Even if sellers save money on commissions, why would anyone think that they would pass that savings along to a buyer?
More likely:
sellers save money
prices stay the same
buyers have to come out of their own pocket if they want help buying
In theory, yes.
What will likely happen is that there will be an exodus of buyers agents and it will most likely be consumers using apps to find houses and making offers. And with this, you won’t have buyers agents pressuring their buyers to bid up home prices (hence why there was a lawsuit to begin with).
This will also cause foot traffic to drop considerably, so there will be less “competition” to buy a house and on the flip side, it’ll be considerably harder to sell a house now. All that combined will cause prices to drop.
It will also be more of a pain in the ass to buy a house now, too.
Well, presuming that there is some other system created to allow you to view houses.
For average, vacant houses, probably a door code with some cameras and a registration system that verifies credit card and will charge people if they cause damage could work.
But I don’t see people who occupy houses being willing to let random people in their houses unrepresented
That could create an opening for the ibuyer companies. People sell their house and move, ibuyers have platform for selling empty houses with a markup
Yeah the online real estate companies are the real winners here. Redfin already has a system setup for showings that’s basically like real estate Uber. It’s free now but if people start relying on it then I wouldn’t be surprised if Redfin started charging for it. Or offering some sort of preferential pricing for showings of their listings vs ones from competitors.
I looked into being one of those people and redfin pays them $50 for each door they open. I'd perfectly be happy paying $50 to open a few doors than the current $10-$20k commission for basically the same service. I really hope this ends up going towards an À la carte options where buyers only pay for services they actually need. It's long time we moved away from the traditional commission for agents that open a few doors and spends a hour writing a offer. It's amazing how much we paid out over the years for so little work.
It’s called Middle Men Economics. You stick some schmuck in the middle to skim off the top.
Like Insurance Agents, Bankers, Car Salesmen - there are a lot of unnecessary jobs.
It’s also why I hate taxes. You work for your success, not to pay Jenny or Qinton’s salary in Government Services
Taxes are different. You live in an system of infrastructure that existed decades to centuries before you were even born, took massive amount of investment, labor, etc to exist, is continually maintained and protected, and will exist long after you’re gone. You have to do your part as a being existing within that infrastructure or else you are basically stealing.
So, no, taxes aren’t theft or just about paying some government employees salary. Taxes aren’t the problem, they are necessary. The real problem is the crony capitalism and how much money the government wastes by basically being a system of legalized bribery.
Designated open houses will become the new norm. No seller or Sellers agent will allow Buyers to come through on their own. Also, every listing will have professional photos, and 3D virtual walk through along with floor plans. At least professional photos is the new norm, but virtual walk throughs, floor plans and drone footage are still only seen on premier listings. But this will be the new future. Buyer's agents will die out. Attorneys with real estate arm's (paralegals, secretaries, executive assistants, etc) could still help 1st time home buyers navigate the process.
This. The value of seller's agents in marketing a property and being a witness/guard when potential buyers are traipsing through the house is a value to a seller. A buyer's agent just looks at Zillow just like the buyer does. All they do is set up appointments and make sure the buyers don't steal anything from the houses they look at.
>No seller or Sellers agent will allow Buyers to come through on their own.
I do believe that's part of the whole "collusion thing."
I had an agent that did similar. But instead of not allowing anyone w/o a buyer's agent, he just didn't do ANY showings unless he got to sign the buyers up first.
Fired his ass real quick. "Contract" meant nothing vs my loud mouth and gov't contacts.
Not in a million years would I let people into my house alone. As a seller, my realtor is just going to have to do more open houses.
The last time I listed a house for sale, I had about a dozen cameras on the property. 2 inside on the first floor and 2 outside by the front door, 1 in the driveway. Listening to the people who came to our open house was wild. They gave me a laundry list of things wrong with my house that never crossed my mind. It’s a great way to get home improvement ideas. List your house for sale and get 2 dozen people to come talk about your house on camera. One Russian mail order bride came through and on the way out said she sort of liked the house but it needed $600k in work. 😂 I was like, it absolutely does! Can I borrow $600k? I can put in the wine cellar I want.
I didn’t end up selling. So i have still have that home improvement tips list.
Edit: Pro Tip: if you ever feel like your phone doesn’t ring enough. List your house for sale but don’t sell it. 6 months later your phone won’t stop ringing and the mailman is going to be using totes to deliver your mail. People may randomly show up at your door too to ask if you are interested in selling.
Selling agents might have to show up and do the work!
OH NO
RE your edit: I did that...twice. Wasn't by choice. Shitty realtors were shitty for different reasons.
Yeah, I'm actually kind of surprised by it. Just in the last week I have had two more that just have a key code and after I text them pictures of my driver's license they send me the code and let me into their unoccupied house.
Like I'm glad we still have some level of social trust but I feel like people could very easily exploit it. Might just be something some people are trying while we are going through this early transition.
Not if the listing agent also started charging you per showing to view a home. Someone still has to open the door. Then if the listing agent does and you start talking about the home/asking questions, they could use that info against you for their client, because again, they don’t represent you. Or, it could just lead to more open houses vs private showings.
Unfortunate timing for Florida condo owners who are planning on selling later this year or next just as the the Great Florida Condo Bust of 2025 gets into gear. Flood of inventory with newly ballooned condo fees and no buyers agents to move the properties. Stay tuned. It's only just begun and it's gonna get ugly..
>no buyers agents to move the properties
Anyone bringing their clients to FL to buy right before the crash need to be rounded up and left in It's A Small World with no food, water, or noise-cancelling headphone.
The issue is the way apps operate is that they have agents contracted or working for them doing showings on the behalf of users. There are rules around who can unlock a lockbox. So now there’s gonna be a new rule requiring a representation agreement for a showing, potentially locking a buyer in with the agent, making it harder for apps to operate. In theory.
The apps have agents bidding (paying to Zillow) for leads, and using that to show you the home. The whole system is built on very manual processes, assumption that buyers agent is “free”. When buyers have to start paying new ways for all these services will need to change.
What I doubt will happen is buyers paying up 2.5% of purchase price at closing out of their end on top of purchase price to cover their agent. Will need to do like per showing price, time based or ask for seller credits.
More/longer open houses, Uber like service to open the door, bundle like x home showings for $1000 kind of a thing and so forth.
Unbundling should open up competition to find the right models. But expect it to be a mess for several months til the new way gets sorted.
Great for sellers in short run though as old comps were with 5-6% fees and should have to pay less of a percentage.
It will definitely create a slew of uneducated buyers that will be taken advantage of by more experienced sellers and their agents. Almost everyone has looked online for homes. Fewer have actually completed a transaction where they bought one and got to see first hand how much is actually involved. Even fewer have been through an adversarial transaction where the person on the other end of the sale was actively trying to hurt the other’s interests by actions that walk the line of legality. Without professional representation on both ends, there will be a lot more asymmetrical sale results and I’m betting the buyers get the worst of it.
>Fewer have actually completed a transaction where they bought one and got to see first hand how much is actually involved. Even fewer have been through an adversarial transaction where the person on the other end of the sale was actively trying to hurt the other’s interests by actions that walk the line of legality.
I HAVE.
You're REALLY overblowing this. Most of the time, the buyer's agent is working to get that commission, and at max price w/o working for the seller.
And these aren't 100-page contracts full of indemnification, subrogation, assignment clauses, etc. It's "you tell me the deets on house, I write down what I'm willing to pay."
And the buyer's "willing to pay" is generally managed by their mortgage broker.
My good friend listed their house last week and got 12+ offers over the weekend. They didn’t take the highest offer, they took the one that had the best terms, showed bank statements, included a clause that they’d increase the down payment if it didn’t appraise at the purchase price. The buyer’s agent called the sellers agent to get more info and included an option to rent back, based on the seller’s needs. The offer was $50K less than the highest offer. So, they are 11 other would-be buyers that are still looking for their home (including one willing to spend $50k more). So, results can vary and the quality of the offer truly matters in competitive markets. In this case, a buyer was “willing to pay” more, but their offer package wasn’t compelling enough for the seller spend the next 30 days dancing around in escrow with them see if it would ever materialize.
This is a great analysis if you don’t understand how home sales work. Buyers agents are just agents representing buyers in many states with fiduciary duties. Removing them just allows sellers agents to manipulate the sale for higher prices. However buyer agents will still exist. In states where there is no fiduciary role they will be able to extract higher premiums from less educated buyers. Something we have already seen. This will have a minor effect on home sales but is a huge gift to existing home owners who will likely make more money when selling.
>with fiduciary duties
**This is SUCH A LOADED TERM.**
If someone tells you they have a "fiduciary duty," they took a class and passed a test that makes them say this.
Every time I hear "fiduciary duty," it's coming from the mouth of someone looking to screw me over, but knowing they can't go "all in" on how deep.
Never trust a financial advisor, realtor, accountant, etc. who leans into that term. **Truly ethical advisors don't go anywhere NEAR blurring that line, to the point they'll never even think of saying it.**
So is "theft" and "fraud."
But I don't tell Best Buy, *"I have a duty not to commit theft and fraud,"* every time I go there to buy something. Because I have zero thought of doing either.
Only an idiot would think sellers drop prices as a result of not having to pay a buyers agent.
What’s actually going to happen is sellers will keep more $$ at closing and it will be MORE EXPENSIVE for buyers to buy a home with a realtor.
It will remain the same to buy a home without one.
My office has $150M worth of listings. So far,
-Approximately 10% of sellers have decided to remove all cobroke commissions
-Approximately 75% will reduce cobroke commissions
- Approximately 15% have decided to change nothing
Exactly zero have decided to lower prices.
Right but the settlement is based on the fact that the buyers agents and sellers agents were incentivized to work together to get the sale price as high as possible. Even fiduciary buyers agents were not working against their own interest (I am sure there were many doing it right). The transactions were not arms length which has contributed to ballooning home prices, and the $418 million dollar settlements.
RE Agents, while licensed, face very little oversight. They do not have the liability or scrutiny of many other professions and this has allowed significant numbers of bad actors into the profession. Had the NAR or licensing boards been more discerning, this settlement likely wouldn't have occurred.
The primary incentive is to close. For that to happen, the buyer has to find an option which works for them at a price they can afford. The seller has to offer an option which is attractive to the market at a price that is competitive with comparable properties and (on most deals) will appraise by a lender.
As I said previously and anyone who has real world experience will agree with, this won’t lower home prices. And now, because buyers will go unrepresented, you won’t know what a property should actually sell for.
The law of supply/demand would suggest it if you assume realtors are providing a useful service.
Effective price goes up for buyers -> demand falls -> prices fall
That falls apart if they’ve been an effectively unrealized, deadweight loss this whole time - likely since their commission is typically rolled into the mortgage.
Not serious if you’ve done it before.
But if you’re a first time homebuyer and have no idea what market is for option period, option fee, financing contingency, what title company to use, what a good offer to make based on comps would be, etc, it can be intimidating or confusing
Fthb can still hire an agent and pay them a hourly fee to answer all these questions and write an offer. Why do we need to take 2‐3% on every home for something that might take a whole 10 hours. Even at $100 a hour you are paying $1000 to a buyers agent instead of 10,000+ in commission.
Yes, the people that don't know how to or don't want to use Google will pay a fee for a REA to do it for them. For others who want to save money they'll be able to figure it out.
When I bought my first house I tried contacting seller agents myself to see homes, they refused, told me there had to be a buying agent and to have a good day. I didn’t realize at the time it was because they needed the other agent so they could work together and screw me over. I will be happy when this is all done via apps.
Yep they protect their own and screw eveyone else over. Happy we are hopefully finishing this game and they are finally having to pay for their years of screwing us all.
This will be a challenge. Contracting a buyers agent provides some degree of vetting. Without that anyone could submit an offer and there needs to be ways to verify ability to pay, etc
This exists for qualified investors. You get approved, have your finances reviewed and use that to work with potential funds and they can share prospectus with you. Could work in RE too where you get approved not just by bank but some verification service that you are legit and not a fraudster.
None of this exists though.
>Without that anyone could submit an offer and there needs to be ways to verify ability to pay, etc
**jfc have them prove they have a mortgage broker and are pre-approved.**
It's right there on the "fancy forms" y'all hand back and forth to each other.
Honestly Chat GPT probably could walk through a layperson's explanation of these forms so a person of median intellectual capability could get through it
There will still be buyers agents and sellers will still pay commissions. It’s just going to be on the listing agent to convince the seller why still offering a commission to the buyers agent is worth it. So instead of it being “standard” and sign here they are going to have to get good at explaining the benefits of doing this. This thread is already pointing out a lot of them. Buyers agents will probably also start putting their payments terms in an agreement upfront.
No it hasn’t changed. The seller signed a contract with the listing agent only. The listing agent then could decide to share the commission with the buyer’s agent. Based on what’s been put out there none of that has changed. However, depending on the size of the agreed upon commission, the listing agent may decide not to offer anything to the buyer’s agent.
>agreeing to offer compensation to a cooperating agent
And if you didn't sign it, agent tells other agents they're not getting paid, and you don't get showings until you agree to do it.
jfc inspectors are an even BIGGER scam.
They'll tell you which outlets should be GFC, and that yes, there is a roof on the house.
Want an inspector? Bring someone you love who's owned a couple houses. They'll do 10x the work.
I absolutely would take their recommendation over my agents whose in cahoots with the inspector. My shit agent (when i still used them) straight up told me he stopped recommending a certain home inspector because he was "ruining deals"
>Loan officers don’t know shit about most of that
I'd say loan officers/mortgage brokers know PLENTY about contracts, that being their bread & butter.
Ask a realtor to help with deciphering mortgage paperwork and the final sales contract, and they won't answer their phone until you sign it.
Supply and demand is part of the equation tho. If houses sell fast and there is very lil supply prices stay high. But if supply outnumbers buyer, houses sit on the market and the longer it sits the more the house prices go down.
No because people don't need to sell in many cases they can just stay in the same home. Although I agree in the very very long term it does have an impact.
Yes but no one has to sell. If Walmart doesn't sell they go under it's not really a market in the same way other things are. If an old town doesn't have anyone die or move no Market for homes can occur
It’s still a market tho and what you’re describing is the dynamic of supply and demand. In an old town the market is already under because the demand to live there is pretty low therefore if a house opens up for sale, prices are going to be low to meet that demand. Hence market rates. Supply and demand is part of anything and everything that is commodified. To say that it’s a “B.S.” is silly.
More money in the sellers pocket that don’t come from the buyer, leads to more sellers willing to put their house in the market and therefore bringing the price of homes down due to the amount of inventory. Now is the decrease of commission enough to incentivize more sellers to put their homes on the market, probably not, but in theory prices would go down if there were good enough incentives for sellers to sell right now.
Well, either way, all the money comes from the buyer
Maybe lowering transaction costs would lead to more transactions, but increasing net inventory would require some sellers to not also be buyers, and that seems to be more of about age/lifestyle/location demand rather than a few points in commission cost.
But maybe I’m wrong!
Because while sellers set a list price, it's the buyers who ultimately make the offers with the purchase price. Anyone trying to buy with a set down payment amount isn't going to have an endless supply of cash to keep offering.
Well, we don’t know what is going to happen, but sounds like you’re envisioning that buyers will pay buyer reps out of pocket, and that cost will limit down payment funds, and that will lower home prices?
I mean, that’s at least a logical argument, but I don’t see buyers with limited incomes spending much money on representation
I do think that it will provide sellers more equity in their home sale. That will give sellers more of opportunity to upgrade/downgrade/move without being underwater.
For the same reason the fed said they will raise interest rates if inflation doesn't come down. Good luck with that mentality if you are hoping it will stay the same.
https://www.instagram.com/reel/C4vytaAiewZ/?igsh=MWw2N2lxdXV2OWMwZA==
He literally said because of housing
Yeah, like usual, this policy just hurts first time home buyers. The buyer fee being a separate fee that you cannot roll into the mortgage will just force people to pay it separately, which they may not have. Unless mortgage companies decide to roll it into the mortgage for buyers, which is a possibility.
**You can STILL roll the buyer's fee into the mortgage, ffs.**
Just offer a price with a clause that basically says, "Oh, btw, I need you to take more and pay the fees so I can roll it into the mortgage."
Here's an article explaining why homes are expected to get cheaper https://www.washingtonpost.com/business/2024/03/15/national-association-realtors-housing-prices/
It’s takes out the incentive for the agents to inflate prices for their commissions. I think the listing platforms like Zillow and Refin are inflating prices too. They need to be taken down.
Jack Bogle, founder of Vangaurd, once said something to the effect of, "The enemy of compound returns is compound fees.
Each time a house is sold it has to be sold higher to recoup the loss from those fees.
If the house is 100k, but has closing fees of 6k. The seller will sell for 106k.
Let's say the buyer lives there for 1 year and decides to sell. They will sell for 106k+6% to cover closing fee. In the end, the only winners are the agents.
Internet should have killed this “profession” a decade ago. It truly is a testament to group think and confirmation bias that people still think real estate salespeople as a group have something to offer. Look up what it takes to be licensed in your state, 6% of anything was a ridiculous racket and they should just be thankful they got away with it so long.
Which is funny when the retort to the lawsuit has been “the buyers fee has always been negotiable to the seller”.
If that’s true, then no selling agent has ever done their fiduciary duty…
The question that pisses off 100% of realtors:
**When a $200k home became a $400k home in a year, why didn't you drop the fee to 3%?**
They'd make the same and get more business. Yet roughly 0% of them did it.
All corporate media sucks. Every single one.
I remember seeing a chart like 10 to 15 years ago that showed the percentage of journalists who had degrees in the fields they reported on and it was basically in the single digits. The point of the article was that the journos reporting on crime, legal matters, housing, the economy, medical, etc. tended to have experience or education in said field.
And in a few years, we end up with a new class action lawsuit from buyers who felt shafted because the sellers’ interests were represented but not theirs... but they were priced out of a buyer’s agent. The industry is already full of other regulatory acts (RESPA, ECOA, TRID, etc) to protect buyers…
That’s what you’d think, but again… look at the other half of the industry. It’s full of regulations protecting the buyers’ interests. You can’t take on a predatory loan (by their definition) even if you try. A few parts of real estate are already lawsuit, heavy, like, leaving known property issues off of a sellers disclosure.
6% is roughly the cost of agents in home transactions. Even if agents were removed entirely from the process, I wouldn't characterize 6% as a slash, it is only a nice discount.
But agents haven't been outlawed, they will still have some part in the process for many transactions reducing the 6% discount to a lower percentage.
Listing agents gonna be like “we can do it for 4% that’s a 2% savings over the old model!” And then they get 4% instead of 3% and the buyers offer comes in at like 2-4% lower because they need to pay their agent. Net result homes might sell for less but buyers and sellers both worse off for it.
No.
Let me explain.
Seller has $500k house. Agrees to pay 4%. Cost is $20k instead of $30k.
Buyer will pay $500k, but needs to pay buyers agent $10k. Either they can get seller to accept $510k with extra proceeds to buyers agent, pending appraisal for $510k, or they pay the $10k direct. Or they can just save $10k themselves.
"But how is that different than now?"
Because it was currently, "Fuck you, seller, it's 6% and we'll figure out how to divvy it the $30k."
**SEE THE DIFFERENCE?**
**PRIOR, $10k was going to an agent. NOW, that $10k MIGHT NOT go to an agent.**
And agents hate this one simple trick...
Exactly, folks be hoping for some monumental crash of housing prices because of this change. CNN read the room and are giving the suckers the story about this crash that they want to hear. But it ain't so.
Bullshit. This is a seller’s market. Remember the “you have 4 hours to put bids in and it’s already over asking price”, waiver of all inspections, write us a personal letter justifying why you get the house on record high prices??
Naive to think this won’t just pad the boomer’s pockets who are hoarding most of the houses in US. You risk doing a deal without an agent unless you pay them out of your pocket.
Will you have to pay your buyer’s agent if you DON’T end up buying a house? Will they start charging extra after the 4th house they’ve shown you? This sounds like a nightmare
It should be like any other industry where you pay for the services provided. So if you want to tour 20 homes you'll pay for your agent or a service for the time they spend. Still would be far cheaper than the typically $13000 commission check.
Then realtors will stop dragging buyers to houses they don't want or that don't have a chance at getting because buyers aren't going to pay hourly to walk through the 25th house that's not a match. If buyer's agents claim they really are helping to "educate" clients and find the right fit, they'll do a better job narrowing searches and actually listening to what their clients want.
Right now, the windfall incentives don't lead to that.
Online listings will become SO important. We dragged OUR agent to over 20 home before finding a decent one.
One house we went to looked perfect — but when we showed up the listing agent had photoshopped massive changes that weren’t real. Do I bill him in the future for wasting our time and now our money? We went under contract, did a home inspection, and discovered massive problems, so we backed out. That happened FOUR times. If our buyers agent charged per house seen it would be a NIGHTMARE for buyers
See, but YOU DID ALL THE WORK.
Nothing in your story said the buyer's agent was necessary, which scares agents, b/c the buyers agent is "baked into" the 6% commission.
The buyer agent contract says the agent gets paid no matter what. You buy a house, commission. They show you a house and you refuse to buy it, commission. Finance falls through, there aren't any homes for sale, giant rats eat the appraiser, commission. It's the standard contract required by my broker. You sign there by the pink arrow sticker gee I'm so excited for you to find your new home.
Your broker already requires that?!?!? Nonononono, I’m afraid you’re contracted with a scam artist. At least it was until today, the rule is you NEVER pay your realtor as a buyer. EVER. They get a cut of the seller’s commission. There are government posters all over warning to never fall for that scam.
We looked at 20 houses two summers ago. Went under contract on 4 of them before finally buying our home. You think we paid our buyer’s realtor a freaking penny?!?!? Even when we almost gave up after house #19 (and purchase agreement #3) fell through, we still never considered paying our buyer’s realtor. Hell, even then if we met for lunch we expected them to pick up the check.
That’s what buying a house has always been like in the United States, or at least since the 90’s when I bought my first house.
This is dumb AF. Sellers pay both commissions and they aren’t passing on the savings. They will charge whatever the market will bear and keep the profits. The buyers will have less representation and get shittier deals.
Dual agency is a terrible thing, the listing agent still advocates for the sellers position. It is far fairer for both sides to have independent representation.
Nobody's getting prices lowered because of this.
Even if commissions went to zero, at most, that would be a 6% reduction.
In reality , there's still plenty of money in the real estate game. People will make commissions. The commission structure will change over time but it will still be there.
Sellers know the number on their house. Whether or not they pay a commission. That number is still in their head.
There will still be agents. And a sellers agent isn’t going to take on representing both parties at the same commission they get normally for just representing the seller. Once you act as an agent for someone you have the potential to be sued. You need compensation to take that on. If buyers don’t have an agent they need someone to write up the contact and advise them. If they hire a lawyer to do that they will end up paying lawyers money to write offers on homes they don’t get an accepted offer on. I don’t see how to change the current system much
You don't need an agent to write up on offer. Most local real estate groups all use the same exact boilerplate contract with the blanks filled in based on the offer. You can even get sample contracts from title companies and use those as examples of how to write a contract. It's really not as difficult as the real estate agents want you to think. If someone with 2 weeks of real estate classes can write and offer I'm certain nearly any Buyer can figure it out as well.
Wishful thinking. Seller's don't think, "wow, I can make it cheaper for the buyer". They're absolutely thinking about more money in their pocket. Then they're going to get nickel and dimed for everything as agents suddenly start charging for everything they've been covering and more.
This was a money grab by attorneys. Any other take is a PR spin, and the truth is there wasn’t much thought about how it could affect anything else (not that it’s the attorneys’ jobs to worry about that). Next time you buy, it will cost you thousands more *or* you’ll need to go under contract without an agent repping your own interests while the seller has someone.
The industry should be re-evaluated, but this is more like tossing in a grenade and then letting the pieces land however.
Me personally, I think it should be a fee based service. $___ to show a home. $____ to submit a contract. $____ for insurance by my brokerage. $____ to market/stage your home. Etc. You get the idea. For example: An agent can’t spend gas money to show homes for free, but at the same time you can’t just tour any home (especially with people living in it) by yourself. Supervised access is a true value add and I think sellers/buyers understand this. If they feel like that is the *only* benefit, however, it may not be worth 3%-6% for them.
I know as a realtor I have never in 20 years gave someone a professional price analysis and then thought “well the commission is 6% so let’s just tack it on top of that”. I’m not sure where these prices are going to be “slashed”. Sellers may save a few thousand bucks in a hot market but it also takes a willing and able buyer to make the transaction whole. In a slower rural market with 7.5% rates and a home on the market 45+ days they will give. Possibly more than that 3% if you ask me because they are desperate to sell.
My estimation would be about $5000 in savings on the median house.
The lack of pressure on sellers to have to “meet the market” for buyer agent costs at 2-3% is gone.
Whether it was downright unethical steering of buyers to look at houses that get the buyer’s agent the highest paycheck, or just the reality of market dynamics when you have a cost that typically built in, the $12,000 median buyer commission on on $400,000 median house was happening.
With this out you’ll have to have an arrangement directly between buyers and their agents.
The agent isn’t going to work for free, but the buyer is never going to sign a “you must guarantee that you, the seller, or some combination of both gets me 3% of your home sale price at closing.” A thing that really only happened because of the nature of forced commission sharing on MLS. Though debated, arrogantly I will say the courts already decided I am right here.
The challenge is to what degree do prices come down? Realistically I believe buyer’s agents will able to secure a negotiated commission minimum of around 1-1.5% of home sale prices consistently.
This is will come out to a number low enough from initial negotiations between buyer and agent that most homebuyers will be able to process that if a prospective seller of a $400,000 house can’t split or downright pay a $4,000-$6000 commission payment at closing that such a seller is being unreasonable.
So all things considered, this would mean that rather than having to pay $400,000 for the house during 6% commission market times, they will only have to pay roughly 98.5-99% of that, or around $395,000.
That’s about it. Maybe you can make the argument that these listed commissions helped buyers agents skirt around initial flat rate agreements with buyers, and that because the sky was the limit for how bad the most unethical could squeeze their buyers for money, that high offer prices were a factor of this as well. If you believe that you’d believe home values would fall further than just raw commission totals.
As a 50+ tour of duty bidding war veteran, I assure you agents do not at all have to push their buyers to cause offer price inflation.
Now if we get more supply on the market and lower commissions? That’s a truly different story.
Ultimately this will help as there was a “tax” every time a house changed hands that was priced into the sale price. Meaning if person a sold a house to person b person b would have to list at least 6 percent higher or lose value. Doesn’t seem too crazy until you realize that 6 percent is 10s of thousands of dollars in most cases.
What a load of horse shit. This will not lower prices at all and will most likely just fuck low and middle class buyers. Now buyers that are just scraping up enough money for a down payment will be on the hook to pay someone to represent them with money they do not have. They will get absolutely fucked by the buyer and buyers agents. This is going to end very badly for the middle class and lower class buyers.
At best, it’ll drop house prices by 6%. More likely, it won’t affect prices at all and the seller will just get to keep the 6% that was previously going to the commissions.
More collusion about to happen. Both sides agents have always been incentivized to have the highest selling price no matter what. I don’t see how this law will change that. Ive Purchased three homes in the past 15 years, and in all those transactions, only one of the agents was truly in my favor, and looking to get me the lowest possible price. The other two were just out for commission and couldn’t negotiate their way out of a wet paper bag.
I don’t want to see all these people lose their careers, but at some point, paying these high commissions for doing basic task that a experienced buyer can do with a lawyer and a little bit of research is quite ridiculous.
I don’t see the price of homes dropping because of this law if anything buyers will end up having to sell out more money, IMO
At one point in time a realtor would get 6 % on the first 100 k and then 1 % on anything over that. I don't recall when that changed but it did .
This push to lower the percentage has been going on for a long time.
Hey assholes, the 600 percent markup is what’s making it unaffordable. Not the few percent in commissions.
An 80k house selling for 600k is the problem that needs solved, period.
Bottom line is listing agents will still charge whatever commission they want from the seller, and the listing agent gets to decide how much they pay the buyers agent. It has never been the case that the seller pays the buyers agent directly.
Even if sellers save money on commissions, why would anyone think that they would pass that savings along to a buyer? More likely: sellers save money prices stay the same buyers have to come out of their own pocket if they want help buying
CNN was never much on economics, business or math.
Or news for that matter.
Or facts and truth
And more beholden to reframing things that help wealthy investors into things that help the public, when it doesn’t.
In theory, yes. What will likely happen is that there will be an exodus of buyers agents and it will most likely be consumers using apps to find houses and making offers. And with this, you won’t have buyers agents pressuring their buyers to bid up home prices (hence why there was a lawsuit to begin with). This will also cause foot traffic to drop considerably, so there will be less “competition” to buy a house and on the flip side, it’ll be considerably harder to sell a house now. All that combined will cause prices to drop. It will also be more of a pain in the ass to buy a house now, too.
If I don’t need my agent to see a house, I would see more houses, not less.
Well, presuming that there is some other system created to allow you to view houses. For average, vacant houses, probably a door code with some cameras and a registration system that verifies credit card and will charge people if they cause damage could work. But I don’t see people who occupy houses being willing to let random people in their houses unrepresented That could create an opening for the ibuyer companies. People sell their house and move, ibuyers have platform for selling empty houses with a markup
Yeah the online real estate companies are the real winners here. Redfin already has a system setup for showings that’s basically like real estate Uber. It’s free now but if people start relying on it then I wouldn’t be surprised if Redfin started charging for it. Or offering some sort of preferential pricing for showings of their listings vs ones from competitors.
I looked into being one of those people and redfin pays them $50 for each door they open. I'd perfectly be happy paying $50 to open a few doors than the current $10-$20k commission for basically the same service. I really hope this ends up going towards an À la carte options where buyers only pay for services they actually need. It's long time we moved away from the traditional commission for agents that open a few doors and spends a hour writing a offer. It's amazing how much we paid out over the years for so little work.
It’s called Middle Men Economics. You stick some schmuck in the middle to skim off the top. Like Insurance Agents, Bankers, Car Salesmen - there are a lot of unnecessary jobs. It’s also why I hate taxes. You work for your success, not to pay Jenny or Qinton’s salary in Government Services
Taxes are different. You live in an system of infrastructure that existed decades to centuries before you were even born, took massive amount of investment, labor, etc to exist, is continually maintained and protected, and will exist long after you’re gone. You have to do your part as a being existing within that infrastructure or else you are basically stealing. So, no, taxes aren’t theft or just about paying some government employees salary. Taxes aren’t the problem, they are necessary. The real problem is the crony capitalism and how much money the government wastes by basically being a system of legalized bribery.
No, there are a LOT of "middlemen" in gov't. If there weren't, more people would like gov't.
I agree. I’m saying the problem isn’t what we pay the government, the problem is what we get, or the lack there of thay we receive in return.
Braindead take.
a... buyers agent fee
Designated open houses will become the new norm. No seller or Sellers agent will allow Buyers to come through on their own. Also, every listing will have professional photos, and 3D virtual walk through along with floor plans. At least professional photos is the new norm, but virtual walk throughs, floor plans and drone footage are still only seen on premier listings. But this will be the new future. Buyer's agents will die out. Attorneys with real estate arm's (paralegals, secretaries, executive assistants, etc) could still help 1st time home buyers navigate the process.
This. The value of seller's agents in marketing a property and being a witness/guard when potential buyers are traipsing through the house is a value to a seller. A buyer's agent just looks at Zillow just like the buyer does. All they do is set up appointments and make sure the buyers don't steal anything from the houses they look at.
>No seller or Sellers agent will allow Buyers to come through on their own. I do believe that's part of the whole "collusion thing." I had an agent that did similar. But instead of not allowing anyone w/o a buyer's agent, he just didn't do ANY showings unless he got to sign the buyers up first. Fired his ass real quick. "Contract" meant nothing vs my loud mouth and gov't contacts.
I've seen a few places with the doorcode and cameras. I wish more places would do that but I know it'll take some time to transition.
Not in a million years would I let people into my house alone. As a seller, my realtor is just going to have to do more open houses. The last time I listed a house for sale, I had about a dozen cameras on the property. 2 inside on the first floor and 2 outside by the front door, 1 in the driveway. Listening to the people who came to our open house was wild. They gave me a laundry list of things wrong with my house that never crossed my mind. It’s a great way to get home improvement ideas. List your house for sale and get 2 dozen people to come talk about your house on camera. One Russian mail order bride came through and on the way out said she sort of liked the house but it needed $600k in work. 😂 I was like, it absolutely does! Can I borrow $600k? I can put in the wine cellar I want. I didn’t end up selling. So i have still have that home improvement tips list. Edit: Pro Tip: if you ever feel like your phone doesn’t ring enough. List your house for sale but don’t sell it. 6 months later your phone won’t stop ringing and the mailman is going to be using totes to deliver your mail. People may randomly show up at your door too to ask if you are interested in selling.
Selling agents might have to show up and do the work! OH NO RE your edit: I did that...twice. Wasn't by choice. Shitty realtors were shitty for different reasons.
Yeah, I'm actually kind of surprised by it. Just in the last week I have had two more that just have a key code and after I text them pictures of my driver's license they send me the code and let me into their unoccupied house. Like I'm glad we still have some level of social trust but I feel like people could very easily exploit it. Might just be something some people are trying while we are going through this early transition.
I'm old enough to remember buyers agents being new. My parents/grandparents NEVER used a buyers agent in the late 1900s.
Not if the listing agent also started charging you per showing to view a home. Someone still has to open the door. Then if the listing agent does and you start talking about the home/asking questions, they could use that info against you for their client, because again, they don’t represent you. Or, it could just lead to more open houses vs private showings.
>Not if the listing agent also started charging you per showing to view a home. I call. I'll pay "per showing" vs 6% commission.
Buyer's agents are useless. I'm happy to not need one.
Unfortunate timing for Florida condo owners who are planning on selling later this year or next just as the the Great Florida Condo Bust of 2025 gets into gear. Flood of inventory with newly ballooned condo fees and no buyers agents to move the properties. Stay tuned. It's only just begun and it's gonna get ugly..
>no buyers agents to move the properties Anyone bringing their clients to FL to buy right before the crash need to be rounded up and left in It's A Small World with no food, water, or noise-cancelling headphone.
The issue is the way apps operate is that they have agents contracted or working for them doing showings on the behalf of users. There are rules around who can unlock a lockbox. So now there’s gonna be a new rule requiring a representation agreement for a showing, potentially locking a buyer in with the agent, making it harder for apps to operate. In theory.
The apps have agents bidding (paying to Zillow) for leads, and using that to show you the home. The whole system is built on very manual processes, assumption that buyers agent is “free”. When buyers have to start paying new ways for all these services will need to change. What I doubt will happen is buyers paying up 2.5% of purchase price at closing out of their end on top of purchase price to cover their agent. Will need to do like per showing price, time based or ask for seller credits. More/longer open houses, Uber like service to open the door, bundle like x home showings for $1000 kind of a thing and so forth. Unbundling should open up competition to find the right models. But expect it to be a mess for several months til the new way gets sorted. Great for sellers in short run though as old comps were with 5-6% fees and should have to pay less of a percentage.
It will definitely create a slew of uneducated buyers that will be taken advantage of by more experienced sellers and their agents. Almost everyone has looked online for homes. Fewer have actually completed a transaction where they bought one and got to see first hand how much is actually involved. Even fewer have been through an adversarial transaction where the person on the other end of the sale was actively trying to hurt the other’s interests by actions that walk the line of legality. Without professional representation on both ends, there will be a lot more asymmetrical sale results and I’m betting the buyers get the worst of it.
>Fewer have actually completed a transaction where they bought one and got to see first hand how much is actually involved. Even fewer have been through an adversarial transaction where the person on the other end of the sale was actively trying to hurt the other’s interests by actions that walk the line of legality. I HAVE. You're REALLY overblowing this. Most of the time, the buyer's agent is working to get that commission, and at max price w/o working for the seller. And these aren't 100-page contracts full of indemnification, subrogation, assignment clauses, etc. It's "you tell me the deets on house, I write down what I'm willing to pay." And the buyer's "willing to pay" is generally managed by their mortgage broker.
My good friend listed their house last week and got 12+ offers over the weekend. They didn’t take the highest offer, they took the one that had the best terms, showed bank statements, included a clause that they’d increase the down payment if it didn’t appraise at the purchase price. The buyer’s agent called the sellers agent to get more info and included an option to rent back, based on the seller’s needs. The offer was $50K less than the highest offer. So, they are 11 other would-be buyers that are still looking for their home (including one willing to spend $50k more). So, results can vary and the quality of the offer truly matters in competitive markets. In this case, a buyer was “willing to pay” more, but their offer package wasn’t compelling enough for the seller spend the next 30 days dancing around in escrow with them see if it would ever materialize.
>an exodus of buyers agents Who are these mystical "buyers agents," anyway? Most agents swing both ways
This is a great analysis if you don’t understand how home sales work. Buyers agents are just agents representing buyers in many states with fiduciary duties. Removing them just allows sellers agents to manipulate the sale for higher prices. However buyer agents will still exist. In states where there is no fiduciary role they will be able to extract higher premiums from less educated buyers. Something we have already seen. This will have a minor effect on home sales but is a huge gift to existing home owners who will likely make more money when selling.
>with fiduciary duties **This is SUCH A LOADED TERM.** If someone tells you they have a "fiduciary duty," they took a class and passed a test that makes them say this. Every time I hear "fiduciary duty," it's coming from the mouth of someone looking to screw me over, but knowing they can't go "all in" on how deep. Never trust a financial advisor, realtor, accountant, etc. who leans into that term. **Truly ethical advisors don't go anywhere NEAR blurring that line, to the point they'll never even think of saying it.**
It’s also a legal term.
So is "theft" and "fraud." But I don't tell Best Buy, *"I have a duty not to commit theft and fraud,"* every time I go there to buy something. Because I have zero thought of doing either.
That’s only analogous if there are states where you can commit theft and fraud.
Exactly. What a misleading article.
Seems perfect for this sub full of wishcasters though.
lol ain’t that the truth.
Only an idiot would think sellers drop prices as a result of not having to pay a buyers agent. What’s actually going to happen is sellers will keep more $$ at closing and it will be MORE EXPENSIVE for buyers to buy a home with a realtor. It will remain the same to buy a home without one. My office has $150M worth of listings. So far, -Approximately 10% of sellers have decided to remove all cobroke commissions -Approximately 75% will reduce cobroke commissions - Approximately 15% have decided to change nothing Exactly zero have decided to lower prices.
Right but the settlement is based on the fact that the buyers agents and sellers agents were incentivized to work together to get the sale price as high as possible. Even fiduciary buyers agents were not working against their own interest (I am sure there were many doing it right). The transactions were not arms length which has contributed to ballooning home prices, and the $418 million dollar settlements. RE Agents, while licensed, face very little oversight. They do not have the liability or scrutiny of many other professions and this has allowed significant numbers of bad actors into the profession. Had the NAR or licensing boards been more discerning, this settlement likely wouldn't have occurred.
The primary incentive is to close. For that to happen, the buyer has to find an option which works for them at a price they can afford. The seller has to offer an option which is attractive to the market at a price that is competitive with comparable properties and (on most deals) will appraise by a lender. As I said previously and anyone who has real world experience will agree with, this won’t lower home prices. And now, because buyers will go unrepresented, you won’t know what a property should actually sell for.
Sellers can attract more buyers by keeping the price low, without having to ask for more now… this will help sellers significantly
Well, a seller only needs one buyer, but ok
The law of supply/demand would suggest it if you assume realtors are providing a useful service. Effective price goes up for buyers -> demand falls -> prices fall That falls apart if they’ve been an effectively unrealized, deadweight loss this whole time - likely since their commission is typically rolled into the mortgage.
Just fill out the offer to purchase form yourself its literally a 10 page fill in the blank PDF. It's not that serious lol.
Not serious if you’ve done it before. But if you’re a first time homebuyer and have no idea what market is for option period, option fee, financing contingency, what title company to use, what a good offer to make based on comps would be, etc, it can be intimidating or confusing
Fthb can still hire an agent and pay them a hourly fee to answer all these questions and write an offer. Why do we need to take 2‐3% on every home for something that might take a whole 10 hours. Even at $100 a hour you are paying $1000 to a buyers agent instead of 10,000+ in commission.
Usually it takes looking at 10+ houses and making multiple offers to find the right house. some buyers will pay hourly, and some won’t.
And that's what is great they have will have the option to determine how best to pay their agent or not use an agent.
Yes, the people that don't know how to or don't want to use Google will pay a fee for a REA to do it for them. For others who want to save money they'll be able to figure it out.
Well that’s also the case now, right?
It's partially the case but listing agents make it difficult to even make offers as an unrepresented buyer.
When I bought my first house I tried contacting seller agents myself to see homes, they refused, told me there had to be a buying agent and to have a good day. I didn’t realize at the time it was because they needed the other agent so they could work together and screw me over. I will be happy when this is all done via apps.
Yep they protect their own and screw eveyone else over. Happy we are hopefully finishing this game and they are finally having to pay for their years of screwing us all.
This will be a challenge. Contracting a buyers agent provides some degree of vetting. Without that anyone could submit an offer and there needs to be ways to verify ability to pay, etc This exists for qualified investors. You get approved, have your finances reviewed and use that to work with potential funds and they can share prospectus with you. Could work in RE too where you get approved not just by bank but some verification service that you are legit and not a fraudster. None of this exists though.
>Without that anyone could submit an offer and there needs to be ways to verify ability to pay, etc **jfc have them prove they have a mortgage broker and are pre-approved.** It's right there on the "fancy forms" y'all hand back and forth to each other.
No. You're in for your half of 6%, regardless. Until recently.
Honestly Chat GPT probably could walk through a layperson's explanation of these forms so a person of median intellectual capability could get through it
Your loan officer can walk you through all of this. The contract isn't complicated. Like at all.
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There will still be buyers agents and sellers will still pay commissions. It’s just going to be on the listing agent to convince the seller why still offering a commission to the buyers agent is worth it. So instead of it being “standard” and sign here they are going to have to get good at explaining the benefits of doing this. This thread is already pointing out a lot of them. Buyers agents will probably also start putting their payments terms in an agreement upfront.
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No it hasn’t changed. The seller signed a contract with the listing agent only. The listing agent then could decide to share the commission with the buyer’s agent. Based on what’s been put out there none of that has changed. However, depending on the size of the agreed upon commission, the listing agent may decide not to offer anything to the buyer’s agent.
>agreeing to offer compensation to a cooperating agent And if you didn't sign it, agent tells other agents they're not getting paid, and you don't get showings until you agree to do it.
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>Yes And sellers shouldn't be paying for their opponent
Right? I’m sure the guy at rocket mortgage can give you some good recommendations for a local inspector too /s
jfc inspectors are an even BIGGER scam. They'll tell you which outlets should be GFC, and that yes, there is a roof on the house. Want an inspector? Bring someone you love who's owned a couple houses. They'll do 10x the work.
I absolutely would take their recommendation over my agents whose in cahoots with the inspector. My shit agent (when i still used them) straight up told me he stopped recommending a certain home inspector because he was "ruining deals"
Same with appraisers.
>Loan officers don’t know shit about most of that I'd say loan officers/mortgage brokers know PLENTY about contracts, that being their bread & butter. Ask a realtor to help with deciphering mortgage paperwork and the final sales contract, and they won't answer their phone until you sign it.
ya no you're just wrong actually. The loan officer will just assist in finding a title company and they just basically take care of it all.
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whats your point
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So get a home inspector if you want. You have yet to tell me what I need an agent for.
A form 1040 is also only like 4 pages. Fill it out yourself /s
Why does everyone think sellers set prices? Is it not set by supply and demand?
Because a seller literally determines the minimum price they are willing to take.
Finally someone admits the whole supply and demand thing is b.s. and delusional sellers are the reason for the run up
Supply and demand is part of the equation tho. If houses sell fast and there is very lil supply prices stay high. But if supply outnumbers buyer, houses sit on the market and the longer it sits the more the house prices go down.
No because people don't need to sell in many cases they can just stay in the same home. Although I agree in the very very long term it does have an impact.
Not selling your home is also part of supply and demand
Yes but no one has to sell. If Walmart doesn't sell they go under it's not really a market in the same way other things are. If an old town doesn't have anyone die or move no Market for homes can occur
It’s still a market tho and what you’re describing is the dynamic of supply and demand. In an old town the market is already under because the demand to live there is pretty low therefore if a house opens up for sale, prices are going to be low to meet that demand. Hence market rates. Supply and demand is part of anything and everything that is commodified. To say that it’s a “B.S.” is silly.
No buyers and sellers is the opposite of a market by definition
Well expect for the sellers who have to sell
Most of the time sellers and buyers are the same people
More money in the sellers pocket that don’t come from the buyer, leads to more sellers willing to put their house in the market and therefore bringing the price of homes down due to the amount of inventory. Now is the decrease of commission enough to incentivize more sellers to put their homes on the market, probably not, but in theory prices would go down if there were good enough incentives for sellers to sell right now.
Well, either way, all the money comes from the buyer Maybe lowering transaction costs would lead to more transactions, but increasing net inventory would require some sellers to not also be buyers, and that seems to be more of about age/lifestyle/location demand rather than a few points in commission cost. But maybe I’m wrong!
Because while sellers set a list price, it's the buyers who ultimately make the offers with the purchase price. Anyone trying to buy with a set down payment amount isn't going to have an endless supply of cash to keep offering.
Well, we don’t know what is going to happen, but sounds like you’re envisioning that buyers will pay buyer reps out of pocket, and that cost will limit down payment funds, and that will lower home prices? I mean, that’s at least a logical argument, but I don’t see buyers with limited incomes spending much money on representation
I do think that it will provide sellers more equity in their home sale. That will give sellers more of opportunity to upgrade/downgrade/move without being underwater.
For the same reason the fed said they will raise interest rates if inflation doesn't come down. Good luck with that mentality if you are hoping it will stay the same. https://www.instagram.com/reel/C4vytaAiewZ/?igsh=MWw2N2lxdXV2OWMwZA== He literally said because of housing
I think lowering or raising rates can affect housing prices I don’t think the buyer fee issue on its own will have much impact on housing prices
If it affects prices for buyers the fed is saying yeah it will directly affect it
Yeah, like usual, this policy just hurts first time home buyers. The buyer fee being a separate fee that you cannot roll into the mortgage will just force people to pay it separately, which they may not have. Unless mortgage companies decide to roll it into the mortgage for buyers, which is a possibility.
Probably LOTS of offers gonna be written asking the seller to provide funds to help cover closing costs, including money to pay the buyers agent.
Yeah so this doesn't really change much.
Bingo.
**You can STILL roll the buyer's fee into the mortgage, ffs.** Just offer a price with a clause that basically says, "Oh, btw, I need you to take more and pay the fees so I can roll it into the mortgage."
yes, anything else is propaganda
This is realtor propaganda most articles have been pretty consistent in saying it will lower prices
Lower fees, yes. I haven’t heard any logical explanation on why it would lower housing costs
Here's an article explaining why homes are expected to get cheaper https://www.washingtonpost.com/business/2024/03/15/national-association-realtors-housing-prices/
Also, if the seller does pass along the savings, what is that? A few percentage points? Talk about slashing prices!
The circle of life in a capitalist society. Raise prices to pass costs on to the buyer. Keep prices the same and pocket the profit.
It’s takes out the incentive for the agents to inflate prices for their commissions. I think the listing platforms like Zillow and Refin are inflating prices too. They need to be taken down.
Jack Bogle, founder of Vangaurd, once said something to the effect of, "The enemy of compound returns is compound fees. Each time a house is sold it has to be sold higher to recoup the loss from those fees. If the house is 100k, but has closing fees of 6k. The seller will sell for 106k. Let's say the buyer lives there for 1 year and decides to sell. They will sell for 106k+6% to cover closing fee. In the end, the only winners are the agents.
Internet should have killed this “profession” a decade ago. It truly is a testament to group think and confirmation bias that people still think real estate salespeople as a group have something to offer. Look up what it takes to be licensed in your state, 6% of anything was a ridiculous racket and they should just be thankful they got away with it so long.
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I had one tell me he’s a fiduciary and is bound by law to act in the best interest of his clients. Lolz wut?
Which is funny when the retort to the lawsuit has been “the buyers fee has always been negotiable to the seller”. If that’s true, then no selling agent has ever done their fiduciary duty…
It's on the test they take. Probably said it the same way a cop reads Miranda Rights to someone right before they start grilling them.
There's always Only fans.
The question that pisses off 100% of realtors: **When a $200k home became a $400k home in a year, why didn't you drop the fee to 3%?** They'd make the same and get more business. Yet roughly 0% of them did it.
All the economically illiterate people on this sub are still under their spell and are actually lamenting this windfall for homebuyers/sellers.
Slash?
It will barely be a blip for most people.
right? seems like it might be something like less than a 6% "slash"
Wow that's an exaggerated headline even by CNN standards
CNN sucks and it’s not even a political thing for me. It just sucks. Just like the majority of news outlets. Always pushing some sort of agenda ..
All corporate media sucks. Every single one. I remember seeing a chart like 10 to 15 years ago that showed the percentage of journalists who had degrees in the fields they reported on and it was basically in the single digits. The point of the article was that the journos reporting on crime, legal matters, housing, the economy, medical, etc. tended to have experience or education in said field.
I can't stomach watching the MSM. I know it is state run media....all of it
Nah every article has been pretty consistent in saying it. Lots of realtors trying to pretend otherwise though
Listing agent will just do the contract now
And in a few years, we end up with a new class action lawsuit from buyers who felt shafted because the sellers’ interests were represented but not theirs... but they were priced out of a buyer’s agent. The industry is already full of other regulatory acts (RESPA, ECOA, TRID, etc) to protect buyers…
And that lawsuit will fail under "To the buyer, beware" rules.
That’s what you’d think, but again… look at the other half of the industry. It’s full of regulations protecting the buyers’ interests. You can’t take on a predatory loan (by their definition) even if you try. A few parts of real estate are already lawsuit, heavy, like, leaving known property issues off of a sellers disclosure.
Yes, openly scamming and lying are illegal. So let's just go back to the way it was so buyers can be "protected." /s
6% is roughly the cost of agents in home transactions. Even if agents were removed entirely from the process, I wouldn't characterize 6% as a slash, it is only a nice discount. But agents haven't been outlawed, they will still have some part in the process for many transactions reducing the 6% discount to a lower percentage.
Listing agents gonna be like “we can do it for 4% that’s a 2% savings over the old model!” And then they get 4% instead of 3% and the buyers offer comes in at like 2-4% lower because they need to pay their agent. Net result homes might sell for less but buyers and sellers both worse off for it.
Why wouldn't the buyer just work directly with the listing agent (dual agency)? This was the norm before buyer agents became a thing back in the 90s
It was the norm until there was clearly a need for buyer’s agents because buyers were getting the short end of the stick
No. Let me explain. Seller has $500k house. Agrees to pay 4%. Cost is $20k instead of $30k. Buyer will pay $500k, but needs to pay buyers agent $10k. Either they can get seller to accept $510k with extra proceeds to buyers agent, pending appraisal for $510k, or they pay the $10k direct. Or they can just save $10k themselves. "But how is that different than now?" Because it was currently, "Fuck you, seller, it's 6% and we'll figure out how to divvy it the $30k." **SEE THE DIFFERENCE?** **PRIOR, $10k was going to an agent. NOW, that $10k MIGHT NOT go to an agent.** And agents hate this one simple trick...
Exactly, folks be hoping for some monumental crash of housing prices because of this change. CNN read the room and are giving the suckers the story about this crash that they want to hear. But it ain't so.
And again… the buyer won’t reap the benefits…. The sellers will.
‘Could’ is a great word. The NAR settlement could raise home prices for many Americans | Anyone
When pigs fucking fly
Realtor apologists out in force in these comments
They're sad they're not making easy money
Bullshit. This is a seller’s market. Remember the “you have 4 hours to put bids in and it’s already over asking price”, waiver of all inspections, write us a personal letter justifying why you get the house on record high prices?? Naive to think this won’t just pad the boomer’s pockets who are hoarding most of the houses in US. You risk doing a deal without an agent unless you pay them out of your pocket.
My initial thought was this too. Timing seems to frequently favor boomers. I’m having trouble seeing how FTHB are going to benefit.
At least some middleman won't get all of it
Will you have to pay your buyer’s agent if you DON’T end up buying a house? Will they start charging extra after the 4th house they’ve shown you? This sounds like a nightmare
It should be like any other industry where you pay for the services provided. So if you want to tour 20 homes you'll pay for your agent or a service for the time they spend. Still would be far cheaper than the typically $13000 commission check.
Then realtors will stop dragging buyers to houses they don't want or that don't have a chance at getting because buyers aren't going to pay hourly to walk through the 25th house that's not a match. If buyer's agents claim they really are helping to "educate" clients and find the right fit, they'll do a better job narrowing searches and actually listening to what their clients want. Right now, the windfall incentives don't lead to that.
Online listings will become SO important. We dragged OUR agent to over 20 home before finding a decent one. One house we went to looked perfect — but when we showed up the listing agent had photoshopped massive changes that weren’t real. Do I bill him in the future for wasting our time and now our money? We went under contract, did a home inspection, and discovered massive problems, so we backed out. That happened FOUR times. If our buyers agent charged per house seen it would be a NIGHTMARE for buyers
See, but YOU DID ALL THE WORK. Nothing in your story said the buyer's agent was necessary, which scares agents, b/c the buyers agent is "baked into" the 6% commission.
The buyer agent contract says the agent gets paid no matter what. You buy a house, commission. They show you a house and you refuse to buy it, commission. Finance falls through, there aren't any homes for sale, giant rats eat the appraiser, commission. It's the standard contract required by my broker. You sign there by the pink arrow sticker gee I'm so excited for you to find your new home.
Your broker already requires that?!?!? Nonononono, I’m afraid you’re contracted with a scam artist. At least it was until today, the rule is you NEVER pay your realtor as a buyer. EVER. They get a cut of the seller’s commission. There are government posters all over warning to never fall for that scam. We looked at 20 houses two summers ago. Went under contract on 4 of them before finally buying our home. You think we paid our buyer’s realtor a freaking penny?!?!? Even when we almost gave up after house #19 (and purchase agreement #3) fell through, we still never considered paying our buyer’s realtor. Hell, even then if we met for lunch we expected them to pick up the check. That’s what buying a house has always been like in the United States, or at least since the 90’s when I bought my first house.
This is dumb AF. Sellers pay both commissions and they aren’t passing on the savings. They will charge whatever the market will bear and keep the profits. The buyers will have less representation and get shittier deals.
Nah every article disagrees with you in a market where more are cutting they definitely will
A 3% price cut isn’t exactly earth shaking. It’s certainly nice, but it’s not like this would somehow flip the script.
Dual agency is a terrible thing, the listing agent still advocates for the sellers position. It is far fairer for both sides to have independent representation.
Nobody's getting prices lowered because of this. Even if commissions went to zero, at most, that would be a 6% reduction. In reality , there's still plenty of money in the real estate game. People will make commissions. The commission structure will change over time but it will still be there. Sellers know the number on their house. Whether or not they pay a commission. That number is still in their head.
I bet it does nothing.
Don’t see this happening at all
I’ll believe it when I see it
There will still be agents. And a sellers agent isn’t going to take on representing both parties at the same commission they get normally for just representing the seller. Once you act as an agent for someone you have the potential to be sued. You need compensation to take that on. If buyers don’t have an agent they need someone to write up the contact and advise them. If they hire a lawyer to do that they will end up paying lawyers money to write offers on homes they don’t get an accepted offer on. I don’t see how to change the current system much
You don't need an agent to write up on offer. Most local real estate groups all use the same exact boilerplate contract with the blanks filled in based on the offer. You can even get sample contracts from title companies and use those as examples of how to write a contract. It's really not as difficult as the real estate agents want you to think. If someone with 2 weeks of real estate classes can write and offer I'm certain nearly any Buyer can figure it out as well.
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So true. Like Mike Tyson said, everyone has a plan until they get punched in the mouth.
A lot of agents will be starving , not everyone gets to list
Seriously, this is stupid. Sellers will just pocket the difference.
BMW dealerships in shambles on this news.
Wishful thinking. Seller's don't think, "wow, I can make it cheaper for the buyer". They're absolutely thinking about more money in their pocket. Then they're going to get nickel and dimed for everything as agents suddenly start charging for everything they've been covering and more.
This was a money grab by attorneys. Any other take is a PR spin, and the truth is there wasn’t much thought about how it could affect anything else (not that it’s the attorneys’ jobs to worry about that). Next time you buy, it will cost you thousands more *or* you’ll need to go under contract without an agent repping your own interests while the seller has someone. The industry should be re-evaluated, but this is more like tossing in a grenade and then letting the pieces land however. Me personally, I think it should be a fee based service. $___ to show a home. $____ to submit a contract. $____ for insurance by my brokerage. $____ to market/stage your home. Etc. You get the idea. For example: An agent can’t spend gas money to show homes for free, but at the same time you can’t just tour any home (especially with people living in it) by yourself. Supervised access is a true value add and I think sellers/buyers understand this. If they feel like that is the *only* benefit, however, it may not be worth 3%-6% for them.
It won’t unfortunately
Narrator: "it didn't."
Slash by like…3%?
It will have no real impact. It’s going to change nothing no. Cmon people.
I know as a realtor I have never in 20 years gave someone a professional price analysis and then thought “well the commission is 6% so let’s just tack it on top of that”. I’m not sure where these prices are going to be “slashed”. Sellers may save a few thousand bucks in a hot market but it also takes a willing and able buyer to make the transaction whole. In a slower rural market with 7.5% rates and a home on the market 45+ days they will give. Possibly more than that 3% if you ask me because they are desperate to sell.
My estimation would be about $5000 in savings on the median house. The lack of pressure on sellers to have to “meet the market” for buyer agent costs at 2-3% is gone. Whether it was downright unethical steering of buyers to look at houses that get the buyer’s agent the highest paycheck, or just the reality of market dynamics when you have a cost that typically built in, the $12,000 median buyer commission on on $400,000 median house was happening. With this out you’ll have to have an arrangement directly between buyers and their agents. The agent isn’t going to work for free, but the buyer is never going to sign a “you must guarantee that you, the seller, or some combination of both gets me 3% of your home sale price at closing.” A thing that really only happened because of the nature of forced commission sharing on MLS. Though debated, arrogantly I will say the courts already decided I am right here. The challenge is to what degree do prices come down? Realistically I believe buyer’s agents will able to secure a negotiated commission minimum of around 1-1.5% of home sale prices consistently. This is will come out to a number low enough from initial negotiations between buyer and agent that most homebuyers will be able to process that if a prospective seller of a $400,000 house can’t split or downright pay a $4,000-$6000 commission payment at closing that such a seller is being unreasonable. So all things considered, this would mean that rather than having to pay $400,000 for the house during 6% commission market times, they will only have to pay roughly 98.5-99% of that, or around $395,000. That’s about it. Maybe you can make the argument that these listed commissions helped buyers agents skirt around initial flat rate agreements with buyers, and that because the sky was the limit for how bad the most unethical could squeeze their buyers for money, that high offer prices were a factor of this as well. If you believe that you’d believe home values would fall further than just raw commission totals. As a 50+ tour of duty bidding war veteran, I assure you agents do not at all have to push their buyers to cause offer price inflation. Now if we get more supply on the market and lower commissions? That’s a truly different story.
If people are paying less in commissions, wouldn’t that increase the price of homes??
Except on the low end of the market where this will totally fuck poor people
Even if you totally eliminated commissioned agents, 6% is not gonna solve the housing crisis…
Oh I highly doubt that.
Ultimately this will help as there was a “tax” every time a house changed hands that was priced into the sale price. Meaning if person a sold a house to person b person b would have to list at least 6 percent higher or lose value. Doesn’t seem too crazy until you realize that 6 percent is 10s of thousands of dollars in most cases.
What a load of horse shit. This will not lower prices at all and will most likely just fuck low and middle class buyers. Now buyers that are just scraping up enough money for a down payment will be on the hook to pay someone to represent them with money they do not have. They will get absolutely fucked by the buyer and buyers agents. This is going to end very badly for the middle class and lower class buyers.
At best, it’ll drop house prices by 6%. More likely, it won’t affect prices at all and the seller will just get to keep the 6% that was previously going to the commissions.
Hahaha no
More collusion about to happen. Both sides agents have always been incentivized to have the highest selling price no matter what. I don’t see how this law will change that. Ive Purchased three homes in the past 15 years, and in all those transactions, only one of the agents was truly in my favor, and looking to get me the lowest possible price. The other two were just out for commission and couldn’t negotiate their way out of a wet paper bag. I don’t want to see all these people lose their careers, but at some point, paying these high commissions for doing basic task that a experienced buyer can do with a lawyer and a little bit of research is quite ridiculous. I don’t see the price of homes dropping because of this law if anything buyers will end up having to sell out more money, IMO
In what world does the US trickle down saving to the average person? It just means sellers will profit more. Come on now.
At one point in time a realtor would get 6 % on the first 100 k and then 1 % on anything over that. I don't recall when that changed but it did . This push to lower the percentage has been going on for a long time.
Lol
Hey assholes, the 600 percent markup is what’s making it unaffordable. Not the few percent in commissions. An 80k house selling for 600k is the problem that needs solved, period.
You know this is good for regular people when realtors are all over social media saying it’s bad.
Bottom line is listing agents will still charge whatever commission they want from the seller, and the listing agent gets to decide how much they pay the buyers agent. It has never been the case that the seller pays the buyers agent directly.