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?

[Guy Gimenez]

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

I get it. You're scared for your future. It's OK man...just adapt or find a job that guarantees you a paycheck. The HUD is a legal document...but OK, you can claim it's bunk if you wish as I know it makes you feel comfortable. Using a specific marketing strategy, I'm able to sell about 40% of my flips directly to a buyer. My houses don't sell for less but there is considerably less drama in the transaction. I know brokers and NAR provide you this "the buyer pays the commission anyway" because this industry has refused to change for decades and any change brings little quotes as you mentioned above to help ease the pain. As a frequent seller, I know who pays the fees and it ain't the buyer. But again, stay that course if it makes you feel better.  

[V.G Jason]

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Forget the HUD, just look at the net transaction. The buyer pays both, and the buyer's agent has a vested interest in the deal closing at arguably the highest mark. Which in theory means the buyer pays both sides at the worst metric to them.

[Shane H.]

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

I get it. You're scared for your future. It's OK man...just adapt or find a job that guarantees you a paycheck. The HUD is a legal document...but OK, you can claim it's bunk if you wish as I know it makes you feel comfortable. Using a specific marketing strategy, I'm able to sell about 40% of my flips directly to a buyer. My houses don't sell for less but there is considerably less drama in the transaction. I know brokers and NAR provide you this "the buyer pays the commission anyway" because this industry has refused to change for decades and any change brings little quotes as you mentioned above to help ease the pain. As a frequent seller, I know who pays the fees and it ain't the buyer. But again, stay that course if it makes you feel better.  

I love watching the people who claim they’re dictate get all emotional. As the last guy said. The net transaction says it all. One guy brings money to the table one leaves with it. bUT The sELeR pAid tHaT pArT. It’s absurd. 

[Guy Gimenez]

Quote from @V.G Jason:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Forget the HUD, just look at the net transaction. The buyer pays both, and the buyer's agent has a vested interest in the deal closing at arguably the highest mark. Which in theory means the buyer pays both sides at the worst metric to them.

The HUD shows the net. You guys kills me with the "the HUD" is useless talk. There's clearly a lot of fear amongst buyer agents now the the tide has turned and they have to prove themselves instead of forcing a seller to pay a broker a fee, regardless of a buyer brokers competency. Wonder if you'd think the HUD was useless if your commission wasn't shown on it?

[Guy Gimenez]

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

I get it. You're scared for your future. It's OK man...just adapt or find a job that guarantees you a paycheck. The HUD is a legal document...but OK, you can claim it's bunk if you wish as I know it makes you feel comfortable. Using a specific marketing strategy, I'm able to sell about 40% of my flips directly to a buyer. My houses don't sell for less but there is considerably less drama in the transaction. I know brokers and NAR provide you this "the buyer pays the commission anyway" because this industry has refused to change for decades and any change brings little quotes as you mentioned above to help ease the pain. As a frequent seller, I know who pays the fees and it ain't the buyer. But again, stay that course if it makes you feel better.  

I love watching the people who claim they’re dictate get all emotional. As the last guy said. The net transaction says it all. One guy brings money to the table one leaves with it. bUT The sELeR pAid tHaT pArT. It’s absurd. 

Stick with your theory. But you better learn to "up" your game as you now have to prove value rather than just using little industry quips about it. The golden goose has been terminated and those with true value will win, those who only believe they add value will be looking for the next guaranteed check. 

[Shane H.]

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

I get it. You're scared for your future. It's OK man...just adapt or find a job that guarantees you a paycheck. The HUD is a legal document...but OK, you can claim it's bunk if you wish as I know it makes you feel comfortable. Using a specific marketing strategy, I'm able to sell about 40% of my flips directly to a buyer. My houses don't sell for less but there is considerably less drama in the transaction. I know brokers and NAR provide you this "the buyer pays the commission anyway" because this industry has refused to change for decades and any change brings little quotes as you mentioned above to help ease the pain. As a frequent seller, I know who pays the fees and it ain't the buyer. But again, stay that course if it makes you feel better.  

I love watching the people who claim they’re dictate get all emotional. As the last guy said. The net transaction says it all. One guy brings money to the table one leaves with it. bUT The sELeR pAid tHaT pArT. It’s absurd. 

Stick with your theory. But you better learn to "up" your game as you now have to prove value rather than just using little industry quips about it. The golden goose has been terminated and those with true value will win, those who only believe they add value will be looking for the next guaranteed check. 

Lol this guy… the emotions pouring out are great. I never said I was a buyers agent. Some other guys on here are actually mad at me for saying the buyers agent is often worthless. I’m just a guy who can see the obvious. When 2 people come to the table one brings the money, the other leaves with it. By your theory next month all the home prices are going to “stay the same,” but the buyers are going I pay 3% more. We will see if that happens. What I expect is home prices will “go down 3%,” the buyer will pay the same exact amount. The HUD statement will adjust in the middle but the amount the buyer brings to the table and the amount the seller takes won’t change. 

[V.G Jason]

Quote from @Guy Gimenez:

Quote from @V.G Jason:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Forget the HUD, just look at the net transaction. The buyer pays both, and the buyer's agent has a vested interest in the deal closing at arguably the highest mark. Which in theory means the buyer pays both sides at the worst metric to them.

The HUD shows the net. You guys kills me with the "the HUD" is useless talk. There's clearly a lot of fear amongst buyer agents now the the tide has turned and they have to prove themselves instead of forcing a seller to pay a broker a fee, regardless of a buyer brokers competency. Wonder if you'd think the HUD was useless if your commission wasn't shown on it?

 My commission? I'm an investor, probably more so than 99% of this board, and if you had a clue you'd see I'm actually more anti-agent then the next guy. 

I never said HUD is useless, I said just look at how the the transaction plays out. Buyers pays net closing costs(including down payment), lender distributes cash, seller receives cash less mortgage debt and agent's commissions. Do you not agree?

So in totality, the buyer really pays for both sides once we factor the lender's cash(/mortgage) is subsidizing the buyer. 

Versus in the new era, where I think the buyer pays similar to what they are paying, the buyer's agent takes less, and the seller ends up keeping more. The seller agent remains unch, but now are arguably one of the most vital pieces in how transactions work. Who you hire as a sellers agent probably has never been more important. Fake promises, communication, etc., are going to be heavily scrutinized. 

[Bradley Miller]

I'm most curious not about what has happened, but what is going to happen next. A couple things brewing in our market: 1) Just a bit ago I received an email of a Listing Service for Buyers where buyer's agents can "publically post the specific wants and needs of their buyers," and "Request commissions and customize fees per listing and deal."  And 2) I received a video message from the owner of our technology company that they are working on ways to be able to post how much seller's are willing to pay for buyer's agent commissions on our company website (which specifically is allowed in the settlement). The dust isn't even settled yet, but the wheels are spinning.

[Guy Gimenez]

Quote from @V.G Jason:

Quote from @Guy Gimenez:

Quote from @V.G Jason:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Forget the HUD, just look at the net transaction. The buyer pays both, and the buyer's agent has a vested interest in the deal closing at arguably the highest mark. Which in theory means the buyer pays both sides at the worst metric to them.

The HUD shows the net. You guys kills me with the "the HUD" is useless talk. There's clearly a lot of fear amongst buyer agents now the the tide has turned and they have to prove themselves instead of forcing a seller to pay a broker a fee, regardless of a buyer brokers competency. Wonder if you'd think the HUD was useless if your commission wasn't shown on it?

 My commission? I'm an investor, probably more so than 99% of this board, and if you had a clue you'd see I'm actually more anti-agent then the next guy. 

I never said HUD is useless, I said just look at how the the transaction plays out. Buyers pays net closing costs(including down payment), lender distributes cash, seller receives cash less mortgage debt and agent's commissions. Do you not agree?

So in totality, the buyer really pays for both sides once we factor the lender's cash(/mortgage) is subsidizing the buyer. 

Versus in the new era, where I think the buyer pays similar to what they are paying, the buyer's agent takes less, and the seller ends up keeping more. The seller agent remains unch, but now are arguably one of the most vital pieces in how transactions work. Who you hire as a sellers agent probably has never been more important. Fake promises, communication, etc., are going to be heavily scrutinized. 

We'll have to agree to disagree regarding who pays but we CAN agree that sellers will net more because we are no longer forced to include a commission amount in the MLS. Now a buyer broker will be less likely to lowball offers because the "concessions" offered, if any, will surely include any amounts a buyer broker will receive.

[Guy Gimenez]

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Investor / broker here. 

Funny how it's always the other party who is greedy, never the person in the mirror. Why is it greedy that a seller takes a risk and wants to reap the full rewards, but it's not greedy for a buyer to expect the seller to pay someone to negotiate against a seller? 

I think the proposed NAR settlement is a good thing. It levels the playing field for sellers, like myself.

 Well for starters… because the buyer always lid both fees so…

Review a HUD and tell me who pays. The industry language has never worked for me...I look at things logically, not emotionally. 

Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

I get it. You're scared for your future. It's OK man...just adapt or find a job that guarantees you a paycheck. The HUD is a legal document...but OK, you can claim it's bunk if you wish as I know it makes you feel comfortable. Using a specific marketing strategy, I'm able to sell about 40% of my flips directly to a buyer. My houses don't sell for less but there is considerably less drama in the transaction. I know brokers and NAR provide you this "the buyer pays the commission anyway" because this industry has refused to change for decades and any change brings little quotes as you mentioned above to help ease the pain. As a frequent seller, I know who pays the fees and it ain't the buyer. But again, stay that course if it makes you feel better.  

I love watching the people who claim they’re dictate get all emotional. As the last guy said. The net transaction says it all. One guy brings money to the table one leaves with it. bUT The sELeR pAid tHaT pArT. It’s absurd. 

Stick with your theory. But you better learn to "up" your game as you now have to prove value rather than just using little industry quips about it. The golden goose has been terminated and those with true value will win, those who only believe they add value will be looking for the next guaranteed check. 

Lol this guy… the emotions pouring out are great. I never said I was a buyers agent. Some other guys on here are actually mad at me for saying the buyers agent is often worthless. I’m just a guy who can see the obvious. When 2 people come to the table one brings the money, the other leaves with it. By your theory next month all the home prices are going to “stay the same,” but the buyers are going I pay 3% more. We will see if that happens. What I expect is home prices will “go down 3%,” the buyer will pay the same exact amount. The HUD statement will adjust in the middle but the amount the buyer brings to the table and the amount the seller takes won’t change. 

Real property has intrinsic value based on supply and demand. If there's anything I've learned in the last 24 years of investing is that that Buyers will not bring 2% to 3% to pay their agent. Will those buyers just hang up their home buying hat and continue renting (or staying in their entry level home) thereby foregoing their dream home? No, no they won't. They'll go direct to the listing agent just as they often do with new build properties. I have proven this "theory" over and over again. Values do not decrease based on whether a buyer broker is involved. All NAR did was remove the free market restriction and I'm all for it.

[Matthew Paul]

What may also happen , is something I havent seen mentioned is that the LISTING agents commissions will possibly be negotiated downward .  Now , I know all the Agents out there will say no way , wont happen . BUT every agent out there will be hustling business to get the listing ( since the buyers agent side is in flux ) .   All depends on the market and how hungry an agent gets . 

1 or 2 percent of $700K  is still better than 3 percent of nothing . 

Just a prediction , Its all over the news about the settlement . The public is aware . And even though raters are up , at least in my area , its still a sellers market .  I have 1 house to sell and 100 agents to choose from . And in my zip code there are only 6 houses under $650K for sale .

[Russell Brazil]

Quote from @Matthew Paul:

What may also happen , is something I havent seen mentioned is that the LISTING agents commissions will possibly be negotiated downward .  Now , I know all the Agents out there will say no way , wont happen . BUT every agent out there will be hustling business to get the listing ( since the buyers agent side is in flux ) .   All depends on the market and how hungry an agent gets . 

1 or 2 percent of $700K  is still better than 3 percent of nothing . 

Just a prediction , Its all over the news about the settlement . The public is aware . And even though raters are up , at least in my area , its still a sellers market .  I have 1 house to sell and 100 agents to choose from . And in my zip code there are only 6 houses under $650K for sale .

 Consumers can already hire agents at discounted rates. Yet by and large they dont. Redfin has a 2% market share in your/mine market. Deeply discounted sales process is already available to them, but most do not go that route. Why?

75% of sellers only interview 1 agent, and then hire them. That's because they have already decided who they are hiring before they even call that agent. And that isnt hyperbole, thats the stat.

Additionally, real estate salespersons arnt actually empowered to negotiate their fees. They work for brokers that set their fees. 

And the Redfin model isnt actually sustainable. In 20 years of existence, they have yet to turn a yearly profit. I think they have 1 quarter ever where they were profitable, during 2020. Theyll be out of business too in the next 18 months most likely as their stock continue to plummet.  Theyll be purchased by Home Services of America during that time for pennies. Theyre market cap is at a point where like 300 agents could chip in and buy out the whole company right now. HSA will buy them, use the data and website, and strip the rest and discard it. 

[Mark Brown]

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?

Among the largest issue I see here for the overall ecosystem is that there will be a new disparate impact challenge here. Most buyers are not real estate investors but are everyday people with children and other responsibilities. Sellers will be paid to employ a bevy of tactics to undermine, hard negotiate, and undersell to unknowing buyers. I can see real estate getting more prosperous of an investment. I think the banks are going to see a spike in defaults in which people will be paying massive monthly payments due to increased PITI and may inevitably default on the mortgage. I think the market will get saturated for seller agents and many agents will want to cash in since that's where the money (cranking up buyer cost by selling to seller way over comps and market value for homes).

[Victor Patel]

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?

I'm not convinced home prices will go down anytime soon.  I believe this settlement will make things worse for home buyers.  Many home buyers barely have enough money for a down payment and now they have to come up with additional funds for their buyer's agent?  Sure the buyer can go directly to the listing agent but that agent will not represent the buyer for free.  Even if he/she does so the savings is perhaps 3% of the sales price.  On an average $400,000 home that amounts to $12,000 savings over a 30 year period.  At an interest rate of 6% that amount to a monthly savings of around $72.  Sure the buyer could pay a higher price and ask the seller to pay the buyer's agent 3%.  If that is the case, has affordability really gone down?  Has the buyer really saved any money?  How is that different than it has been?  Perhaps the government should let market forces dictate commissions.  I have been a realtor for around 25 years.  I have taken listings for 4%, 5%, 6% and even a $1500 flat fee.  There was never a "standard" commission.  I am glad to be on the tail end of my career.  This new law will not work.  Buyer's will get screwed even more.  

[Guy Gimenez]

Quote from @Victor Patel:

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?

I'm not convinced home prices will go down anytime soon.  I believe this settlement will make things worse for home buyers.  Many home buyers barely have enough money for a down payment and now they have to come up with additional funds for their buyer's agent?  Sure the buyer can go directly to the listing agent but that agent will not represent the buyer for free.  Even if he/she does so the savings is perhaps 3% of the sales price.  On an average $400,000 home that amounts to $12,000 savings over a 30 year period.  At an interest rate of 6% that amount to a monthly savings of around $72.  Sure the buyer could pay a higher price and ask the seller to pay the buyer's agent 3%.  If that is the case, has affordability really gone down?  Has the buyer really saved any money?  How is that different than it has been?  Perhaps the government should let market forces dictate commissions.  I have been a realtor for around 25 years.  I have taken listings for 4%, 5%, 6% and even a $1500 flat fee.  There was never a "standard" commission.  I am glad to be on the tail end of my career.  This new law will not work.  Buyer's will get screwed even more.  

I agree with much of what you say. And I'm all for free market principles but requiring a seller to pay another party to negotiate against the seller is the polar opposite of free market. The NAR settlement, if approved, is a big step toward a free market. Sellers have been getting screwed for decades. This will even the playing field a bit.

[Gaetano Ciambriello]

This is a net positive for the business AND top producing agents like yourself.

You will have agents who do this part time or only do 1-3 transactions a year no longer want to spend time in the business (as it will not be as lucrative).

The top agents will pick up more market share and be able to help more clients.

That is how I see it.

[Vito Ciambriello]

@Alan Asriants

Great post Alan! I think buyers who are untapped or go directly to the listing agent will be negatively impacted because they won’t have a fiduciary acting solely on their behalf for the purchase. This could make first time buyers vulnerable many issues like inspection issues and just bad real estate practices.

[Alan Asriants]

Quote from @Rob Tennyson:

Quote from @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 ?

 I'm curious about this as well. I've seen appraisers reduce the appraised value by the seller credit. So wouldn't they do the same for buyer's agent comp?

For instance. $500,000 listing price. Offer gets accepted at $505,000 with $5k in seller credit. Then the appraisal comes in at $500,000. Ruins the whole seller credit. 

 Likely if you incorporate it into sales price that you would have to make an agreement that the appraised value does not affect your commission as a buyers agent. Otherwise you are working on chance. Might as well play poker - even there you might have more of a shot...

[Alan Asriants]

Quote from @Mark Cotter:

Quote from @Devin Scott:

Quote from @Shane H.:

I think the whole thing is irrelevant. Prices aren’t going to go down. Are you seriously going to list a house for 145,500 instead of 150k because of this? Lol I expect an increase in overall cost. The only way it’s going to drive prices down is if buyers agents (like all of them not just one here or there) encourage buyers to make offers accordingly. I don’t see it… the fact of the matter is that buyers have always paid both sides of the fees. That hasn’t changed. This situation is the equivalent of a store listing sales tax in the price one day and not the next. Except in real estate the price is already so murky it won’t be as noticeable. 

 Prices aren't just determined by list price.  Buyers won't be able to pay as much across the board because they need to cover their own agent fees.  Hmm, what could that do to prices...

 When there is a void something always moves in to fill it. I'm willing to bet you that companies like Redfin and Zillow will be all over this. Buyers won't be using Agents within 5 years.

 How will Buyers get their representation? Lawyers, just paper pushers? Lawyers aren't trained to know location, neighborhoods, property conditions. 

[Alan Asriants]

Quote from @Matthew Paul:

Quote from @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?

 It doesent matter whats   " fair "  .    Its what both buyer and the agent agree on .  

If I , the buyer wants to see a house and a buyers agent takes me in and shows me , And then I want to put in an offer , they are entitled to be paid for their time . Is that amount a percentage of the sales price ?   No , not in my opinion .   If they have 8 hours of their time involved , they should be compensated .  If the agent is asked to provide additional services , they charge accordingly .

Becoming an agent is not hard , take a free course offered by a real estate company , study , pass the test , you are a licensed agent . No college , no 5 years of experience needed . Plumbers , electricians , HVAC , need time in the field under a master before they can be a journeyman and more years before they can sit for the test for their masters license .  

Yes  buyers agents will make less , when you are hungry you will do what you need to to put food on the table . And other buyer agents will lower their prices to get the work . 

 So every time you call an agent about questions for a home, or the agent follows up with your lender, or replies to email, they will bill you by the hour? 

That model might have a lot of holes in it.

This point is not completely directed to you but generally

Also, you are right, barrier to entry for agents is very low. But that doesn't mean the profession is easy. I have had countless friends join the business, get their license, and struggle to even find 1 client to sell a home to in 3 years!

75% of real estate agents fail within the first year, and 87% fail within five years

Out of the 25% who don't fail, they aren't making "bank." Those are only the top of the top. Most agents don't even make 6 figures. 

I think the notion that being an agent is easy is a very big misunderstanding. Personally if someone told me that all I have to do is open some doors and fill out some contracts and I can make 3% of 500,000, I would try that profession out in a heart beat. Maybe thats exactly why I tried it. But man, getting that first sale was incredibly difficult. Scaling your business to a point where income is not guaranteed to creating a more or less stable system also took many many hours. Like all good things in life, building a business takes time. Especially on a platform where we talk about real estate investing, we all are aware that building a portfolio, investing, managing, etc all take time and are not easy things to do. 

Its like saying: "Oh you're a landlord? All you do is write a lease and collect rent. You guys do nothing, you shouldn't get these kinds of benefits"

It's a lot easier to type about how easy something is, then to go try it for yourself and make an accurate judgement. 

[Alan Asriants]

Quote from @Robert C.:

HOT TAKE - If buyer’s commission really gets whittled down to a low flat fee, isn’t there a point where most of you (realtors) should just become leasing agents for a living instead?!

unfortunately there will be a point where it is not worth it to go around and tour homes. Working with buyers takes up a lot of your time. Some buyers don't even buy for years. That kind of investment is not worth it and has a low ROI.

It's like putting 50% down on an investment in the midwest that has barley any appreciation, and doesn't cash flow lol!

If the flat fee is that low, then agent will likely put the burden of touring, negotiating, due diligence all on buyer and just write contracts. 

[Alan Asriants]

Quote from @Carlos Ptriawan:

Quote from @Marc Rice:

Quote from @Alan Asriants:

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

 I agree! Should be way easier for good agents. Part time agents will get flushed out, good buyers agents will charge a premium, and things will be ok. I see Redfin and Zillow launching "flat fee low budget, low service" buyer-agent lead network, but those agents will not be good, especially anything investment related. If you're a buyer agent finding off market deals, you can now charge even more for your service due to the extra headaches.

Some of realtor folks here are always making funny assumptions :-) why in the world the part time agent would get flushed out, the other way around could be happening too because as the cake is smaller, it's almost no make sense to have living as full time agent lol 

also there's no such thing as good and as bad agent, if good agent offering 3 percent and lousy agent could offer 1 percent , buyer can still flock using the lousy agent. 

Remember this all good cop bad cop good agent bad agent is only self-proclaimed imaginary status lol

 So when you do renovations on a property do you get the cheapest guy? Because there are no such thing as a good or bad contractor. lol 

[Steve Babiak]

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

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Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

 In 2019, I bought a house where the seller had to bring almost $60K to closing ;)

[Jay Hinrichs]

Quote from @Steve Babiak:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

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Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

 In 2019, I bought a house where the seller had to bring almost $60K to closing ;)

back in 2010 bringing money was common.. i bought some lots and seller had to bring 750k to closing :)  

[Steve Babiak]

Quote from @Jay Hinrichs:

Quote from @Steve Babiak:

Quote from @Shane H.:

Quote from @Guy Gimenez:

Quote from @Shane H.:

Quote from @Guy Gimenez:

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Logically speaking, only one side brings money to the table. The HUD is nonsense. The reality is the buyer pays a certain amount less based on certain things. The seller doesn't pay a penny. Unless they're under water that's a whole different thing, but it has to be pretty bad to pay at closing. Lol

 In 2019, I bought a house where the seller had to bring almost $60K to closing ;)

back in 2010 bringing money was common.. i bought some lots and seller had to bring 750k to closing :)  

Agreed, values had tanked.

That’s why I gave the year as 2019, values were heading up. And I didn’t mention earlier that there were multiple offers, and mine was the highest - that seller would’ve had to bring over $60K if not for my making the offer I made.