Rumors about NAR settlement

[Tharber]

So I am no advocating any of this. Just repeating what I have heard in the industry.

Several large Realtor associations are considering splitting away fro NAR and creating their own identities. They already have the memebership counts, the MLS systems, etc so this could almost be seemless to their members. They could create their own 'name', instead of calling themselves a 'Realtor' for example, they could be called a California Agent of Real Estate (CARE) or anything else.

Buyers agents are considering moving towards an hourly rate, payable via upfront deposit and will write a contract only and provide no help or expertise in any other part of the transaction. This is because many of the large listing brokers are considering raising their rates to accomodate the added work load as clients are already going straight to the listing agent. Listing agent commisisons are not required to be disclosed by the way and since in essence, its the buyer paying this fee, its another loss for the buyer. All the people who are so sure that it is always 3% and 3% will have no clue that the listing side is just going to charge 6% flat and split nothing. If you are a large franchise, imagine having thousands of listings, your own web sites and data feeds, you could eliminate Realtor.com all together and use any number of other search engines out there.

Yes there will still be cheaper ways to sell and buy and again I am not advocating any of this. It will become interesting for sure.

TH

 

[Wat_MPG]

I see people buying unrepresented. Buyer's agents hardly do anything compared to selling agents. At least they have several expenses like photos, staging, etc. But the fees across the industry are downright atrocious and I'm glad this is happening.

 

[Tharber]

I'm not going to try and change you mind on this but if the buyer goes straight to the listing agent, then the listing agent is representing them. Most states even require this to be acknowledged in writing before moving forward. Now, we can also take on a client as none representation but thats a complete different story and different circumstances. In FL, our RE laws are written so that we are automatically transactions brokers, meaning we owe buyer and seller them same duties.

The duties of the transaction broker include the following:

• Dealing honestly and fairly
• Accounting for all funds
• Using skill, care, and diligence in the transaction
• Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer
• Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
• Limited confidentiality, unless waived in writing by a party, that prevents disclosure of the motivation of any party for selling or buying property, any party’s willingness to agree to financing terms other than those offered, or of any other information requested to remain confidential
• Any additional duties that are mutually agreed to with a party

 

[SC Maintenance]

will write a contract only and provide no help or expertise in any other part of the transaction.

Sounds like my last 2 buyers agents.

 

[CKN]

I'm all for professionals being compensated. But the Real Estate professional has been grossly over paid for decades. The Internet comes along-and buyers can see which houses they are interested in and yet they still hold on to the 5 or 6% rate structure. This change has been a long time coming.

 

[SC Maintenance]

If there is one thing I have learned growing up in a family run business and afterwards reporting directly to 3 self made multi-millionaires, is outside of a monopoly the customers hold all the cards. In a monopoly it seems they can be convinced they do not.

So in your example, if they can command a monopoly on the inventory this scheme may work.

However if houses are selling in a day, and the seller doesn't feel like paying a listing agent 6%, and the listing brokerage doesn't own the buyers agents because there now freelance, then they simply will not do so. Once word gets around that's happening many will follow.

So once all the inventory is not locked up by a single party, then the buyers are back to holding a lot better cards, especially since there buyers agent is basically a contract writer.

And the free market prevails again.

This entire concept is driven back around trying to create a monopoly - as you said yourself:

If you are a large franchise, imagine having thousands of listings, your own web sites and data feeds, you could eliminate Realtor.com all together and use any number of other search engines out there.

 

[zzyzzx]

I don't know why any buyer would willingly use an agent.
I don't know why any seller wouldn't just use a flat fee agent.

It's all mostly very expensive hand holding.

Now if you are trying to sell something that's not local to you, maybe, but even then there is Redfin.

 

[JohnnyG]

To me, it depends on how much work they actually need to do for the buyer or seller. My last house that I sold, I had to move before it closed or an offer was even made. The agent in that case worked hard and the fee was well worth it. I didn't even need to be there to close the deal.
When I bought my place in Florida, it was for sale by owner.
Since there was no agent involved, there were no fees, except for the Title Office. I did the home inspection myself, and we went to a title office for the closing.
No issues at all in either transaction.
Things have changed a bit in 10 years though, so it pays to be careful these days.

 

[BMWTurboDzl]

I don't know why any buyer would willingly use an agent.
I don't know why any seller wouldn't just use a flat fee agent.

It's all mostly very expensive hand holding.

Now if you are trying to sell something that's not local to you, maybe, but even then there is Redfin.

Because an agent may know of a property which is for sale but not listed. Buyers agents also have the time to look whereas the buyers themselves may not. You're paying the buyers agent for their market knowledge. Yes you can eventually get a handle on that yourself but it's extremely difficult and time consuming especially if you don't live in the area.

 

[Ed_Flecko]

I can't speak about the laws of other States, but In California "someone holding a real estate" (i.e. an agent, Broker, attorney who holds a real estate license, etc.) license MUST disclose "dual agency" if they intend to represent both a buyer AND a seller in the same transaction (California Code, Civil Code - CIV § 2079.16 - https://codes.findlaw.com/ca/civil-code/civ-sect-2079-16/). Even then, they are ONLY allowed to do so IF both buyer and seller AGREE to allow them to do so.

https://www.car.org/-/media/CAR/Doc...hash=CE6EC2791E3C9282F647A77A817B0C18A4296673

https://www.dre.ca.gov/files/pdf/reb/rebwinter_19.pdf

Time is a real estate agents' most valuable commodity. In MY opinion, and agent who works for a buyer (i.e., helps locate a desired property, schleps them around to look at properties, etc.) without a buyer first signing a contract (like this: https://www.car.org/-/media/CAR/Doc...hash=C13BBA1980AB4E49552D90CC568197AE4335B931) to guarantee they will be compensated for their time...is pretty stupid.

Ed

 

[SC Maintenance]

Because an agent may know of a property which is for sale but not listed. Buyers agents also have the time to look whereas the buyers themselves may not. You're paying the buyers agent for their market knowledge. Yes you can eventually get a handle on that yourself but it's extremely difficult and time consuming especially if you don't live in the area.

This is the theory, but its never worked that way for me. Any question you ask is "I don't know", or "where not allowed to say".

I imagine there are good agents out there. The problem is those of us that use one a decade, never end up with those ones. Last time I tried very hard to shop around, interviewed agents, etc. In the end it was no better than at random.

 

[Owen Lucas]

If you are a large franchise, imagine having thousands of listings, your own web sites and data feeds, you could eliminate Realtor.com all together and use any number of other search engines out there.

I think moving away from Zillow / Realtor.com and creating your own competing system from scratch would be a bad move and an extremely difficult undertaking. Scraping public data for historical pricing, square footage, and market details will be super expensive as the big guys systems are most likely proprietary.

Buyers agents are considering moving towards an hourly rate, payable via upfront deposit and will write a contract only and provide no help or expertise in any other part of the transaction.

So like a real estate attorney, except they provide advice.

The duties of the transaction broker include the following:

• Dealing honestly and fairly
• Accounting for all funds
• Using skill, care, and diligence in the transaction
• Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer
• Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
• Limited confidentiality, unless waived in writing by a party, that prevents disclosure of the motivation of any party for selling or buying property, any party’s willingness to agree to financing terms other than those offered, or of any other information requested to remain confidential
• Any additional duties that are mutually agreed to with a party

These are common business principals for many financial transactions where consumers don't pay a massive commission. Realtors hype this as a selling point, "you're paying for honesty".

Yes there will still be cheaper ways to sell and buy and again I am not advocating any of this.

There are already low cost providers when it comes to commissions, this will be a great opportunity for them to further break into the market with flat fees.


I am currently working on a FSBO, here's my process so far:

• Get appraisal. $500
• Crosscheck appraisal for accuracy with current homes on market. Markup price 15% to see how market reacts.
• Pay online agency to list on MLS / Zillow / Realtor.com. $200
• Set appointment blocks so interested buyers can show up all on the same day or email pictures. Free
• If there is a buyers agent, negotiate to a flat fee. I've seen fees go from 3% to $5k on a $1.2MM purchase when it should have been $36k. I'm tempted to tell them no thanks since this is a hot market. Not very nice I know, but I don't want to get robbed for someone giving me a lead.
• Have attorney handle legal procedures. $1500
• Profit.

On my potentially $150k property 6% in realtor fees is $9000. This FSBO process could cost me $2500. + negotiated buyer fee, but since this is an investment property I will most likely be dealing outside the sphere of realtors anyway.

These base costs could most likely be no different between selling a $150k house or a $1MM house depending how well you negotiate a buyers fee or not have to deal with a buyers agent in the first place.

 

[Owen Lucas]

Because an agent may know of a property which is for sale but not listed. Buyers agents also have the time to look whereas the buyers themselves may not. You're paying the buyers agent for their market knowledge. Yes you can eventually get a handle on that yourself but it's extremely difficult and time consuming especially if you don't live in the area.

I don't think this market knowledge is worth $40,000. Almost everyone searches for their house online and the chances of getting first dibs on a home that didn't hit the market would not be beneficial to the seller who would want the market to compete for their property.

 

[BMWTurboDzl]

I don't think this market knowledge is worth $40,000. Almost everyone searches for their house online and the chances of getting first dibs on a home that didn't hit the market would not be beneficial to the seller who would want the market to compete for their property.

Well let me tell ya. There are people who sell their homes but don't want to deal with the traffic of people looking. Not everyone is looking for or needs a bidding frenzy and some prefer to sale to be private. Its called a "Silent Sale".

 

[SC Maintenance]

Well let me tell ya. There are people who sell their homes but don't want to deal with the traffic of people looking. Not everyone is looking for or needs a bidding frenzy and some prefer to sale to be private. Its called a "Silent Sale".

If certain people want concierge type service, I am sure it will always be available. But they should clearly pay a different fee than the average stiff that gets basically no service.

 

[CarbonToast]

I have gotten value from my buying agents. When we found the hot property they got the first showing and we were the first offer in.

Then they ensured the sellers didn't backout and we got the deal closed.

You need the right agent and know when to Aim and fire. Becuase they know the people and system and work it to your advantage.

 

[alarmguy]

So I am no advocating any of this. Just repeating what I have heard in the industry.

Several large Realtor associations are considering splitting away fro NAR and creating their own identities. They already have the memebership counts, the MLS systems, etc so this could almost be seemless to their members. They could create their own 'name', instead of calling themselves a 'Realtor' for example, they could be called a California Agent of Real Estate (CARE) or anything else.
...

It's always been this way. This is the problem with social media these things spread like they are truth. Not that you meant to spread misinformation. You're just misinformed.
Only half the real estate agents in the USA are members of NAR. Half already are simply licensed real estate agents and brokers.
You do not have to be a member, never did.
Im reading all these posts and people are talking like that know what they are talking about! *LOL* But im not going to educate anyone this time, it's like talking to a stone wall
I love the overpaid thing, but that is the typical complaint of any service you hire, including your plumber. Dont hire one ... You live in the USA, not N Korea. Amazing, too cheap to pay but want the service.

 

[thastinger]

I'm all for professionals being compensated. But the Real Estate professional has been grossly over paid for decades. The Internet comes along-and buyers can see which houses they are interested in and yet they still hold on to the 5 or 6% rate structure. This change has been a long time coming.

Concur, bunch of vultures. Never seen a group of such low skilled people be paid so well...especially the "selling agents" posted at the newest "mixed use" development of blackrock.

 

[zzyzzx]

I have gotten value from my buying agents. When we found the hot property they got the first showing and we were the first offer in.

Then they ensured the sellers didn't backout and we got the deal closed.

You need the right agent and know when to Aim and fire. Becuase they know the people and system and work it to your advantage.

Fixed:
Because they know the people and system and work it to their advantage.

 

[alarmguy]

Concur, bunch of vultures. Never seen a group of such low skilled people be paid so well...especially the "selling agents" posted at the newest "mixed use" development of blackrock.

Jealousy reigns