NAR Settles Commission Lawsuit… Now What?
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Brandon is a real estate broker in Michigan and is the CEO of Brookstone Realtors. Real estate coaching is Brandon’s passion. He teaches real estate agents at his company and around the country how to get listings using his reverse selling lead generation system. His mission is to teach real estate agents how to sell without being salesy, he calls it reverse selling.
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I vthink that attorneys, in thiese situations, are price fixing because they have a standard percentage.
They have a traditional percentage much like auto mechanics hourly labor costs but there was never collusion by them as a whole to set their rates. Same can be said for gas stations in the same area. They all charge just about the same price per gallon but aren’t colluding with on another. NAR told brokerages to set their rates at 5-6% and forced sellers to agree to BA compensation to list on the MLS.
Don’t worry in 10-20 years lawsuit needs will go after them
Another great video with some excellent information. We all need to keep in mind this is a “proposed” agreement The DOJ has the last say in this. Overall serious fulltime realtors will do even better. Unfortunately the BS that home prices will come down is complete nonsense
Home price will go even crazier!
The comment I was writing was getting way too long.
Is there someone we can call or write to about this lawsuit because no one asked for the feedback of local agents.
Brandon, don’t forget about Dual Representation that listing agents are happy to my opinion simply deceive buyers saying that dual representation is of a great value or same just like an exclusive buyer representation! One of the listing agents already got mad at me when I said that Dual representation is essentially no representation for the buyer, because of the conflict of interest when representing sellers best interest! Dual representation in this situation should become illegal in ALL STATES! But I don’t think it will…so yes, buyers are the ultimate losers here in this market of short inventory and inflated prices.
I believe that the point you made around the 15:30 mark is the way it will truly be: The seller will continue to pay the listing agent’s commission, and the buyers will negotiate to have their agent’s commission paid by the seller. One question that listing agents will need to get used to asking is, “Are you willing help pay the buyer’s agent commission if they ask for that concession? If so, how much are you comfortable with paying?” In many ways this is how it is today but with a little more empowerment for the seller.
This is like a layoff for realtors
Why would anyone think that going to the listing agent saves money??? Which listing agent would do both sides of the deal for one commission??
Buyers will likely either go unrepresented if they are FTHB or don’t have the money to pay an agent. Or, more experienced and/or wealthier buyers will pay their attorney just to review the contracts for them. Paying an attorney $500/hr. for 5 or 6 hours of document review and council is way cheaper than paying an agent $15-30k. The rich get richer. The poorer get screwed.
Hi, I need more podcasts or conversations like this Brandon. I am eager to hear more like this. Regards.
It would be interesting to hear a commercial agent’s perspective on this.
What about VA buyers? They are not supposed to pay a buyers agent.
When a seller lists their home, the agent lists which types of financing the seller is willing to accept. They could list it as cash only, conventional, FHA, or VA. If the seller wants to have buyers that are eligible for VA financing, then the listing agent should be able to identify to the seller that they will need to cover the buyers agent commission. Very little will actually change
Does anyone else here believe that this whole thing was part of a deeper plot to make it harder for people to own homes and force them to rent and live in apartments?? Just a thought.
Yup 100 percent
I hate that we have to think that way but yes, that thought definitely has crossed my mind. Especially with all of these large industrial buyers buying up all these loans in default. Too many weird things going on.
I had the same thought because this directly affects buyers more than anything else. Lenders may start programs that cover there commission dues.
Yes, I’ve been playing with this idea as well
Definitely
42:40 – I think to one of your earlier and great points about non-mls listings and not having maximum coverage that leads to maximum sales price conflicts with this message. I think if we do have segregated markets and marketing…it could potentially lead to lower home prices simply because in any given set of sales you’ll likely have a greater than zero number of people who would have bought a house at a higher price had they been aware of the home to begin with. Of course we have that today but we are talking about what induced by this new framework
I think those of us who work with buyers who have built a business from a position of specialty, will be fine. If you are a buyer’s agent and you’re struggling to understand how to communicate your value in this industry shift, you’re going to have to face the reality that you need to create something about your business that sets you apart.
Will it be harder for a buyer’s agent to get an offer accepted if buyers are asking for a credit to help pay for their agent. The offer will look less appealing than an offer that is not asking for anything. Try explaining to your buyer then how much you are worth.
Great video. I wish NAR also said that listing agents can’t represent buyers… but rather to force buyers to go retain a buyer’s agent or go unrepresented.
I do wonder if listing agents will still have the option to pay a cooperating broker X% to be negotiated between the 2 agents??? Rather than bringing that request for concession to the seller? Like if the Listing Agent takes the listing at 4% … can he split 2% to a Buyers Agent or does that request for 2% have to go to the seller for a concession for a total cost of 6% to the seller?
It’s my understanding that that could be negotiated with seller, however, compensation to buyer’s agent can not be in the MLS but can be listed on your brokerage website.
In the scenario where the buyer goes to listing agent, then dual agency comes into play? There is no additional commission for doing both sides of the transaction unless negotiated up front in the Listing Agreement, I’m assuming how that will go.
Me, personally, I am going to have a very difficult time asking buyers for compensation. Also, first time buyers certainly do not have those extra funds.
“Aunt Sue” here. I will gladly negotiate with a knowledgeable professional for the services I want at an hourly rate, not commission. But, I just lost two houses where I would have paid $30k more than the house sold for, but the LA did the usual of set asking at 90% of comps, hold an open house, and find the unrepresented buyer where she can double her commission. So, the Seller got screwed but the LA gets to move on to the next. I have also had LA refuse to allow my BA to show properties unless I agreed to use certain financing companies or other vendors, or just refuse to let her show them at all. So long as that continues, we will be forced to just go to the LA, or not be able to buy. Alternatively, if there is collusion and LA refuse to show houses to unrepresented buyers, the opposite can happen. The problem is the industry functioning as a cartel, not just the commission structure.
Sounds like you didnt want to pay the commission and have it your way. It’s interesting how the rest unfolded for you.
Great podcast, thank you!
Genuine question here: What separates us as realtors from that of a wholesaler? If the MLS becomes unnecessary because of buyer agency compensation. Why does one need to be licensed? If all we will be doing is acting as a advertising agency.
Personally I see value in having a license and ethically representing a client. However, I am having difficulty seeing how it will be needed in the future.