more unrepresented buyer inquiries and thus a lot higher % of dual agency transactions.
And that alone, dual agency, scares the hell out of 50%+ of retail brokers/agents because they are not of the professional level.
I see a LOT of novice agent's leave and being shown the door, because there scared, not up to the job, or brokers have no faith that agent ___ won't mess up dual agency so there not worth the risk. For me that's going to be my #1 biggest change, adding in new scrutiny that agents are NOT allowed to act alone or as primary on transaction until they can prove mastery of dual agency.
- Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes2y
I'm eventually going to be a Seller as I unload my portfolio within the next 5 years.
This Ruling means I don't have to worry about Buyer Agents refusing to show their Buyer Clients my properties because I didn't offer a Buyer Agent cut on the MLS.
In my Market of multi-million dollar properties, 2.5% Buyer Broker Commissions is easily $50k.
My overall assumption is that the incentive of the Buyer Broker Commission effectively steers Buyers away from these properties or the Buyer Broker just doesn't get paid since the Buyer really doesn't sign an exclusive in my Market.
This ruling seems to take away the unintended consequences of the old system to let a listed property with no Buyer Broker Commission split languish.
- Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes2y
I actually like the decision, although I'm sure I'm in the minority of agents. I got my license because I didn't like the high commission rates agents charged, and I found it surprisingly hard to find a broker who would let me charge less. So I'm looking forward to seeing how this shakes out. I hope it leads to far fewer, more efficient real estate firms that focus on full-time professional agents doing more business at a reasonable rate. Our MLS has already changed our standard purchase agreement so that the buyer asking seller to pay a buyer broker fee is a fully negotiable contract term just like closing cost assistance. I do think it may lead to more unrepresented buyers, but once the same problems start happening that led to buyer broker agency, they'll figure out a way to make it work. Maybe loan programs will start allowing a certain amount added to loan balance to cover buyer broker fees. Listing agreements will now likely add in terms for additional fees if handling an unrepresented buyer, so seller may be fine agreeing to buyer broker fees stated in an offer if they're similar to what the listing firm would be charging them to handle the buyer, anyway.
- Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes2y
I like it - let the system work and let the market set the price.
It should have always been negotiable - that's how you drive market competition, and price competition is always a good thing. It's an inherently fair system at its core.
@Lynn McGeein Loan programs can already add to cover closing expenses such as fees --- seller concessions. However, for the seller to net the agreed price, the price has to go up in which case you can run into the issue of the property not appraising.
I think the fundamental issue is this requires a more sophisticated buyer and seller (especially to have a graduated commission scheme which is common in commercial). However, fundamentally that's pretty difficult.
@Llewelyn A. I wonder about that... With the advent of zillow, etc... Buyers see all the listings, so its not up to the agent to be the sole "finder" of listings. With the MLS currenlty required to show the buyer's agent compensation, my clients could see my potential compensation. Its sort of funny --- they considered the ramifications to my pay if they found that they liked a house.
However, I wonder if we will have more dual agency type transactions. The buyer's get to save on the commission. They potentially stumble through the transaction while the listing agent tries to keep it on track for free. The listing agent may still have increased compensation from the seller if the commission was variable. With so many buyers thinking agents suck or are out to screw them, this just eliminates the buyer's agent role...
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
This would affect the brokerage business model more than the house value.
Every brokerage works very differently Jason. One can adapt and the older one using the conventional model would be force to change. Their cost structure is also very widely different from one another.Think the era where 20 years ago we have to pay $10 to buy a stock and now it is zero, what we see decade later is massive consolidation or M&A in brokerage business. I am expecting the same. Lot of people may leave the industry.
- Member since 2019 · 7k+ posts · 4k+ votes2y
It's either dual agent or seller agent gives a discounted listing agent (for free) from the same brokerage.
In all technicalities , if home is good, all disclosure is known, and price/comp matches literally there's almost no need to have buyer agent.
Even 80 years from now, maybe FSBO would be more common, a transaction could involve just seller and buyer and some attorneys for legality.
Yeah, guess it also depends given that some states don't allow dual agency. Maybe the buyer is just unrepresented ... that's sort of what it was like with sub-agents before there were buyer's agents.
Or like in commercial, the commission is as variable structures such as 4% + 2.5% to the buyer or if the listing agent brings the buyer its 5%. Incentizes the listing agent to find a buyer and the seller to accept it.
I think on a different thread, it was mentioned that agents will just go about it "business as usual." I think the ruling "doesn't disallow" the current practice, its just trying to open up to different practices. Makes sense since Redfin's model is different. There was a company that didn't offer any split, but that died off.
I think reasons for buyer's agent to is make the showings and help people through the transaction. Most listing agents don't want to do showings. Only experienced investors, at best, can handle a transaction themselves in a particular market. In states w/o attorneys, pretty much only the agent is there to help "arbitrate" to get the deal to closing. Sure, in attorney states the attorney can screw it up too, but so can the agent. I just see it as having two chances of having a successful avenue of communication :)
If buyers will have to price match/comparison shop between the different fees, it just becomes a small nightmare for them. Not to mention, you have to ask each listing for it since it will no longer allowed to be shown on the public listing.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
This would affect the brokerage business model more than the house value.
Every brokerage works very differently Jason. One can adapt and the older one using the conventional model would be force to change. Their cost structure is also very widely different from one another.Think the era where 20 years ago we have to pay $10 to buy a stock and now it is zero, what we see decade later is massive consolidation or M&A in brokerage business. I am expecting the same. Lot of people may leave the industry.
Carlos, the most accurate comparison I can think of for this is Y2K, seriously.
People are freaking out and saying it's going to do all kinds of everything, fire will be wet, water will be hot, up will be down, home prices collapse blah blah blah..... And what it will be is, an adjustment of some paperwork.
So biggest impact is, a good item to run fear-news on for a bit. That's it, just another way to sell some more fear messaging.
In reality, it's some paperwork.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
This would affect the brokerage business model more than the house value.
Every brokerage works very differently Jason. One can adapt and the older one using the conventional model would be force to change. Their cost structure is also very widely different from one another.Think the era where 20 years ago we have to pay $10 to buy a stock and now it is zero, what we see decade later is massive consolidation or M&A in brokerage business. I am expecting the same. Lot of people may leave the industry.
Carlos, the most accurate comparison I can think of for this is Y2K, seriously.
People are freaking out and saying it's going to do all kinds of everything, fire will be wet, water will be hot, up will be down, home prices collapse blah blah blah..... And what it will be is, an adjustment of some paperwork.
So biggest impact is, a good item to run fear-news on for a bit. That's it, just another way to sell some more fear messaging.
In reality, it's some paperwork.
That's if you think from small individual realtor perspective.
But this just means the competition between nationwide brokerage is intensified, folks expecting tech-driven RE company like Costar's homes.com and Zillow to take over traditional nationwide brokerage that lacks of efficiency or transaction cost.
As real estate volume reduces and reduced commission would be the new game, I don't expect traditional brokerage could survive if they don't adapt.
Think like company like homes or zillow or local exp team that could offer a very efficient buying process thus could offer more attractive buyer commission, especially at expensive home price above 1 mil area, that would impact heavily on heavily-dependant commission based broker.Yes some folks could argue they are the best realtor in the planet, but if one company thru efficiency process could save seller $35k, they would flock to the alternative.
Lot of complain here in CA where buyer agent almost do nothing and got free 20-40k net after broker commision lol we know the hard work is being done by listing agent only. Maybe 1-2% buyer agent commission is the new normal. In market where DOM is less than 10, buyer agent is almost unnecessary,they are only the exchangor communication between seller and buyer.
Also in most countries, the concept of buyer agent is unknown. - Real Estate Agent · Worcester, MA · Member since 2023 · 88 posts · 52 votes2y
Quote from @Jack Seiden:
I could be wrong, I honestly think this is such a systemic change that it’s hard to predict the ripples, but I find it extraordinary hard to believe this doesn’t lead to a substantial reduction in commissions, I’m literally taking with a client in an hour, I like the guy, I suspect he may be a repeat customer and I’m not gonna take any chance I lose him over a few dollars, so I’ll negotiate with him, I suspect other agents will take the same approach, especially given the real risk buyers just walk and go unrepresented, whether that’s a good idea or not l, it will happen. I was getting a quote for a roof a few weeks ago and the owner of the company called me and told me I just want you ti know we want your business & if you get a lower bid, we will match it, now the area I’m investing doesn’t have a glut of roofers or anything but he decided he would rather have my business and make less than get no money, I suspect many realtor will follow that same logic.Quote from @JD Martin:
Quote from @Russell Brazil:
Actually youll likely see upward pressure on commissions due to this settlement. I mentioned this in an Axios article I was interviewed for just last month
That's exactly what I think is going to happen as well. Good agents aren't going to work for nothing, and buyer's agents will probably either switch to a combo system (upfront plus commission) or higher rates. Yes, the worst agents will be advertising some low fees on their end.
The thing that makes me laugh the most is the idea that home prices will modulate. If that were true there would already be a booming market FSBO. In reality all that will happen is any fees not taken by the agent & broker will just become part of the seller's profit.
Definitely agree you can't predict what will happen, but I feel the risk of inexperienced home buyers going unrepresented could cost far more in the long run if the deal isn't straight-forward. High lawyer hourly on a messy drawn out deal and similarly agents taking lower commissions and pushing volume under the new model to make the same amount of money may be detrimental to buyers with more out of pocket fees (pay per showing, pay per offer, etc), versus being able to finance the brokerage costs.
Will be interesting to see how price reflects the new system whether there is any change or not. I imagine the "work-arounds" for this new system will be plentiful. My opinion anyway.
- Real Estate Agent · Worcester, MA · Member since 2023 · 88 posts · 52 votes2y
Quote from @James Hamling:
Quote from @Russell Brazil:
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
I do think we see a slight uptick in listings, but it's hard to decipher how much of that is from this ruling. This will consolidate a lot of the real estate teams & agents, you'll see some systematic models and approaches being created like ala carte online tools that you pay as you go with it for a buyer. I just don't see how the entry home buyer is going to be able to overcome this, this is just now another hurdle. Or am I off?
The buyer doesnt have to overcome that hurdle. The commission will simply be included in each offer, as opposed to listed on the MLS.
In less than 24hrs there is articles coming out from Real Estate know-nothings reporting on it declaring there "knowing" on how this will so radically change things, with a narrative as if buyer agency just magically became free, lol.
I have seen major news outlet's with articles saying things as dumb as now real estate transactions will cost only 1-2% in total, lol.
So for those not in the know, in simplest terms what was just done is the function between sellers and buyers has been severed. So now, each side must work more independent of the other. Meaning listing a home for sale will require MORE actions, efforts, energy, intelligence. And a buyers agent will have to also do MORE, be smarter, more experienced, intelligent, AND will have to integrate direct billing.
That = MORE expense, not less. More = MORE, not less.
Less buyers = more work to get the buyers. And the childish notion that prices will plumet is ignorant of fact of sellers CHOICE on what price is worth it to sell at. If sellers don't get a worth-it price, THEY DONT SELL, it's just not complicated people. Less homes for sale does not reduce prices, it holds them UP.
Novice agent's who don't have the chop's for negotiations, who don't comprehend how to negotiate seller concession, there gone baby GONE! So less agent's. Again, less does NOT = cheaper.
And my personal funniest one I read, on how the various discount/flat-fee brokers are gonna win, LMAO. There gonna loose the MOST. There done, this is an extinction level event for discount/flat-fee brokers because there discounted system was reliant on an ocean of ready buyers/buyer agents bringing buyers because that's literally how they could be discount, they just listed on MLS, did the bare minimum.
Now, in a world where listing agent's are doing way more, spending more, interacting more with more people, namely unrepresented buyers, it's not gonna be some big fire-sale of listing fee's.
End of day I see it as a change of some paperwork and that's about it, at least for me. How I do listings changes very minimally, because I already did most of what this change will require. Biggest change will be intaking a lot more unrepresented buyer inquiries and thus a lot higher % of dual agency transactions.
And that alone, dual agency, scares the hell out of 50%+ of retail brokers/agents because they are not of the professional level.
I see a LOT of novice agent's leave and being shown the door, because there scared, not up to the job, or brokers have no faith that agent ___ won't mess up dual agency so there not worth the risk. For me that's going to be my #1 biggest change, adding in new scrutiny that agents are NOT allowed to act alone or as primary on transaction until they can prove mastery of dual agency.
It is amazing to see how many articles come out stating what "WILL" happen from folks who probably used an agent and sung their praises on their own transactions. Fits the digital age well.
I agree with your take James. I read an article where NAR was "expecting over 1million of the 2million active agents" to be leaving the industry. If true, definitely doesn't lower the price tag on a good professional agent, and even if it did, they would make up for it in the ability to generate new upfront fees. I think you'll be spot on with a paperwork change and the offers containing the commission rate, seems like the least painful way to move forward.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Matthew Gentile:
Quote from @Jack Seiden:
Quote from @JD Martin:
Quote from @Russell Brazil:
but he decided he would rather have my business and make less than get no money, I suspect many realtor will follow that same logic.
Definitely agree you can't predict what will happen, but I feel the risk of inexperienced home buyers going unrepresented could cost far more in the long run if the deal isn't straight-forward. High lawyer hourly on a
What is the percentage of home transaction that's messy and not straight-forward ?
We are in 3 DOM market, These days even Owner / inexperienced buyers are super aggressive, I saw lot of broken homes are bought by owner occupant and not by flipper , if they don't care about all these mess/possibility to sue, then the job of buyer agent is simply a Docusign transaction exchanger.
With this ruling there's possibility for buyer to contact seller agent and deal directly. And seller has more space to negotiate because of lowered commision/no buyer agent/dual agent.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Matthew Gentile:
Quote from @James Hamling:
Quote from @Russell Brazil:
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
I agree with your take James. I read an article where NAR was "expecting over 1million of the 2million active agents" to be leaving the industry. If true, definitely doesn't lower the price tag on a good professional agent, and even if it did, they would make up for it in the ability to generate new upfront fees. I think you'll be spot on with a paperwork change and the offers containing the commission rate, seems like the least painful way to move forward.
The real battlefield is not on the hands of the realtor or paperwork.
But it's initiation to take over NAR/MLS from Zillow/Homes/Redfin/Movoto.
These are the realtor actual threat.
Once they can simplified the process then some of the traditional broker is on trouble. It's not coincidence that some RE broker stock is falling 10% once it's announced. - Real Estate Agent · Worcester, MA · Member since 2023 · 88 posts · 52 votes2y
Quote from @Carlos Ptriawan:
Quote from @Matthew Gentile:
Quote from @Jack Seiden:
Quote from @JD Martin:
Quote from @Russell Brazil:
but he decided he would rather have my business and make less than get no money, I suspect many realtor will follow that same logic.
Definitely agree you can't predict what will happen, but I feel the risk of inexperienced home buyers going unrepresented could cost far more in the long run if the deal isn't straight-forward. High lawyer hourly on a
What is the percentage of home transaction that's messy and not straight-forward ?
We are in 3 DOM market, These days even Owner / inexperienced buyers are super aggressive, I saw lot of broken homes are bought by owner occupant and not by flipper , if they don't care about all these mess/possibility to sue, then the job of buyer agent is simply a Docusign transaction exchanger.
With this ruling there's possibility for buyer to contact seller agent and deal directly. And seller has more space to negotiate because of lowered commision/no buyer agent/dual agent.
I'm a wholesaler so every deal is messy haha, but I have agent experience that lets me solve those problems. That a first time home buyer probably wouldn't get through at least not without a decent struggle. Comes down to price/comfort, is the going rate to have everything done for you whether it be menial or not 5-6% of the transaction? Maybe, maybe not. I do it myself because I dislike having others do it for me.
Not sure what the % of non-straight foward deals is at present, inventory is too low to matter like you mentioned. But it won't be too low forever and it'll be interesting to see how this all develops.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Carlos Ptriawan:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
It's incredibly hard to tell what will happen.
This would affect the brokerage business model more than the house value.
Every brokerage works very differently Jason. One can adapt and the older one using the conventional model would be force to change. Their cost structure is also very widely different from one another.Think the era where 20 years ago we have to pay $10 to buy a stock and now it is zero, what we see decade later is massive consolidation or M&A in brokerage business. I am expecting the same. Lot of people may leave the industry.
Carlos, the most accurate comparison I can think of for this is Y2K, seriously.
People are freaking out and saying it's going to do all kinds of everything, fire will be wet, water will be hot, up will be down, home prices collapse blah blah blah..... And what it will be is, an adjustment of some paperwork.
So biggest impact is, a good item to run fear-news on for a bit. That's it, just another way to sell some more fear messaging.
In reality, it's some paperwork.
That's if you think from small individual realtor perspective.
But this just means the competition between nationwide brokerage is intensified, folks expecting tech-driven RE company like Costar's homes.com and Zillow to take over traditional nationwide brokerage that lacks of efficiency or transaction cost.
As real estate volume reduces and reduced commission would be the new game, I don't expect traditional brokerage could survive if they don't adapt.
Think like company like homes or zillow or local exp team that could offer a very efficient buying process thus could offer more attractive buyer commission, especially at expensive home price above 1 mil area, that would impact heavily on heavily-dependant commission based broker.Yes some folks could argue they are the best realtor in the planet, but if one company thru efficiency process could save seller $35k, they would flock to the alternative.
Lot of complain here in CA where buyer agent almost do nothing and got free 20-40k net after broker commision lol we know the hard work is being done by listing agent only. Maybe 1-2% buyer agent commission is the new normal. In market where DOM is less than 10, buyer agent is almost unnecessary,they are only the exchangor communication between seller and buyer.
Also in most countries, the concept of buyer agent is unknown.All that is a "Spruce-Goose" of Real Estate.
Look, discount brokerages have been around for literally generations.
At every turn, it's been argued how various discount brokerages would "end" traditional real estate agency. And generation after generation, it does not.
Most recently Zillow threw epic resources into a direct "war" on taking over real estate transactions, and all Zillow achieved was finding a fast way to loose a few hundred million.
There is no greater efficency offered by big tech, that is just a marketing slogan. The only way it stands true is vs some solo agents. VS experienced Real Estate Teams, big-tech is leagues BEHIND thoe efficencies the R.E. Teams afford. Because Big-Tech does not have the boot's on the ground teams have. Big-tech does not have the market specific QUALITY of service teams have.
Fact is name the big-tech and it's a universal of LOW quality. Because big-tech uses VA's, call centers, low wage persons to do big volume. And humans who are buying/selling, in majority part want QUALITY.
So as long as people seek RESULTS, in market Real Estate TEAMS will lead the way.
The sector most at risk from Big-Tech is actually Discount Brokers/Brokerages. Because they are the same thing as Big Tech, and they got nothing in vs Big-Tech.
Big-Tech does not do and can't do half of what me and my team does, fact. We interact with a person, get to know there exact situation, formulate answers and strategies for them, specific to today, tomorrow and the future. And we than deploy that strategy. This is way too much "customization" for big-tech. So in my sphere big-tech is nothing, literally a nothing factor.
Every tool big-tech has, we have. So I have all the same tools BUT I also have what they don't, boot's on the ground AND HUMAN BRAIN POWER. I know many are drunk on ai, but fact is a good experienced agent is still 10X smarter and more intuitive than anything ai can offer. This is why we use tech tools and than a human disseminates it and adjusts it to a real world applicable strategy and actions.
ai still does not have command of human emotions, and until it does, ai won't have command of how these things fully work and how to best navigate them.
Someday, sure, ai may get there BUT if/when ai can/does it's the same day ai can take over any/all sales, be it homes, cars, widgets, anything/everything. So impact is not just real estate.
This action now, it's honestly a very minor change, it is, for those experienced agents/brokers. We are universally clapping hands of this. It's a problem for the agents that us Pro's want to see less of in first place.
So it's doom for the novice, and a gift for the Pro's.
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