Why NAR Settling is THE BEST Thing That Could Ever Happen To Real Estate Agents
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What books do you recommend on communication? LOVE this video and I love your perspective. Thank you for sharing your thoughts!!
Thank you Ricky! š„š„š„
No immediate change for my wife because she has always negotiated her commissions in listing consultation & buyers consultation before going forward. She uses this as a prerequisite for her & client/ s to decide if they want to work together.
When she started in real estate we decided to treat it like a business. She never said to a buyer you don’t pay my commission the seller does.
How does she word her commission in a buyers consult? Does she say the buyers pay her commission?
Wow. Never heard an agent tell the truth like that. Impressive. Yup the biggest threat is to dishonest agents scamming buyers. That may starve out these agents someday and increase business to honest agents. So ya, good for your wife’s business.
But she hopefully will also prepare for a future that will likely be more of a flat fee model rather than a percentage. She will have many more customers coming at her which will lower acquisition costs and require more tech to handle the load all of which will push costs and fees lower. Someday. Don’t know when, but it seems the direction.
She negotiates with the list agent. Now she will have to negotiate with her buyer.
So we have a property listed with a discount broker, is offered 3 to buyer’s agent; she was brutal honest, she nor realtors will show the property because after all is a “sale by owner”, so what you recommend… throw
a bigger bone? Ups! Bigger commission. Anyway is commission going up from the standard % 6 to 5? Or just disclose buyer pays both commissions?
Same here! ā¤ I had buyers sign my Buyer Agreements from 2020-2022 which gave me confidence that they couldnāt buy another house with another agent, I could help them with off market properties including FSBO, and I negotiated between 2.5-3% so if someone paid out 2% they paid me the difference. It was AMAZING!ā¦then I switched to 100% listing agent in Feb 2022 because I heard about the lawsuit ( saw this coming) I prepared and now Iām ready šŖ
I appreciate your outlook given we canāt change what āisā. Itās still a bummerā¹ļø.
I don’t know why an agent would want to offer to list the home for a 3% commission and take a pay cut? Sure, if the agent lists the house and a buyers agent who has an agreement to be compensated by the buyer shows the house, writes up an offer to present to the listing agent and shepherds the buyers to the closing process and they receive their commission from the buyer, if you’re the listing agent and you find a buyer, are you going to create a buyers contract with the buyer to be paid the commission from them also?
It’s gonna depend on how the DOJ responds to the proposed settlement and then how each state wants to handle dual agency moving forward???
Yes, exactly. As a listing agent you can convince an owner to pay whatever you can get out of them. If they aren’t too bright and you’re a slick talker, 5%, 10%, whatever. There have long been agents willing to list for a fixed rate. Here in Phoenix we have several from $199 to $799 flat rate. They do everything a 3% agent does. These flat rate agent make money in the volume and not wasting 90% of their time advertising themselves to owner to try and land a few fat commission whales. The flat rate lister are also learning how to get more of the market every year and this latest court loss for broker will increase flat rate brokers. At some point there will be a tipping point and virtually all listings will be flat rate. After all the only reason flat rate agents exist is because of other lawsuits brokers lost.
And yes, if you want to do dual agency you would need to sign a contract with your buyer where you disclose the cost they have to pay you. This was the entire purpose of this recent lawsuit. Before now agents could lie to buyers saying “seller pays”. Signing a buyer who thinks they’re getting driven around in a nice car for free is a much easy sale than telling them “you have to pay me $20k for driving you around”.
Or you just have to do what you’ve always done and steer buyers away from sellers not offering a buyer agent commission. I assume most sellers will now put 3% to buyer agent as a signal the scam continues.
Just makes future fraud charges a little more easier to prove. Which will likely require increase in the fees you’re required to pay to NAR.
Not really a big change probably. But things are slowly changing. This could open the door a little to some new online company advertising the scam and converting more buyers to skip agents and more sellers going to flat rate agents. Zillow, Redfin, etc… originally wanted to crack the broker monopoly but failed and now have to support the broker scam. But new companies could jump in and try again. Companies like OpenDoor might too since they haven’t had to get in bed with brokers.
Weāve had this in CT for years. The only difference is that we were paid via the MLS unilateral offering of compensation BBC.
I love the delusion of people in real estate. āBut if we donāt get $25,000.00 why on EARTH would we spend the whole 10 hours it takes to sell the house?ā
Itās so unfathomably ridiculous in the first place. The 6% commission structure started in the 1940s when the average house cost $2,938.00 and the cost of agent commission to sell a home cost about 8% of the average yearly income. Todayās home prices average ~400k meaning a seller shells out around 40% of the average yearly income just to the agents.
The other delusion here is the necessity of agents in the first place.
They donāt advise on contracts because they arenāt lawyers. They donāt stage or photograph the house, thatās hired out at the sellerās expense. They essentially unlock a door follow the buyer around.
So what I suspect happening is the market is realizing agents are an unnecessary burden and so their lobbying and price fixing is no longer sustaining and theyāre losing their stranglehold.
What would we really lose if every agent reskilled and got a job that produces actual value?
At most I wouldnāt have some annoying overpaid agent hovering over me telling me that I am in fact standing in the houseās kitchen.
Itās so bad now that people are willing to sell their homes to speculative investors and private equity for 6% less than market rate just to skip the unnecessary grift of paying two agents to do nothing
No, the seller needs to share their commission with the buyer’s agent. There is no need for the buyer to compensate the buyer’s agent.
WHAT ABOUT THIS SITUATION CAN SOMEONE ANSWER THIS??
What happens when a listing agent has two offers on the table
Offer 1 – has their own agent that is not paying listing agent anything
Offer-2 doesnāt have an agent will pay listing agent to represent them
Do you think offer 1 will ever win ?? Probably not the agent will sway automatically to the offer they will make more money on (I donāt care what anyone says , money talks)
Also will the listing agent be required to tell seller ā¦hey I have an interest in this offer?
You will never get an offer accepted if there is a situation like this every time and Iām sure this will be the norm.
This essentially happens now. Its nothing new. Listing agents are suppose to be trying to find a buyer themselves anyways. Its the buyer giving the listing agent an incentive to sweeten their offer and increase the chances of getting it accepted. Is it ethical? That’s debatable. The seller is the one that should be choosing the offer to accept, not the listing agent. I disagree that it will be the norm but who knows?
seller will likely select the offer that nets them the most if both buyers are equally qualified. anyhow, some buyers go straight to listing agent now thnking that they can get a deal or win the property. silly buyers.
Selling agent must present the offers, but yeah they totally will dissuade buyers agents from making offers and they already do
how do they dissuade buyers agents from making offers?@@JakeAllen3
In Texas we do not have Dual Agency, we have Intermediary Agency, which is different. It requires both Seller and Buyer to sign legal documents agreeing to work with the same agent on the sale. At times it can certainly work. However in all the 20+ years in this business I’ve chosen to represent only one party in the deal. If an unrepresented buyer wants to submit an offer I recommend they contact an Agent or Broker of their choosing to write their offer on my listing. To me this gives both parties full representation which they need and deserve. There have been and always will be unscrupulous people who only care about themselves in every industry. Morality can not be legislated.
Our local board says we can still post BAC in agent remarks. So whatās the point? Next attorneys will sue us all again to remove private agent remarks.
That is explicitly outlined as not allowed in the proposal. Not sure why your local board would say something so inaccurate.
@@livinginoklahomacityofficialyeah sure, so no publicly or privately advertised seller concessions allowed (just have to call the agent if itās not even allowed in private remarks, but I also heard it will be allowed in private remarks)
What board is this?
Incorrect. Absolutely no comments or attached docs that mention commission
@@pamelapennington6307 my state board sent an email that we can request seller concessions for ābuyer closing costsā on further conditions in purchase agreement. This whole thing is just inconsistent and I am not sure how deals will go.
Its going to be an interesting future in real estate. Still there will be plenty of opportunity out there.
Buyers will want to avoid buyers agents so they wonāt have to pay commission and go straight to listing agent.
until buyers learn that they are losing more than what they would have paid in commission. the reason there is buyers agent commission is because buyers were getting the short end of the stick in transactions and cried out for more representation.
@@albundy3929 your logic is sound. But youāre giving people a lot of credit. This is being advertised as saving money for consumers. I think word is gonna get around really fast that they can just go directly to the list agent, especially with down payment assistance programs.
I’m sure the listing agent will do an agreement with the buyer for compensation. So buyers will still be paying weather they choose the list agent or their own buyer agent.
@@wyndeegoodwillrealtor3864 itās possible but doubtful.
@@wyndeegoodwillrealtor3864 I am a listing agent, the buyers are coming to me directly now but after this, I will have to ask them so you have a sing contract with a buyers agent.
I think this wanna be Tony Robbins is feeding a lot Of good positive energy, but been doing this for 24 years. There is nothing good about this. It’s gonna be very confusing. Most agents won’t show a house if there’s nothing in it for them. This is going f the market up even more..once the main stream news runs withe the story ,Facebook moms will dictate the buyers side and every Daren and Karen will come out of the wood works to steal your soleššš.ps l love Ricky’s content, but totally feeling tony vibes
Anyone who list a lot of homes is the real winner. They will negotiate commissions on both sides and can potentially make more than ever before. If they charge seller 3.5 and charge buyer 3.5 or more they could really cash in. They hold all the power. I think that is the perspective he is coming from, definitely not from a buyers agent perspective. What they fail to realize is, there will be a whole new host of agents coming for those listings they never had to compete with. In this current market there is not enough listings to go around. At the same time you canāt blame them (listing agents) they put in the work to get their skill set to the level that itās at to get listings , itās not easy.
Agreed! Come on bro, you have to keep your channel going I get it but you know this is BS. This has completely changed our industry and not in a good way for Realtors
Seems like it will hurt first time home buyers more then anyone because they will avoid agetns to save the commission cost and be unrepresented all together or by the listing agent who doesn’t have their best interest in mind.
They are going to be okay. Some agents like myself will accept them and give them a minimum fee if we are unsuccessful in negotiating to get our fee paid in the structure of the offer with the Seller. I’m willing to gamble on myself and my negotiation skills provided they are pre-qualified and have signed a buyer representation agreement.
See this is the problem..people are thinking all Sellerās are going to all of a sudden not pay buyer agent commission. The commission was paid to the listing agent in which shared the commission with the buyer agent. Everything is negotiable as usual. If sellers rather sit on the market instead of paying commission then they are not motivated to sell.
@@tanikatherealtor Im betting the williningness of the seller to pay the buyer agent commission will directly match the state of inventory of the market.
This guy does not make any sense. We always did that. We always did sit down with the buy and established the agency and asked what their interest is, what type of home, how much they are looking into spend and also i always made sure they had a pre-approval mortgage letter to show with the offer. What is h talking about?
@brunomaciel4246 your statement is true for some agents but there is a percentage of agents that donāt do that.
He doesn’t know what he’s talking about. Very uneducated
Just because you do it and is your standard doesnāt mean itās everyoneās standard. I always meet with my clients and hear their needs but some newer agents, even older, with online leads they just go show homes and write offers then figure it out along the way.
Your BEST video. Thank you.
It’s basically going to come down to the lender and whether they’ll roll in the buyer’s commission to the loan amount….
So sorry, the new law clearly states that these fees can not be financed
@adenrele1496Ā wow! I didn’t know that…. thanks for sharing
@@adenrele1496 Really, which law is this ? Thanks
Yea why would the lender do that anyway. That might affect the appraisal etc. what if there is only enough room in the price for the home (which is most of the time) . Doesnāt seem logical plus why would lenders care about buyers agent commission.
Not roll into loan, but increase allowable concessions.
I’m still going to recommend sellers compensate a buyer’s agent
And we are going to say no.
I donāt see that being the norm. If you can list at 2 or 3% with no Buyer comp you will kill it on listings.
@@markthegolfaddict9051but who is going to buy if no agent is motivated to show your property? The best buyers are always repād by agents . And those agents need to be paid-period.
I agree 100%
you can not sale your property if there are no buyers, only in seller market but in buyers marker you will be wishing to have buyer ,@@elicash315
Networking with agents in your community will have more impact than ever now. Attend the events. Go to the fundraisers. Support their causes and build relationships with your competitorsā¦oh and use a Broker Compensation Agreement. Human nature makes us want to run away when thereās change but the more we run towards this we will adapt and thrive. Even if agents did the work for free there would still be keyboard warriors wanting to see the world burn. Theyāll soon move on to the next popular thing to pile on and weāll still be providing amazing service . Adapt or Die.
Now that’s the spirit!!!!! Adapt or go back to selling cars.
Adapting indeed, and thankfully my motivation is channeled into growth and service, not into YouTube comment spirals on multiple repliesā¦which is a game Iām not interested in playing.
Thanks for showing everyone what we should have been doing in the first place vs just going with the status quo or laissez-faire business model. We have to show buyers and sellers our worth. If not, they don’t know what we do for them and they get the mind set that things are easy and we don’t do anything. Each transaction is different. Some easy, with great negotiation, or not so good with tough negotiation. I welcome the competition!
At the end of the day. Thereās all this focus on what the seller is paying or the buyer.. the money to fund the deal comes from the buyer or the loan the buyer is getting. I think this will impact what buyers offer on homes. So sellers have to consider what offers will come in. But things will sdjust
On to something here
My prediction: Yes, commissions percentages will go down. The flip side is that because it will be a lot cheaper to sell, homeowners won’t feel the need to stay in their homes 10, 15, 20+ years. In other words, you’re going to have a lot more transactions. In the end, realtors will make a similar income to what they’ve been used to, though they will likely have to work harder to achieve it.
Absolutely. You have to plan on keeping your home long enough so the appreciation covers a 7% commission which in normal markets takes several years.
Said it months ago.
Commercial is very similar to this approach.
It’s game changing in commercial when you have a buyer, that is ready and available to purchase, and you go out and help them purchase what they want/need.
Same thing with tenant rep/lease rep. The tenant rep typically holds all of the power because they rep the person that can fill those spaces.