03/18/2024
My thoughts regarding the whole lawsuit and whats going to follow. First buyers will continue to buy houses and sellers will continue to sell houses. There will be some pivoting needed as we speak to our clients about what this means for them and how we can best represent their best interest.
Honestly I think its a good thing and its always better for the consumer to be able to make a knowledgeable decision based on the value they receive and not just based on “This is how everyone does it”. Remember that in the absence of value it will come down to price. But when the value of an agent is there people are willing to pay for what they receieve. So in the long run, low value-producing agents will likely fall to the way-side and high value-producing agents will be fairly compensated.
For Sellers:
As a seller you will now get to decide how much, if any, you want to pay the Buyers Agent for supplying the buyer and procuring the sale. You always had this choice but many did not realize it which was the grounds of the lawsuit.
Some sellers will choose to not pay anything to the buyers agent. This means only buyers who have enough additional funds to pay their agent directly will likely show your house. When you consider that price is tied to supply and demand, its likely that you will not attract as many buyers as the ones who are unable to pay their buyers agents (which is the majority) will instruct them to only show them houses where the seller will pay their agent and as the demand goes down, its likely that sales prices will go down as well. This could end up netting you less in the long run than if you decided to pay the buyers agent in the first place.
On the other hand, if you decide to pay the buyers agent something, you are likely to see the higher you pay the more buyers will be willing to look.
It's possible that some buyers will reach out to the Listing Agent directly to see the house. In this case they are hoping to not have to pay a buyers agent directly. Since there is more work required from a listing agent who is now helping both the buyer and the seller, they will need to be compensated for the additional work of helping the buyer to navigate the buying process which means dealing with lenders, inspectors and even issues like Buyer’s Remorse. This additional cost will likely be negotiated between buyer and seller and if the buyer simply cant pay, it will end up being the sellers responsibility if they want to sell to that buyer.
Lastly, buyers getting a VA loan are prohibited by law from paying the buyers agent anything so if you want to have Veterans who are using their VA benefits to see your home you will have to pay their agent’s fee.
For Buyers:
In order to see every house available to you, you will need to be willing to pay your agents fee in instances where the seller is not willing to. In many cases the seller will be willing to pay your agents fee, in which case even though you were willing to pay your agent if need be, you may not have to. This will enable you to have more money to make a more attractive offer to the seller with the understanding that in a market with low inventory, the home will be awarded to the buyer with the strongest overall offer. This is where its important to hire the strongest agent possible as the best agents will help you to navigate and negotiate the best possible
scenario for you. A great agent will
also be able to help you find properties that are not listed in the MLS which can be very valuable.
If as a buyer you are simply unable to pay a buyers agent, you will only be able to consider homes where the sellers are willing to pay them for you or who are willing to pay their agent more for the additional workload.
For Everyone:
While all this sounds scary and daunting the bottom line is the creative agents will find creative solutions to best serve the needs of the public. Our team is already coming up with great solutions for buyers who dont have the extra money and we are always positioning sellers to get the highest dollar possible with the most money in their pocket! The best agents will adapt to the new practices and will continue to thrive even amidst a lot of confusion.
The Realtor you hire matters more now than ever before, regardless if you are a buyer or seller. Agents without problem solving strategies or the ability to provide winning solutions will likely not make it. Some don't even want to try to shift or pivot again and will self select out, while others will be forced out. The ones who offer innovative programs and solutions available to both buyers and sellers will be much more valuable today than ever before!!
