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All Forum Posts by: Eric James

Eric James has started 22 posts and replied 2235 times.

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
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.

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.

Am I missing something? The current NAR Buyer Representation Agreement already includes all the elements you describe as the solution. And NAR members are required to use this form

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
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.

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
Quote from @Dan Mc Donald:
Quote from @Steven Zagaris:

Where does it say offering buyer agent commission in the MLS is illegal going forward?

In California we never had a "6% standard commission". In the last 18 years I've taken listings between 3-6% because it was always negotiable. I'm not really sure how this will effect us other than sellers on average paying less per listing.


Too many people are just reading the headlines. For starters, NAR has zero control over what non affiliated MLS's do. The major one in our area, for example (major metropolitan city) will still plan on requiring commissions to be posted in the MLS. NAR isn't the end all be all police for the entire real estate industry, which everyone needs to realize, although they have lots of influence. They can't make paying a buyer's commission illegal on a national scale. It's ridiculous that some people are even saying or thinking that. That would get NAR in even more legal trouble if they tried to do that. All NAR is agreeing to is to not have "affiliated NAR MLS's publish "publicly" the coop commission. Several MLS's have already stated that listing agent can simply post the coop in private remarks, in affiliated disclosures in the MLS or through the showing confirmation. Many listing agents will be doing business as usual if they want to draw the largest pool of buyers, like FHA or
VA. The settlement isn't even a done deal. It's a proposal.


I don't think the issue is that every MLS or agency is affected by this judgement. It's that a precedent has been set that could happen to anyone.

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
Quote from @Christie Gahan:
Quote from @Colleen F.:

One other thing a buyers agent can do is drive a crappy sellers agent so the deal closes. You don't have a choice of the sellers agent and if they are bad slow, drop the ball that is where a buyers agent is effective.  It will be interesting to see how the showing aspect works out.  Probably you elite guys are gonna have to hire people to show your houses for you if you lose all the small volume agents as predicted. 

In the end as long as there are still relators, they will find a way to get at least the same dollars out of the transaction regardless of how this plays out, it is in the markets interest to make the fees less transparent to buyers and make them easy to roll into the transaction. Unless the move to a nation of renters takes over you are still going to see those first time buyers because the government will find a way to keep them there by providing additional assistance in the FHA or state programs loan package.

No one has shared any understanding of how the settlement will be distributed or what it will be used for? or where NAR will get it. Curious on your thoughts on that. Does this mean it is going to get more expensive to be a relator?


 I was thinking that the banks might cover a first time buyer 3% fee but it makes even more sense that the government would do it too.  The government needs money to keep moving to help stimulate the economy and tax revenue.  


 I've heard there's something like that in Australia. Where the government takes a part interest in private home ownership. As they say, the government doesn't like to let a a crisis go to waste. Could be an opportunity for the US government to gain more control by "helping" home buyers.

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
Quote from @Peter Tverdov:
Quote from @Eric James:
Quote from @Peter Tverdov:
Quote from @Vlad B.:

If I'm selling a property right now, is it worthwhile to hold off until 2H 2024 when fees go down? Property commission is around $23K not including closing costs.

Does anyone have an idea when this will actually be passed and implemented?


 If you want to sell now, sell it. If you brought it up to me and said Pete I don't want to pay the buyer commission I'd say no problem. Let's list at 3-4% and let me get to work. That's it. if the house is priced right a buyer will pay their commission OR you will get like 50k over asking and in the contract it will say seller pays 2-3% of buyers commission, which you would obviously do. 


 And then it won't appraise at the sale price and seller will have to come up with a lot more cash or cancel the contract.


 Then that buyer doesn't buy the house. If you can't come up with enough cash to pay 2-3% more you probably shouldn't be buying at that price point. Too many buyers in America now, I'm not worried about demand rn if someone cannot perform under contract. 


 Yes, tha may be a broad effect of this. Fewer buyers and lower demand.

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
Quote from @Peter Tverdov:
Quote from @Vlad B.:

If I'm selling a property right now, is it worthwhile to hold off until 2H 2024 when fees go down? Property commission is around $23K not including closing costs.

Does anyone have an idea when this will actually be passed and implemented?


 If you want to sell now, sell it. If you brought it up to me and said Pete I don't want to pay the buyer commission I'd say no problem. Let's list at 3-4% and let me get to work. That's it. if the house is priced right a buyer will pay their commission OR you will get like 50k over asking and in the contract it will say seller pays 2-3% of buyers commission, which you would obviously do. 


 And then it won't appraise at the sale price and seller will have to come up with a lot more cash or cancel the contract.

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
Quote from @Chris Seveney:

@James Wise

Hey, I just want to say I was told in another forum post I am mean and it was irresponsible for telling a potential homebuyer who did not have earnest money deposit that if you don’t have the money for earnest money deposit that should not be buying a house

Because a 23 year old living with mommy and daddy’s mansion says they buy all the time with no money down….

So why you trying to kill their dreams -

Lightbulb moment!!!

- when will the gator guru start a new lending program - crocodile lending - you lend to people so they can pay their buyers agent

Ok no one go steal this idea.


 Of course you were told you are mean for saying buyers should have earnest money to buy a house. This is BP. The home of how to get into real estate with no money.

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

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512
Quote from @Jay Hinrichs:
Quote from @James Wise:
Quote from @Jay Hinrichs:
Quote from @Bruce Lynn:
Quote from @Bill B.:

Sounds like your agent didn't do you any favors.  I normally save my clients thousands on new builds.  They must build way better houses in Vegas than they do in Dallas.  I'll bet in most of the new homes I've sold here, there is thousands of $ worth of rework needed that a buyer without a great realtor would get suckered with as "standard" for the industry.   When the client has a picky and demanding realtor that work gets redone....and most of the inspection callouts get fixed or discounted.   Recently sold resale that was 2 years old.  Now out of the main warranty.  I can tell the seller didn't have a realtor when they bought it and didn't do an inspection and they got to do thousands worth of fixes to sell it to my buyer....and that is all stuff I would have had the builder fix if they would have been my client when they purchased.

well being a broker for 50 years I am still confused what this all means when i started in the business in 75 I only sold land and I never did co op deals I sold my own listings.

as a builder currently half of our sales come from other agents.. My wife sells the others ( which is nice of course). So does this mean we have to remove the BAC ( other brokers commish) from the MLS.. ?? And hope that the buyers find us ?

Bruce I am going to brag a little.. WE had a home inspection yesterday on one of my new builds my wife attended along with her buyer so she is double ending it.. The client was there as well the whole time and he is in the industry Appliances sales.  The Inspector could not find ONE defect or item for us to correct.. Said it was the best built home that he has ever inspected and felt bad charging the buyer the inspection fee .  We usually get a few small items from the inspectors but its nothing like the production builds and I agree what I have seen in TX MS and other southern states.. Just sayin.

But still confused on this ruling.. I am in DC right now so will call the wife and ask her if her brokerage put out a memo today. 

 Big winners in this are going to be Zillow and people like me or @Russell Brazil , elite brokers who have an elite level of skill and  offer an elite level service but expect to be paid accordingly.

Big losers here are going to be the NAR and the mega brokerages like Keller Williams & Re/Max etc....The NAR and these brokerages make their money on the fees collected from the 1,000's & 1,000's & 1,000's of side hustle agents who are producing minimal revenue. Current setup right now is friendly enough for 1,000's & 1,000's of these side hustle agents to pay their dues and fees and give it a go. Granted the annual fail rate is already about 90%, it's easy enough to earn a couple bucks to keep the next crop of hopefuls coming in every year to replace last year's failures. The skill it takes to play the game has increased enough to stop a lot of that so NAR and the mega brokerages are going to have a lot less folks to get those fees from.


 how does the first time home buyer who only has a minimum down and cant afford to pay a buyers broker going to navigate this..  So the buyer looking at 10 houses has no money to hire a buyers agent will end up having to call 10 listing brokers to look at the props they may want to buy .. then the listing brokers are too busy to show them.. ?   Just trying to think through the mechanics of how this will actually play out.  

I am all for the situation we face as builders/owners.. someone comes to my community i spend an hour with them showing them houses.. then 3 hours later their relative who happens to have a license calls and says she/he is writing it up.. that piss's us off..  now we can handle all our own buyers since our product is all in one place. but how are you going to do it with scattered inventory listed all over Cleveland and all these buyers calling you directly that want to view the homes .. I guess you could have your own team and they could go show the homes.. no way you personally are going to be able to do this time management wise.. other wise you wont be able to post on BP you simply wont have the time with all the deals your doing.   Talking to my wife she is not worried as her business is all listings by referrals which is the benefit of a 30 year career and one that is going to wind down in the next few years. 


 If buyers will need to pay an agent out of pocket or forego representation that would seem to mean there will be fewer buyers, which translates to lower demand and prices.

Post: Top Ten Excuses(I’ve Gotten) For Not Making Mortgage Payment

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,280
  • Votes 2,512

Sounds like you might want to change your lending criteria.