NAR Settlement - HOT TAKES

[Alan Asriants]

I have a few HOT TAKES on this recent NAR Settlement News

1. Buyer's agents won't wait long to get into written agreement with a Buyer. Right now, many agents don't sign any agreements until they sign an offer. With this new system, I won't wait long to sign an agreement and spell out what commissions are owed. Many Buyers will refuse to sign, but will quickly see that no one will want to work with them for free without an agreement in place. This is actually not a bad thing for Buyer's agents, as we will encounter less tire kickers. 

2. Prices of listings will adjust. The MLS market always included both sides of the commission. So if the Seller is not offering that commission, then the price of the home offered should be less, since the buyer is now assuming this responsibility

3. Many agents will leave the business. Again, this is a good thing. For many agents it can be a sigh of relief, as we no longer have to compete with incompetent family members for business 

4. The market will drive commissions. In a sellers market, anyone can sell a home. This is why I believe this issue started in the first place. Sellers got greedy and wanted more money in their pocket because they felt they could sell their home on their own just by putting it on the market. While some of this is true, this won't hold true when the market shifts. In a Buyer's market, sellers offer LARGER commissions to Buyers agents in hopes of getting an offer. To the sellers thinking they are going to make more money, maybe not. 

5. Buyers who don't have representation will get screwed. If a buyer doesnt want to pay an agent and goes directly to the seller, their interests are not protected. In the short term we might not see any issues, but overtime, cases will arise when Buyers start getting screwed in shaky deals. Its like going to court without a lawyer. The lawyer could've likely gotten you a shorter sentence.

What are your thoughts?

[Bjorn Ahlblad]

I buy with an agent and stay away from sale by owner. I understand folks trying to shave a percent here and there; but I don't do my own root canal either! All the best y'all! 

[Jay Hinrichs]

I think it will be a learning curve for sure with some pain in the beginning.

Out here on the West coast residential mom and pop buyers simply never sign buyer broker agreements I have never signed one as a buyer in 50 years or actually any market I work in and I have bought and sold thousands of properties in my day.

Just today one of the Agents ( KW ) who just sold one of my new builds calls my wife ( Ms. Lori is my listing agent)  and they start discussing this new ruling.. the agent ( who is very experienced ) related to Mr. Lori that he is working with a new buyer and was explaining they he needs to get a buyers brokers signed and the commish rate.. Buyer says NO WAY I am signing that.. then came around and said sure I will sign it but I am not paying you more than $500.00 .. Well in our market which is mid to low level for west coast  average transactions is around 600k.. so average fee is 12k and up..  This agent just told the buyer he cannot then work with him and show him houses or send him listings etc and told Mr. Lori well there ya go I just lost a good buyer..

So Ms. Lori and I chatted some more and she has 30 plus years of doing retail owner occ RE sales and managed a large C 21 office at one time. She thinks that open houses which have always been the bane of listing agents ( NO one likes to do them and you usually pon them off to starter agents.. ) Will now become very popular as buyers will have to go to these for not just kicking tires but to actually get to see a house they want to buy..

We also discussed the Modern agent.. who never ever picks up the and says text me and then never calls anyone back ESPECIALLY listing agents  Listing agents dont want buyers they want listings.

In addition many brokerages in our market do NOT allow dual representation.. So how is that going to work when buyers are forced to use the listing agent.. ???

Lots to think about here on the mechanics of how this all is going to work.

For us selling our own new construction if it drives more buyers directly to us its a bonanza for us and much welcomed.

[Sam Yin]

@Jay Hinrichs

That's the likely outcome. Very well explained and a prime example.

The buyer is the general loser here when you weigh everyone out.

Time will tell and the industry will have to adjust and come up with new customary ways of doing business as this ruling begins to grow its own legs into the public that have little knowledge of the inner workings of real estate. Some people will be upset, others confused, and some will just plain never get it because of ego and expectations. Capitalism will work itself out.

[Sasha Mohammed]

Lets keep this thread going! 

Personal opinion, ive never liked dual-agency. When a listing agent also represents the buyer, the fiduciary duty to both parties gets removed, and instead turns into a duty to oneself (as the agent) to make the most amount of money possible. One cannot simultaneously get the highest price for the seller and the lowest price for the buyer in the same transaction. 

As a mortgage broker in these types of transactions, or buyers going at it without an agent, puts a lot on our shoulders to answer questions that would typically be referred to their buyer's agent. I'm also concerned with the liability here. Yes, i'm licensed, but i don't work as an agent in any capacity; there's no experience on my end other than a piece of paper that says i'm allowed. this is a disservice to a buyer as well, may of whom are first timers and could benefit from all the support they can get. 

I also don't love that in a market where buyers are already having affordability issues, especially where i am (Orange County, CA) where most 30-somethings are already struggling to piece together a minimum down, they will likely be slapped with an additional cost in paying their own agent. even at 2%, on an entry level $1m home, that's an extra $20k most don't have.

IMO, this just made our affordability situation worse. and i don't see it reducing home prices, i see it benefitting the seller to pocket that extra 3%-ish at a time of record equity building over the last few years. 

Not sure what the aim was with this NAR settlement. only thing i could think of is slowing down demand further to meet the supply (or lack thereof)?

[Zander Kempf]

I don't see listing prices being adjusted. If you were about to sell your house and your listing agent told you that you only need to pay 3% now instead of 6%, would you drop your price by 3%? Nope, sellers will just pocket the difference. 

[Jay Hinrichs]

Quote from @Zander Kempf:

I don't see listing prices being adjusted. If you were about to sell your house and your listing agent told you that you only need to pay 3% now instead of 6%, would you drop your price by 3%? Nope, sellers will just pocket the difference. 

are appraisers going to value the homes different depending on commish amounts ?

[Matthew Paul]

My thoughts , The buyers agent wont be working on a percentage basis , it will be a flat fee plus any extras .  Very similar to how contractors work .   

The 5 house package , I will show 5 houses within a 30 mile radius ( extrs $2 a mile past that ) submit up to 3 contracts . For xxxx  dollars .   Arrange home inspector  xxxx dollars  . etc etc . 

There is no more work to show a $500K house than a $900K house , for the most part . 

As far as the open houses , I can see some attorneys selling a pre made contract to buyers and the buyers without agents will fill out the contract and hand it to the selling agent . 

I think the days of a commission based structure for buyers agents is going to be over .

Sure there are agents that say they wont work for less , thats fine , others will .   

[Mark Cotter]

Quote from @Alan Asriants:

I have a few HOT TAKES on this recent NAR Settlement News

1. Buyer's agents won't wait long to get into written agreement with a Buyer. Right now, many agents don't sign any agreements until they sign an offer. With this new system, I won't wait long to sign an agreement and spell out what commissions are owed. Many Buyers will refuse to sign, but will quickly see that no one will want to work with them for free without an agreement in place. This is actually not a bad thing for Buyer's agents, as we will encounter less tire kickers. 

2. Prices of listings will adjust. The MLS market always included both sides of the commission. So if the Seller is not offering that commission, then the price of the home offered should be less, since the buyer is now assuming this responsibility

3. Many agents will leave the business. Again, this is a good thing. For many agents it can be a sigh of relief, as we no longer have to compete with incompetent family members for business 

4. The market will drive commissions. In a sellers market, anyone can sell a home. This is why I believe this issue started in the first place. Sellers got greedy and wanted more money in their pocket because they felt they could sell their home on their own just by putting it on the market. While some of this is true, this won't hold true when the market shifts. In a Buyer's market, sellers offer LARGER commissions to Buyers agents in hopes of getting an offer. To the sellers thinking they are going to make more money, maybe not. 

5. Buyers who don't have representation will get screwed. If a buyer doesnt want to pay an agent and goes directly to the seller, their interests are not protected. In the short term we might not see any issues, but overtime, cases will arise when Buyers start getting screwed in shaky deals. Its like going to court without a lawyer. The lawyer could've likely gotten you a shorter sentence.

What are your thoughts?

 Here's my take on your post. Initially, I'm sure nobody will know what to do but this is how I think it settles.

1. Buyers won't use agents, Companies like Redfin and Zillow, who are more Silicon Valley than RE companies, will develop technology to cut them out.

2. In my neighborhood homes sell for 2-3 million, there are currently 2 homes pending that were on the market for a week, and no homes for sale. When I purchased here it was the opposite, I made an offer and it was low and they quickly said no and all my Realtor did was tell me to make another offer, tried to rush me, and create urgency but eventually the market came to me. Homes will always sell for the amount the market dictates.

3. I agree, and that is a good thing. Millions of incompetent agents propped up by an inflated compensation model.

4. "Sellers got greedy" no, the general opinion of Realtors out there in the world is extremely negative. This is based on experiences people have with them. Price and value are not the same thing and it isn't the price that has been the problem it is the perceived lack of value. As for the rest of point 4 I think, in a vacuum, this might be correct but as technologies improve, especially LLM/AI products I think Agents will become even less important. This is a rather large kink in the NAR's armor and there have always been those on Wall Street who have eyed the lucrative housing market.

5. Why will they get screwed? Disclosures in my neck of the woods are the responsibility of the seller and if they don't disclose well we shall see. I can order a pest, talk to the title company, and have house inspections done. Realtors use transaction coordinators, maybe it's an opportunity for them to branch out. It is nothing like going to court without a lawyer.

[Alan Asriants]

Quote from @Bjorn Ahlblad:

I buy with an agent and stay away from sale by owner. I understand folks trying to shave a percent here and there; but I don't do my own root canal either! All the best y'all! 

 Respect! Would you pay your agent a 2.5% commission if the seller didnt?

[Alan Asriants]

Quote from @Jay Hinrichs:

I think it will be a learning curve for sure with some pain in the beginning.

Out here on the West coast residential mom and pop buyers simply never sign buyer broker agreements I have never signed one as a buyer in 50 years or actually any market I work in and I have bought and sold thousands of properties in my day.

Just today one of the Agents ( KW ) who just sold one of my new builds calls my wife ( Ms. Lori is my listing agent)  and they start discussing this new ruling.. the agent ( who is very experienced ) related to Mr. Lori that he is working with a new buyer and was explaining they he needs to get a buyers brokers signed and the commish rate.. Buyer says NO WAY I am signing that.. then came around and said sure I will sign it but I am not paying you more than $500.00 .. Well in our market which is mid to low level for west coast  average transactions is around 600k.. so average fee is 12k and up..  This agent just told the buyer he cannot then work with him and show him houses or send him listings etc and told Mr. Lori well there ya go I just lost a good buyer..

So Ms. Lori and I chatted some more and she has 30 plus years of doing retail owner occ RE sales and managed a large C 21 office at one time. She thinks that open houses which have always been the bane of listing agents ( NO one likes to do them and you usually pon them off to starter agents.. ) Will now become very popular as buyers will have to go to these for not just kicking tires but to actually get to see a house they want to buy..

We also discussed the Modern agent.. who never ever picks up the and says text me and then never calls anyone back ESPECIALLY listing agents  Listing agents dont want buyers they want listings.

In addition many brokerages in our market do NOT allow dual representation.. So how is that going to work when buyers are forced to use the listing agent.. ???

Lots to think about here on the mechanics of how this all is going to work.

For us selling our own new construction if it drives more buyers directly to us its a bonanza for us and much welcomed.

 There are certianly lots of moving parts here, and your story resonates with me.

I think you are right that there will be turbulence in the short term. Listing agents will get greedy to sign listings and offer no to limited commission to the buyers agent, and buyer agent wont work with buyers leaving them unrepresented.

Its tough enough for buyers to pay for 3-5% down, not sure how they can afford another 2.5% for realtors. 

Banks wont lend on that and allow that, at least not now. Incorporating it into the price poses other challenges regarding appraisal... Who covers that? 

I think that dual representation should be eliminated nationwide to prevent listing agents from dominating this business and pushing out great buyer agents. A listing agent dominated business means trouble for buyers, who might be forced to take on lawyers to represent them, even in non attorney states. 

[Alan Asriants]

Quote from @Sam Yin:

@Jay Hinrichs

That's the likely outcome. Very well explained and a prime example.

The buyer is the general loser here when you weigh everyone out.

Time will tell and the industry will have to adjust and come up with new customary ways of doing business as this ruling begins to grow its own legs into the public that have little knowledge of the inner workings of real estate. Some people will be upset, others confused, and some will just plain never get it because of ego and expectations. Capitalism will work itself out.

 It;s tough enough to get the trust of a buyer on your side with NO FEES. Imagine winning a buyer over and telling them they have to pay up! Lots of unhappy buyers. 

Could mean that tire kickers get out quicker, but good clients might not want to pay. its a toss up. time will tell. 

[Alan Asriants]

Quote from @Sasha Mohammed:

Lets keep this thread going! 

Personal opinion, ive never liked dual-agency. When a listing agent also represents the buyer, the fiduciary duty to both parties gets removed, and instead turns into a duty to oneself (as the agent) to make the most amount of money possible. One cannot simultaneously get the highest price for the seller and the lowest price for the buyer in the same transaction. 

As a mortgage broker in these types of transactions, or buyers going at it without an agent, puts a lot on our shoulders to answer questions that would typically be referred to their buyer's agent. I'm also concerned with the liability here. Yes, i'm licensed, but i don't work as an agent in any capacity; there's no experience on my end other than a piece of paper that says i'm allowed. this is a disservice to a buyer as well, may of whom are first timers and could benefit from all the support they can get. 

I also don't love that in a market where buyers are already having affordability issues, especially where i am (Orange County, CA) where most 30-somethings are already struggling to piece together a minimum down, they will likely be slapped with an additional cost in paying their own agent. even at 2%, on an entry level $1m home, that's an extra $20k most don't have.

IMO, this just made our affordability situation worse. and i don't see it reducing home prices, i see it benefitting the seller to pocket that extra 3%-ish at a time of record equity building over the last few years. 

Not sure what the aim was with this NAR settlement. only thing i could think of is slowing down demand further to meet the supply (or lack thereof)?

 Good point about affordability, Makes me wonder if this is all planned to drive buyers away from market and slow demand without rate cuts... 

Maybe a conspiracy, but not a crazy one...

Also to your point, a first time buyer can benefit greatly from an experienced agent, now they might miss out

[Alan Asriants]

Quote from @Zander Kempf:

I don't see listing prices being adjusted. If you were about to sell your house and your listing agent told you that you only need to pay 3% now instead of 6%, would you drop your price by 3%? Nope, sellers will just pocket the difference. 

 In this market 100%. Seller's are getting greedy IMO. Anything will sell if priced right. If the market flips, we might be talking a different story.

My father is being offered 5% buyer commissions in FL from Builders unable to offload inventory. 

The tables will turn

[Alan Asriants]

Quote from @Matthew Paul:

My thoughts , The buyers agent wont be working on a percentage basis , it will be a flat fee plus any extras .  Very similar to how contractors work .   

The 5 house package , I will show 5 houses within a 30 mile radius ( extrs $2 a mile past that ) submit up to 3 contracts . For xxxx  dollars .   Arrange home inspector  xxxx dollars  . etc etc . 

There is no more work to show a $500K house than a $900K house , for the most part . 

As far as the open houses , I can see some attorneys selling a pre made contract to buyers and the buyers without agents will fill out the contract and hand it to the selling agent . 

I think the days of a commission based structure for buyers agents is going to be over .

Sure there are agents that say they wont work for less , thats fine , others will .   

 What do you think is fair?

[Alan Asriants]

Quote from @Mark Cotter:

Quote from @Alan Asriants:

I have a few HOT TAKES on this recent NAR Settlement News

1. Buyer's agents won't wait long to get into written agreement with a Buyer. Right now, many agents don't sign any agreements until they sign an offer. With this new system, I won't wait long to sign an agreement and spell out what commissions are owed. Many Buyers will refuse to sign, but will quickly see that no one will want to work with them for free without an agreement in place. This is actually not a bad thing for Buyer's agents, as we will encounter less tire kickers. 

2. Prices of listings will adjust. The MLS market always included both sides of the commission. So if the Seller is not offering that commission, then the price of the home offered should be less, since the buyer is now assuming this responsibility

3. Many agents will leave the business. Again, this is a good thing. For many agents it can be a sigh of relief, as we no longer have to compete with incompetent family members for business 

4. The market will drive commissions. In a sellers market, anyone can sell a home. This is why I believe this issue started in the first place. Sellers got greedy and wanted more money in their pocket because they felt they could sell their home on their own just by putting it on the market. While some of this is true, this won't hold true when the market shifts. In a Buyer's market, sellers offer LARGER commissions to Buyers agents in hopes of getting an offer. To the sellers thinking they are going to make more money, maybe not. 

5. Buyers who don't have representation will get screwed. If a buyer doesnt want to pay an agent and goes directly to the seller, their interests are not protected. In the short term we might not see any issues, but overtime, cases will arise when Buyers start getting screwed in shaky deals. Its like going to court without a lawyer. The lawyer could've likely gotten you a shorter sentence.

What are your thoughts?

 Here's my take on your post. Initially, I'm sure nobody will know what to do but this is how I think it settles.

1. Buyers won't use agents, Companies like Redfin and Zillow, who are more Silicon Valley than RE companies, will develop technology to cut them out.

2. In my neighborhood homes sell for 2-3 million, there are currently 2 homes pending that were on the market for a week, and no homes for sale. When I purchased here it was the opposite, I made an offer and it was low and they quickly said no and all my Realtor did was tell me to make another offer, tried to rush me, and create urgency but eventually the market came to me. Homes will always sell for the amount the market dictates.

3. I agree, and that is a good thing. Millions of incompetent agents propped up by an inflated compensation model.

4. "Sellers got greedy" no, the general opinion of Realtors out there in the world is extremely negative. This is based on experiences people have with them. Price and value are not the same thing and it isn't the price that has been the problem it is the perceived lack of value. As for the rest of point 4 I think, in a vacuum, this might be correct but as technologies improve, especially LLM/AI products I think Agents will become even less important. This is a rather large kink in the NAR's armor and there have always been those on Wall Street who have eyed the lucrative housing market.

5. Why will they get screwed? Disclosures in my neck of the woods are the responsibility of the seller and if they don't disclose well we shall see. I can order a pest, talk to the title company, and have house inspections done. Realtors use transaction coordinators, maybe it's an opportunity for them to branch out. It is nothing like going to court without a lawyer.

 4. I don't know if technology can replace someones experience of living and breathing in that area/environment. Maybe im wrong here and tech will advance far past our imagination, but I don't know if a computer can describe certain emotions feels, perceptions etc. Maybe we are being forced into a colder world, where people just buy builder grade BS, and things are just treated as roofs over peoples heads, but feel is something human that cannot be taken away, and a good agent understands this and their buyers. Again, lots of us here are investors. We are not emotionally involved. But many people buying for themselves are EXTREMELY emotional. 

5. An agent can simply take advatage of a buyer that doesn't have information. Again, you can't think from your perspective as someone who has experience. Many people dont! When I first started rehabbing houses, I got taken advantage left and right by contractors, because they fed me some BS and I ate it up. Now I know its BS. 

[Mark Cotter]

Quote from @Alan Asriants:

Quote from @Mark Cotter:

Quote from @Alan Asriants:

I have a few HOT TAKES on this recent NAR Settlement News

1. Buyer's agents won't wait long to get into written agreement with a Buyer. Right now, many agents don't sign any agreements until they sign an offer. With this new system, I won't wait long to sign an agreement and spell out what commissions are owed. Many Buyers will refuse to sign, but will quickly see that no one will want to work with them for free without an agreement in place. This is actually not a bad thing for Buyer's agents, as we will encounter less tire kickers. 

2. Prices of listings will adjust. The MLS market always included both sides of the commission. So if the Seller is not offering that commission, then the price of the home offered should be less, since the buyer is now assuming this responsibility

3. Many agents will leave the business. Again, this is a good thing. For many agents it can be a sigh of relief, as we no longer have to compete with incompetent family members for business 

4. The market will drive commissions. In a sellers market, anyone can sell a home. This is why I believe this issue started in the first place. Sellers got greedy and wanted more money in their pocket because they felt they could sell their home on their own just by putting it on the market. While some of this is true, this won't hold true when the market shifts. In a Buyer's market, sellers offer LARGER commissions to Buyers agents in hopes of getting an offer. To the sellers thinking they are going to make more money, maybe not. 

5. Buyers who don't have representation will get screwed. If a buyer doesnt want to pay an agent and goes directly to the seller, their interests are not protected. In the short term we might not see any issues, but overtime, cases will arise when Buyers start getting screwed in shaky deals. Its like going to court without a lawyer. The lawyer could've likely gotten you a shorter sentence.

What are your thoughts?

 Here's my take on your post. Initially, I'm sure nobody will know what to do but this is how I think it settles.

1. Buyers won't use agents, Companies like Redfin and Zillow, who are more Silicon Valley than RE companies, will develop technology to cut them out.

2. In my neighborhood homes sell for 2-3 million, there are currently 2 homes pending that were on the market for a week, and no homes for sale. When I purchased here it was the opposite, I made an offer and it was low and they quickly said no and all my Realtor did was tell me to make another offer, tried to rush me, and create urgency but eventually the market came to me. Homes will always sell for the amount the market dictates.

3. I agree, and that is a good thing. Millions of incompetent agents propped up by an inflated compensation model.

4. "Sellers got greedy" no, the general opinion of Realtors out there in the world is extremely negative. This is based on experiences people have with them. Price and value are not the same thing and it isn't the price that has been the problem it is the perceived lack of value. As for the rest of point 4 I think, in a vacuum, this might be correct but as technologies improve, especially LLM/AI products I think Agents will become even less important. This is a rather large kink in the NAR's armor and there have always been those on Wall Street who have eyed the lucrative housing market.

5. Why will they get screwed? Disclosures in my neck of the woods are the responsibility of the seller and if they don't disclose well we shall see. I can order a pest, talk to the title company, and have house inspections done. Realtors use transaction coordinators, maybe it's an opportunity for them to branch out. It is nothing like going to court without a lawyer.

 4. I don't know if technology can replace someones experience of living and breathing in that area/environment. Maybe im wrong here and tech will advance far past our imagination, but I don't know if a computer can describe certain emotions feels, perceptions etc. Maybe we are being forced into a colder world, where people just buy builder grade BS, and things are just treated as roofs over peoples heads, but feel is something human that cannot be taken away, and a good agent understands this and their buyers. Again, lots of us here are investors. We are not emotionally involved. But many people buying for themselves are EXTREMELY emotional. 

5. An agent can simply take advatage of a buyer that doesn't have information. Again, you can't think from your perspective as someone who has experience. Many people dont! When I first started rehabbing houses, I got taken advantage left and right by contractors, because they fed me some BS and I ate it up. Now I know its BS. 

The tech that I refer to will replace the actions of the buyer agent, not the experience of seeing the product. Seller agents have an obligation "fiduciary" to their clients so they will have to show the home to unrepresented buyers, if agents want to try and cut the independent buyer out then they risk the buyer lodging formal complaints. In strong sellers markets it may be more difficult for unrepresented buyers and they may choose to get a Realtor but this is the market dictating the circumstance and not the NAR. This was the point of the decision. If an agent wants to "take advantage of a buyer, " this ethical issue already plagues the industry.

The comment that "sellers are greedy" Is such a red flag for me. I would never use a Realtor who told me I was greedy. Getting the best price for the asset is one of the skills Realtors claim to have and to pass off their failure as "seller's greed" is one of the reasons Realtors have such a poor standing in our society today.

[Corey Conklin]

Quote from @Zander Kempf:

I don't see listing prices being adjusted. If you were about to sell your house and your listing agent told you that you only need to pay 3% now instead of 6%, would you drop your price by 3%? Nope, sellers will just pocket the difference. 

 This is spot on. Agent commissions have nothing to do with the market rate of a property.

[Lucia Rushton]

@Alan Asriants agree on everything except I do not think that prices will be affected, I think Sellers will continue to ask market or above pricing, and they will just keep the additional 3% in their pocket. Just my opinion and not written by Ai

[Jay Hinrichs]

Quote from @Matthew Paul:

My thoughts , The buyers agent wont be working on a percentage basis , it will be a flat fee plus any extras .  Very similar to how contractors work .   

The 5 house package , I will show 5 houses within a 30 mile radius ( extrs $2 a mile past that ) submit up to 3 contracts . For xxxx  dollars .   Arrange home inspector  xxxx dollars  . etc etc . 

There is no more work to show a $500K house than a $900K house , for the most part . 

As far as the open houses , I can see some attorneys selling a pre made contract to buyers and the buyers without agents will fill out the contract and hand it to the selling agent . 

I think the days of a commission based structure for buyers agents is going to be over .

Sure there are agents that say they wont work for less , thats fine , others will .   

we can buy pre made contracts at the stationary stores .. they have been there for decades. AS for ala carte services thats a novel idea.. Although I can see collection issues. I guess with the new ways to move money Zell and such.. an agent can just wait until the money hits their account.. I would not advise or do it on the promise of getting paid thats for sure.

[Carlos Ptriawan]

Quote from @Mark Cotter:

Quote from @Alan Asriants:

Quote from @Mark Cotter:

Quote from @Alan Asriants:

I have a few HOT TAKES on this recent NAR Settlement News

1. Buyer's agents won't wait long to get into written agreement with a Buyer. Right now, many agents don't sign any agreements until they sign an offer. With this new system, I won't wait long to sign an agreement and spell out what commissions are owed. Many Buyers will refuse to sign, but will quickly see that no one will want to work with them for free without an agreement in place. This is actually not a bad thing for Buyer's agents, as we will encounter less tire kickers. 

2. Prices of listings will adjust. The MLS market always included both sides of the commission. So if the Seller is not offering that commission, then the price of the home offered should be less, since the buyer is now assuming this responsibility

3. Many agents will leave the business. Again, this is a good thing. For many agents it can be a sigh of relief, as we no longer have to compete with incompetent family members for business 

4. The market will drive commissions. In a sellers market, anyone can sell a home. This is why I believe this issue started in the first place. Sellers got greedy and wanted more money in their pocket because they felt they could sell their home on their own just by putting it on the market. While some of this is true, this won't hold true when the market shifts. In a Buyer's market, sellers offer LARGER commissions to Buyers agents in hopes of getting an offer. To the sellers thinking they are going to make more money, maybe not. 

5. Buyers who don't have representation will get screwed. If a buyer doesnt want to pay an agent and goes directly to the seller, their interests are not protected. In the short term we might not see any issues, but overtime, cases will arise when Buyers start getting screwed in shaky deals. Its like going to court without a lawyer. The lawyer could've likely gotten you a shorter sentence.

What are your thoughts?

 Here's my take on your post. Initially, I'm sure nobody will know what to do but this is how I think it settles.

1. Buyers won't use agents, Companies like Redfin and Zillow, who are more Silicon Valley than RE companies, will develop technology to cut them out.

2. In my neighborhood homes sell for 2-3 million, there are currently 2 homes pending that were on the market for a week, and no homes for sale. When I purchased here it was the opposite, I made an offer and it was low and they quickly said no and all my Realtor did was tell me to make another offer, tried to rush me, and create urgency but eventually the market came to me. Homes will always sell for the amount the market dictates.

3. I agree, and that is a good thing. Millions of incompetent agents propped up by an inflated compensation model.

4. "Sellers got greedy" no, the general opinion of Realtors out there in the world is extremely negative. This is based on experiences people have with them. Price and value are not the same thing and it isn't the price that has been the problem it is the perceived lack of value. As for the rest of point 4 I think, in a vacuum, this might be correct but as technologies improve, especially LLM/AI products I think Agents will become even less important. This is a rather large kink in the NAR's armor and there have always been those on Wall Street who have eyed the lucrative housing market.

5. Why will they get screwed? Disclosures in my neck of the woods are the responsibility of the seller and if they don't disclose well we shall see. I can order a pest, talk to the title company, and have house inspections done. Realtors use transaction coordinators, maybe it's an opportunity for them to branch out. It is nothing like going to court without a lawyer.

 4. I don't know if technology can replace someones experience of living and breathing in that area/environment. Maybe im wrong here and tech will advance far past our imagination, but I don't know if a computer can describe certain emotions feels, perceptions etc. Maybe we are being forced into a colder world, where people just buy builder grade BS, and things are just treated as roofs over peoples heads, but feel is something human that cannot be taken away, and a good agent understands this and their buyers. Again, lots of us here are investors. We are not emotionally involved. But many people buying for themselves are EXTREMELY emotional. 

5. An agent can simply take advatage of a buyer that doesn't have information. Again, you can't think from your perspective as someone who has experience. Many people dont! When I first started rehabbing houses, I got taken advantage left and right by contractors, because they fed me some BS and I ate it up. Now I know its BS. 

The tech that I refer to will replace the actions of the buyer agent, not the experience of seeing the product. Seller agents have an obligation "fiduciary" to their clients so they will have to show the home to unrepresented buyers, if agents want to try and cut the independent buyer out then they risk the buyer lodging formal complaints. In strong sellers markets it may be more difficult for unrepresented buyers and they may choose to get a Realtor but this is the market dictating the circumstance and not the NAR. This was the point of the decision. If an agent wants to "take advantage of a buyer, " this ethical issue already plagues the industry.

The comment that "sellers are greedy" Is such a red flag for me. I would never use a Realtor who told me I was greedy. Getting the best price for the asset is one of the skills Realtors claim to have and to pass off their failure as "seller's greed" is one of the reasons Realtors have such a poor standing in our society today.

 Mr. Alan would think differently if he's not real estate agent and perhaps a buyer/seller ;-)

the original post is very realtor-bias , I told you folks, realtor do not control the market. It's the bidding process that makes the market.

This changes would spur competition and also drive innovation.

[Jay Hinrichs]

Quote from @Mark Cotter:

Quote from @Alan Asriants:

Quote from @Mark Cotter:

Quote from @Alan Asriants:

I have a few HOT TAKES on this recent NAR Settlement News

1. Buyer's agents won't wait long to get into written agreement with a Buyer. Right now, many agents don't sign any agreements until they sign an offer. With this new system, I won't wait long to sign an agreement and spell out what commissions are owed. Many Buyers will refuse to sign, but will quickly see that no one will want to work with them for free without an agreement in place. This is actually not a bad thing for Buyer's agents, as we will encounter less tire kickers. 

2. Prices of listings will adjust. The MLS market always included both sides of the commission. So if the Seller is not offering that commission, then the price of the home offered should be less, since the buyer is now assuming this responsibility

3. Many agents will leave the business. Again, this is a good thing. For many agents it can be a sigh of relief, as we no longer have to compete with incompetent family members for business 

4. The market will drive commissions. In a sellers market, anyone can sell a home. This is why I believe this issue started in the first place. Sellers got greedy and wanted more money in their pocket because they felt they could sell their home on their own just by putting it on the market. While some of this is true, this won't hold true when the market shifts. In a Buyer's market, sellers offer LARGER commissions to Buyers agents in hopes of getting an offer. To the sellers thinking they are going to make more money, maybe not. 

5. Buyers who don't have representation will get screwed. If a buyer doesnt want to pay an agent and goes directly to the seller, their interests are not protected. In the short term we might not see any issues, but overtime, cases will arise when Buyers start getting screwed in shaky deals. Its like going to court without a lawyer. The lawyer could've likely gotten you a shorter sentence.

What are your thoughts?

 Here's my take on your post. Initially, I'm sure nobody will know what to do but this is how I think it settles.

1. Buyers won't use agents, Companies like Redfin and Zillow, who are more Silicon Valley than RE companies, will develop technology to cut them out.

2. In my neighborhood homes sell for 2-3 million, there are currently 2 homes pending that were on the market for a week, and no homes for sale. When I purchased here it was the opposite, I made an offer and it was low and they quickly said no and all my Realtor did was tell me to make another offer, tried to rush me, and create urgency but eventually the market came to me. Homes will always sell for the amount the market dictates.

3. I agree, and that is a good thing. Millions of incompetent agents propped up by an inflated compensation model.

4. "Sellers got greedy" no, the general opinion of Realtors out there in the world is extremely negative. This is based on experiences people have with them. Price and value are not the same thing and it isn't the price that has been the problem it is the perceived lack of value. As for the rest of point 4 I think, in a vacuum, this might be correct but as technologies improve, especially LLM/AI products I think Agents will become even less important. This is a rather large kink in the NAR's armor and there have always been those on Wall Street who have eyed the lucrative housing market.

5. Why will they get screwed? Disclosures in my neck of the woods are the responsibility of the seller and if they don't disclose well we shall see. I can order a pest, talk to the title company, and have house inspections done. Realtors use transaction coordinators, maybe it's an opportunity for them to branch out. It is nothing like going to court without a lawyer.

 4. I don't know if technology can replace someones experience of living and breathing in that area/environment. Maybe im wrong here and tech will advance far past our imagination, but I don't know if a computer can describe certain emotions feels, perceptions etc. Maybe we are being forced into a colder world, where people just buy builder grade BS, and things are just treated as roofs over peoples heads, but feel is something human that cannot be taken away, and a good agent understands this and their buyers. Again, lots of us here are investors. We are not emotionally involved. But many people buying for themselves are EXTREMELY emotional. 

5. An agent can simply take advatage of a buyer that doesn't have information. Again, you can't think from your perspective as someone who has experience. Many people dont! When I first started rehabbing houses, I got taken advantage left and right by contractors, because they fed me some BS and I ate it up. Now I know its BS. 

The tech that I refer to will replace the actions of the buyer agent, not the experience of seeing the product. Seller agents have an obligation "fiduciary" to their clients so they will have to show the home to unrepresented buyers, if agents want to try and cut the independent buyer out then they risk the buyer lodging formal complaints. In strong sellers markets it may be more difficult for unrepresented buyers and they may choose to get a Realtor but this is the market dictating the circumstance and not the NAR. This was the point of the decision. If an agent wants to "take advantage of a buyer, " this ethical issue already plagues the industry.

The comment that "sellers are greedy" Is such a red flag for me. I would never use a Realtor who told me I was greedy. Getting the best price for the asset is one of the skills Realtors claim to have and to pass off their failure as "seller's greed" is one of the reasons Realtors have such a poor standing in our society today.

So you think Agents have a poor standing in Society today  .. like used care salesmen or how people pick on Lawyers etc etc.. I dont see that at all personally . what I see is just like any other industry you have  OK agents you have great agents and you have poor agents.. I think I saw in one response of yours that your from OZ .. Its hard to compare the RE industry there to the US.. its really apples and Oranges of how they operate. When i first started funding folks that were selling to OZ investors about 2010 ( exchange rate favored OZ) and all the conversations I had with OZ investors .. the amount of public information in OZ was minuscule compared to the US.. Many in OZ did not realize all the information that could be found for free on the internet.. And folks selling US properties of course would present their opportunities like they were some secret inventory.. Many times Charging OZ investors 5k up front just to get the list.. And grossly over charging OZ investors for the properties that ended up being in some of the worst neighborhoods in America.

I funded fix and flippers that were picking up the pieces of failed oz investors every week.. In their super funds and so on.. props I know they spent 70 to 80k on and then were selling for 10k to my clients. It was a blood bath for them.  of course NOT all but enough to make an impression on me.

[Jay Hinrichs]

Quote from @Alan Asriants:

Quote from @Jay Hinrichs:

I think it will be a learning curve for sure with some pain in the beginning.

Out here on the West coast residential mom and pop buyers simply never sign buyer broker agreements I have never signed one as a buyer in 50 years or actually any market I work in and I have bought and sold thousands of properties in my day.

Just today one of the Agents ( KW ) who just sold one of my new builds calls my wife ( Ms. Lori is my listing agent)  and they start discussing this new ruling.. the agent ( who is very experienced ) related to Mr. Lori that he is working with a new buyer and was explaining they he needs to get a buyers brokers signed and the commish rate.. Buyer says NO WAY I am signing that.. then came around and said sure I will sign it but I am not paying you more than $500.00 .. Well in our market which is mid to low level for west coast  average transactions is around 600k.. so average fee is 12k and up..  This agent just told the buyer he cannot then work with him and show him houses or send him listings etc and told Mr. Lori well there ya go I just lost a good buyer..

So Ms. Lori and I chatted some more and she has 30 plus years of doing retail owner occ RE sales and managed a large C 21 office at one time. She thinks that open houses which have always been the bane of listing agents ( NO one likes to do them and you usually pon them off to starter agents.. ) Will now become very popular as buyers will have to go to these for not just kicking tires but to actually get to see a house they want to buy..

We also discussed the Modern agent.. who never ever picks up the and says text me and then never calls anyone back ESPECIALLY listing agents  Listing agents dont want buyers they want listings.

In addition many brokerages in our market do NOT allow dual representation.. So how is that going to work when buyers are forced to use the listing agent.. ???

Lots to think about here on the mechanics of how this all is going to work.

For us selling our own new construction if it drives more buyers directly to us its a bonanza for us and much welcomed.

 There are certianly lots of moving parts here, and your story resonates with me.

I think you are right that there will be turbulence in the short term. Listing agents will get greedy to sign listings and offer no to limited commission to the buyers agent, and buyer agent wont work with buyers leaving them unrepresented.

Its tough enough for buyers to pay for 3-5% down, not sure how they can afford another 2.5% for realtors. 

Banks wont lend on that and allow that, at least not now. Incorporating it into the price poses other challenges regarding appraisal... Who covers that? 

I think that dual representation should be eliminated nationwide to prevent listing agents from dominating this business and pushing out great buyer agents. A listing agent dominated business means trouble for buyers, who might be forced to take on lawyers to represent them, even in non attorney states. 

I can also see many more brokerages taking a page out of companies like New Western that actually gets their listings in contract to buy then sells then wholesale style ??? still not keen on that model.
But for agents that are part of someone's dream team you know the core 4..

I can see more agents finding someone like me that partners on fix and flip and just buy their own deals and cut the investor out of the equation. since they are doing all the work for small fee especially in low value markets they can now pick up the profit on the deal along with listing commish and basically do the same thing.. they can cut down on volume and make more money . I fund a few agents already that do this.. I think you will see this much more frequently going forward. Making it that much harder for investors to find deals.. Agents will now be direct competition just like New Western is.   Some thing to think about.

[Rob K.]

Well there is a lot to sort out in how the compensation model will evolve going forward.

As I understand it, the rule will be that you can't post buyer compensation from a seller/listing agent on the MLS. But that does not mean a listing agent can't make it be known outside the MLS that a seller is still willing to cooperate, although perhaps not at the level it has been. As a seller, I can understand incentivizing buyer agents to show my property by offering some level of compensation to maximize market exposure, especially when many other listings don't offer compensation.

As a buyer, the new system would seem to be for the benefit of sophisticated buyers who don't necessarily care about the down sides of dual representation and are able to protect themselves.

As a buyer's agent, generic exclusive representation agreements at buyer's cost are likely a very hard sell. I would think a more nuanced marketing approach where agents compensation is based on achievable results and other factors (e.g., hours committed to representation, achievement goals, discounts for properties based on price for square footage, negotiation of post escrow discounts, credit for seller/agent cooperation, transaction coordination commitment) might be more digestible for a buyer.

Should be interesting to see going forward, but I do think in general, agent compensation will be less as things develop.

[Alan Asriants]

Quote from @Mark Cotter:

Quote from @Alan Asriants:

Quote from @Mark Cotter:

Quote from @Alan Asriants:

I have a few HOT TAKES on this recent NAR Settlement News

1. Buyer's agents won't wait long to get into written agreement with a Buyer. Right now, many agents don't sign any agreements until they sign an offer. With this new system, I won't wait long to sign an agreement and spell out what commissions are owed. Many Buyers will refuse to sign, but will quickly see that no one will want to work with them for free without an agreement in place. This is actually not a bad thing for Buyer's agents, as we will encounter less tire kickers. 

2. Prices of listings will adjust. The MLS market always included both sides of the commission. So if the Seller is not offering that commission, then the price of the home offered should be less, since the buyer is now assuming this responsibility

3. Many agents will leave the business. Again, this is a good thing. For many agents it can be a sigh of relief, as we no longer have to compete with incompetent family members for business 

4. The market will drive commissions. In a sellers market, anyone can sell a home. This is why I believe this issue started in the first place. Sellers got greedy and wanted more money in their pocket because they felt they could sell their home on their own just by putting it on the market. While some of this is true, this won't hold true when the market shifts. In a Buyer's market, sellers offer LARGER commissions to Buyers agents in hopes of getting an offer. To the sellers thinking they are going to make more money, maybe not. 

5. Buyers who don't have representation will get screwed. If a buyer doesnt want to pay an agent and goes directly to the seller, their interests are not protected. In the short term we might not see any issues, but overtime, cases will arise when Buyers start getting screwed in shaky deals. Its like going to court without a lawyer. The lawyer could've likely gotten you a shorter sentence.

What are your thoughts?

 Here's my take on your post. Initially, I'm sure nobody will know what to do but this is how I think it settles.

1. Buyers won't use agents, Companies like Redfin and Zillow, who are more Silicon Valley than RE companies, will develop technology to cut them out.

2. In my neighborhood homes sell for 2-3 million, there are currently 2 homes pending that were on the market for a week, and no homes for sale. When I purchased here it was the opposite, I made an offer and it was low and they quickly said no and all my Realtor did was tell me to make another offer, tried to rush me, and create urgency but eventually the market came to me. Homes will always sell for the amount the market dictates.

3. I agree, and that is a good thing. Millions of incompetent agents propped up by an inflated compensation model.

4. "Sellers got greedy" no, the general opinion of Realtors out there in the world is extremely negative. This is based on experiences people have with them. Price and value are not the same thing and it isn't the price that has been the problem it is the perceived lack of value. As for the rest of point 4 I think, in a vacuum, this might be correct but as technologies improve, especially LLM/AI products I think Agents will become even less important. This is a rather large kink in the NAR's armor and there have always been those on Wall Street who have eyed the lucrative housing market.

5. Why will they get screwed? Disclosures in my neck of the woods are the responsibility of the seller and if they don't disclose well we shall see. I can order a pest, talk to the title company, and have house inspections done. Realtors use transaction coordinators, maybe it's an opportunity for them to branch out. It is nothing like going to court without a lawyer.

 4. I don't know if technology can replace someones experience of living and breathing in that area/environment. Maybe im wrong here and tech will advance far past our imagination, but I don't know if a computer can describe certain emotions feels, perceptions etc. Maybe we are being forced into a colder world, where people just buy builder grade BS, and things are just treated as roofs over peoples heads, but feel is something human that cannot be taken away, and a good agent understands this and their buyers. Again, lots of us here are investors. We are not emotionally involved. But many people buying for themselves are EXTREMELY emotional. 

5. An agent can simply take advatage of a buyer that doesn't have information. Again, you can't think from your perspective as someone who has experience. Many people dont! When I first started rehabbing houses, I got taken advantage left and right by contractors, because they fed me some BS and I ate it up. Now I know its BS. 

The tech that I refer to will replace the actions of the buyer agent, not the experience of seeing the product. Seller agents have an obligation "fiduciary" to their clients so they will have to show the home to unrepresented buyers, if agents want to try and cut the independent buyer out then they risk the buyer lodging formal complaints. In strong sellers markets it may be more difficult for unrepresented buyers and they may choose to get a Realtor but this is the market dictating the circumstance and not the NAR. This was the point of the decision. If an agent wants to "take advantage of a buyer, " this ethical issue already plagues the industry.

The comment that "sellers are greedy" Is such a red flag for me. I would never use a Realtor who told me I was greedy. Getting the best price for the asset is one of the skills Realtors claim to have and to pass off their failure as "seller's greed" is one of the reasons Realtors have such a poor standing in our society today.

 The market is the highest it has ever been. Sellers are getting FAR more than what they imagined they would get for them home. In some cases 10-20%+ more. They are trying to limit commissions and save 1-2%. Don't get me wrong, I understand the idea of getting the most for your home. You are absolutely right I do get the most for my sellers. Even in multiple offer situations I will try to get additional value and terms for my seller from the higher bidders. That's what I am paid to do. What I don't understand is why this issue of paying commissions is coming at the highest point and best market ever for sellers... 

Instead of taking my comment and turning it into a "red flag", consider the overall picture. When its easy to sell, no one wants to pay anyone anything. When its tough, people try to get/pay for all the help they can. Its simple psychology. 

[Jay Hinrichs]

Quote from @Rob K.:

Well there is a lot to sort out in how the compensation model will evolve going forward.

As I understand it, the rule will be that you can't post buyer compensation from a seller/listing agent on the MLS. But that does not mean a listing agent can't make it be known outside the MLS that a seller is still willing to cooperate, although perhaps not at the level it has been. As a seller, I can understand incentivizing buyer agents to show my property by offering some level of compensation to maximize market exposure, especially when many other listings don't offer compensation.

As a buyer, the new system would seem to be for the benefit of sophisticated buyers who don't necessarily care about the down sides of dual representation and are able to protect themselves.

As a buyer's agent, generic exclusive representation agreements at buyer's cost are likely a very hard sell. I would think a more nuanced marketing approach where agents compensation is based on achievable results and other factors (e.g., hours committed to representation, achievement goals, discounts for properties based on price for square footage, negotiation of post escrow discounts, credit for seller/agent cooperation, transaction coordination commitment) might be more digestible for a buyer.

Should be interesting to see going forward, but I do think in general, agent compensation will be less as things develop.

I just wonder why its not like commerical..  in the private remarks on MLS just say Courtesy to Brokers ?? we all know what that means.. and many FSBO's do this as well.. without buyers agents your going to have a lot of stale product that wont move.