03/20/2024
No doubt you have seen the headlines about NAR (National Association of REALTORS), the Settlement, and Commissions being “slashed”. I thought it might be helpful to provide some facts and context.
- There has never been price fixing or price colluding. Brokerage fees have ALWAYS been negotiable, including the Buyer’s Agent fee. That is abundantly clear in our agreements with Sellers and Buyers. (Let me know if you want to see GA documents.)
- Commissions often range from 6%, 5%, 4%, discount brokerage fees, to FSBOs (For Sale By Owner). Nothing is industry-fixed.
- There have been many headlines which I will say are very misleading, and I do wish that NAR would have addressed these a bit more aggressively. For example:
- Other countries (in Europe, Australia, etc) charge far less in real estate commissions/brokerage fees. True, except those Agents also receive a base SALARY, plus Commission. And often receive Healthcare, either government or private.
- Interestingly, some other countries are trying to move towards the US real estate model of both Seller and Buyer representation. That doesn’t exist over there, and it is Buyer beware.
- In the US, Agents are 100% commission, and are not compensated until the transaction closes. Once paid, they must pay Taxes and Health Insurance, in addition to business expenses. Nothing is deducted. It’s on the Agent to manage their business.
- If this Settlement is approved (expected July 2024), Brokerage fees are being “de-coupled” meaning Listing fee and Buyer fee will be presented and handled differently, but as always, still negotiable.
- Who will this change potentially hurt? FIRST-TIME Home Buyers who may not have a surplus of cash for a down payment, plus Buyer commission fee. And VETERANS, who wish to use a wonderful benefit offered to them – the VA Loan. When using a VA Loan, the Buyer is not allowed to pay their Agent a commission.
- Housing prices are not expected to go down. Why? Because prices are based on supply and demand, and we are living with a housing shortage.
- If, as a Buyer, you forgo hiring an Agent and work directly with the Seller’s Agent (always has been your right), that Agent represents the SELLER’S best interest only. The Seller is the Client, and you are the Customer, a completely different relationship. Just FYI.
- There will be fewer Agents a year from now because, honestly, there will be a separation from the Professional Agent and the Hobbyist Agent.
- Professional, skilled Agents will always have a place and serve a purpose, whether you are Selling or Buying. Having your OWN representation, advisor, negotiator, and resource is truly beneficial. If you have ever worked with a great Agent, whether Buying or Selling, you know what I am talking about.
If you have questions and want to discuss, please let me know. I’m happy to do so.
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