All Forum Posts by: Jeet Sangha

Quote from @Wilson Lau:

Thanks for the breakdown, Jeet. On the bright side, I think this will definitely separate realtors who are dedicated and putting in hard work vs. those who only put in minimal effort. On your end, I am curious how your sellers are reacting to this news?

 Hey Wilson, i’m working with two sellers ant the moment and none of them brought up the settlement. In fact, I had to bring it up.

Quote from @Bruce Lynn:

The real trick is how to bridge the equity gap.  If a buyer has cash, that works, or owner willing to take back 2nd....but I've had trouble finding a lender who will take a 2nd on the gap.   How about you?

 I have a loan broker who can help with 2nd position mortgages and I would only look for properties with high loan balances to avoid that scenario altogether. 

If you're planning to buy or sell a house, here's a useful Realtor tip.

If you're a seller and your home has a low-interest FHA financing, you may be able to sell your home for a higher price. This is because FHA loans are assumable, which means that a potential buyer is willing to pay a higher price for a home if they can take over the existing low-interest rate mortgage.

On the other hand, if you're looking for a home to purchase, try to find a home that has an FHA loan.

This can be beneficial for both buyers and sellers and can result in a win-win situation.

Quote from @Lucy Yen:

I am fresh in the industry of real estate investment and here to learn how scale in real estate across the country for cash flow and to retire in real estate. 

 Hello Lucy, welcome! What are some of the questions you have that we can answer to get you started on your real estate journey?

Quote from @Joshua Ostler:

I'm a golf professional working near San Jose, CA. I'm wanting to invest in real estate outside of CA (obviously) and am learning as much as I can. I want to invest in Arizona (Phoenix or Tucson). Would love to do SFH or Multi Family. Will trade golf lessons for mentoring 😁

 @Joshua Ostler As a professional golfer, your background may provide you with an advantage over other investors. You can specialize in investing in properties located near golf courses, which will attract golf enthusiasts. This could also be a smart short-term rental strategy since golf courses are typically situated in well-established neighborhoods with easy access to other amenities. I know an awesome Phoenix area Realtor if you need a recommendation down the road. 

Quote from @Shane H.:

Do you really think buyers are going to buy a different house over say… $4,500?

I’ll believe that when I see it. Buyers always paid both commissions. Regardless of what the settlement sheet says. It’s such a silly thing to say the seller pays anything when they sell their home. 

As long as the house appraises buyers are just going to wrap it into their mortgage, or not use an agent. If it doesn’t wrap into the mortgage the buyers agent didn’t do a very good job considering they are paying absolute top dollar for the house. Lol

In my area, the average real estate commission is $25,000. Therefore, I believe that commission fees will be a significant factor in buyers' decision-making process. If the market shifts and becomes a buyer's market, we will see sellers offering to pay both sides of the commission to entice buyers to purchase their properties.

Both buyers and sellers can make valid arguments. On one hand, sellers may feel like they're losing out on their net proceeds after paying commissions and closing costs. On the other hand, buyers may feel like they're overpaying for the property to cover commission costs.

Exactly! As a buyer’s agent, you’ll need to communicate your worth and expertise to the clients more than ever. 

In light of the recent lawsuit against the National Association of Realtors (NAR), There has been significant discussion regarding real estate commissions following this settlement. Today, I want to take this opportunity to ​clarify some things and share what is going to change.

Under the current compensation model, a seller typically pays a commission of 5% or 6% to their listing agent. The listing agent then splits the commission with the agent who brings a qualified buyer, and this percentage is advertised on the MLS for each property. This settlement essentially decoupled the commission; now it's very likely that sellers may refuse to offer any commission on the buy side, and buyers will have to pay out of pocket if they want Realtor representation.

Starting this July, here's what's going to change:

1. Similar to signing a listing agreement before listing a house for sale with an agent, a buyer representation agreement is now required when working with a buyer's agent.

2. When hiring a Realtor to represent a buyer, the buyer and agent will negotiate the commission beforehand as part of the buyer representation agreement.

3. Buyer agent commissions will no longer be advertised on the MLS, but sellers can still offer to pay the buyer's agent commission as part of the purchase agreement or seller concessions.

4. Some sellers may opt not to pay the buyer-side commission, in which case the buyer will be responsible for compensating their agent.

How it may affect buyers and sellers: Sellers may feel that not having to pay the buyer's agent commission is good for them as they can save half of the commission. However, in a competitive market, if a seller down the street from you is offering to pay the buyer agent commission, the buyers are likely to choose that house over yours since they won't have to pay their agent out of pocket. This incentivizes buyers to look at properties that offer buyer agent commission. If you're not offering any commission, you may see reduced buyer activity on your property, or you may get unrepresented buyers, and they may not be fully qualified since they have not been vetted by a buyer's agent. The new policy may also hurt first-time buyers as they are usually cash-strapped. They barely have enough money for a downpayment, and now they have to come up with additional funds to cover the real estate commissions.

Furthermore, it is unlikely to bring home prices down because prices are market-driven and not related to real estate commissions.

I hope this information was helpful; if you want to discuss this in more detail, I'm always available to chat. 

Quote from @Hyeonji Oh:

Quote from @Jeet Sangha:

@Hyeonji Oh , you may be able to purchase your primary home using Santa Clara County's Empower Homebuyers shared appreciation down payment assistance programs. They can lend you up to $250,000 towards a down payment if you are a first-time homebuyer, live or work in the county, and meet their income criteria, which I believe is up to 120% of the area's median income.  Then use your savings to purchase an investment property. 

I didn't know Santa Clara County had this loan. It is a great opportunity to buy a house near my area. Thank you for sharing!

If you decide to pursue this option, I have a qualified lender who can assist you with this program. Not every lender is certified to offer this type of service. 

@Mark Vesu curious to know if you ever got an answer to your question. Have you talked to the planning department about this?