Today is a CRAZY day! NAR has officially “lost” the lawsuit against them (and RE/MAX, KW, Home Services etc) - this is really going to shake things up!
NAR has said they are going to appeal. But in the meantime, I am sure a lot of things are going to change. So I thought I’d start a thread where we can begin to discuss and prepare for all these up coming changes.
First question: What changes need to be made immediately? And then next, how do you foresee commissions for listing agents and sellers eventually settling out?
I’ll start:
Buyers agency agreements: I think these are going to become the norm in almost all markets. Ideally they will serve a positive function in that they will build loyalty between the buyer and the agent. But what will they look like?
A: The buyers agent says they will negotiate with the listing agent on compensation for bringing the buyer? (Or some form of finder/referral fee?)
B: Buyers agent will require a minimum x dollars from the buyer at closing (or negotiate with the selling agent, whichever is greater?)
C: Flat fee buyers representation?
What are your thoughts?
On the settling of commissions, the listing agent has all the power now.
Do you think they will try to maintain the status quo and pro-actively offer 50% of “their” earned commission or do you think they will shift the equation a bit and start taking more of the commission on the sell side?
What are some of the early changes or advice you’re getting from your local boards or your broker?
I’m wondering if home prices will come down to compensate the buyers agent. As a buyers agent, I won’t get out of bed for anything less than 2%, and that’s if it’s negotiable to 2.5%.
As an Accredited Buyers Representative (ABR) for 20 plus years, buyer broker agreements have been a tool in my tool belt… Guess it appears that could be standard practice moving forward. The dust hasn’t settled from the lawsuit and it will depend upon brokerages and Realtor Associations to determine what happens next…Life of a Realtor, not as easy as some people think.
People who wish to buy will go directly to the listing agent, unrespresented by a buyer agent because they now know that they don’t have to. The verdict just proved their point.
Based on what I have read so far, the dust may be long way off from being settled. However, that doesn’t mean there won’t be some changes. Brokerage firms and MLS’s will all have something to say eventually. NAR has already made changes even though they are appealing along with other Brokerages. I am not sure how all this is going to shake out. I agree that if buyers have to ask for compensation directly from the buyers they are representing then that may be a hard sell since it hasn’t been that way for a long time. Sellers understand that commissions are negotiable and that is one of the first questions that in the listing appointment. Again, Brokers will be advising the realtors that are under them with information that will allow them to operate and receive compensation but what that looks like is anyone guess. Lot’s of questions but not a lot of answers.
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I just left a conference “Preparing your Office for Industry Changes to Buyer Representation, compensation, and MLS Policy” put on by the Chicago Association Of Realtors. The Message was “NOT IF BUT WHEN” There will be “0” compensation offered to Buyers Agents. They deferred to Realtors adapting by using a Buyer Broker Agreement or refusing to work with them. I would love to hear what other agents think.