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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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Brandon, I definitely agree with you it’ll be bad for buyers agents but good for the listing agents and I would absolutely change the complete dynamic of real estate industry. I think it will definitely be a must watch but as you were saying they’re in a contract they agree to it, and it’s all negotiable at the end of the day, and it’s kind of been like that for a while so to change it now will be crazy.
I know! It will be interesting to see what happens…
As a buyers agent I would call you up before scheduling a showing and say “Matthew if you can get your seller to agree to offer me 3% of the sales price as my commission, I will schedule a showing with my buyer. Otherwise we will look at competing listings instead”.
@Tyrone Smith waste of money ! Time to change from percentage to a flat fee, were not in 60’s prices have increased alot and sorry no commission is worth a “hona civic”.
Cool my flat fee is $20,000
@Tyrone Smith thank you for proving my point 😅 this is the attitide you find in most agents. They think they bring so much value when your fee is worth squat and doable for 1000$
I don’t believe there is any way the plantiffs can win. They signed the contract. HUGE LIABILITY FOR BUYERS. More lawsuits. Thank you Brandon. Excellent discussion topic!
Sellers sign a contract stating that a buyers agent will receive 50% if they should bring a buyer. It’s agreed to. Thats what an MLS is..cooperation with all agents. Who they represent is also spelled out.
Many realtors misrepresent what the contract says, and the contract is too confusing for average folks. As a first time home buyer, I was shocked that Seller would compensate my agent, it goes against basic agency law.
@Vic Marc actually it doesn’t.
@Vic Marc your agent represented you without any cost to you. The sellers know who your agent represents in the transaction.
While I do appreciate the lengths to which NAR has gone, to protect our industry as a whole. This case indicates to me that NAR could do some PR regarding this issue. Perhaps to avoid suits like this all together NAR could sponsor aggressive campaigns educating both buyers and sellers about why paying a commission is important and in the best interest of our clients. Next, I appreciate this video and the information you have shared. For me, it brings to light this point, with or without the outcome, there are still options both buyers and sellers have regarding commissions: 1. Exclusive agency 2. Dual Agency. This case highlights the history of our industry where long ago before agency relationships, buyers complained they wanted to be represented and sued for this privilege. The difference now IS agency relationships that can work for both buyers and sellers. As it stands now, sellers do not have to pay commission to a buyers agent. I was taught by Keller Williams that when this happens (an option) you ask the buyer if they will pay your commission negotiate where they pay lower percentage in lieu of a referral. ????????? – My question is, why is there a lawsuit in the first place in light of how we work right now?????? Unless, the laws in Missouri are different somehow. No one even discusses the fact that realtors DO NOT get paid until the deal closes and our commission comes out of the proceeds when the home sells. Buyers and sellers DO NOT pay for any of the work we do up front – EVER!!!! Again, why must we constantly defend our position regarding commission????????? Frustrating, if you ask me!!!!!!
Some great points…🙏
Because it is so much money now and it is basically to open doors. Sales are a lot of times controlled by the listing agent and ethics are tossed to the wind.
Ya I have a few friends that sell real estate and are paid on commission.
But it does bring up ethical questions. I asked several real estate people a year ago or when they listed a property I’d comment Saying people probably should wait. And the real estate seller would comment and say it’s a great time to buy. Or they said prices might go down just a little but ya gotta lock in these low interest rates. I just think DUMB people are out there that believe everything real estate or even stock brokers tell them. Just stay in stocks and the market will take care of you. It’s like there’s very few people that will tell you the truth and be frank. It’s probably why there’s a survey I saw that said buyers remorse was high especially now as real estate sales are dying off.
It’s like this one British guy said. In England we subsidize health care and privatize mortgages. In the US you socialize mortgages and privatize health care. The federal reserve artificially low rates and owning 2.4 trillion in mortgages screwed a lot of people out of real estate while making a lot of people rich
@kolton crane The Central Bank sets rates in the UK just like the Fed in the US . Educate yourself
Brandon, having real estate brokerage in the St Louis area, we have definitely been tracking this AND keeping our agents up to date on developments I am not sure we hold the same opinion as you that the plaintiffs will be unsuccessful. However, like you, we are on the lookout for the opportunities that will arise from this lawsuit regardless of the outcome. ( First time I have commented on your videos. You have some good stuff! )
I appreciate you! Would love to hear your views on this…
@Brandon Mulrenin Absolutely… better yet… my biz partner who is totally tracking this lawsuit is ready to jump in on this discussion. His name is Dennis Norman. Watch for his comment. It’s great you have brought this topic up because so many real estate professionals (even in our area) are oblivious to this lawsuit and the possible ramifications that it could bring to the industry if successful. Thanks for your work!
With discount companies like REX and Redfin, as well as flat fee agents, sellers have free will to choose who they want. Where does the word force come in? These people were never forced.
If plaintiffs win, I think buyer agent commissions will come under a great amount of pressure. I would expect buyers to go direct to listing agent and try to get their representation for less than the traditional commission. The better buyer agents, those who can articulate their value, will fare better.
I agree with you. Sellers agree to the agreement. Most sellers that I have met at least understand how it works and never had issue with paying a buyers agent.
Thanks for talking about this! I can’t believe this isn’t being spoken about more!
I don’t think listing agents will decrease their percentage just because they’re not paying a buyers agent. As it is right now listing agents in our area are charging 7% and only giving a buyers agents 2 1/2% in some cases. You would think if they’re only giving the buyers agents 2 1/2% they would charge the seller less, not so. So in this case I don’t think it will help Sellers pay less in commission I think the listing agents will just keep it all for themselves.
The market moves as fast as it does because of the way buyer’s agents are paid. It’s a great system. If buyers had to pay agents for helping them find a house, most would just try and do it themselves. A lot of buyers don’t know exactly how the process works and they most definitely need guidance. If that guidance doesn’t cost them a fee, they’re more likely to use a buyer’s agent. The seller already agreed to a 6% commission. What the listing agent does with 3% shouldn’t matter to the seller. Besides, when the seller goes and buys their new home, the same thing happens, so it’s a wash.
agreed…. what the listing agent does with the funds, as long as their party is properly represented and protected…. is really none of the seller business. a money grab of greed and attorneys – nothing less.
In Australia if you want to be represented as a buyer then you pay for a buyers agent yourself. Otherwise you browse the online listings and attend inspections yourself. If you like the property you negotiate the price yourself. Has been like this for 100 years without issues. Btw commission to list and sell is app. 2.2%.
I don’t know think it would completely eliminate Buyer’s Agents, that would create a double jeopardy scenario for consumers. I do think this would force dual agency, and reconstruction listing contracts. But it would just create more work for everyone involved and little to no benefit.
I haven’t gone over the court details yet. But if this was just standard business practices, that Class Action Attorney(s) needs to get disbarred. The clients will still be paying 6%, and they just made the process of buying/selling more difficult and won’t realize until the next time they sell a home.
Agree with Brandon there will be the good and bad side. If a lawsuit change the game, everything will change to be more aggressively negotiable as prices will adjust to the new model, banking will have to change, etc
Homeowners are tired of being forced to give up such a large chunk of their equity. Savvy sellers and buyers are educating themselves more and more and perhaps coming to conclusions (right or wrong) that it is not worth giving up 6-7%. The median home price in the United States is $428,700 so the real question is whether a seller thinks it’s worth $30,000 (at 7%) to pay for agents in this “median” price example. Title companies will assist with FSBOs and in this day of internet access, it’s quite easy to attract buyers. The commission structure for agents haven’t changed in many decades, maybe it’s time for a change?
What do you mean sellers are “forced”? Don’t sellers “choose” to hire a realtor and “agree” to compensate?
Yes a dual agency is a blessing selling a house, it brings alot more buyers!
I hope the real estate doesn’t change, it’s a great system Honestly!
What sucks and what should change is that banks should be able to loan under 50g again, my first house passed FHA for 32g and I sold it for 84g 4 years later!
You can’t do that anymore and it sucks..
I’m a broker from California. Here, our C.A.R. (California Association of Realtors) listing contracts require that the seller and their brokerage agree up front to all compensation. Most importantly the seller agrees to the total compensation as well as how that total commission will be split between the listing broker and the buyer’s broker. It’s a matter of disclosure…we also immediately review and sign documents detailing how Agency works and the different types of Agency (including Dual Agency). As long as there has been full written disclosure, like we have in California, I don’t see the plaintiffs prevailing.
Agreed…
thank you for this..I think if the plaintiffs win, states would have to look at the viability of double ending deals from the perspective of the buyer…As you said, listing agents are fiduciaries to the seller…If states outlawed double ending (as some states already do) then the buyers agent’s role is secured. It would come down to how to finance a buyers payment to the agent..wether it be rolled into the loan, out of pocket, etc. There is an argument that the commission is rolled into the price of the home and if buyers had to pay 2.5 percent then the price of the home would reflect that…thoughts?
I see two issues for the Sellers even if the Plaintiffs in this case think they’re way is better. If the Plantiffs win, Sellers agents will have to work harder and could start demanding more commission, so if I have to manage the buyers too, I’m charging more to the seller. So they pay anyway. And buyers would now have less funds to work with so they’ll be offering less or asking for it back as a seller closing concession. Either way I don’t think this is a straightforward win for the sellers.
Interesting thoughts Brandon. Here in Australia it works exactly how you said. 99% of homes are sold straight by the seller agents, with all the benefits you spoke about. Buyers agents are not common here at all, and if used are payed directly by the buyer.
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You’re right!! I’m exploring different investment opportunities and would appreciate others’ insights on this matter.
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