New Rules for Realtors

[WhenIsItTime]

I see some parallel's to FA's, but where they collude on fee structure. People who aren't confident in the transaction pay for help and often get abused on the service cost and can get steered towards certain products that might not be in their best interest or lowest cost/best fit. Agent's create urgency only adding stress to client.

For sure some FA's and some realtors provide folks excellent advice, but many are just in the game to partake in the inefficiencies in the industry between buyer and seller. Seems these changes will help the consumer and shrink the realtor pool to only those who figure out how to add value at the lower price point.

 

[4legsgood]

As they say, hope is not a strategy. Tell your agent that you'd like to work out a fixed price deal.

Haha so true! I think the change in fees happen mid-July, so I may manage to purchase before then. I'll definitely arrange a fixed price if I don't buy soon.

 

[OldShooter]

Haha so true! I think the change in fees happen mid-July, so I may manage to purchase before then. I'll definitely arrange a fixed price if I don't buy soon.

All fees are negotiable at any time. I wouldn't worry a bit about what is going on in the agent's business life. Just tell them what you want and, if necessary, listen to their cries of woe and lists of issues.

Remember, too, from Negotiating 101: If you're not willing to leave the table you're not negotiating, you're begging.

 

[Qs Laptop]

How will this new arrangement impact viewing properties for sale?

Typically there is a lockbox on the property and the buyer's agent has the combination to access the key to unlock the door. Yes, the seller's agent is supposed to be there when the property is viewed but that doesn't happen all the time.

Do you suppose the seller would allow a buyer that is not represented by an agent to access the property?

 

[OldShooter]

How will this new arrangement impact viewing properties for sale?
Typically there is a lockbox on the property and the buyer's agent has the combination to access the key to unlock the door. Yes, the seller's agent is supposed to be there when the property is viewed but that doesn't happen all the time. Do you suppose the seller would allow a buyer that is not represented by an agent to access the property?

Same problem exists today with FSBO properties. I'm sure it gets effectively solved in various ways.

FWIW my experience is that buyer's agents usually take their people in alone, with no presence of the seller's agent. The practice in our market at least is for the visiting agent to leave a business card on the dining room or kitchen table to let the seller's agent know they have shown the property.

 

[Qs Laptop]

Same problem exists today with FSBO properties. I'm sure it gets effectively solved in various ways.

FWIW my experience is that buyer's agents usually take their people in alone, with no presence of the seller's agent. The practice in our market at least is for the visiting agent to leave a business card on the dining room or kitchen table to let the seller's agent know they have shown the property.

Yes, that is how it typically works now. But under the new rules, if a buyer doesn't contract an agent, how will they be able to get into the house?

Most seller agents don't want to come along on these viewings. Now, with the new rules, they might be working for less commission than before AND need to open the door so the buyer can view the property. I don't think that will make for very happy seller agents.

 

[Qs Laptop]

I think there will have to be a major overhauling of the way homes are listed for sale for there to be any real, radical change in the way homes are sold.

Right now, as a seller you need to get your home on the MLS system. So far as I know, the only way to do that is to contract a sellers agent.

If a buyer wants to look at houses for sale they, too, need to be able to access the MLS listings. But they can't do it without a buyers agent. Is this correct?

Sure, as a buyer you can see Zillow, Realtor.com, and other websites with listings but these are not exactly immediately updated. In a hot market you want to see the listings as they hit the listings. There is also the "pre-listing" listing category.

Why is there no competitor to the MLS system?

 

[Aerides]

Right now, as a seller you need to get your home on the MLS system. So far as I know, the only way to do that is to contract a sellers agent.

I don't know if it's all states, but in Florida you can pay a flat fee to list on the MLS without a realtor.

 

[aja8888]

I think there will have to be a major overhauling of the way homes are listed for sale for there to be any real, radical change in the way homes are sold.

Right now, as a seller you need to get your home on the MLS system. So far as I know, the only way to do that is to contract a sellers agent.

If a buyer wants to look at houses for sale they, too, need to be able to access the MLS listings. But they can't do it without a buyers agent. Is this correct?

Sure, as a buyer you can see Zillow, Realtor.com, and other websites with listings but these are not exactly immediately updated. In a hot market you want to see the listings as they hit the listings. There is also the "pre-listing" listing category.

Why is there no competitor to the MLS system?

I bought a house last year. I was able to look at the MLS anytime I wanted and I did so over the course of three months without contacting any agent. And, when I saw a property I wanted to see, I emailed my agent and he set up the visit.

 

[mwilson]

I am not sure how the fees will work out, but in my experience the buyers agent has provided much more value than the selling agent.

First house I looked at a ton of houses, the one I ended up with my agent allowed me to view the property and make the offer before the house was on the market. This was in a strong sellers' market (dot com boom). The seller's agent probably allowed the sellers to price the house too law.

Second house we looked at less than a dozen houses, but the sellers were dysfunctional and used an incompetent and inexperienced relative as their realtor. It took months to close the deal (our offer was contingent on sale of first house) but our agent really persevered and protected our interests through the process. This agent also sold our first house, but I don't feel we got as much value out of the selling side. They did have to hand-hold buyer's agent and financing to get the deal done.

The hard part is finding a good agent. Hopefully these changes will lead to good agents staying in the field and the bad ones leaving, but I have no understanding whether this is how it will play out.

 

[socca]

When I bought my current house in the mid-2010's, I did a DIY search using online resources. I was able to eliminate 98% of candidates without ever setting foot inside the house. If I wanted to tour a house, I called the listing agent and had a look. The seller's agent was a "transactional" broker and handled both sides of the deal for a bit less than 6% commission. The seller's agent was pretty lazy so there wasn't much competition for the house - good for me, not so good for the seller.

So ... under the new rules would the "new normal" for a DIY-buyer like me be a 3% commission to the seller's broker and no buyer's broker commission in the picture? If so, this is good news for DIY-buyers and not so great for seller's agents.

 

[socca]

So ... under the new rules would the "new normal" for a DIY-buyer like me be a 3% commission to the seller's broker and no buyer's broker commission in the picture? If so, this is good news for DIY-buyers and not so great for seller's agents.

Since the past convention was that a seller pays both the seller and buyer agent's commission, for a DIY buyer the new convention could result in a direct financial benefit for the seller and an indirect benefit for the buyer. A lower overall transaction cost could translate into a lower offer price depending upon the local market.

 

[Amethyst]

The standard answer has always been, "Sure, we can cut it down to 5.5% (or whatever) but it'll come out of the buyer's agent's fee, and then they won't have an incentive to show your house."

I think there must be a lot of real estate agent collusion surrounding commissions and fees, since, where I lived in MD, demands for 7% - on an expensive house, yet - were becoming common, and if I tried another broker it was the same thing. Not to mention the unsubtle hints for "seller incentives," i.e. paying $$ to have buyer's agents show your house. Those are common in the FL RE market, too.

But wasn't a lot of it always open to negotiation? You want my listing, I'm gonna let you have X%. Now, that works better in a seller's market of course, but I have always thought it was somewhat negotiable.

 

[HI Bill]

The dollar value of a home has almost nothing to do with the work required to sell it.

+1! In selling my mom's last home, my realtor had to do a lot of w$rk. She helped me coordinate repairs, cleaning, dealing with a POA, then redoing the contract when the POA was no longer valid. Then she had a VA buyer which added extra rules. She probably spent 80+ hours to sell a $200K house, earning less than $6K. That's about $75 per hour. I have no issue at all paying fees like this to sell a house (but the buyer's agent getting the same seems unfair to me, unless they have to show a lot of houses to the client).

Then when I bought my first house a few years ago, my realtor helped write two offers, spent about 3 hours showing us properties, and mostly saw us through the buying process (I had to follow up on a lot myself). He made 5X the commission (roughly $30K) compared to that earned by the agent on my mom's house. Roughly $3800/hour, assuming he spent a total of 8 hours on the sale. Certainly not earned in line with effort expended!

 

[SecondAttempt]

What if as a seller I want to offer a buyer agent a commission to induce the buyer agent to show my listing to their client over listing that don't have such an inducement?

Or would we shift to a model where the seller pays a commission to the selling agent and the buyer pays a commission to the buyer agent?

Even so, as a seller I might want to juice traffic on my listing by offering an inducement to the buyer's agent to gain an advantage.

I don't know the answer to your questions and I don't think anyone knows how things will play out long term. I agree that offering an inducement to buyer agents should be allowed but my understanding is that MLS must ban that practice moving forward.

 

[brucethebroker]

How will this new arrangement impact viewing properties for sale?

Typically there is a lockbox on the property and the buyer's agent has the combination to access the key to unlock the door. Yes, the seller's agent is supposed to be there when the property is viewed but that doesn't happen all the time.

Do you suppose the seller would allow a buyer that is not represented by an agent to access the property?

If the seller is prudent, they will insist the seller agent be present, or be there themselves if a buyer contacts without a buyer agent.

 

[MarieIG]

When our house was for sale (during Covid) our agent scheduled showings with buyers - and their agents. The buyers were always accompanied by their agent.

We would not have wanted potential buyers (or indeed people who weren't even considering buying) wandering unaccompanied around the house.

 

[Amethyst]

I have never toured a home for sale, where I wasn't let in and accompanied by an agent. Just think of the opportunities for theft, vandalism, etc. - in fact, those can occur even with an agent present, especially in larger homes where the agent can't always be in the same room.

I have never felt that real estate agents "add no value." Far from it, and I am always willing to pay for professional assistance. Just not as much, in most cases, as the expected RE commissions would suggest.

When our house was for sale (during Covid) our agent scheduled showings with buyers - and their agents. The buyers were always accompanied by their agent.

We would not have wanted potential buyers (or indeed people who weren't even considering buying) wandering unaccompanied around the house.

 

[sengsational]

What I understand about the usual lock boxes used by seller agents, those require a key and a code. I felt a bit exposed with a non-key lock box that I got at the hardware store. But I had no selling agent. I'd get calls from buyers agents and give them the code. Then I'd later change the code periodically, and I got annoyed agents trying to show to another buyer without calling first.

One point about who pays commissions. It always annoys me that people don't realize we all pay the commission through higher prices. Yes, the commission is subtract from seller funds, but the price is inflated to cover it.

As to MLS competition, why does Ticketmaster have no competition? It's the nature of the service.

 

[athena53]

I think it would be healthier to negotiate for a basket of services on both sides. Last time DH and I sold our agent did a lot- brought in professional photographer for the listing and a professional stager, made suggestions about easy repairs and fixes we could do, referred us to people who did deep-cleaning, etc. A coworker negotiated a much lower commission through one of those services that leave you to pretty much DIY but lists you on MLS and she was happy with that, too.

DH and I did a lot of searching MLS on our own and then drive-bys for the ones that looked promising before we had our agent set up appointments, so we narrowed the list down a lot.

There's still an element of luck on the seller's agent's side. I still get steamed when I think about the year a friend and I sold our 2-family in NJ and our selling agent talked a good game but they had an answering machine on weekends! The buyers' agent contacted my friend who let them in to see the house. Our agent was nowhere to be found but she collected a nice commission.

 

[ShokWaveRider]

I think it still remains to be seen.

We have always considered Realtors and Car Salespeople to be in the same category. Ultimately, they just work for themselves for the maximum commission. While some are very nice and conscientious, others will do the minimum for the maximum reward, at the end of the day they are the same animal.

When buying we always do our own research when house hunting then go directly to the selling agent when we find a place we may be interested in.

When selling we have either just put a sign in the front of our home and welcomed buyer's agents that we would gladly pay ourselves or used a single source "exclusive" realtor who charges half the regular fee. This only works in highly desirable areas that luckily, we have always lived in.

When we sell our current home, we will take our own photos that I always keep up to date on Zillow anyway, and then list it ourselves on the MLS for a few months through an MLS listing only service (Usually about ~$300 or so), and again gladly pay a buyer's agent.

 

[Qs Laptop]

If the seller is prudent, they will insist the seller agent be present, or be there themselves if a buyer contacts without a buyer agent.

Yes, but we know that seller agent or the seller might not be able to be there. Especially if it is a hot market with multiple showings per day over the week. Do you think the seller would want the lockbox combination given to some random person looking at the property?

When I sold my mom's house back in 2019 it was a hot market and her house was 15 miles away. At times there were 3 or 4 showings per day. I couldn't leave work in the middle of the day and my agent couldn't be there for many of the showings.

 

[freedomatlast]

I always considered the fees to be negotiable anyway. If one realtor didn't want to work for 5% instead of 6%, there are plenty that will. I hope they get rid of all the extraneous fees too like the $495 brokers fee that I refused to pay on the last property I bought in February. I only used a realter to sell one property. All the others I sold myself using Zillow. I have to say the one with the realtor involved became much harder and more complicated than it had to be. For me, it was much easier working directly with the buyers, directly answering all their questions and working through the process with them. The savings of tens of thousands of dollars was nice too.

 

[OldShooter]

Yes, but we know that seller agent or the seller might not be able to be there. Especially if it is a hot market with multiple showings per day over the week. Do you think the seller would want the lockbox combination given to some random person looking at the property? ...

I don't know why you're so concerned about this. The potential issues really don't have much to do with the legal settlement except that unrepresented buyers may appear more frequently as fewer buyers hire agents. Both FSBOs and selling agents already make decisions on how to handle showings to potential buyers who don't have representation. It's nothing new.

 

[Maximus]

I searched this thread for the word “settlement “. Did not see what I would like to know. How and to who will the $481 million dollar settlement be disbursed?