07/06/2024
Text of my recent Newsletter:
My topic for this newsletter is the recent settlement of a lawsuit by several clients in Missouri. To make sure we know where we’re going here, let’s make the conclusion clear. Real estate transactions in Maryland and D.C. will be minimally affected because regulations and ethical standards have already been in place.
The case in Missouri involved brokers from different companies “price fixing”. This has been prohibited in Maryland and DC since long before I became an agent. While the general rule is a 5% or a 6% commission (depending on services provided by the selling agent), this is always negotiable with the seller.
The confusion I have been hearing is in regard to the buyer’s agent commission. In Maryland and DC the agent always represents the seller unless there is a written and signed buyer’s agreement. This was not true in the Missouri case, so a lot of jurisdictions nationwide are simply doing what Maryland has done for decades. The other part of this is that the seller pays the commission, and if there is a buyer’s agent the commission is split.
This does NOT mean that if there is no buyer’s agent the seller pays 2.5% or 3%. There is a lot of work involved, and the question is whether one agent is doing all the work or the work is being split between two agents. The total list of 179 tasks the agent/ broker performs is at this National Association of Realtors link. If the seller does not have an agent or two working on the transaction, the seller must take care of these issues. It is not simply a matter of “going to see a lawyer”.
A side issue I run into as an agent is the assertion that the seller does not need an agent. With increasing litigation, especially in the area of disclosures of material defects, lawyers are increasingly requiring sellers and buyers to at least find a broker to review documents. This is simply to avoid and spread risk. Brokers will not do this for free and would be charging a commission. On this type of case the broker is not working for either the buyer or the seller’s interest. If the seller wants an agent who is committed as a fiduciary, they must sign a listing agreement and agree to a commission.
There are updated forms being generated by the Maryland Association of Realtors.
So to sum up where we are, most of the terms of the settlement were already in place in Maryland. The commission has been and is negotiable between the seller and their agent. Out of courtesy, I would expect any seller clients of mine to establish the percentage for the buyer’s agent up front. This means a bigger pool of prospective buyers and more competition among buyers.
In a couple weeks I will be sharing some issues sellers need to be aware of as far as Fair Housing issues. Another topic coming up this summer is a view of the market now that we are out of the spring buyer “frenzy”.
For those of you who have been with me awhile, I am now in Weichert’s Chevy Chase DC office, and I will be getting my DC license in addition to my Maryland license. The North Bethesda office where I met a lot of you (and conducted three settlements) is now closed.
Please refer this article to anyone you know who would like to buy or sell a home this spring and early summer. I am ready to help you, your friend, or your relative come to a successful and satisfying conclusion to your search.
Kirk Marchand
Weichert, Realtors
5034 Wisconsin Ave. NW
Washington D.C. 20016
Email - [email protected]
Cell & Text: 301 602-6474
Office: (202) 326-1300
Website: https://kirk-marchand.weichert.com
Blog: http://www.kirkmarchand.com/blogrealestate.html
Website: https://kirk-marchand.weichert.com/ Go here for a lot of information and resources about buying, selling and moving!
