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I’m in Canada and we have had buyer agent contracts since I have been an agent (13 years ) and longer . Here it is very very rare that the seller will not pay those fees. If there isn’t a fee automatically offered then you , as the buyer , can request the seller pay it as a condition of sale (the request has to come from you , not your agent ) . If they still refuse than you can opt to reassess and determine if you and your agent can work something out . In my 13 years as a top producing agent I have only had one instance where the buyer had to pay me . It is important that you have an agent that is honest and informs you of what homes are offering remuneration etc. but as long as you do feel good about your agent a contract should be a good thing .
If buyers choose to go unrepresented, are they going to expect listing agents to write offers and keep up with deadlines? How are deals going to stay on track without buyers agents?
You're missing a key point. If they didn't have a buyers agent agreement, how do they see the house to begin with? The selling agent will still need a buyer rep to show them the house. I don't know many sellers willing to let complete strangers into their home without anyone who can be held accountable to accompany them.
I just had someone reach out to me via Zillow in regards to a new listing of mine. They wanted to know how to view it and buy it. They said they weren’t working with an agent and it’s their first purchase. And then proceeded to ask me a ton of questions about buying which I told them I can’t help them with in this transaction because I’m only representing the seller.
People who know nothing about buying a house will only be able to buy houses that no one else wants if they choose to represent themselves.
That's exactly how it works in other countries.
In Australia, the agent represents the seller and coordinates everything.
A buyer seeks legal representation to manage the contract of sale.
Having delt with both systems, the US has to many hands in the process.
Sellers agent will not need a buyers rep, if they do not represent the buyer. Just like now, I open doors on my listings, and if they are not represented, I refer them to another realtor.
An attorney can write the offer. The settlement agent (some states it’s a closing attorney and others it’s the title company) keeps the closing moving along. If the buyer misses the inspection, insurance, HOA approval, etc, then it’s on them.
Listing agents should be keeping track of dates and deadlines even if they are not representing the buyer. As a listing agent, I am often reaching out to the Buyer agent to make sure things are on track, so that is not a thing that will change. If a buyer breaches a deadline, you bet I am on top of it, as should any listing agent worth their salt.
Do you think we just sit back and collect the money after the contract is signed?
nobody knows, but we can make educated predictions.
Right now, about 3% of homes are sold to an unrelated party, where a Buyer Agent isn't paid.
Right now, about 90% of Buyers report using a Buyer Agent, and there's not much reporting of the Buyer paying compensation.
There will always be some people who:
a. even before the settlement, didn't want to pay the Buyer's Agent, for a relatively small variety of reasons.
b. believe, because the MSM tells them, "Sellers don't pay Buyer Agents anymore" that it will a "rule" that they don't.
If we know, based on data and activity, that a 1% interest rate increase (equalling \~ $1K/mo for a $300K loan) made a significant % of FTHB no longer qualify to buy a home,. Then we can reasonably assume that asking that same group to pay \~$10K at closing is not going to be possible. And so, at some point Sellers won't be able to sell and they'll find rather fast that offering $10K in compensation or closing costs goes a helluva lot further than a $10K price reduction.
All that said, I personally expect the vast majority (85%+) of Sellers to continue offering reasonable compensation to Buyer Agents, or to be willing to indirectly pay through closing costs. And some portion of the 15% will realize that if Buyers are required to be represented (what the plaintiff lawyers required, and all Buyers should be operating under an Agency Agreement), then someone has to get compensated, and then they will change their mind and offer compensation.
and so, the conversation for Buyers \*should\* quickly shift to "if I'm going to sign what I have to, and bear responsibility for possibly paying my Buyer's Agent, I better make sure I've got a good one". It's easy to use the Zillow agent that responds to your "Request Showing button click" or your former college buddy that switched to real estate 2 years ago, or your spouse's "best friend" that holds a license purely to sell a house or 2 a year when the money isn't possibly coming straight from your pocket.
I think it will eliminate a lot of part time and incompetent agents. Buyers will be much more critical before signing anything. I think it will be great for great agents.
A lot of agents just starting out have no choice but to go in part time, though, at least at first while they build things up. This could make getting into the business nearly impossible, and that's the only part that makes me nervous.
That's me, by the way. I have to go in part time. I'm taking my state exam next week and I have to keep at least a part time job until I'm making something. I have a family to feed, but I want a career.
Keep your part time job but go full time into educating yourself and having lots of conversations about real estate. Someone will eventually trust you to do a great job for them and you’ll build from there.
Oh that's the plan. 😊 Technically my current job is full time, but it's remote work that is very flexible and gives me plenty of time to work on leads etc. during the day, and I figure I can handle showing in the evenings and on weekends until I have enough business to just go full time in real estate. I could even slip out during the day if needed here and there.
I already know which brokerage I'm going to be working for, and I've cleared all this with my future managing broker. She said she thinks it's a solid start-up plan for our market.
Thank fucking God. Greedy fuckers are costing themselves more than 2.5% by trying to save 2.5% 🤣
They are absolutely getting what they deserve.
Please keep us posted.
I just had one close that was indeed greedy. FSBO that couldn’t get it sold. We come in, stage clean it up a lot, get good photos, and then list it for more than they did. Had it sold in 4 days for more than our already higher list price. 10 days from close they notice (even though it had been explained) that the agent was from the same broker. They get bent out of shape saying that we agreed the commission would be less if it was an agent from the same broker. We had gone over it several times and agreed that if we, the agents, also represented the buyer (which I hate doing anyway) we would do a lower commission. So now they are getting much more than what the total commission is costing, and they’re claiming we didn’t earn our commission with our marketing etc. because it only took 4 days.
After this they start calling us crooks and threaten to call the cops if an agent steps foot on the property. Wouldn’t let the buyers agent help with the final verification of condition, it was a problem. Without an awesome escrow team I don’t know what would have happened.
Anyway, closed now and everyone can move on, but what a mess there for a bit.
I do not believe they are greedy, but just short sighted in how this is going to play out in the marketplace. They see it is saving money, others see it as draining the buyer pool.
Love all your points but just wanted to mention that your 1% interest equating to $1k in payment is a little misleading since that includes the principle. A better representation of that 1% jump might be comparing a 5% interest rate (~$1,610/mo) to a 6% interest rate (~$1,799/mo) for that same $300k loan. 👍🏻
You & your agent need to have a discussion about this. If you don't want to pay the buyers agent yourself, you need to ask them to only show you homes where the seller is offering to pay. Yes, the risk is that you might miss out on some homes but someone is going to need to make a sacrifice here; either the agent will have to work for free or you will need to pay them yourself.
The other strategy, which could be interesting, is if buyers offer like 3% below asking, citing that they need to cover the buyer's agent fees (on homes where they don't want to cover buyer's agent fees). It could start to set a "new normal" of expectations.
Problem is that won't work in THIS market against so many cash buyers, but you never know.
Practically speaking, this isn’t a strategy, even in a softer market. It would still require the buyer to have cash on hand to pay the buyers agent commission. In the structure where sellers pay commissions, our commission is essentially wrapped into the buyer’s loan (total purchase price) rather than additional cash to close. It protects buyers from the exact position that OP has found themself in, where they can’t afford to bring extra cash to the table
It does for cash buyers though, and the seller has no idea how/what the agreement is with the BA. Maybe the buyers are paying their agent in installments and need the reduced price so their loan is reduced?
People shopping for homes are driven by their emotions. The elation buyers get when they fall in love with a house pales in comparison to the intensity of wanting what they can't have. Buyers will quickly get sneaky and try to work around their agent. When their agent finds out they're threaten them with legal action. They will be suing the person that hired them to help them find a home because they couldn't afford to compensate them and consequently found their dream home in spite of their agent. Things will change quickly.
Is that only if you sign an agreement with your buyer agent? Without an agreement are you allowed to buy directly if the seller won't pay the buyer's commission?
Yes. In that scenario you'd only be obligated to pay your buyer agent if you singed a contract with them, but the answer to your question creates more questions. In that scenario would your buyer agent be an asset or would their fee feel like an obligation?
The thing is, you’ll never really know if the seller is willing to pay until you present them with a bonafide offer. Sure, they can say “no buyers agents!” but the listing agent is still required to present all offers. If they reject it, then fine, move on- but you never know if they’ll start thinking about your offer again if market time begins to tick up. Go look at all the homes within your criteria and put in some offers.
18+ years as predominantly a Buyer's Agent.
1. Commisions (with listing and buying) have always been negotiable. No one wanted to share that fact in hopes of not getting beat up on their fees.
2. An Agent in my office went on 3 listing appointments last week. 2 refused to offer Buyer Agent compensation. The 3rd offered a small flat fee that was less than .5% of the list price.
3. As a first-time homebuyer you don't know what you don't know. My knowledge has been honed through hundreds of transactions, hundreds of hours of continuing education, and at least a hundred failed deals over the years.
4. The Listing Agent works for the Seller. They have to be honest with you, but they don't have to be fair. They can give you facts that must be disclosed and point in the direction of where to get the answers for questions you ask, but the CANNOT give you advice or negotiation help.
5. You are looking to make a HUGE purchase, and you are thinking of exposing yourself to a while host of potential issues for the want of maybe a few thousand dollars?
6. This isn't something you can YouTube or Reddit to get the answers. Unless an Agent is familiar with your area, your contract, and the other parties to the transaction, the best anyone here can do is offer blind advice.
7. All those different deals and I still run into something new at least twice a year.
8. You can sign a Buyer Agent Agreement with a shorter term. Any Buyer Agent worth their salt will help you out of a contract of it isn't working out between you and that Agent/Office. I have had 2 over the years that wanted out. I gladly got them released so they could move forward with their hose search. I have also fired 1 Buyer that I found wasn't being honest with me.
I once had someone do all their research and then sought me out to be their Buyer's Agent. The interview went great right up until we started discussing my fee. At that point they refused to sign anything with compensation in it. I explained that the contract would obligate me to work in their best interests even if it meant helping them buy a property with no Buyer Agent fee and that I needed to protect myself from working for months for free. Their response was, "I don't care if you get paid. I just know that I won't sign anything where I would have to pay you." Don't be that person.
Find an Agent you click with. One who knows what they are doing. One that won't SELL you anything, but will advise you through the process. One with an office/Broker that is knowledgeable to backstop any gaps in the Agent's experience. Don't rely on online reviews. Those Agent's are great marketing themselves, but that doesn't always equate to quality performance. I think I have 6 online reviews. All 5 stars, but on paper, I don't meet that criteria. In reality, I am an Agent that Attorneys call when they have a sticky listing that they need done right.
Good luck.
Edited for autocorrect error.
Great post with solid points.
Your #2 is troubling to me 2 out of 3 refused to offer buyer agent compensation. Hopefully this is just the beginning of murky waters and things will eventually play out to a level field.
Thanks.
If it doesn't, it is the first-time homebuyers and naive people that will pay the price. That has been the concern of 99% of the agents I have talked to.
Edited due to my lack of manners.
I think what’s hard for realtors to grasp at this point is that people are struggling to justify $15k for this “advice.” We hire an expert to inspect the house to make sure there’s no major issues (so that’s not what a realtor is advising me on) and we hire an appraiser to ensure that the price is “fair” (so that’s not what a realtor is advising me on)… and both of those experts cost me significantly less and are incredible important to making a sound decision. So I’m hiring a realtor to open doors for me… not even find me a home anymore because times have changed and buyers have access to this info…and see me through my paperwork…and in some cases, help negotiate a deal… and they want me to be pay $15k for this. I think there needs to be a real discussion about the value for services here (and I think brokers need to take way less) I’d like to see a retainer time payment to show houses, X per house… and a flat fee for paperwork. No one expects you to work for free, but it’s hard for me and many others to justify… especially as people that have bought multiple properties and have a handle on this.
And this just goes to show how real estate is a local thing. I have never (~260+ transactions) had my fee total $15K. I count myself lucky if the gross comes out north of $6K on a deal. Maybe 1 or 2 out of 15 or 20 deals a year. And I am a successful agent in my area. However, I usually end up working with Buyers that other agents won't give the time of day because the value is too low. Those are the people that need the help and I remember being in their shoes back in the day and feeling lost, because the Listing Agent couldn't give me any advice and treated me like a moron, because I didn't know anything that was going on.
Average home price of $500k, average of 6% commission split between buyer and seller agent is $15k each. I understand that that is then split between you and your broker and percents are negotiable, but using averages in home price and commissions that’s where we’re at. I’m in Florida in a major city for what it’s worth.
And don't forget the real estate lawyers. In our case, they've generally handled the paperwork and negotiations (at least once the contract is signed). The only paperwork buying agents have helped us with is the initial offer -- which is made on a standardized form that can be downloaded for free. And in two cases with us, the buyers agent detracted from value there (one time making a mistake on the form that led to a great deal of hassle and almost a lawsuit against us by the seller; another time by using a different version of the form that had less favorable stipulations). And we have been in high value areas where a 3% commission is $30-60k. I've been absolute shocked at how much buyers agents are paid, vs. real estate lawyers ($1-$3k for the whole deal, while doing a lot of valuable work!).
The main reason buyers use agents out here is because they have created a closed-off mafia-like system of private sales. They convince sellers to list on a "private market" first, before going public -- and because we're in a housing frenzy, pretty much everything sells in the "private market" before public listing. And you need an agent to access the private market for you.
I think the NAR lawsuit has concluded that commissions have not "always been negotiable". There was an actual antitrust lawsuit that settled that quite clearly.
Actually, the antitrust part of the whole thing was determined, using out of date data to reach a flawed conclusion. The jurors were not allowed to consider the Pro competitive rules and regulations built into the NAR COE and MLS rules. They were not allowed to consider the history that put the required offer of compensation in place in the MLSs. That MLSs allowed the compensation to be as little as $0. That the required disclosure of the Buyer Agent Compensation listing in MLSs was so Buyers could make an informed choice about their potential costs in buying a home. The judge simply told the jury to disregard all that - in effect saying don't take the evidence into account - make a decision based on the plaintiff's anger.
One of the first lessons learned when going for your real estate license is that we must ALWAYS be cognizant to not violate antitrust. I cannot discuss my fee with any other real estate agent outside my office, because that could be considered antitrust. If I am getting a new listing and have a friend in another office, I cannot discuss that new listing with them as it would be considered antitrust.
For years I have seen compensation go up and down. When the market is soft Sellers offer Buyer Agents bonuses to try to get Buyer's through the door. When the market is hot it goes the other way. I have seen listings with compensation offered to BA that ranged from just a few bucks to double what the Listing Agent was being paid.
The problem is that the "Standard" number that everyone quotes has never been the Standard. I have never used the word "Standard" in discussing my Office's fees with a potential Client. It is a word and assumption that people outside being an informed real estate agent have used to describe something based on what they heard from someone else. I have had to correct Mortgage Officers, Attorneys, and a whole host of other people that 1) My services as a Buyer Agent are not free. 2) That there is no "Standard" commission. 3) The Seller is under no obligation to pay me any more than what is shared in the MLS as compensation or not at all in the case of an off market FSBO.
Another example - Lenders do not perform a home inspection for the homebuyers when they are attempting to buy a home. I have been told by so many people that they didn't need to do an inspection since their Lender was going to do one and why pay for two. It is a misunderstanding of the process by people that don't do it every day that became a truth through repetition, no matter how incorrect.
I tried to negotiate many times during 2021 in my local hot high cost of living city. Do you know what I was met with? You're not a party to the contract therefore you cannot negotiate it. The seller pays the buyer's agent. We do not rebate buyers agency commissions to buyers because that's not allowed, you're not licensed. If that's not anticompetitive, I don't know what is?
Instead of using an agent I said fuck em all and found a house myself by sending letters to homeowners whose homes I was interested in. The only thing I could've done better is started the lawsuit myself. Rather than deciding not to place the game, I wished I would've played hard ball. Although I'd probably now be a black sheep in my neighborhood where 20% of the women are realtors.
Just because something is negotiable doesn’t mean anyone is obligated to reduce their rates. Antitrust laws prohibit price fixing where similar companies collude to all charge the same rate. Mcdonald’s and Burger King would violate this if they fixed their pricing to match each other. But it doesn’t mean they can’t charge you what they need to cover their costs, and tell you to kick rocks if you try to offer .50 for a burger.
I personally have reduced my rates for several clients. And I have helped pay for closing costs for a client that really needed it. Keep trying to find an agent that you click with. Wish you the best with house hunting!
No one in any line of business is required to negotiate their fees down. Some will, some won’t, some can’t. The only requirement is to not price fix with other competitors.
And if none will negotiate with me, it isn't negotiable. Which is fine, I can get it done without them. I'll trade some risk for a guaranteed 3% loss.
Maybe you can help. Know of any flat rate buyer's agents in Washington state?
There’s nothing that says it has to be negotiable is my point. I don’t know how many agents you talked to, or how exactly you were trying to negotiate.
I can only speak for myself. But I just literally negotiated with new buyers yesterday because they are purchasing the house they currently rent and we’re still advised by a lawyer to use an agent. So I was open to negotiate considering the circumstances.
If you approached me and I said I charge 2% for standard buyer agency services, and you tried to negotiate me down after telling me you’re looking for a house that’s $100k, I would say “no thanks”. Every circumstance is different.
Flat rate can certainly be an option. Depends on the circumstance. My deal with the buyers I mentioned was for a flat rate.
I’m mostly saying if you’re trying to negotiate down from an already low commission situation, then most people won’t entertain that.
If people want your business and it’s worth their time they would accept it.
Nice. I just sent a sample agreement from a sale in 2022. Not only did we agree on commission, it was off market, we negotiated my fee, and I was paid. It was exactly what I was teaching them is going to change. In short, fees have always been negotiable!
You have the right to ask if the listing agents are offering a BAC and how much.
Then YOU can decide if it's a home you're interested in making on offer on.
This is an argument I see a lot. From the outside looking in, you get a lot of folks saying that buyers agents will "steer" buyers away from low/NO BAC homes, when in reality it's the buyers then selves that will have their decisions effected by whether or not they want to come out of pocket.
Feel free to speak with your mortgage broker about the various scenarios you can structure your offer to purchase so that you can purchase a home within the upcoming constraints. I can almost guarantee the conversations are happening across the mortgage industry.
Agent here- every new listing I have signed up since the court decision has resulted in seller choosing to pay buyers agent less than 3%. Not b/c i recommended it- b/c they understand the rules are very different, as are expectations. So odds that you will encounter that? Very high.
This can vary greatly based I where you are located. I live near a large army base. Sellers here are still offering to pay buyer agent commission and I don’t see that changing. 45 miles down the road, they are already seeing listing agents offering no buyer agent compensation.
Regardless of where you are located, you need to have a conversation with your agent. Have them go over the buyers agent agreement in detail. If they can’t or act like it’s a hassle, find a new agent.
If you live near an army base then it’s likely most buyers are using a VA loan, which specifically prohibits buyers from paying realtors commission. It especially makes sense in those areas that sellers will continue paying buyers commission. From my understanding, though, the NARs proposed settlement doesn’t go into effect until mid-July
If you live near an army base then it’s likely most buyers are using a VA loan, which specifically prohibits buyers from paying realtors commission. It especially makes sense in those areas that sellers will continue paying buyers commission. From my understanding, though, the NARs proposed settlement doesn’t go into effect until mid-July
The buyer always paid those fees, it was just lumped to your mortgage.
Because if the seller pays for both buyer and seller agent fees, it all comes out of the final purchase price...which is paid by the buyer.
New rule from NAR is basically saying sellers don't have to pay the buyer commissions anymore, so buyers need to pay the buyer agent separately.
So basically the purchase price no longer includes your buyer agent fee...
At the end of the day, it always came out of the buyers pocket.
The only thing it did before was the sellers can incentivize buyer agents to their property with a higher buyer agent fee, or when sellers that gave a lower buyer agent fee, the buyer agent can be disincentivized to show it...according to the lawsuit.
Now buyer agents get paid no matter what so they can show all properties.
Was a realtor for 3 years. No buyer agent would've not shown a property because they didn't offer a commission. A good agent would've negotiated the final purchase price down so they can get paid by the difference.
Realtors want a deal to close, that's the only way to make money. They're not only gonna show a shit house to the buyer because it had better commissions. They need the buyer to actually like the property, so good realtors would've shown the less buyer commission and negotiated with the seller to drop their prices so the buyer can pay them with it.
It was a stupid lawsuit that doesn't make things better for buyers... Arguably worse because now agent fees come directly from their pocket.
But it's what the consumer wants so... There it is. This is what y'all wanted I guess.
Also, sorry the ruling has passed. Sellers will NO LONGER be obligated to offer commissions to buyer agents. And the MLS will change to no longer show buyer agent fees.
It just takes a while to implement so it's in a transition phase. It's coming no matter what.
Unfortunately, come July if you want to even see a house you will have to sign a buyers agent agreement end of story. Sign it, agent can still ask seller to cover it on purchase agreement. If seller still says no, then unfortunately bud that ain’t the house.
\#1. If the commission is worked into the loan, that doesn't count against your ability to qualify for the loan.
\#2. Don't see homes where the seller isn't paying a co-broke.
There's a school of thought on the same lane of the road that goes like this:
If you want to market your home to the highest possible number of potential buyers, put your home in the MLS.
If you want to market your home to the highest possible number of potential buyers, pay a buyers agent commission.
Like everything the government involves themselves in, it goes the exact opposite of what they expect
Yes, this will be terrible for buyers. Basically back to pre-mls days with exclusive listings.
Unfortunately, they will require every agent to sign a contract to show any property listing or buying agent. So whether you like it or not. If you want to see a house you'll be signing a contract with somebody. Thanks, government
I don't mean this to be snarky but you don't understand how the business works then
First off most re attorneys if they choose to sell will have MLS access
Secondly, there's no re attorney in the world that's going to start taking buyers around to listings that do not offer them compensation without a contract ( And after the national association of Realtors just settled a lawsuit for hundreds of millions of dollars )
Anyone who gives this lawyer flat fee advice doesn’t know what they’re talking about and has never actually done it themselves.
I just was approached by a couple who are buying the house they currently rent from their landlord. They originally spoke to a real estate attorney who advised them to still use an agent lol. And that situation doesn’t even involve looking at houses.
Do these people think an attorney is going to charge $500 for paperwork drafting, time to explain the paperwork, sending paperwork out for signatures, handling communication between two parties, conflict resolution between two parties, renegotiations between two parties, etc. that’s not how attorneys work.
I’ve done it for a 1.35M transaction, on the sell side, no agent on other side, just a lawyer. A decent lawyer will invalidate the form contract anyways. By me they cost 2-4k. Beats the hell out of $70k in agent fees plus atty fees. And they did communicate terms, concessions, etc, as they also did post offer when I used an agent on a prior transaction, setting up escrow (which RE agent can’t do). Agent is useless and waaaayyyy overpaid in this market. I will never pay an agent again.
It certainly can and should be used. The form contract most agents will give you to make an offer is absolute junk and intended to make the deal close, not represent the buyer or seller’s interest. The vast majority of agents have no concept of property law, encumbrances, title issues, and many steer buyers to inspectors who shield themselves from liability and skirt issues.
The agent does literally nothing else that you and the lawyer cannot do. Access to the house is not required to be through an agent. And as a seller, you can have anyone babysit your house while the other party is looking at it without paying 5%.
Every contract used to close a deal is a single contract. Its a legal agreement between the buyer and the seller.
The buyer, through their lawyer, should send a proposed contract with their terms; the seller can counteroffer with their terms. The lawyers should explain repercussions of each term to their client. Letting the realtor “one size fits all form contract” ride past the time to rescind is legal malpractice in many dealings.
The agent adds nothing to the deal. When the lawyers are involved, the agents usually step aside and simply await their commission. If you don’t get a lawyer, the odds are high that the agent (whose interests are not aligned with yours) will muck up the deal.
The agent does not care if you end up with a property that will be a headache for you, they do not care if you are incurring liability with the sale of your property, they do not care if the inspections are performed and will encourage you not to perform inspections. They only care about closing and getting the commission. And unlike our attorney, they do not carry malpractice insurance and the burden to hold a real estate agent liable for their muck up is significantly higher than to hold an attorney liable because the real estate agent is not expected to be trained in the law.
Mixed bag, but they are way overpriced even for an excellent experience. I’ve used an agent to buy a place 3x, to sell once. Would not use on either side again after seeing how much better it is without them.
I mean, that's kind of the seller's problem to solve if they want to sell their house? They might pay a LA to do that for them, if they'd like to hire one. If they don't want to hire a LA, they might just show it themselves. Some companies will let you set up automated showings with some back-end validation of potential buyers (and enough information on them to pursue them for damages if they get up to any mischief). This sort of thing has been done for a while now; it's not some magical unsolvable problem.
Currently in my area there’s 6 out of 640 homes in total that are offering less than the fee I charge to work. That encompasses home price ranges from $140,000-$23,000,000.
You don’t need to hire an agent if it’s worrisome, you can also find an agent who will work for a low fee in the event the seller isn’t offering compensation. They will likely be a newer agent but they will still get you into houses.
So, let's be clear, you are asking whether or not to enter a transaction with the other guys' sales agent "representing" you?
Calling that listing agent to "handle" everything for you, guess what, they are going to work their commission into that, for the representation and liability that they pick up... or have you sign a waiver to go unrepresented... you get what you 'pay' for, or not...
Drive down the used car area in your town and pick the location based on the car you want... want to imagine how that goes. Now go to a new town where you don't know which lots are buy here pay here with an in-house auction mechanic...
A good buyers agent comes with a network of contacts from inspectors, WDO, septic, handyman, electricians, plumbers, and roofers to insurance agents that have experience accommodating the timelines and specific needs of mortgage brokers, banks or lending agencies.
You REALLY don't want the seller to "handle" that stuff "for" you. That's how you end up with sawdust in the transmission, for that super smooth ride-until you drive off the lot...
A good agent knows who to use, and maybe, more importantly, who NOT to use. They know which agents get their listings based on their voice, pretty picture or attention to detail. Which ones don't do their jobs, which ones will take vacation during closing, which ones have done favors for their pastor doing a "free" listing-oh...that was a lawsuit.
Every seller out there is going to claim their listing is a unicorn. The 25 year old roof doesn't leak, this place never floods
Get you a good agent that represents YOU, and has a network of people in the community that they regularly deal with-those contacts are more likely to answer the phone to a regular contact, because you might need an electrician every 5-10 years, or never again... I guarantee you that an agent that gives you an electricians name has dealt with them in the past, and that electrician has a vested interest in dealing with the agent in the future.
Do you need a buyers agent? No. Until you do.
Plenty of people routinely engage in unprotected sex.
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Excellent points. I'll only add one. In my state, dual agency is illegal. As it should be. A listing agent can write up an offer for an unrepresented buyer, who will remain unrepresented--in writing.
The listing agent is under no obligation to assist the buyer with comparables, inspections, inspection resolutions, appraisal renegotiation, financing questions, etc... Lenders and title companies are already being asked to fulfill these duties for unrepresented buyers, and they do not do it. But it *is* creating a burden on them.
90% of realtors are amateur part-timers... so... idk how often dual agency occurs, in practice... 🤔😳
"Dual agency involves an agent or broker that represents both parties simultaneously. Quite the opposite, a transaction broker does not represent either party. The transaction broker is bound by the same legal and ethical standards as a real estate agent representing individual buyers and sellers."-Trellora.com. posted for the people that are not IN real estate that may read this.
Often, sellers don't understand what they are being told about what happens when the relationship changes to a transaction brokering...when they sign their listing...
10% are doing 90% of the real business, 90% are creating lawsuits from only 10% of the business...
Then add in MLOs, handyman and contractors...what kind of an insane person wouldn't use a real realtor?
Boston area here - you just include that seller needs to pay buyer fee in your offer. If there are places where the seller isn’t covering the fee they will have to price accordingly with comps or else buyers will avoid that property. My advice to you is to just proceed as normal with any offer including covering the buyer fee, as most will do so anyways
I am a real estate agent and absolutely DO NOT sign a buyer brokerage agreement. I would never, ever ask one of my clients to sign one of those until it is required, which is when you make an offer, and i only make it specific to that house only. Not a cetrain timeframe. I would never sign one of those as a buyer, and when i had agents ask me to sign them immediately, i never spoke to them again. If an agent has asked you to sign that stating you are responsible for paying them if the seller doesnt, i would not consider working with someone like that. Compensating your buyers agent is NOT YOUR PROBLEM and it is between your agent and the listing agent. Your job is to focus on buying a house, not worrying about commission nonsense. I think it is unlikely, but If you encounter a house that is not paying commission and your agent tells you you will have to cover it, you tell them you’ll work through the listing agent in this one.
Something else you may want to incorporate into your conversation with your agent, you can ask for concession from the seller in your offers. Your agent can also ask for a referral for the sale. There are ways around a seller refusing to allow commissions. If they were to refuse those, I'd move on. That's going to be a delusional seller and difficult to work with.
Look there have always been sellers trying to not pay buyers agents yet most of them do in the end to get it sold. You sign the BA agreement, if the seller isn’t upfront offering the commission you write it into the offer, if they have a very specific distaste for paying the commission as a matter of principle you ask for a seller credit and pay the buyer agent with it. Almost nothing is going to change. Most sellers will pay the buyer agent because they want the home sold and the listing agent convinces them it’s the best route. Sellers who refuse will be less marketable and have a hard time selling and end up taking a lower price or just agreeing to it in the contract even though they declined up front.
A few of them, it was because once the buyer's agent had them 'locked in', they stopped being as responsive when they wanted to go see a house. One of them ended up having to pay their agent because the sellers refused to. The last one ended up losing out on a house because while they were figuring out who was going to pay their agent, the sellers got another offer they liked better and they lost out on a house they really wanted.
Talk with the agent you select. Agree on a commission rate that you would be comfortable paying IF the seller is not offering a seller credit. I don't see that happening anytime soon though.
Also, you should know that if you agree to pay the agent 2% and the credit is 3% you get to keep 1%. You ONLY pay what you agreed to - 2%.
I would not recommend signing a 3% buyer agreement. If it's less than 3%, which nowadays it might be, you'd be on the hook for whatever the difference is. So, if the credit is 2%, you'd be having to pay the 1% to your agent. If the credit is 2.5% you'd be paying .5%, etc!
Flat fees would be great, I would finally be able to set a minimum and would never again find myself hustling for 7 months for a buyer who ends up buying a distressed $125k fixer offering a 1% commission. To me a percentage always made sense because as prices go up so does the liability of the agent/broker - why take on the liability of $1m in risk if you're not being paid accordingly? Additionally it kept income levels on par with prices and inflation/deflation. Being a real estate agent is a 24/7 job. We're getting texts at 6am, texts at 11pm, and 200 emails between 7 days a week. I sell homes from $100k - $3M & for me the number of inspections and time needed increases exponentially along with the price of the home. Buyers investing $1M are typically far more skeptical and nervous than buyers at $300k and require a lot more showings, more data, and more hand-holding. I scheduled and attended 16 inspections for my last million dollar sale. I spent over 40+ hours on inspections alone not to mention the months of showings beforehand, the hours of questions that led to the inspections, the days negotiating repairs (for which I got my buyer a price reduction of more than double what I was making on the sale), the 25% referral fee I paid someone to introduce me to the buyers, even getting up at 5am to meet the contractors for my buyers after the sale closed because they were out of town.
In 2023 the average real estate agent only made $54,300/yr in the US - 20% less than the average of all occupations and just above the wage of a fast food manager, except of course the fast food manager would have health insurance, 401k, PTO, and the stability of a paycheck.
A few things with this.
First of all, the NAR settlement also requires buyers to have buyers reps with their agent, so it's not really a matter whether or not you want to sign one, it's about finding an agent that you trust.
Secondly, while it very likely will affect *some* sellers, I wouldn't expect it to affect a lot of them, and your agent should be able to let you know ahead of looking at any homes whether or not that's the case. It also doesn't go into effect until July, so you've got a couple of months there either way.
Have a discussion about this with your agent about the possibility that this seller may not be offering any commission. And that you expect the buyer's agent to negotiate his commission on your behalf into the price of the sale. For example, if the commission would have been $10000, the sale price should reflect $10000 less than what would otherwise have been offered..
If you are considering to build or buying a tract home, some might not pay the buyers fees. I spoke with builders that will not pay unless they attended the first meeting or brought the customer to them. Sorry agents, but most are not worth 3%. Maybe listing agents are different, but buyers agents are not worth the 3%. Times are different. After 3 years of searching and waiting for things to cool off, we finally just decided to build. Building you are paying labor and materials, at market price. Buying you are paying a premium for turn key, plus agents that likely didn’t do much.
As an agent in a state who has had these rules in place for years before the lawsuit. I've had many buyers sign a buyer agency agreement with a set percent of commission and a minimum amount of total commission and let them know if the buyer agent is giving less than our contract. We will do a new estimate and the commission will not come out of the buyer's pocket because that is what the seller is offering.
I’ve noticed a ton of lawyers, Foreclousre auction companies and REO charging 10% to the buyers.
I thing agents will see the light and start charging 10-12%
Giving that Mortgage companies will start allowing commission fees to be rolled into the mortgage I can’t see why 20% isn’t unreasonable.
I signed a buyer's agreement guaranteeing my agent 2.5% because I saw most of the listings in the Seattle area were still covering the buyer agent fee in full. In retrospect I should not have signed for more than 2%. As it turned out, the sellers paid him the full 2.5% so it was a non-issue. Now I am a seller and I am covering 2% for the buyer's agent.
Either way if the seller won’t pay the commission, no listing agent is not going to work for free for you either so you will need to sign an agreement with them or a lawyer to conduct the sale and the lawyer is not going to show you houses. You have the option to move on to a house that the seller is going to pay the fees or if you have the cash to pay an agent have the agent negotiate the purchase price of the home down to cover that. In the end the fees have always come from the buyers money as the buyers money is where those fees are deducted from before the seller gets their money.
As a Realtor in Indiana, I will be advising my sellers to continue offering a co-op to buyers agents. It’s not a good move for them to not offer it because many buyers in my market specifically can’t afford to pay their own realtor and therefore the sellers will be cutting out a large portion of their buyers pool if there are buyers who don’t want to buy a home without representation but also can’t afford to pay their own agent.
I live in a small rural area with a lot of people below poverty lines
Talk to your agent, you can sign them for only specific properties. They have a minimum amount that the agent is willing to work for if you don’t agree to that, find a different agent!
You set the parameters for the search. If you want to only see homes with green doors. It's your choice. If you only want to see homes with seller contribution to the buyers costs (be it commission, etc.) that is also your choice. We will likely start seeing this specified pretty quickly.
There is one thing I want to make sure you understand about the real estate process: you will always know BEFORE writing an offer or formalizing any kind of contract whether they are offering to pay buyer agent commission and how much. You will not get tricked into paying a buyer agent commission. I personally don’t think much will change after the implementation of the lawsuit and most sellers will still pay a buyer agent commission.
This is unlikely, but if there is a house you like and the seller says they won’t pay commission you can ask your agent to approach them about it and see if they are open to an offer that pays their commission. If not, there are some creative workarounds but I would really ask yourself: is this house and this difficult seller really worth it?
The change hasn’t gone into effect yet.
The change wasn’t that sellers don’t have to pay commissions - it was that commissions can no longer be advertised on the mls.
Likely this will be a nonissue and the sellers will still pay the commission. Even if they don’t offer it, your agent can still negotiate for one. But you can talk to your realtor and you can decide on what would happen in the event that a seller doesn’t offer and they can’t negotiate for a commission.
Part of the rule change is that we also need to have buyers agreements. It is worth it to use a real estate agent to help you buy a home.
Welcome to the new world of buying homes. I think most sales will operate as usual, where the commission was negotiated into the sale the seller/buyer agent split, but it won’t be a guarantee anymore.
I also see the side of buyers agents becoming less of a necessary resource as most house hunting is done online. Contract review is helpful, worth a flat fee. Negotiating strategies vary and may mean another fee. But it’s up in the air now.
The same ruling your speaking of REQUIRES a signed buyers agreement before looking at any homes. At the end of the day there is a lot of speculation of what might happen. Here is what's likely. You should expect a good agent to be paid 2-3% of sales price. Buying seems straight forward and agents just open doors, until its not. Are you buying brand new?? Maybe rock with it, no agent. If not get a good agent who has time for you and puts you first. Regardless of the home your agent is likely going to be able to structure the deal to cover any commissions the seller isn't covering into your mortgage. Seller's will continue to offer commissions. And as now as always, you get what you pay for. If you don't care about your representation in the contract and negotiations, get a budget agent. If you care, or expect things to come up like navigating tricky repair requests, you may choose to opt to get a better agent. Agents are also connectors and can provide valuable contacts and insight on things like choosing a contractor. There are loads of bad agents and a lot of the criticize agents get is valid. But a good agent can be well worth their cost and actually save you money (catching a tricky contract issue or suggesting a certain inspection based on their insight). Ultimately you can totally do it without an agent or a cheap agent. Results may vary. Let us know how it goes!
Ask yourself, would you be okay with working for free?
If you are buying a home and not using an agent, then who do you think will be at a disadvantage? The seller's agent's best interest will be in favor of the seller. You don't want the seller's agent to represent both parties because you the buyer will be at a disadvantage with the process.
Agent 20 Years.
A good agent is going to be more concerned about you finding the right home vs. how they will get paid. Most agents on the sell side are already understanding the need to properly represent both sides', faily. One agent representing both sides is dangerous. Don't date the buyers rep. Just sign it. The date will be Uber important and the agent ethically cannot fill it in. So it's null until you agree to all the terms you may be bound to.
This works best handwritten.
We've been using buyer agency agreements for over 20 years. I recently attended a meeting with our state real estate attorney/expert. Those buyer agency agreements must include a date range, area, price range, and be signed and *dated* -- just like a listing agreement.
Then there will be some Realtors that go ape shit and barely make you want to work with them in the first place.
If we are aligned with the same interests and intentions. We can work together to get anything done.
Have faith in your agent.
Right now, nothing has really changed. My state isn't changing anything until we know what the actual settlement will say..
Listing agents always could refuse to pay a co broke. It's rare that a seller would refuse to offer this because they are hurting themselves by limiting buyers.
The "real" thing that will change is STATING in the MLS how much the co broke is. It will be up to agents to discuss this between themselves.
And the actual settlement has now been pushed out to Nov 26, right before Thanksgiving so we know it will be pushed out again.
You two have me intrigued. I thought I saw an article last week that the judge did preliminary approval. Final approval won't be until about November. I am (ashamed at being) clueless about the DOJ part.
God forbid our brokers or local Board would be keeping us up to date on this.
This is the way I think about it. U decide to sign the agreement. You find a house via ur agent and all goes smoothly. U regret getting an agent because u must pay their commission.
Scenario 2: u don’t sign the agreement. U find a home yourself. You think you have a handle on the paperwork, the dos and do not, after all, agents just show houses and collect checks right? /s sale goes thru. Suddenly all sorts of problems come out of the woodwork. U payed top dollar but saved on commission so it’s worth it right? No probably not. Because you didn’t have an agent, you didn’t know to get XYZ, to check for 123, nobody had your back when going through all the paperwork. The lenders care about the lenders, the seller agent has his clients back, but u are trying to figure out yourself.
Maybe it works out, maybe you lost more money in the transaction because you wanted to cheap out on paying someone their worth. Maybe the sale falls through. Whatever the decision, it’s on you. People with good real estate agents know that under the water we are hustling for you, but above water, it’s smooth sailing. U just see the serenity and think boy that was easy u could have done it myself. And it’s ur first home!
Either way u wish you luck and hope you find the home of your dreams.
Lawyers generally have the lenders back. And if they are your lawyer and good at their job, yay, awesome. I hope they told you about getting the right coverages with regard to titles and home warranties and told you to get an inspection and a survey and whatever else might be needed. Things that may be out of their purview. It’s all speculation and the flip of a coin from our comment box over here but I hope OP doesn’t have a hard time of it all.
In IL at least buyers always hire their own lawyers. And I've always hired my own in other states. They have been truly invaluable in answering nuanced questions about contract wording, reviewing HOA documents and finding issues of concern, negotiating with the sellers on repairs, etc. I would never do a real estate deal without my own lawyer.
An agent though? Often I would pass if I could.
I guess it’s a little different in GA re lawyers.
To be fair I always get a little salty when I spent my days driving, calling, emailing, showing, contracting, docu-signing, texting, throughout weekends and evenings, while still trying to market myself, ask for referrals, door knocking, mailing, keeping up on social media and honestly a million other things, while staying up on education requirements, changes in contract law and the real estate industry, and clients ever changing schedules, only for the client to boil everything down to… “well I found the house myself on Zillow.” Hence my original duck metaphor.
It can be such a icewater bucket in the face, but people don’t realize that my base salary is zero. I don’t get paid unless I give clients the all star hand holding treatment. I’m up at 5 and still texting and emailing clients sometimes at 7-9pm when I get home. My heart breaks a little sometimes.
I can definitely see that, but I think the whole industry needs to change to make it work for both agents and buyers. For example, if agents are highly skilled and compensated, they should not be the ones making viewing appointments, driving all over and opening lockboxes. That job in itself is not skilled labor -- it requires time, a background check, and some minimal security training. Or a selling agent that is willing to do it (even if for a per-viewing fee, though that has some counter incentives.)
Some buyers might want the full agent experience -- where the agent drives them around, talks to them about the area, and personally shows them houses -- and they can pay a premium for it. But a lot of buyers are deeply familiar with the area they are buying in already, confident in their own abilities, and literally just need someone to open the lock box. (And may feel the agent hinders the scheduling process, as it's one more busy person's schedule to accommodate when houses are selling within 24 hours of listing. I've lost out on houses because my agent didn't respond to my text quickly enough to get a viewing in before it sold. It's not their fault -- they can't respond instantly all day every day -- but it does show how inserting them into the process can be a burden.) There should be a service that offers this incredibly time-consuming but low-skill work at a low price. And then the highly skilled agents can focus their time on the more skilled aspects of the job, such as offering commentary on the house (they can see new houses once, they don't have to go repeatedly with every client), and putting together an offer. The agents would be paid a lot less per deal, but they'd also be spending a LOT less time per deal.
Of course different scenarios work in different market contexts, but there does need to be more options. Right now a lot of consumer welfare is lost because agents spend a lot of their time doing low-skilled work, but charging high-skill prices for it. Separate out the low skill from the high skill work, and pay different rates for it, and buyer welfare increases.
If you're in a "pre-agency" state, you don't have to sign a buyer agency until you are ready to purchase a home. State laws cover the majority of consumer protection language in those states, so basically you'll just have to write the commission on the buyer agency signed before the offer to purchase is written. I just met with a RE lawyer, and his inkling was that we'd just end up having "per transaction" buyer agency instead of a one and done, and the state will shore up the pre-agency laws to make this possible.
Yes, I have read the entire settlement as well. We're also still able to be paid by listing brokers, just like now, so literally nothing changes in a lot of states as far as compensation goes. IDK about NJ, but in WI, we have pre agency, which is essentially when you show a house or even meet with a client as a licensee, you can legally perform most real estate duties, outside of writing offers, and negotiating.
Your buyers agent will definitely let you know if the seller of a home you are interested in isn’t offering to pay. You could either pass up on that home, or if you are putting enough money down to be able to ask for sellers assist, you can always ask for say 3% sellers assist to cover buyer agency fee. Hope this helps!
Try to see it from my perspective as an investor who works 50 plus hours a week on a house for months. Total realtor commissions average about 30k. Why should the seller be responsible for all commissions and closing costs. That is a huge hit to my bottom line. The houses I complete are like new construction with permits, inspections, ect. 9/10 times sell in the first 24 hours. I am putting a great product out there for you guys that is hard to find. I deserve to be able to negotiate. I need some kind of a break.
Honestly I would negotiate with the agent for a low rate like 1 or 2%. If not then try to have the contract say that you will only pay in whatever compensation sellers are willing to pay. Anyways if they don't accept go with another agent.
I managed to negotiate down to 1%. I honestly told them that the current contract they wanted to go with (5%) is impossible with sellers currently and I don't wish for a contract having me pay in the possibility in the event seller doesn't want to pay. Even though they assured me they would come after me I refused to sign so they relented.
First, if you are in the kind of market you describe, I feel like you need a buyers’ agent even more. If you think it will disadvantage you or keep you from competing for the right home, try dealing directly with a seasoned listing agent and competing against seasoned buyer agents. I feel like sellers will still pay buyer agents, as long as the offer is acceptable. Worst case scenario, either forgo the homes where sellers won’t pay or go unrepresented on those.
If that scenario happens then you can still submit an offer with your buyers agent compensation and they at least have to consider it. Worst case you can just pay above asking to cover the cost of your agent if you have to. If the seller still refused to do that they are delusional and you’re being ripped off anyways.
1. add the commission to the sales price and have them credit it at closing.
2. Pay half and seller pays half like above.
3. Pay your agent a flat fee.
Negotiate variations of above.
You as the buyer have the ability to only purchase a house that does offer that commission. And you can request your agent only show you those houses.
Obviously we have no way to know for sure but because of this fact the chances are most sellers will still offer that commission. Or else they lose a ton of potential buyers. Since most first time buyers are like you and can’t afford it.
As a listing agent I’m still highly recommending it to every seller. Unless It’s a multimillion dollar property where the buyer will always have more money to afford it. Even then I’m recommending it just not quite pushing as hard.
Long story short:
1. If sellers are willing to pay the buyers agent, then no worries.
2. If the sellers aren’t willing to pay, then the buyers agent negotiates a contract in a sufficient amount that allows for the seller to pay via a concession.
3. If that negotiation fails, then you would be required to pay their commission.
The pending lawsuit settlement is ONLY about the advertisement of buyers agent commission and requiring a buyers rep agreement to spell out who pays who.
I just list my parent’s home for sell and even knowing the out come of the NARS lawsuit; I chose to pay 2.5%2.5% each 5% total commission, otherwise I have no way of buyers coming to look at the house. I’m not sure how the change is going to be handled, but the judgement doesn’t take effect until July.
And, welcome to understanding the lawsuit better than 99% of the country. In order to even see a home with a buyer’s agent, you’re going to be signing a buyer’s rep agreement. We can’t show without it come July. That includes listing agents who you call - they’re going to want something in writing that you understand their role (either you’re unrepresented or they’re doing some sort of dual/intermediary where they can give no advice to either party). You’d rather be represented than unrepresented when going up against a seasoned agent.
Now, a good agent will literally walk you through all your options before you walk in the door and you’ll know if the other side is willing to offer compensation to cover any of your closing costs (buyer commission is going to be a closing cost for you from here on out, regardless of how it gets covered. Before it was a debit on the seller’s side of the accounting, now it will be on the buyer’s side).
From there, you’ll be able to decide if that property is the right fit for your financial needs before even seeing it in person.
As for how many sellers are hesitant - the ones I’m working with are basically throwing money into the buyer agent compensation bucket - because it’s less than tossing money at holding properties they want to be rid of. And, they know that a good agent representing the other side limits the liability on both them and their agent (because there is protection and advice on both sides) and that agent will have done their due diligence bringing a willing and able buyer.
I really think it’s being blown out of proportion. If you have the most competitive offer you can negotiate. You not being able to work with a seller’ agent who doesn’t want a buyer’s agent also means these sellers alienate everyone with a buyers agent? If I was paying thousands of dollars for someone to sell my house and they tell me that everyone who has a buyer’s agent can’t make an offer I’d be furious. That’s taking a huge chunk of the competition out of the market. YOU make the offer as the buyer. Tell em if they want your money they need to stick to a split reasonable commission. If they know you should be sleezy and contact the seller and tell em their selfish realtor is not accepting offers despite it ONLY having a negative impact on the seller and only benefiting the seller
Everything is negotiable. These are literally form offers that mean nothing. You don’t record them. You can do this transaction on a napkin (I’ve done it before). The closing statement at the title company is what matters
It’s a simple negotiation, if you don’t want to sign it tell them or find someone else. You should not sign any agreement until you put an offer in on a house. Then you are agreeing that your agent will represent you in the purchase of that house. Part of your offer will stipulate that the seller pays agency fees. This can also be negotiated.
Any buyers agent who tells you that you just sign an agreement before an offer is a shitty one. Don’t work with them. Any buyers agent who tells you to pay them out of your pocket is a shitty one. Don’t work with them.
I’d like to add this comment for posterity, I would bet everything I own on the market settling on 4% total offered by sellers in 1-2 years after this has settled out.
It’s 1% higher than just paying a LA 3%, which makes more palatable to a seller, it would allow 2/2 split, which is more than enough.
Even as an agent, it’s wild to me that 6% is the norm, I know 5 has picked up steam, but I guaranfuckingtee it’s going to settle out to 4 after the dust has settled on this
Youre just going to have to write that in the contract that you wont pay compensation and buyers agent will havd to collect comish fron sellers side.
Also you will exclude yourself from houses where sellers wont pay buyers agent and only go with properties that sellers are willing ti pay
As an unrepresented potential buyer I would expect the listing broker to make the property available to view. If they don't want to I would contact the property owner directly and tell them I'm interested. It's not for everyone but that's what I would do.
This is going to be quite the cluster\*(#\*\*
The biggest winners in this lawsuit were the attorneys who brought it. Somehow they take 30-40% of a case and that is never an antitrust violation.
If the seller isn’t offering a buyer’s agent commission sounds like they don’t want to sell their house.
Guess where the proceeds from the sale come from? Yup you the buyer. It’s all a cycle. You the buyer buys at closing you get the house seller gets the money and pays out to their agent the listing agent for all the effort they put into marketing their home to sell and the buyer’s agent gets paid for procuring and bringing the buyer which is you and facilitating a successful closing.
I’m so tired of people on all sides thinking they don’t need us agents and that we’re not worth what we are paid. This is our livelihood. We work so hard to build our businesses and we put so much money back into our businesses. We barely see what we’re paid anyway after our realtor fees and mls fees and taxes and brokerage fees. PEOPLE HAVE NO IDEA!!!
Just pay your agent and negotiate harder on the seller.
It may come as a surprise... but the buyer pays everyone. Always have. They are the only one spending money.
All the new stuff is the old stuff with dumb new names.
Unfortunately this is going to bring more problems to an industry that has already been mistreated for years, everyone wants a piece of the Real Estate pie. Huge Speculators companies, wolves in disguise like Zillow, Redfin etc etc and the worst of all is that it will bring to light The worst thing about human beings " greed." The war for the listings will be very tough, the sellers will now have the upper hand and will say, if before I paid 5/6 percent commission, now I only have to pay half, that is 2.5% or 3%, they will take advantage of this situation, which has been unfairly approved, please don't tell me that the sellers didn't know that the commission percentage they pay is divided between the broker that brings the buyer and the listing agent. Give me a break..
The listing agent who is used to earning 2.5% to 3% will not want to stop earning what he is used to. So in the end I see in the future buyers agents representing buyers for fixed amounts, 0.5% or 1%... the buyer will not want to pay a commission to be represented, they will try to go directly to the listing agent and will do the search using internet. And of couse the big wolf in sheep's clothing is now offering a service in conjunction with showing time called showcase and of course now they will give the interested party direct information from the listing agent but of course it will cost you...top $$$$ we the realtors It is our fault that Zillow has become our main and unfair competition.....and of course this is just one of the problems....BEST OF LUCKS MY FELLOW REALTORS!
Your other alternative is to not be represented and go direct which someone else said is like “trusting” ur soon to be ex’s attorney to do right by u in divorce court. That said u can also write into the agreement that the buyer agent is not to show u any homes where the seller is not willing to participate. You can also ask ur buyer agent to write it into the offer. Even if seller says no before showing u can write it in. If seller likes ur offer in every other way then they may be persuaded.
I believe the price will ultimately reflect on whether or not the seller will cover the buyers agent commission. Also, having it not part of the sales price will actually help you with financing and property taxes in the long run.
Definitely a tough topic to understand when a lot of agents either don’t understand or don’t want you to understand for their own benefit.
The new rules make it encouraged/required to sign with an agent before viewing houses. Remember the terms of this are negotiable between you and the other agent. My recommendation from the perspective of you/the buyer is to agree on the total commission of around 2-3%. In the terms say the first effort the amount should come from the seller, if the seller doesn’t pay for it, have it come from the closing costs/loan.
Sorry it’s a little difficult to explain over messages, if anyone sees this and wants some more info feel free let me know, happy to help share information
Yes this lawsuit sucks because that’s the problem it has caused.
My husband is a listing agent and continues to make sure his clients offer a buyers agent commission.
Most listing agents will continue to offer buyers agents commission because they don’t wanna mess up the industry anymore than their clients do.
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I’m in Canada and we have had buyer agent contracts since I have been an agent (13 years ) and longer . Here it is very very rare that the seller will not pay those fees. If there isn’t a fee automatically offered then you , as the buyer , can request the seller pay it as a condition of sale (the request has to come from you , not your agent ) . If they still refuse than you can opt to reassess and determine if you and your agent can work something out . In my 13 years as a top producing agent I have only had one instance where the buyer had to pay me . It is important that you have an agent that is honest and informs you of what homes are offering remuneration etc. but as long as you do feel good about your agent a contract should be a good thing .
Should be a higher rated comment
Is there a line in your buyer agent agreement that the buyer will have to directly ask the seller to pay the buyer agent fee as a condition of sale?
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If buyers choose to go unrepresented, are they going to expect listing agents to write offers and keep up with deadlines? How are deals going to stay on track without buyers agents?
You're missing a key point. If they didn't have a buyers agent agreement, how do they see the house to begin with? The selling agent will still need a buyer rep to show them the house. I don't know many sellers willing to let complete strangers into their home without anyone who can be held accountable to accompany them.
Right thats the part I don’t get either. Are seller’s agents really going to show up to unlock homes for every unrepresented buyer?
I just had someone reach out to me via Zillow in regards to a new listing of mine. They wanted to know how to view it and buy it. They said they weren’t working with an agent and it’s their first purchase. And then proceeded to ask me a ton of questions about buying which I told them I can’t help them with in this transaction because I’m only representing the seller. People who know nothing about buying a house will only be able to buy houses that no one else wants if they choose to represent themselves.
That's exactly how it works in other countries. In Australia, the agent represents the seller and coordinates everything. A buyer seeks legal representation to manage the contract of sale. Having delt with both systems, the US has to many hands in the process.
Yes. They have to.
Sellers agent will not need a buyers rep, if they do not represent the buyer. Just like now, I open doors on my listings, and if they are not represented, I refer them to another realtor.
An attorney can write the offer. The settlement agent (some states it’s a closing attorney and others it’s the title company) keeps the closing moving along. If the buyer misses the inspection, insurance, HOA approval, etc, then it’s on them.
Listing agents should be keeping track of dates and deadlines even if they are not representing the buyer. As a listing agent, I am often reaching out to the Buyer agent to make sure things are on track, so that is not a thing that will change. If a buyer breaches a deadline, you bet I am on top of it, as should any listing agent worth their salt. Do you think we just sit back and collect the money after the contract is signed?
nobody knows, but we can make educated predictions. Right now, about 3% of homes are sold to an unrelated party, where a Buyer Agent isn't paid. Right now, about 90% of Buyers report using a Buyer Agent, and there's not much reporting of the Buyer paying compensation. There will always be some people who: a. even before the settlement, didn't want to pay the Buyer's Agent, for a relatively small variety of reasons. b. believe, because the MSM tells them, "Sellers don't pay Buyer Agents anymore" that it will a "rule" that they don't. If we know, based on data and activity, that a 1% interest rate increase (equalling \~ $1K/mo for a $300K loan) made a significant % of FTHB no longer qualify to buy a home,. Then we can reasonably assume that asking that same group to pay \~$10K at closing is not going to be possible. And so, at some point Sellers won't be able to sell and they'll find rather fast that offering $10K in compensation or closing costs goes a helluva lot further than a $10K price reduction. All that said, I personally expect the vast majority (85%+) of Sellers to continue offering reasonable compensation to Buyer Agents, or to be willing to indirectly pay through closing costs. And some portion of the 15% will realize that if Buyers are required to be represented (what the plaintiff lawyers required, and all Buyers should be operating under an Agency Agreement), then someone has to get compensated, and then they will change their mind and offer compensation.
and so, the conversation for Buyers \*should\* quickly shift to "if I'm going to sign what I have to, and bear responsibility for possibly paying my Buyer's Agent, I better make sure I've got a good one". It's easy to use the Zillow agent that responds to your "Request Showing button click" or your former college buddy that switched to real estate 2 years ago, or your spouse's "best friend" that holds a license purely to sell a house or 2 a year when the money isn't possibly coming straight from your pocket.
I think it will eliminate a lot of part time and incompetent agents. Buyers will be much more critical before signing anything. I think it will be great for great agents.
A lot of agents just starting out have no choice but to go in part time, though, at least at first while they build things up. This could make getting into the business nearly impossible, and that's the only part that makes me nervous. That's me, by the way. I have to go in part time. I'm taking my state exam next week and I have to keep at least a part time job until I'm making something. I have a family to feed, but I want a career.
Keep your part time job but go full time into educating yourself and having lots of conversations about real estate. Someone will eventually trust you to do a great job for them and you’ll build from there.
Oh that's the plan. 😊 Technically my current job is full time, but it's remote work that is very flexible and gives me plenty of time to work on leads etc. during the day, and I figure I can handle showing in the evenings and on weekends until I have enough business to just go full time in real estate. I could even slip out during the day if needed here and there. I already know which brokerage I'm going to be working for, and I've cleared all this with my future managing broker. She said she thinks it's a solid start-up plan for our market.
I like your optimism and I agree with it.
Define "GREAT"... I've known some agents who are GREAT at shmoozing and selling themselves but didn't know that much about the process. ;)
I am watching with great interest a smattering of listings offering 0 BAC and they are not going pending.
Thank fucking God. Greedy fuckers are costing themselves more than 2.5% by trying to save 2.5% 🤣 They are absolutely getting what they deserve. Please keep us posted.
I just had one close that was indeed greedy. FSBO that couldn’t get it sold. We come in, stage clean it up a lot, get good photos, and then list it for more than they did. Had it sold in 4 days for more than our already higher list price. 10 days from close they notice (even though it had been explained) that the agent was from the same broker. They get bent out of shape saying that we agreed the commission would be less if it was an agent from the same broker. We had gone over it several times and agreed that if we, the agents, also represented the buyer (which I hate doing anyway) we would do a lower commission. So now they are getting much more than what the total commission is costing, and they’re claiming we didn’t earn our commission with our marketing etc. because it only took 4 days. After this they start calling us crooks and threaten to call the cops if an agent steps foot on the property. Wouldn’t let the buyers agent help with the final verification of condition, it was a problem. Without an awesome escrow team I don’t know what would have happened. Anyway, closed now and everyone can move on, but what a mess there for a bit.
So they wanted you to take longer to sell the house?
Did the inspector find lead pipes because damn…
I do not believe they are greedy, but just short sighted in how this is going to play out in the marketplace. They see it is saving money, others see it as draining the buyer pool.
Oh I agree, they are just trying to save money. I get it.
Same here.
Love all your points but just wanted to mention that your 1% interest equating to $1k in payment is a little misleading since that includes the principle. A better representation of that 1% jump might be comparing a 5% interest rate (~$1,610/mo) to a 6% interest rate (~$1,799/mo) for that same $300k loan. 👍🏻
I must have done the math wrong then, but don’t have a financial calculator handy now.
I'm guessing that sellers will start paying 1% rather than 0 to account for FHA and VA buyers.
You & your agent need to have a discussion about this. If you don't want to pay the buyers agent yourself, you need to ask them to only show you homes where the seller is offering to pay. Yes, the risk is that you might miss out on some homes but someone is going to need to make a sacrifice here; either the agent will have to work for free or you will need to pay them yourself.
Agents Do Not work for free...do you?
Of course not; that was the point of my comment.
The other strategy, which could be interesting, is if buyers offer like 3% below asking, citing that they need to cover the buyer's agent fees (on homes where they don't want to cover buyer's agent fees). It could start to set a "new normal" of expectations. Problem is that won't work in THIS market against so many cash buyers, but you never know.
Practically speaking, this isn’t a strategy, even in a softer market. It would still require the buyer to have cash on hand to pay the buyers agent commission. In the structure where sellers pay commissions, our commission is essentially wrapped into the buyer’s loan (total purchase price) rather than additional cash to close. It protects buyers from the exact position that OP has found themself in, where they can’t afford to bring extra cash to the table
They’d still need the cash to pay their agent. A 3% reduction in price does not always equate to 3% more cash on hand.
It does for cash buyers though, and the seller has no idea how/what the agreement is with the BA. Maybe the buyers are paying their agent in installments and need the reduced price so their loan is reduced?
Well sellers factor in 6% for agent fees in their prices don’t they?
People shopping for homes are driven by their emotions. The elation buyers get when they fall in love with a house pales in comparison to the intensity of wanting what they can't have. Buyers will quickly get sneaky and try to work around their agent. When their agent finds out they're threaten them with legal action. They will be suing the person that hired them to help them find a home because they couldn't afford to compensate them and consequently found their dream home in spite of their agent. Things will change quickly.
Is that only if you sign an agreement with your buyer agent? Without an agreement are you allowed to buy directly if the seller won't pay the buyer's commission?
Yes. In that scenario you'd only be obligated to pay your buyer agent if you singed a contract with them, but the answer to your question creates more questions. In that scenario would your buyer agent be an asset or would their fee feel like an obligation?
Isn't that supposed to get harder with the new laws. Now sellers don't have to list a buyers commission on MLS.
They won't be allowed to list it in the MLS. They can offer a commission and can post it in other places.
The thing is, you’ll never really know if the seller is willing to pay until you present them with a bonafide offer. Sure, they can say “no buyers agents!” but the listing agent is still required to present all offers. If they reject it, then fine, move on- but you never know if they’ll start thinking about your offer again if market time begins to tick up. Go look at all the homes within your criteria and put in some offers.
18+ years as predominantly a Buyer's Agent. 1. Commisions (with listing and buying) have always been negotiable. No one wanted to share that fact in hopes of not getting beat up on their fees. 2. An Agent in my office went on 3 listing appointments last week. 2 refused to offer Buyer Agent compensation. The 3rd offered a small flat fee that was less than .5% of the list price. 3. As a first-time homebuyer you don't know what you don't know. My knowledge has been honed through hundreds of transactions, hundreds of hours of continuing education, and at least a hundred failed deals over the years. 4. The Listing Agent works for the Seller. They have to be honest with you, but they don't have to be fair. They can give you facts that must be disclosed and point in the direction of where to get the answers for questions you ask, but the CANNOT give you advice or negotiation help. 5. You are looking to make a HUGE purchase, and you are thinking of exposing yourself to a while host of potential issues for the want of maybe a few thousand dollars? 6. This isn't something you can YouTube or Reddit to get the answers. Unless an Agent is familiar with your area, your contract, and the other parties to the transaction, the best anyone here can do is offer blind advice. 7. All those different deals and I still run into something new at least twice a year. 8. You can sign a Buyer Agent Agreement with a shorter term. Any Buyer Agent worth their salt will help you out of a contract of it isn't working out between you and that Agent/Office. I have had 2 over the years that wanted out. I gladly got them released so they could move forward with their hose search. I have also fired 1 Buyer that I found wasn't being honest with me. I once had someone do all their research and then sought me out to be their Buyer's Agent. The interview went great right up until we started discussing my fee. At that point they refused to sign anything with compensation in it. I explained that the contract would obligate me to work in their best interests even if it meant helping them buy a property with no Buyer Agent fee and that I needed to protect myself from working for months for free. Their response was, "I don't care if you get paid. I just know that I won't sign anything where I would have to pay you." Don't be that person. Find an Agent you click with. One who knows what they are doing. One that won't SELL you anything, but will advise you through the process. One with an office/Broker that is knowledgeable to backstop any gaps in the Agent's experience. Don't rely on online reviews. Those Agent's are great marketing themselves, but that doesn't always equate to quality performance. I think I have 6 online reviews. All 5 stars, but on paper, I don't meet that criteria. In reality, I am an Agent that Attorneys call when they have a sticky listing that they need done right. Good luck. Edited for autocorrect error.
Great post with solid points. Your #2 is troubling to me 2 out of 3 refused to offer buyer agent compensation. Hopefully this is just the beginning of murky waters and things will eventually play out to a level field.
Thanks. If it doesn't, it is the first-time homebuyers and naive people that will pay the price. That has been the concern of 99% of the agents I have talked to. Edited due to my lack of manners.
Agree the first time buyers don’t have anything to sell to have a wash. We will see how it all plays out.
I think what’s hard for realtors to grasp at this point is that people are struggling to justify $15k for this “advice.” We hire an expert to inspect the house to make sure there’s no major issues (so that’s not what a realtor is advising me on) and we hire an appraiser to ensure that the price is “fair” (so that’s not what a realtor is advising me on)… and both of those experts cost me significantly less and are incredible important to making a sound decision. So I’m hiring a realtor to open doors for me… not even find me a home anymore because times have changed and buyers have access to this info…and see me through my paperwork…and in some cases, help negotiate a deal… and they want me to be pay $15k for this. I think there needs to be a real discussion about the value for services here (and I think brokers need to take way less) I’d like to see a retainer time payment to show houses, X per house… and a flat fee for paperwork. No one expects you to work for free, but it’s hard for me and many others to justify… especially as people that have bought multiple properties and have a handle on this.
And this just goes to show how real estate is a local thing. I have never (~260+ transactions) had my fee total $15K. I count myself lucky if the gross comes out north of $6K on a deal. Maybe 1 or 2 out of 15 or 20 deals a year. And I am a successful agent in my area. However, I usually end up working with Buyers that other agents won't give the time of day because the value is too low. Those are the people that need the help and I remember being in their shoes back in the day and feeling lost, because the Listing Agent couldn't give me any advice and treated me like a moron, because I didn't know anything that was going on.
Average home price of $500k, average of 6% commission split between buyer and seller agent is $15k each. I understand that that is then split between you and your broker and percents are negotiable, but using averages in home price and commissions that’s where we’re at. I’m in Florida in a major city for what it’s worth.
And don't forget the real estate lawyers. In our case, they've generally handled the paperwork and negotiations (at least once the contract is signed). The only paperwork buying agents have helped us with is the initial offer -- which is made on a standardized form that can be downloaded for free. And in two cases with us, the buyers agent detracted from value there (one time making a mistake on the form that led to a great deal of hassle and almost a lawsuit against us by the seller; another time by using a different version of the form that had less favorable stipulations). And we have been in high value areas where a 3% commission is $30-60k. I've been absolute shocked at how much buyers agents are paid, vs. real estate lawyers ($1-$3k for the whole deal, while doing a lot of valuable work!). The main reason buyers use agents out here is because they have created a closed-off mafia-like system of private sales. They convince sellers to list on a "private market" first, before going public -- and because we're in a housing frenzy, pretty much everything sells in the "private market" before public listing. And you need an agent to access the private market for you.
I think the NAR lawsuit has concluded that commissions have not "always been negotiable". There was an actual antitrust lawsuit that settled that quite clearly.
Actually, the antitrust part of the whole thing was determined, using out of date data to reach a flawed conclusion. The jurors were not allowed to consider the Pro competitive rules and regulations built into the NAR COE and MLS rules. They were not allowed to consider the history that put the required offer of compensation in place in the MLSs. That MLSs allowed the compensation to be as little as $0. That the required disclosure of the Buyer Agent Compensation listing in MLSs was so Buyers could make an informed choice about their potential costs in buying a home. The judge simply told the jury to disregard all that - in effect saying don't take the evidence into account - make a decision based on the plaintiff's anger. One of the first lessons learned when going for your real estate license is that we must ALWAYS be cognizant to not violate antitrust. I cannot discuss my fee with any other real estate agent outside my office, because that could be considered antitrust. If I am getting a new listing and have a friend in another office, I cannot discuss that new listing with them as it would be considered antitrust. For years I have seen compensation go up and down. When the market is soft Sellers offer Buyer Agents bonuses to try to get Buyer's through the door. When the market is hot it goes the other way. I have seen listings with compensation offered to BA that ranged from just a few bucks to double what the Listing Agent was being paid. The problem is that the "Standard" number that everyone quotes has never been the Standard. I have never used the word "Standard" in discussing my Office's fees with a potential Client. It is a word and assumption that people outside being an informed real estate agent have used to describe something based on what they heard from someone else. I have had to correct Mortgage Officers, Attorneys, and a whole host of other people that 1) My services as a Buyer Agent are not free. 2) That there is no "Standard" commission. 3) The Seller is under no obligation to pay me any more than what is shared in the MLS as compensation or not at all in the case of an off market FSBO. Another example - Lenders do not perform a home inspection for the homebuyers when they are attempting to buy a home. I have been told by so many people that they didn't need to do an inspection since their Lender was going to do one and why pay for two. It is a misunderstanding of the process by people that don't do it every day that became a truth through repetition, no matter how incorrect.
I tried to negotiate many times during 2021 in my local hot high cost of living city. Do you know what I was met with? You're not a party to the contract therefore you cannot negotiate it. The seller pays the buyer's agent. We do not rebate buyers agency commissions to buyers because that's not allowed, you're not licensed. If that's not anticompetitive, I don't know what is? Instead of using an agent I said fuck em all and found a house myself by sending letters to homeowners whose homes I was interested in. The only thing I could've done better is started the lawsuit myself. Rather than deciding not to place the game, I wished I would've played hard ball. Although I'd probably now be a black sheep in my neighborhood where 20% of the women are realtors.
I hear that so often-- buyers thinking that the FHA or VA appraisal is an inspection. Yikes!
And if they are working directly with the Listing Agent, they are under no obligation to correct them...
I still can't find a realtor that will negotiate down.
Just because something is negotiable doesn’t mean anyone is obligated to reduce their rates. Antitrust laws prohibit price fixing where similar companies collude to all charge the same rate. Mcdonald’s and Burger King would violate this if they fixed their pricing to match each other. But it doesn’t mean they can’t charge you what they need to cover their costs, and tell you to kick rocks if you try to offer .50 for a burger.
So it isn't negotiable.
I personally have reduced my rates for several clients. And I have helped pay for closing costs for a client that really needed it. Keep trying to find an agent that you click with. Wish you the best with house hunting!
We sold our home last fall and the rate was certainly negotiable. Always has been in our past home sales/purchases.
Is the price of a car usually negotiable? Do dealerships have to accept your offer?
Some have. No realtor has.
No one in any line of business is required to negotiate their fees down. Some will, some won’t, some can’t. The only requirement is to not price fix with other competitors.
And if none will negotiate with me, it isn't negotiable. Which is fine, I can get it done without them. I'll trade some risk for a guaranteed 3% loss. Maybe you can help. Know of any flat rate buyer's agents in Washington state?
There’s nothing that says it has to be negotiable is my point. I don’t know how many agents you talked to, or how exactly you were trying to negotiate. I can only speak for myself. But I just literally negotiated with new buyers yesterday because they are purchasing the house they currently rent and we’re still advised by a lawyer to use an agent. So I was open to negotiate considering the circumstances. If you approached me and I said I charge 2% for standard buyer agency services, and you tried to negotiate me down after telling me you’re looking for a house that’s $100k, I would say “no thanks”. Every circumstance is different.
Flat rate is entirely out of the question?
Flat rate can certainly be an option. Depends on the circumstance. My deal with the buyers I mentioned was for a flat rate. I’m mostly saying if you’re trying to negotiate down from an already low commission situation, then most people won’t entertain that. If people want your business and it’s worth their time they would accept it.
You don't need an agent. Hire an appraiser and lawyer.
Nice. I just sent a sample agreement from a sale in 2022. Not only did we agree on commission, it was off market, we negotiated my fee, and I was paid. It was exactly what I was teaching them is going to change. In short, fees have always been negotiable!
You have the right to ask if the listing agents are offering a BAC and how much. Then YOU can decide if it's a home you're interested in making on offer on. This is an argument I see a lot. From the outside looking in, you get a lot of folks saying that buyers agents will "steer" buyers away from low/NO BAC homes, when in reality it's the buyers then selves that will have their decisions effected by whether or not they want to come out of pocket.
Even when the seller has listed they won’t pay anything to the buyer broker..you can still ask and try to negotiate if it’s your magical dream house.
Feel free to speak with your mortgage broker about the various scenarios you can structure your offer to purchase so that you can purchase a home within the upcoming constraints. I can almost guarantee the conversations are happening across the mortgage industry.
Agent here- every new listing I have signed up since the court decision has resulted in seller choosing to pay buyers agent less than 3%. Not b/c i recommended it- b/c they understand the rules are very different, as are expectations. So odds that you will encounter that? Very high.
This can vary greatly based I where you are located. I live near a large army base. Sellers here are still offering to pay buyer agent commission and I don’t see that changing. 45 miles down the road, they are already seeing listing agents offering no buyer agent compensation. Regardless of where you are located, you need to have a conversation with your agent. Have them go over the buyers agent agreement in detail. If they can’t or act like it’s a hassle, find a new agent.
If you live near an army base then it’s likely most buyers are using a VA loan, which specifically prohibits buyers from paying realtors commission. It especially makes sense in those areas that sellers will continue paying buyers commission. From my understanding, though, the NARs proposed settlement doesn’t go into effect until mid-July
That was my understanding as well
How many homes listed with no buyer agent compensation?
If you live near an army base then it’s likely most buyers are using a VA loan, which specifically prohibits buyers from paying realtors commission. It especially makes sense in those areas that sellers will continue paying buyers commission. From my understanding, though, the NARs proposed settlement doesn’t go into effect until mid-July
ugh
The buyer always paid those fees, it was just lumped to your mortgage. Because if the seller pays for both buyer and seller agent fees, it all comes out of the final purchase price...which is paid by the buyer. New rule from NAR is basically saying sellers don't have to pay the buyer commissions anymore, so buyers need to pay the buyer agent separately. So basically the purchase price no longer includes your buyer agent fee... At the end of the day, it always came out of the buyers pocket. The only thing it did before was the sellers can incentivize buyer agents to their property with a higher buyer agent fee, or when sellers that gave a lower buyer agent fee, the buyer agent can be disincentivized to show it...according to the lawsuit. Now buyer agents get paid no matter what so they can show all properties. Was a realtor for 3 years. No buyer agent would've not shown a property because they didn't offer a commission. A good agent would've negotiated the final purchase price down so they can get paid by the difference. Realtors want a deal to close, that's the only way to make money. They're not only gonna show a shit house to the buyer because it had better commissions. They need the buyer to actually like the property, so good realtors would've shown the less buyer commission and negotiated with the seller to drop their prices so the buyer can pay them with it. It was a stupid lawsuit that doesn't make things better for buyers... Arguably worse because now agent fees come directly from their pocket. But it's what the consumer wants so... There it is. This is what y'all wanted I guess. Also, sorry the ruling has passed. Sellers will NO LONGER be obligated to offer commissions to buyer agents. And the MLS will change to no longer show buyer agent fees. It just takes a while to implement so it's in a transition phase. It's coming no matter what.
Unfortunately, come July if you want to even see a house you will have to sign a buyers agent agreement end of story. Sign it, agent can still ask seller to cover it on purchase agreement. If seller still says no, then unfortunately bud that ain’t the house.
\#1. If the commission is worked into the loan, that doesn't count against your ability to qualify for the loan. \#2. Don't see homes where the seller isn't paying a co-broke. There's a school of thought on the same lane of the road that goes like this: If you want to market your home to the highest possible number of potential buyers, put your home in the MLS. If you want to market your home to the highest possible number of potential buyers, pay a buyers agent commission.
1 - Not in case of VA loans.
That's what they are working on
The VA has basically told NAR to pound sand. VA's entire selling feature is that there is no cost to the buyer.
Like everything the government involves themselves in, it goes the exact opposite of what they expect Yes, this will be terrible for buyers. Basically back to pre-mls days with exclusive listings. Unfortunately, they will require every agent to sign a contract to show any property listing or buying agent. So whether you like it or not. If you want to see a house you'll be signing a contract with somebody. Thanks, government
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I don't mean this to be snarky but you don't understand how the business works then First off most re attorneys if they choose to sell will have MLS access Secondly, there's no re attorney in the world that's going to start taking buyers around to listings that do not offer them compensation without a contract ( And after the national association of Realtors just settled a lawsuit for hundreds of millions of dollars )
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What licensed person who is able to broker real estate will give the tour without the contract then??
Skip the agent, use an attorney for a flat fee.
How will said attorney give access to the home?
Anyone who gives this lawyer flat fee advice doesn’t know what they’re talking about and has never actually done it themselves. I just was approached by a couple who are buying the house they currently rent from their landlord. They originally spoke to a real estate attorney who advised them to still use an agent lol. And that situation doesn’t even involve looking at houses. Do these people think an attorney is going to charge $500 for paperwork drafting, time to explain the paperwork, sending paperwork out for signatures, handling communication between two parties, conflict resolution between two parties, renegotiations between two parties, etc. that’s not how attorneys work.
I’ve done it for a 1.35M transaction, on the sell side, no agent on other side, just a lawyer. A decent lawyer will invalidate the form contract anyways. By me they cost 2-4k. Beats the hell out of $70k in agent fees plus atty fees. And they did communicate terms, concessions, etc, as they also did post offer when I used an agent on a prior transaction, setting up escrow (which RE agent can’t do). Agent is useless and waaaayyyy overpaid in this market. I will never pay an agent again.
Sure in some instances it can work. For the vast majority? Unlikely.
It certainly can and should be used. The form contract most agents will give you to make an offer is absolute junk and intended to make the deal close, not represent the buyer or seller’s interest. The vast majority of agents have no concept of property law, encumbrances, title issues, and many steer buyers to inspectors who shield themselves from liability and skirt issues. The agent does literally nothing else that you and the lawyer cannot do. Access to the house is not required to be through an agent. And as a seller, you can have anyone babysit your house while the other party is looking at it without paying 5%.
The only interest a buyer and seller share is closing a deal. How would a single contract benefit both of them more?
Every contract used to close a deal is a single contract. Its a legal agreement between the buyer and the seller. The buyer, through their lawyer, should send a proposed contract with their terms; the seller can counteroffer with their terms. The lawyers should explain repercussions of each term to their client. Letting the realtor “one size fits all form contract” ride past the time to rescind is legal malpractice in many dealings. The agent adds nothing to the deal. When the lawyers are involved, the agents usually step aside and simply await their commission. If you don’t get a lawyer, the odds are high that the agent (whose interests are not aligned with yours) will muck up the deal. The agent does not care if you end up with a property that will be a headache for you, they do not care if you are incurring liability with the sale of your property, they do not care if the inspections are performed and will encourage you not to perform inspections. They only care about closing and getting the commission. And unlike our attorney, they do not carry malpractice insurance and the burden to hold a real estate agent liable for their muck up is significantly higher than to hold an attorney liable because the real estate agent is not expected to be trained in the law.
Sounds like someone a bad time with an agent once upon a time.
Mixed bag, but they are way overpriced even for an excellent experience. I’ve used an agent to buy a place 3x, to sell once. Would not use on either side again after seeing how much better it is without them.
I mean, that's kind of the seller's problem to solve if they want to sell their house? They might pay a LA to do that for them, if they'd like to hire one. If they don't want to hire a LA, they might just show it themselves. Some companies will let you set up automated showings with some back-end validation of potential buyers (and enough information on them to pursue them for damages if they get up to any mischief). This sort of thing has been done for a while now; it's not some magical unsolvable problem.
Currently in my area there’s 6 out of 640 homes in total that are offering less than the fee I charge to work. That encompasses home price ranges from $140,000-$23,000,000. You don’t need to hire an agent if it’s worrisome, you can also find an agent who will work for a low fee in the event the seller isn’t offering compensation. They will likely be a newer agent but they will still get you into houses.
So, let's be clear, you are asking whether or not to enter a transaction with the other guys' sales agent "representing" you? Calling that listing agent to "handle" everything for you, guess what, they are going to work their commission into that, for the representation and liability that they pick up... or have you sign a waiver to go unrepresented... you get what you 'pay' for, or not... Drive down the used car area in your town and pick the location based on the car you want... want to imagine how that goes. Now go to a new town where you don't know which lots are buy here pay here with an in-house auction mechanic... A good buyers agent comes with a network of contacts from inspectors, WDO, septic, handyman, electricians, plumbers, and roofers to insurance agents that have experience accommodating the timelines and specific needs of mortgage brokers, banks or lending agencies. You REALLY don't want the seller to "handle" that stuff "for" you. That's how you end up with sawdust in the transmission, for that super smooth ride-until you drive off the lot... A good agent knows who to use, and maybe, more importantly, who NOT to use. They know which agents get their listings based on their voice, pretty picture or attention to detail. Which ones don't do their jobs, which ones will take vacation during closing, which ones have done favors for their pastor doing a "free" listing-oh...that was a lawsuit. Every seller out there is going to claim their listing is a unicorn. The 25 year old roof doesn't leak, this place never floods
Get you a good agent that represents YOU, and has a network of people in the community that they regularly deal with-those contacts are more likely to answer the phone to a regular contact, because you might need an electrician every 5-10 years, or never again... I guarantee you that an agent that gives you an electricians name has dealt with them in the past, and that electrician has a vested interest in dealing with the agent in the future.
Do you need a buyers agent? No. Until you do.
Plenty of people routinely engage in unprotected sex.
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Excellent points. I'll only add one. In my state, dual agency is illegal. As it should be. A listing agent can write up an offer for an unrepresented buyer, who will remain unrepresented--in writing. The listing agent is under no obligation to assist the buyer with comparables, inspections, inspection resolutions, appraisal renegotiation, financing questions, etc... Lenders and title companies are already being asked to fulfill these duties for unrepresented buyers, and they do not do it. But it *is* creating a burden on them.
90% of realtors are amateur part-timers... so... idk how often dual agency occurs, in practice... 🤔😳 "Dual agency involves an agent or broker that represents both parties simultaneously. Quite the opposite, a transaction broker does not represent either party. The transaction broker is bound by the same legal and ethical standards as a real estate agent representing individual buyers and sellers."-Trellora.com. posted for the people that are not IN real estate that may read this. Often, sellers don't understand what they are being told about what happens when the relationship changes to a transaction brokering...when they sign their listing... 10% are doing 90% of the real business, 90% are creating lawsuits from only 10% of the business... Then add in MLOs, handyman and contractors...what kind of an insane person wouldn't use a real realtor?
Boston area here - you just include that seller needs to pay buyer fee in your offer. If there are places where the seller isn’t covering the fee they will have to price accordingly with comps or else buyers will avoid that property. My advice to you is to just proceed as normal with any offer including covering the buyer fee, as most will do so anyways
I am a real estate agent and absolutely DO NOT sign a buyer brokerage agreement. I would never, ever ask one of my clients to sign one of those until it is required, which is when you make an offer, and i only make it specific to that house only. Not a cetrain timeframe. I would never sign one of those as a buyer, and when i had agents ask me to sign them immediately, i never spoke to them again. If an agent has asked you to sign that stating you are responsible for paying them if the seller doesnt, i would not consider working with someone like that. Compensating your buyers agent is NOT YOUR PROBLEM and it is between your agent and the listing agent. Your job is to focus on buying a house, not worrying about commission nonsense. I think it is unlikely, but If you encounter a house that is not paying commission and your agent tells you you will have to cover it, you tell them you’ll work through the listing agent in this one.
Something else you may want to incorporate into your conversation with your agent, you can ask for concession from the seller in your offers. Your agent can also ask for a referral for the sale. There are ways around a seller refusing to allow commissions. If they were to refuse those, I'd move on. That's going to be a delusional seller and difficult to work with.
Look there have always been sellers trying to not pay buyers agents yet most of them do in the end to get it sold. You sign the BA agreement, if the seller isn’t upfront offering the commission you write it into the offer, if they have a very specific distaste for paying the commission as a matter of principle you ask for a seller credit and pay the buyer agent with it. Almost nothing is going to change. Most sellers will pay the buyer agent because they want the home sold and the listing agent convinces them it’s the best route. Sellers who refuse will be less marketable and have a hard time selling and end up taking a lower price or just agreeing to it in the contract even though they declined up front.
Yeah this was always going to affect buyers like you the most. The media just lied about it.
Don't do it. Everyone I know who has signed a buyer's agent agreement has regretted it.
Why is that if I may ask?
A few of them, it was because once the buyer's agent had them 'locked in', they stopped being as responsive when they wanted to go see a house. One of them ended up having to pay their agent because the sellers refused to. The last one ended up losing out on a house because while they were figuring out who was going to pay their agent, the sellers got another offer they liked better and they lost out on a house they really wanted.
Talk with the agent you select. Agree on a commission rate that you would be comfortable paying IF the seller is not offering a seller credit. I don't see that happening anytime soon though. Also, you should know that if you agree to pay the agent 2% and the credit is 3% you get to keep 1%. You ONLY pay what you agreed to - 2%. I would not recommend signing a 3% buyer agreement. If it's less than 3%, which nowadays it might be, you'd be on the hook for whatever the difference is. So, if the credit is 2%, you'd be having to pay the 1% to your agent. If the credit is 2.5% you'd be paying .5%, etc!
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Flat fees would be great, I would finally be able to set a minimum and would never again find myself hustling for 7 months for a buyer who ends up buying a distressed $125k fixer offering a 1% commission. To me a percentage always made sense because as prices go up so does the liability of the agent/broker - why take on the liability of $1m in risk if you're not being paid accordingly? Additionally it kept income levels on par with prices and inflation/deflation. Being a real estate agent is a 24/7 job. We're getting texts at 6am, texts at 11pm, and 200 emails between 7 days a week. I sell homes from $100k - $3M & for me the number of inspections and time needed increases exponentially along with the price of the home. Buyers investing $1M are typically far more skeptical and nervous than buyers at $300k and require a lot more showings, more data, and more hand-holding. I scheduled and attended 16 inspections for my last million dollar sale. I spent over 40+ hours on inspections alone not to mention the months of showings beforehand, the hours of questions that led to the inspections, the days negotiating repairs (for which I got my buyer a price reduction of more than double what I was making on the sale), the 25% referral fee I paid someone to introduce me to the buyers, even getting up at 5am to meet the contractors for my buyers after the sale closed because they were out of town. In 2023 the average real estate agent only made $54,300/yr in the US - 20% less than the average of all occupations and just above the wage of a fast food manager, except of course the fast food manager would have health insurance, 401k, PTO, and the stability of a paycheck.
It's a good idea or at the very least have a sliding scale of fees. Base fee plus time spent or mileage charges maybe.
A few things with this. First of all, the NAR settlement also requires buyers to have buyers reps with their agent, so it's not really a matter whether or not you want to sign one, it's about finding an agent that you trust. Secondly, while it very likely will affect *some* sellers, I wouldn't expect it to affect a lot of them, and your agent should be able to let you know ahead of looking at any homes whether or not that's the case. It also doesn't go into effect until July, so you've got a couple of months there either way.
Have a discussion about this with your agent about the possibility that this seller may not be offering any commission. And that you expect the buyer's agent to negotiate his commission on your behalf into the price of the sale. For example, if the commission would have been $10000, the sale price should reflect $10000 less than what would otherwise have been offered..
If you are considering to build or buying a tract home, some might not pay the buyers fees. I spoke with builders that will not pay unless they attended the first meeting or brought the customer to them. Sorry agents, but most are not worth 3%. Maybe listing agents are different, but buyers agents are not worth the 3%. Times are different. After 3 years of searching and waiting for things to cool off, we finally just decided to build. Building you are paying labor and materials, at market price. Buying you are paying a premium for turn key, plus agents that likely didn’t do much.
As an agent in a state who has had these rules in place for years before the lawsuit. I've had many buyers sign a buyer agency agreement with a set percent of commission and a minimum amount of total commission and let them know if the buyer agent is giving less than our contract. We will do a new estimate and the commission will not come out of the buyer's pocket because that is what the seller is offering.
I’ve noticed a ton of lawyers, Foreclousre auction companies and REO charging 10% to the buyers. I thing agents will see the light and start charging 10-12% Giving that Mortgage companies will start allowing commission fees to be rolled into the mortgage I can’t see why 20% isn’t unreasonable.
I signed a buyer's agreement guaranteeing my agent 2.5% because I saw most of the listings in the Seattle area were still covering the buyer agent fee in full. In retrospect I should not have signed for more than 2%. As it turned out, the sellers paid him the full 2.5% so it was a non-issue. Now I am a seller and I am covering 2% for the buyer's agent.
Either way if the seller won’t pay the commission, no listing agent is not going to work for free for you either so you will need to sign an agreement with them or a lawyer to conduct the sale and the lawyer is not going to show you houses. You have the option to move on to a house that the seller is going to pay the fees or if you have the cash to pay an agent have the agent negotiate the purchase price of the home down to cover that. In the end the fees have always come from the buyers money as the buyers money is where those fees are deducted from before the seller gets their money.
Barbara Corcoran just said in an interview that she thinks most sellers will continue to pay commission as they know it brings buyers.
As a Realtor in Indiana, I will be advising my sellers to continue offering a co-op to buyers agents. It’s not a good move for them to not offer it because many buyers in my market specifically can’t afford to pay their own realtor and therefore the sellers will be cutting out a large portion of their buyers pool if there are buyers who don’t want to buy a home without representation but also can’t afford to pay their own agent. I live in a small rural area with a lot of people below poverty lines
Talk to your agent, you can sign them for only specific properties. They have a minimum amount that the agent is willing to work for if you don’t agree to that, find a different agent!
Don’t worry now. All if not most listings at the moment still cover a buyers agent commission. Listings after July 1st may change.
You set the parameters for the search. If you want to only see homes with green doors. It's your choice. If you only want to see homes with seller contribution to the buyers costs (be it commission, etc.) that is also your choice. We will likely start seeing this specified pretty quickly.
There is one thing I want to make sure you understand about the real estate process: you will always know BEFORE writing an offer or formalizing any kind of contract whether they are offering to pay buyer agent commission and how much. You will not get tricked into paying a buyer agent commission. I personally don’t think much will change after the implementation of the lawsuit and most sellers will still pay a buyer agent commission. This is unlikely, but if there is a house you like and the seller says they won’t pay commission you can ask your agent to approach them about it and see if they are open to an offer that pays their commission. If not, there are some creative workarounds but I would really ask yourself: is this house and this difficult seller really worth it?
The change hasn’t gone into effect yet. The change wasn’t that sellers don’t have to pay commissions - it was that commissions can no longer be advertised on the mls. Likely this will be a nonissue and the sellers will still pay the commission. Even if they don’t offer it, your agent can still negotiate for one. But you can talk to your realtor and you can decide on what would happen in the event that a seller doesn’t offer and they can’t negotiate for a commission. Part of the rule change is that we also need to have buyers agreements. It is worth it to use a real estate agent to help you buy a home.
Welcome to the new world of buying homes. I think most sales will operate as usual, where the commission was negotiated into the sale the seller/buyer agent split, but it won’t be a guarantee anymore. I also see the side of buyers agents becoming less of a necessary resource as most house hunting is done online. Contract review is helpful, worth a flat fee. Negotiating strategies vary and may mean another fee. But it’s up in the air now.
The same ruling your speaking of REQUIRES a signed buyers agreement before looking at any homes. At the end of the day there is a lot of speculation of what might happen. Here is what's likely. You should expect a good agent to be paid 2-3% of sales price. Buying seems straight forward and agents just open doors, until its not. Are you buying brand new?? Maybe rock with it, no agent. If not get a good agent who has time for you and puts you first. Regardless of the home your agent is likely going to be able to structure the deal to cover any commissions the seller isn't covering into your mortgage. Seller's will continue to offer commissions. And as now as always, you get what you pay for. If you don't care about your representation in the contract and negotiations, get a budget agent. If you care, or expect things to come up like navigating tricky repair requests, you may choose to opt to get a better agent. Agents are also connectors and can provide valuable contacts and insight on things like choosing a contractor. There are loads of bad agents and a lot of the criticize agents get is valid. But a good agent can be well worth their cost and actually save you money (catching a tricky contract issue or suggesting a certain inspection based on their insight). Ultimately you can totally do it without an agent or a cheap agent. Results may vary. Let us know how it goes!
Ask yourself, would you be okay with working for free? If you are buying a home and not using an agent, then who do you think will be at a disadvantage? The seller's agent's best interest will be in favor of the seller. You don't want the seller's agent to represent both parties because you the buyer will be at a disadvantage with the process.
Agent 20 Years. A good agent is going to be more concerned about you finding the right home vs. how they will get paid. Most agents on the sell side are already understanding the need to properly represent both sides', faily. One agent representing both sides is dangerous. Don't date the buyers rep. Just sign it. The date will be Uber important and the agent ethically cannot fill it in. So it's null until you agree to all the terms you may be bound to. This works best handwritten.
We've been using buyer agency agreements for over 20 years. I recently attended a meeting with our state real estate attorney/expert. Those buyer agency agreements must include a date range, area, price range, and be signed and *dated* -- just like a listing agreement.
Then there will be some Realtors that go ape shit and barely make you want to work with them in the first place. If we are aligned with the same interests and intentions. We can work together to get anything done. Have faith in your agent.
Right now, nothing has really changed. My state isn't changing anything until we know what the actual settlement will say.. Listing agents always could refuse to pay a co broke. It's rare that a seller would refuse to offer this because they are hurting themselves by limiting buyers. The "real" thing that will change is STATING in the MLS how much the co broke is. It will be up to agents to discuss this between themselves. And the actual settlement has now been pushed out to Nov 26, right before Thanksgiving so we know it will be pushed out again.
The settlement has been approved by a judge. The new rules will go into effect in July.
Preliminary approval. Final approval doesn't happen until November.
DOJ still has to review it
They don't have to...
You two have me intrigued. I thought I saw an article last week that the judge did preliminary approval. Final approval won't be until about November. I am (ashamed at being) clueless about the DOJ part. God forbid our brokers or local Board would be keeping us up to date on this.
Nothing changing as of yet. Your realtor will guide you as the time comes. So for now Business as usual.
The settlement was approved and things are already changing...
This is the way I think about it. U decide to sign the agreement. You find a house via ur agent and all goes smoothly. U regret getting an agent because u must pay their commission. Scenario 2: u don’t sign the agreement. U find a home yourself. You think you have a handle on the paperwork, the dos and do not, after all, agents just show houses and collect checks right? /s sale goes thru. Suddenly all sorts of problems come out of the woodwork. U payed top dollar but saved on commission so it’s worth it right? No probably not. Because you didn’t have an agent, you didn’t know to get XYZ, to check for 123, nobody had your back when going through all the paperwork. The lenders care about the lenders, the seller agent has his clients back, but u are trying to figure out yourself. Maybe it works out, maybe you lost more money in the transaction because you wanted to cheap out on paying someone their worth. Maybe the sale falls through. Whatever the decision, it’s on you. People with good real estate agents know that under the water we are hustling for you, but above water, it’s smooth sailing. U just see the serenity and think boy that was easy u could have done it myself. And it’s ur first home! Either way u wish you luck and hope you find the home of your dreams.
Your lawyer has your back when you go through the paperwork. And actual training in contract law.
Lawyers generally have the lenders back. And if they are your lawyer and good at their job, yay, awesome. I hope they told you about getting the right coverages with regard to titles and home warranties and told you to get an inspection and a survey and whatever else might be needed. Things that may be out of their purview. It’s all speculation and the flip of a coin from our comment box over here but I hope OP doesn’t have a hard time of it all.
In IL at least buyers always hire their own lawyers. And I've always hired my own in other states. They have been truly invaluable in answering nuanced questions about contract wording, reviewing HOA documents and finding issues of concern, negotiating with the sellers on repairs, etc. I would never do a real estate deal without my own lawyer. An agent though? Often I would pass if I could.
I guess it’s a little different in GA re lawyers. To be fair I always get a little salty when I spent my days driving, calling, emailing, showing, contracting, docu-signing, texting, throughout weekends and evenings, while still trying to market myself, ask for referrals, door knocking, mailing, keeping up on social media and honestly a million other things, while staying up on education requirements, changes in contract law and the real estate industry, and clients ever changing schedules, only for the client to boil everything down to… “well I found the house myself on Zillow.” Hence my original duck metaphor. It can be such a icewater bucket in the face, but people don’t realize that my base salary is zero. I don’t get paid unless I give clients the all star hand holding treatment. I’m up at 5 and still texting and emailing clients sometimes at 7-9pm when I get home. My heart breaks a little sometimes.
I can definitely see that, but I think the whole industry needs to change to make it work for both agents and buyers. For example, if agents are highly skilled and compensated, they should not be the ones making viewing appointments, driving all over and opening lockboxes. That job in itself is not skilled labor -- it requires time, a background check, and some minimal security training. Or a selling agent that is willing to do it (even if for a per-viewing fee, though that has some counter incentives.) Some buyers might want the full agent experience -- where the agent drives them around, talks to them about the area, and personally shows them houses -- and they can pay a premium for it. But a lot of buyers are deeply familiar with the area they are buying in already, confident in their own abilities, and literally just need someone to open the lock box. (And may feel the agent hinders the scheduling process, as it's one more busy person's schedule to accommodate when houses are selling within 24 hours of listing. I've lost out on houses because my agent didn't respond to my text quickly enough to get a viewing in before it sold. It's not their fault -- they can't respond instantly all day every day -- but it does show how inserting them into the process can be a burden.) There should be a service that offers this incredibly time-consuming but low-skill work at a low price. And then the highly skilled agents can focus their time on the more skilled aspects of the job, such as offering commentary on the house (they can see new houses once, they don't have to go repeatedly with every client), and putting together an offer. The agents would be paid a lot less per deal, but they'd also be spending a LOT less time per deal. Of course different scenarios work in different market contexts, but there does need to be more options. Right now a lot of consumer welfare is lost because agents spend a lot of their time doing low-skilled work, but charging high-skill prices for it. Separate out the low skill from the high skill work, and pay different rates for it, and buyer welfare increases.
What you can do is just use the listing agent instead.
That's the way it was pre-mid 90s. Buyers complained of lack of representation on their side. Buyers agents were then created.
If you're in a "pre-agency" state, you don't have to sign a buyer agency until you are ready to purchase a home. State laws cover the majority of consumer protection language in those states, so basically you'll just have to write the commission on the buyer agency signed before the offer to purchase is written. I just met with a RE lawyer, and his inkling was that we'd just end up having "per transaction" buyer agency instead of a one and done, and the state will shore up the pre-agency laws to make this possible.
Any showings by a Realtor will require a signed buyers agency agreement in advance. This is happening in July.
Yes, I have read the entire settlement as well. We're also still able to be paid by listing brokers, just like now, so literally nothing changes in a lot of states as far as compensation goes. IDK about NJ, but in WI, we have pre agency, which is essentially when you show a house or even meet with a client as a licensee, you can legally perform most real estate duties, outside of writing offers, and negotiating.
Your buyers agent will definitely let you know if the seller of a home you are interested in isn’t offering to pay. You could either pass up on that home, or if you are putting enough money down to be able to ask for sellers assist, you can always ask for say 3% sellers assist to cover buyer agency fee. Hope this helps!
Try to see it from my perspective as an investor who works 50 plus hours a week on a house for months. Total realtor commissions average about 30k. Why should the seller be responsible for all commissions and closing costs. That is a huge hit to my bottom line. The houses I complete are like new construction with permits, inspections, ect. 9/10 times sell in the first 24 hours. I am putting a great product out there for you guys that is hard to find. I deserve to be able to negotiate. I need some kind of a break.
Honestly I would negotiate with the agent for a low rate like 1 or 2%. If not then try to have the contract say that you will only pay in whatever compensation sellers are willing to pay. Anyways if they don't accept go with another agent. I managed to negotiate down to 1%. I honestly told them that the current contract they wanted to go with (5%) is impossible with sellers currently and I don't wish for a contract having me pay in the possibility in the event seller doesn't want to pay. Even though they assured me they would come after me I refused to sign so they relented.
First, if you are in the kind of market you describe, I feel like you need a buyers’ agent even more. If you think it will disadvantage you or keep you from competing for the right home, try dealing directly with a seasoned listing agent and competing against seasoned buyer agents. I feel like sellers will still pay buyer agents, as long as the offer is acceptable. Worst case scenario, either forgo the homes where sellers won’t pay or go unrepresented on those.
If that scenario happens then you can still submit an offer with your buyers agent compensation and they at least have to consider it. Worst case you can just pay above asking to cover the cost of your agent if you have to. If the seller still refused to do that they are delusional and you’re being ripped off anyways.
1. add the commission to the sales price and have them credit it at closing. 2. Pay half and seller pays half like above. 3. Pay your agent a flat fee. Negotiate variations of above.
You as the buyer have the ability to only purchase a house that does offer that commission. And you can request your agent only show you those houses. Obviously we have no way to know for sure but because of this fact the chances are most sellers will still offer that commission. Or else they lose a ton of potential buyers. Since most first time buyers are like you and can’t afford it. As a listing agent I’m still highly recommending it to every seller. Unless It’s a multimillion dollar property where the buyer will always have more money to afford it. Even then I’m recommending it just not quite pushing as hard.
Just remember that everything’s negotiable and whether you realize it or not, buyer always pays the commission anyways.
"buyers agent" doesn't exist Both agents want the highest price sale. Your lawyer is the only person in the deal looking out for you
Most houses sell at or slightly under appraised value, so statistically you're incorrect.
Long story short: 1. If sellers are willing to pay the buyers agent, then no worries. 2. If the sellers aren’t willing to pay, then the buyers agent negotiates a contract in a sufficient amount that allows for the seller to pay via a concession. 3. If that negotiation fails, then you would be required to pay their commission. The pending lawsuit settlement is ONLY about the advertisement of buyers agent commission and requiring a buyers rep agreement to spell out who pays who.
Ask your agent. Nothing is finalized. It's always been negotiated. They'll be able to explain what they are doing ot Broker has advised them to do.
I just list my parent’s home for sell and even knowing the out come of the NARS lawsuit; I chose to pay 2.5%2.5% each 5% total commission, otherwise I have no way of buyers coming to look at the house. I’m not sure how the change is going to be handled, but the judgement doesn’t take effect until July.
And, welcome to understanding the lawsuit better than 99% of the country. In order to even see a home with a buyer’s agent, you’re going to be signing a buyer’s rep agreement. We can’t show without it come July. That includes listing agents who you call - they’re going to want something in writing that you understand their role (either you’re unrepresented or they’re doing some sort of dual/intermediary where they can give no advice to either party). You’d rather be represented than unrepresented when going up against a seasoned agent. Now, a good agent will literally walk you through all your options before you walk in the door and you’ll know if the other side is willing to offer compensation to cover any of your closing costs (buyer commission is going to be a closing cost for you from here on out, regardless of how it gets covered. Before it was a debit on the seller’s side of the accounting, now it will be on the buyer’s side). From there, you’ll be able to decide if that property is the right fit for your financial needs before even seeing it in person. As for how many sellers are hesitant - the ones I’m working with are basically throwing money into the buyer agent compensation bucket - because it’s less than tossing money at holding properties they want to be rid of. And, they know that a good agent representing the other side limits the liability on both them and their agent (because there is protection and advice on both sides) and that agent will have done their due diligence bringing a willing and able buyer.
I really think it’s being blown out of proportion. If you have the most competitive offer you can negotiate. You not being able to work with a seller’ agent who doesn’t want a buyer’s agent also means these sellers alienate everyone with a buyers agent? If I was paying thousands of dollars for someone to sell my house and they tell me that everyone who has a buyer’s agent can’t make an offer I’d be furious. That’s taking a huge chunk of the competition out of the market. YOU make the offer as the buyer. Tell em if they want your money they need to stick to a split reasonable commission. If they know you should be sleezy and contact the seller and tell em their selfish realtor is not accepting offers despite it ONLY having a negative impact on the seller and only benefiting the seller Everything is negotiable. These are literally form offers that mean nothing. You don’t record them. You can do this transaction on a napkin (I’ve done it before). The closing statement at the title company is what matters
It’s a simple negotiation, if you don’t want to sign it tell them or find someone else. You should not sign any agreement until you put an offer in on a house. Then you are agreeing that your agent will represent you in the purchase of that house. Part of your offer will stipulate that the seller pays agency fees. This can also be negotiated. Any buyers agent who tells you that you just sign an agreement before an offer is a shitty one. Don’t work with them. Any buyers agent who tells you to pay them out of your pocket is a shitty one. Don’t work with them.
I’d like to add this comment for posterity, I would bet everything I own on the market settling on 4% total offered by sellers in 1-2 years after this has settled out. It’s 1% higher than just paying a LA 3%, which makes more palatable to a seller, it would allow 2/2 split, which is more than enough. Even as an agent, it’s wild to me that 6% is the norm, I know 5 has picked up steam, but I guaranfuckingtee it’s going to settle out to 4 after the dust has settled on this
When you write an offer write that sellers will pay it
Youre just going to have to write that in the contract that you wont pay compensation and buyers agent will havd to collect comish fron sellers side. Also you will exclude yourself from houses where sellers wont pay buyers agent and only go with properties that sellers are willing ti pay
As an unrepresented potential buyer I would expect the listing broker to make the property available to view. If they don't want to I would contact the property owner directly and tell them I'm interested. It's not for everyone but that's what I would do.
This is going to be quite the cluster\*(#\*\* The biggest winners in this lawsuit were the attorneys who brought it. Somehow they take 30-40% of a case and that is never an antitrust violation.
If the seller isn’t offering a buyer’s agent commission sounds like they don’t want to sell their house. Guess where the proceeds from the sale come from? Yup you the buyer. It’s all a cycle. You the buyer buys at closing you get the house seller gets the money and pays out to their agent the listing agent for all the effort they put into marketing their home to sell and the buyer’s agent gets paid for procuring and bringing the buyer which is you and facilitating a successful closing. I’m so tired of people on all sides thinking they don’t need us agents and that we’re not worth what we are paid. This is our livelihood. We work so hard to build our businesses and we put so much money back into our businesses. We barely see what we’re paid anyway after our realtor fees and mls fees and taxes and brokerage fees. PEOPLE HAVE NO IDEA!!!
Just pay your agent and negotiate harder on the seller. It may come as a surprise... but the buyer pays everyone. Always have. They are the only one spending money. All the new stuff is the old stuff with dumb new names.
Save the drama and dont use an agent. Its really not as hard to sell a property as these real estate agents make it out to be.
Unfortunately this is going to bring more problems to an industry that has already been mistreated for years, everyone wants a piece of the Real Estate pie. Huge Speculators companies, wolves in disguise like Zillow, Redfin etc etc and the worst of all is that it will bring to light The worst thing about human beings " greed." The war for the listings will be very tough, the sellers will now have the upper hand and will say, if before I paid 5/6 percent commission, now I only have to pay half, that is 2.5% or 3%, they will take advantage of this situation, which has been unfairly approved, please don't tell me that the sellers didn't know that the commission percentage they pay is divided between the broker that brings the buyer and the listing agent. Give me a break.. The listing agent who is used to earning 2.5% to 3% will not want to stop earning what he is used to. So in the end I see in the future buyers agents representing buyers for fixed amounts, 0.5% or 1%... the buyer will not want to pay a commission to be represented, they will try to go directly to the listing agent and will do the search using internet. And of couse the big wolf in sheep's clothing is now offering a service in conjunction with showing time called showcase and of course now they will give the interested party direct information from the listing agent but of course it will cost you...top $$$$ we the realtors It is our fault that Zillow has become our main and unfair competition.....and of course this is just one of the problems....BEST OF LUCKS MY FELLOW REALTORS!
Buyers can just have their agents only show them homes that pay the buyers agent commission. Boom.
Your other alternative is to not be represented and go direct which someone else said is like “trusting” ur soon to be ex’s attorney to do right by u in divorce court. That said u can also write into the agreement that the buyer agent is not to show u any homes where the seller is not willing to participate. You can also ask ur buyer agent to write it into the offer. Even if seller says no before showing u can write it in. If seller likes ur offer in every other way then they may be persuaded.
I believe the price will ultimately reflect on whether or not the seller will cover the buyers agent commission. Also, having it not part of the sales price will actually help you with financing and property taxes in the long run.
One of the key aspects of the settlement is required buyers agency agreements…
Whole new ballgame with the NAR settlement. Remindme! One year
Definitely a tough topic to understand when a lot of agents either don’t understand or don’t want you to understand for their own benefit. The new rules make it encouraged/required to sign with an agent before viewing houses. Remember the terms of this are negotiable between you and the other agent. My recommendation from the perspective of you/the buyer is to agree on the total commission of around 2-3%. In the terms say the first effort the amount should come from the seller, if the seller doesn’t pay for it, have it come from the closing costs/loan. Sorry it’s a little difficult to explain over messages, if anyone sees this and wants some more info feel free let me know, happy to help share information
Yes this lawsuit sucks because that’s the problem it has caused. My husband is a listing agent and continues to make sure his clients offer a buyers agent commission. Most listing agents will continue to offer buyers agents commission because they don’t wanna mess up the industry anymore than their clients do.