03/17/2024
Many of you know I’ve been in real estate sales and coaching for 43 + Years – it’s literally been my only job my entire adult life. BIG news is actually saying that the “automatic” 6% commission that REALTORS charge has been settled out by NAR to end the lawsuit re: commissions and that we’ve been over charging for decades and prices for homes will be lower. This won’t happen – supply is too tight and by the time we get more supply everyone will have figured out that I, as professional REALTOR provide a valuable and needed service. The new isn’t posting that the attorneys settled for $400+ million instead of the BIG news reported $5 Billion +.
So good job National Association of Realtors (NAR) in ending this and moving forward.
As an aside, BIG news predicted the end of real estate as we know it in the 1980’s with the rise of multiple listing services, the end of it all with fax machines, the end of it all with e-signatures, with the rise of franchises, with the advent of the internet and free information, with the great recession, and about 5 other times. All this generates headlines but we as an industry is still here – chugging along supporting buyers and sellers.
Just so you consumers out there know: 6% commissions have never been “automatic.” It has always been negotiable. NAR has never “set” commission rates. Sellers and agents have always negotiated the price paid out. Please DO NOT BELIEVE the NY Times, MSNBC or any other outlet that’s literally making up the story to get more clicks that home prices will automatically be lowered. If anyone actually bothered to actually read the 100+ page document about the settlement they would see that.
Here is what is changing: The MLS will no longer indicate how much (if anything) the seller is willing to pay an agent who brings a buyer. This will add another layer of communication and negotiation to any transaction moving forward. Additional paperwork will be required. (when I started in 1980 a contract was a 1 page legal document on carbonless copy paper – now it will be about 30 pages+ to get an offer to the table.)
If a seller wishes to only pay their agent, they can choose to do that. There will be some instances where a buyer will now have to pay their agent to represent them should they want representation. The amount that the buyer agent is paid will be negotiated between the buyer agent and the buyer. That will be agreed upon and entered into a buyer representation agreement which will now be required by law.
I’m sure most sellers will offer buyers agents compensation to encourage showings and offers on their home for sale. Some will offer 3%, some will offer more, some will offer less or nothing.
My only concern for my clients is buyers tight on cash liking a property in which the seller is not willing to offer any commission. Any Veteran loans by law must have the commission paid for by the seller. Many buyers have no extra cash to pay for the needed support and representation I as a professional Realtor provide.
Moving forward we will need to negotiate how I, or any realtor, gets paid for those services in the offer process. I expect that after a time of uncertainty things will settle down again and we’ll continue to do what we know how to do – help sellers find a buyer and sell for the right price, in the right time with the fewest hassles; and to help buyers find the right home, with the right financing, and the least hassle.
If you have any questions or concerns let me know. I’m always happy to provide professional counsel.
And if you’re a Realtor feel free to share this after adapting it to your particular history.
