So I read several times about this huge settlement yesterday which said no longer a 6% or 7% commission (at least as a mainstay) which in theory would lower relator income levels - and potentially flow to lowering housing costs. The real estate broker stocks - Zillow, Redfin, etc. all fell while the new home builders (DR Horton, Pulte, KB, etc. saw stocks rise.
But admittedly, I don’t understand the entirety of this settlement - and for the person going to list a home tomorrow, what does this exactly mean? No one can have you sign a 6% commission agreement - or what does this entail in regards to listing, marketing, etc? going forward? Will the level of marketing go down if I negotiate a 3% vs. 6% commission - but then how is the “buying” agent impacted? Do I negotiate them separately and what if they pull someone away from buying my home because I’m not willing to pay enough?
Does it impact homes / commissions of currently listed homes?
I’m not sure I understand any of it…but I’m guessing some of you do.
I never understood why, when buyers and sellers were negotiating a sale, they were each expected to do the “sacrificing” (for lack of a better word) but rarely would the realtors adjust their commissions to make the sale.
Our realtor did when we sold our house. The offer from the other party was less than $1000 difference and we wouldn’t budge. Each realtor kicked in $500 or so of their commission to close the sale.
No not currently listed. Starts July and no one knows quite how it is going to work but theoretically it will be 2.5 or 3% and you only pay for your agent
Am I being dumb here or is this a big hit for realtor/real estate office income???
Our realtor recently gave us what I’ll call a “friends and family “ rate when she helped us buy and sell a home. She has bought sold several houses for our family/DIL’s family - she claims at least a quarter of her business can be tracked back to my son!
On paper, it appears you are right - the # of realtors may fall (and we all know, there are a zillion real estate agents that do it part time) - and I’m guessing by the prices of the brokerage stocks, this isn’t a good thing for them (or their employees)
But I asked because I wasn’t sure.
It’s amazing - technology has no upended so many industries - but this one appears simply because someone sued the industry umbrella for - it appears - greed.
But I’m hopeful there are real estate professionals on the thread - because they likely understand the impact.
At some point, we’ll be selling - as my better half is dying to leave Tennessee - so just trying to understand everything. But perhaps no one yet does until they see the impact real time.
well it is all new but yes, buyers agent would have to be paid by buyer. So I think 2 things are likely. Unintended consequences buyer will represent themselves and rely on sellers agent, which is honestly not good for buyers (in RI not legal) and no one will show you a house until you pay/sign contract. I do feel high end realtors will take a hit as I see people paying x dollar amount instead for percentalge
Did you have to ask or did they volunteer ? It’s the least they can do to close the sale. Most don’t do that. They expect the buyer and seller to give it up. How long ago was that? Haven’t heard any realtors nowadays offering to do that.
Splitting the commission was standard practice for home sales when the buyer and seller are represented. I see that as standard procedure, not offering any concession. It’s less common that one realtor would get the full commission, and many homeowners would try to address that. And with the new regulation, the “split commission” (2.5-3% to the buyer and seller agent) is pretty much the same
So if I’m shopping for a home, I’d negotiate an individual deal with the agent showing me around? Interesting.
So now a seller will be responsible to their agent (whatever price they agree to list and market) and if you’re buying, you’d negotiate with someone?
I wonder, if like investing, people will start paying by the hour instead of a price percentage.
But I can totally see your point - that someone would forgo the buyer’s agent because on $500K, that’s $15K savings - but also to your point, you may not know what you’re getting into.
I wonder if a state like RI will alter the laws - I guess it depends on how powerful the realtor lobby.
Not in my state. Sellers must disclose any known issues. Plus in this state, a lawyer is required for most real estate transactions done with an agent. And anyone who buys a home without a good home inspection isn’t very smart, in my opinion.
SOOOO many people are buying without an inspection right now. It’s enticing to a seller in this tight market now to not have to deal with inspection results/repairs.
The law applies to those using the Multiple Listing Service (MLS) which requires a statement of how much a buyer’s agent would be paid. That could be as little as a penny just to fill in the blank.
The standard commission of seller’s broker was normally 6% normally split with a buyer’s agent for 3%.
But a lot comes into play here–what if there is no buyer’s agent? Someone just shows up and buys it? Does the seller’s agent still get the full 6%? In reality you don’t have any idea as the seller how much your agent will be getting when your house is sold.
The law is really an exercise in transparency.
If the difference was only $1000, that must have been quite a while ago. And wise agents would not want to lose a deal over $500. Am guessing in today’s dollars a buyer/seller discrepancy would be larger than $1000. We have friends who were approached by an agent saying they had buyers interested in the neighborhood. Our friends said if they were going to consider a sale, they wanted x dollars net for the sale and the agent could get the rest. No percentage.