All Forum Posts by: Eric James

I think part of the issue is that, per 2016 Brandon Turner, every property cash flows $250 a month forever, and so there's no such thing as a $5K turnover

I've had rental properties for 14 years and never even had a $1000 turnover

0 Votes

Cleveland, Ohio

Buyers commission isn't to be shown on the MLS supposedly because it is negotiable. By that reasoning a listing price shouldn't be shown on the MLS.

2 Votes

Long Island, New York

You can look at it as being too late to the game. But you can also look at it as being. too early. Priices don't remain this high above the inflation adjusted level for long.

1 Vote

Columbus, Ohio

Quote from @Jay Hinrichs:

Quote from @Tony Savage:

My two cents,

Most buyers will not have the extra cash to pay the buyers agent 12,500.00 which is 2.5% of the average commission here in San Diego; that's on a 500K home. Buyers agent's commissions are going to get crushed, It's not going to matter how skilled you are. It's about dollars and cents.

The listing agent will represent the buyer for a lot less than what a buyer's agent would expect when working with a client.

I know if I was a buyer I would definitely consider contacting the listing agent and have him or her write up my offer.

Tony, I dont know about your market but here in PDX. Many Brokerages do not allow dual representations.. so not sure how that will work.. My Wife ( 30 plus year veteran agent) believes open houses will not be much common and critical to the Buyers.. As you state buyers are not going to want to pay for something they have never had to pay for before or heard of . And agents are not going to work for free. so buyers are going to have to find these deals on their own. And open houses will be a big player is what Ms. Lori thinks.

No dual representation here in TX either. It seems there are 8 states where that's the case.

0 Votes

Long Island, New York

Yes, in many markets home 1-4 unit home prices have gone up so much that they will not produce positive cash flow. If you're just looking to start in real estate you might try to look off market or just wait a few years until prices have corrected.

2 Votes

Cleveland, Ohio

Quote from @Tony Kim:

Quote from @Eric James:

Quote from @Tony Kim:

Quote from @Eric James:

Quote from @Carlos Ptriawan:

Quote from @Duane Alexander:

Quote from @James Wise:

Quote from @Carlos Ptriawan:

Quote from @Dan Mc Donald:

Yeah but seller can put 0.5 percent buyer agent in private remark

They've never not been able to do that.

The problem is that if you advertise anywhere that you are only paying a buyer agent .5 percent, no buyers agent will show the house. This is another reason why sellers should NOT be the ones setting the buyer’s agent commission. The buyer agent’s commissions should be negotiated between the buyer and the buyer agent and buyer’s agent needs to prove their value to their client to negotiate the highest amount. This system we have now is stupid.

correct, and since everything is negotiable now, the game would even changing from buyer agent selection. Some broker may be ok to accept less buying commision but decline.

I typically negotiate my buyer commision too but to be extremely honest, only "Asian-born" is typically acceptng less buying agent negotiation, so if they're getting 2.5% and I would get 0.5%, but I mentioned to them I don't ask them to drive me around, I only want disclosure report and I would visit property myself.

The problem with very high hefty buyer agent while buyer agent almost do nothing is very real issue in bay area at least, most buyer agent is just trying to force buyer to submit their bid (and their life) with zero contingency and submit 100k above listing LOL LOL

this regulation would change these mentality for sure, the seller could be more greedy by now lol.

Now because buyer agent and buyer is determined upfront and then seller would have their own metric, these thing would be interesting. I can't wait to see ReMAX only accepting 2.5% minimum and EXP can afford to live 1.5% ; some brokerage would face foreclosure in long term for sure LOL

Now wait til one team EXPI is offering give me $10K flat fee or ala carte service, woooshhh, all commision rate is going to the bottom LOL

Buyers agent commissions have always been negotiable. Despite that, seller's agents were successfully sued for sharing commissions with buyers agents. Now, the only protection seller's agents will have from liability is to not give any commission to buyer's agents.

Well, the protection from liability will now be the fact that the buyer's agent commission can no longer be listed on the MLS. There will no longer be an official buyers agent portion of the commission. But that doesn't mean selling agents will not give any commission to the buying agent. Instead, it will have to be negotiated outside the MLS between listing agent and buying agent.

So the result of a $418M judgement is that just not listing a buyer's agent commission on an MLS is going to protect from future liability? That doesn't sound realistic to me.

Well you're missing the main driver of the lawsuit, which was inflated commissions. Let's say they eliminate the commission sharing, but inflate the commision to 8%. But hey, we've incorporated the only protection against liability right? Wrong.

Without getting too off track, I just disagree that "the only protection seller's agents will have from liability is to not give any commission to buyer's agents." That's totally wrong. It's expected that seller's agents will negotiate what part of their commission will go to buyer's agents. But it will be done outside of the MLS. That has nothing to do with any perceived protection from liability. That's all...

Paying a high commission rate isn't illegal or a basis for a lawsuit.

1 Vote

Quote from @V.G Jason:

Quote from @Eric James:

Quote from @V.G Jason:

Quote from @Peter Tverdov:

Quote from @John Morgan:

Great for buyers and sellers. Bad for agents who make a killing selling high end homes. I’ve always used the listing agents anyway so there isn’t a wasted 3%. Sometimes this listing agents take the whole 6% and some don’t. But I get the prices to come down.

See I think now people like this get hurt because if you come to the listing agent, you need to come to an agreement that they are getting paid to represent you even though it's their listing. Otherwise they don't work for you. It might work on a deal with no offers or interest but even then, they're not going to advise you in a positive way.

This is no different than how it's been. The buyer's agent essentially always worked for the seller. This reform is trying to change that, but if commission is how things are paid it doesn't change anything. The % basis is always going to make both agents want a higher final sale price.

Now, the buyer's agent will only work for the buyer on a separate, term-level basis. Or they'll need to go be wrapped in a deal by the seller if the buyer need representation and isn't experienced enough-- which is no different than it is now.

I'm talking to my agents now in states where I cannot do dual agents, they want to create a minimum barrier of entry for anything to get done now. I am aiming for fixed fees not fixed %s, so I told them if you save me money on a house that you found and we close-- you'll get paid. If I'm picking the house, and we're just negotiating and it's all me. I'll opt to now go do it myself, which I do in other markets. They did not like to hear that, so they're going to try to find a different way to do things.

For example, if I'm buying a fixer upper in Nashville for $680k, and I can get the deal at $620k and I identified the house, I negotiated the price, etc., I'm not paying her $15k as commission. She just gets a flat fee maybe $1,000-$2,000 to look over my contracts or whatever an hourly rate is to do that. If she finds that a problem, I can hire a lawyer that'd charge me akin to that. Now if she finds a house, it's $680k and gets it in at $620k by scrapping and she saved me $60k. I'll give her 2.5% commission and 10% of the differential in that 60k so 6k more(1% extra)-- so 3.5% commission. Either work and do your ****ing job, or someone else will. Buyer's interest is your concern & priority, it's a new agenda I get it. You never cared about it before.

That's what I've heard about this suit as well. It was broader than commissions. It is about sellers paying for a buyers agent to negotiate against them. This puts at risk sellers paying for buyer representation in any form.

I don't get this premise and never did.

Wasn't this suit about agents colluding making buyers pay more? Buyer's agent's were never negotiating against sellers; infact they worked for the sellers. Who pays the buyers agents? The sellers do. The buyer's agents had every incentive to get the deal to close at the highest price possible. Buyers agents rarely took into consideration the actual buyer.

Buyer's agent is a legal fiduciary of the buyer. They are legally required to pursue the interests of their client, even at the expense of the agent themself. This means they negotiate against the seller. Sellers sued for having to pay buyer's agent to negotiate against them

1 Vote

Long Island, New York

Quote from @V.G Jason:

Quote from @Peter Tverdov:

Quote from @John Morgan:

2 Votes

Long Island, New York

Quote from @Scott Trench:

Quote from @Nathan Gesner:

Most people don't understand what this agreement actually means.

In almost all transactions, commissions are paid by the seller. The Listing Agent negotiates their fee with the seller, and they offer a portion of that commission to a Buyer's Agent. The buyer doesn't have to pay anything, making purchasing a home more affordable for the buyer.

The new rule (if approved by the court) says that the Listing Agent can't advertise how much they are willing to pay a Buyer's Agent, but it can be negotiated outside of the MLS.

Here's the problem. Joe asks me to help him find a house. I spend 12 hours showing houses, Joe settles on a nice property listed for $500,000. We write up an offer, it's accepted, and then I learn that the Listing Agent is only offering me a $500 commission!

Here's the solution: every Buyer's Agent will have a written Buyer's Agency Agreement. In that contract, they will stipulate how much their buyer has to pay them for their services. Using the example above, I would tell Joe that he has to pay me 2% commission for my services. This means Joe will need an additional $10,000 to purchase a $500,000 property. If the Listing Agent offers a 1% commission, then I would collect 1% from the Listing Agent and Joe would pay the other 1%.

I already use a Buyer's Agency Agreement and I make sure it is clear that the Buyer has to pay me a fee. However, I also state that I will attempt to collect that fee from the Listing Agent or Seller. This new NAR agreement will require all Buyer's Agents to do the same.

This new requirement will be challenging for some agents to navigate. I expect we'll see a lot of them screw it up and get paid less than their services are worth. More importantly, this could morph into a world where buyers have to pay some or all of their agent's commission, making it more expensive to purchase homes. That's not good in a market that is already unaffordable for most buyers.

Fannie Mae can fix this easily by allowing buyers to wrap buyer agent commissions into the loan. They effectively are doing this today. I think this inability for buyers to come up with liquidity for down payment plus agent commission will be a near-term issue, not a long-term one.

A problem is this would frequently push loans above appraised values.

4 Votes

Long Island, New York

You sue for specific performance. I've done it in TX. You should be awarded legal fees. There is a specific legal process that is followed. Go to a lawyer knowledgeable on real estate and they can take care of it for you. It could take up to a year, but you should win (including your legal costs) if you have a valid contact.

1 Vote

Dallas, Texas

All Forum Posts by: Eric James

Eric James has started 22 posts and replied 2235 times.

Post: Yo! Out of State Investors! Stop doing this. We are laughing at you.

Post: Home sellers would no longer be forced to pay up to 6 percent commission to agents

Post: Ohio markets not really cash flowing! Am I missing something?

Post: Home sellers would no longer be forced to pay up to 6 percent commission to agents

Post: House Hack Numbers Not Working (after I move out in 12 months)

Post: NAR Lawsuit Settled! Offering Buyer Agent Commissions in the MLS now Illegal!!!

Post: Home sellers would no longer be forced to pay up to 6 percent commission to agents

Post: Home sellers would no longer be forced to pay up to 6 percent commission to agents

Post: Home sellers would no longer be forced to pay up to 6 percent commission to agents

Post: Seller threatening to break contract to put back on market (for more $)