How to Structure Real Estate Deals Post NAR Settlement
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- เผยแพร่เมื่อ 27 ต.ค. 2024
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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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Thanks Brandon and Jeff, please make more content for brand NEW agents!
00:00 🏡 Real estate agents need to navigate new deal structures post NAR settlement, considering factors like seller education and competition against lower commission models.
03:36 🏡 Listing agents may prioritize collecting fees over offering concessions, while sellers may start offering concessions as the market shifts, but it is ultimately market dependent, and the speaker welcomes debate on real estate deals post NAR settlement.
06:35 🏠 Agents need to adapt to the NAR settlement by finding alternative methods for offering commissions and concessions, as it will have a significant impact on real estate deals.
09:14 🏡 Agents should focus on buyer presentation and contracts, use the Alm model for buyer agency agreements, and structure deals to ensure compensation for themselves and the buyer.
13:15 💼 Agents can now negotiate commissions and buyers should be prepared to pay full price, with zero concessions, in competitive real estate markets post NAR settlement.
16:49 🏠 Real estate deals post NAR settlement are uncertain, with agents unable to command 3% on the buy side and sellers benefiting from negotiated commissions.
18:44 🏡 Buyer agents may struggle to get offers accepted as buyers go directly to listing agents, leading to questions about compensation and a rise in double-ended properties.
21:56 🏡 Agents need to prepare for new buyer consultations and improve their value proposition, focusing on the net value of the house and ensuring security and protection throughout the closing process.
I’m a newbie and I’m kind of glad this happened now, because I really don’t have to adjust from the old ways. Plus I’m strictly focused on the listing side of things
This will help you a lot (being new). Back in 1993, I was a new agent. That year, Colorado introduced buyer agency. I did it from day one and have ever since (always signed BA before show first home). But the "experienced agents' struggled to adjust.
Don’t seek knowledge from anyone selling something like a course, mentorship, etc. here on TH-cam. These guys here are speculating. Ask your broker for guidance and study business from professionals with excellent pedigree. Always go to the source, man. Good luck on your journey.
Same haha😂
Same here, now we’re on the same page as all the other agents already out there, change allows for new ideas and opportunities
If you are a newbie , evaluate your options across the value chain including lending and home insurance. Newbies have the advantage of a learning mindset , else you will end up leaving half the money on the table !!
As a buyer and seller, I look forward to having the buyer pay for there own agent. By doing this we can keep buyers that have little to no money out of our home, wile increasing both the quality of the buyer and less dead end appointments for our selling agent.
hey Brandon, why does everyone keep saying "the seller pays the buyers agent" The way it should be is the listing broker "agent" charges 5% commission to sell/market the house, at close that 5% is the listing broker "agent" money. the listing broker pays the buying broker 2.5 % for bringing the buyer. so the listing broker is paying the buyers broker a finder fee....how did a slimy lawyer build a case?
This is not always the case. Seems like lots of realtors assume all listing agreements read the way that it does in their state. Many states, the contract CLEARLY outlines that the listing and buyer broker compensation is separate and itemized, and that it is a seller expense. IMO, this is the way it should ALWAYS have read in all listing agreements - as "paying the listing agent and having their broker pay the buyers agent" seems to be one of the many reasons why sellers could make the argument that "they had no idea they were paying the fee that is payed to a buyer's agent".
Agreed, it is literally what our listing contract says: listing agent gets x%, seller acknowledges listing form to pay x% to buyer agent firm AS A MARKETING EXPENSE.
The case was shady and uneducated
the nar gave up we could have won the case the sad part the commission was on the closing docs paid to two brokers that is what won the case in the listing it is disclosed how we the listing broker paid the other buyer broker we told the public from the very the time we took the listing
That's not how it was being done in every state. Read the case. It wasn't slimy lawyers
@@michaelmurphy2067the punishment for Nar settling will be thousands of realtors quitting the field. MAR will lose the good money they got and buyers will never be represented properly again in the nation as Australia real estate. In Australia, the listing agent is the one representing both for just a portion of commission. This is not fair for anyone, not even for sellers.
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Kathleen Chandler.
Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, i'm in my fifth trade with her and it has been super.
You trade with Kathleen Chandler too? Wow that woman has been a blessing to me and my family.
she's mostly on Telegrams, using the user name
fxannchandler 💯 ..that's it
She lost all my money. She scams watch out
Thank you for these honest and straight forward conversations. I feel like too many people are overly optimistic with these new changes. Let’s be real, let’s look at behavioral economics, let’s analyze all sides of this. Great job. This is why i watch everything you post, Brandon! Thanks again!
But even if the listing agent doesn't have the tough conversation, there is gonna to be PAs that specify 3% to the buyers agent. Maybe that makes their offer less attractive, but is a buyer paying their agents commission going to expect to pay the same purchase price?
The buyer's agent isn't working for free, it just makes it even harder for a first time buyers with little capital to get a home.
For my 2 cents no one is better on TH-cam for Realtors, hands down then Brandon
Agreed! Best coach I’ve ever had!
Yes one of the top 5 for sure!
Also it’s going to be considered in the pre-qualification with the lender. Many first time buyers won’t have a budget for this
Exactly!
You can be prepared all you want good luck getting a buyer to pay you 3%
Then buyers can get their asses kicked trying to represent themselves. Either way they’ll pay
@@masonguritz6758right? And loose much more than x% on the deal 🤷🏻♀️
I got 2 buyers committed past July to agree to 3%. It wasn't that difficult. I also don't have that limiting belief though, so there's that.
@@masonguritz6758 Or buyers stop coming and don't make offers.
@@masonguritz6758 how? They won't know to get a house inspected? They would be better off hiring a real estate attorney where they get paid for how many hours they put in.
My theory - the people with enough equity from a past sale or a high enough education level with incomes to save for all closing costs/down/plus 3% buyers agent fee - they aren’t going to see the need for a buyers agent who only took a 40 hr weekend course. This is a modern day reflection to the low barriers of entry to our profession. That is the real transgression here.
I disagree with you. I've been an agent for 8 years in my market. There's no way I would navigate a contract in another state without a real estate pro. Why? Because I know my market and state laws like the back of my hand. I know windstorm mitigation and insurance inspection requirements, zoning, flood zones, HOA's, mandatory club memberships, deep water properties etc. But if I went into a new state with different pests, weather patterns, customs and contracts than here, I would not go it alone. Moving is stressful enough to worry about making a huge costly mistake.
@ArcherNews-ch7ynthe Buyer’s Agent spent is the most valuable thing to have.
@ArcherNews-ch7ynthat is fine. Some states require attorney review so that is nothing new. The attorney will not be a source of information for you regarding all the items mentioned on my previous post. You have always been to take the path you are suggesting. In a hot market like the one we just experienced in 2020-2022, you'd owe your attorney for roughly 15+ offer preparations upfront. And no amount of attorney review could get your offer accepted because of the speed of the market & how competitive it was. It really is a deal to have an agent working for you for no upfront cost, but if you have the means to pay an attorney to prepare and review your proposed offers upfront, do what you feel works best for you.
I think NAR sold agents out a long time ago when they allowed sites like Zillow, Trulia, etc to have access to the data we pay for.
Although agents only take a 40-hour course, those of us with years of experience are help to help guide and negotiate buyers through inspection issues, mortgage issues, potential EMD disputes and other contingency issues that might arise.
1st time buyers will be most adversely affected by this rule change. I think most buyers will just have the listing agent represent them. Or hire an attorney.
Great talk. Not sure I agree with the “we are ready to represent buyers for free” mentality but I do agree with Brandon. We are going to see listing agents take their 2-4% and the buyers agent compensation will be negotiated in the offer
No one should have to work for free. We need to show our value.
Working both ends of a real estate deal sucks! It's double the work, double the headache, AND DOUBLE THE LIABILITY! Now, you're suggesting that listing agents, who despise working with buyers, are going to be working both ends of the deal for less money? I seriously doubt it!
You need to make a video just on this premise! This needs to be a bigger discussion amongst us agents, real talk!
I have same sentiments. I've already decided against dual agency. I never understood the ENCOURAGEMENT of this other than GREED. I will ALWAYS discuss with Sellers the benefits of offering Buyer concessions & providing proof. & the challenges with unrepresented buyers. Buyers & Sellers NEED their own individual agent representation to achieve the MOST FAIR & NONBIASED results. The way I see it is Buyer & Seller Agents are a team & I feel like there are certain practioners sowing seeds of division. WE need to work together to ensure the BEST, MOST FRUITFUL outcome for ALL PARTIES @ ALL times.
Well said! My feelings exactly.
Since when do listing agents hate working with
My state does not allow dual agency. I have single agency on all my listings so unrepresented buyers will be signing a disclosure that they understand they have no brokerage relationship with me and they understand that they are managing the deadlines & obligations under the contract & the associated risks if they breach. Oh, my listing agreement collects a portion of deposits that are forfeited. How many buyers have to lose their deposits to a contract breach before they start waking up and realizing it's a horrible idea to be unrepresented.
As a seller, i understand commissions are negotiable. But, if I hire an “Agent” to sell my house, I expect my agent to sell my house. I’m giving 3% for my agent to sell my house bottom line. That’s what I hired my agent to do. I wouldn’t care how it’s sold, but here is my 3%.
are you saying you don't think you would pay buyers concessions.. even if it makes financial sense?
@@lennyschwartz Anyone netting more money depending on an offer would be silly not to take the more profitable option. just have to educate your sellers on expectation of offers coming in and make them the most money.
Makes sense just be open to accepting offers asking for buyers agent commission closing concessions. There will now be a mixed set of offers and in some cases the one asking for the commission on the buy side covered will net a seller more money at closing just depends how competitive someone is with an agent or not.
And, your home will need to be absolutely off the charts outstanding for a buyer to want to move forward without you considering their closing costs to buy your home...which will now include their buyer broker agreement fee. If you only want to pay 3%, you are better off going FSBO and putting buyer agents to work for you for 3%. Seems like a smarter approach. A stale listing is a dead listing. 💀
@@mommom3172 I agree. For those in populated areas where buyers shop at night and weekends, just FSBO and hire a lawyer to review and close the deal. Buyers can not hire lawyers to show them around, help guide through financing, create and guide through the contract timelines, go to inspections and help the buyer understand the reports. They need the agent. Of course we are seeing selling experts talk about how they don't need one but we are dealing with bakers, nurses, our everyday person who is not a superstar sales guru, who's buying their first or second home and they do not know the process.
I think we will see buyer side commissions being driven by DOM, less than 30 = 1%, 30 to 60 only offer in hand = 2%, over 90 only offer yet = 3%
exactly ...
Buyers wont pay 2-3% to BA, they will probably go directly to listing agent. And I dont think SA also can cleanly get 3% anymore, there will a lot more negotiations by the seller overall commissions should become flat fee more rather than % rate.
Brandon is definitely the most accurate and sharp coach on TH-cam. I wish he had a brokerage in Miami.
Bro , if you are in Miami , I can teach about the mortgage aspect of things
Hey Brandon and Jeff. Amazing discussion on what the New Normal will look like. I agree 1000% with your talking points. And like you said, getting listings are where we need to be laser focused on.
That was Coldwells Banker's presentation. They would tell seller's "we charge 3%", then they would say, "how much do you wish to offer buyer". But reality is that our contract says "Listing broker charges 6% and they are responsible to cooperate and compensate buyer's agent." So in reality. Listing Broker pays Buyer's agent compensation.
Right, because the seller has already agreed to a commission. How the listing agent splits it with a buyer agent doesn't change what they agreed to on the from end
Biuyers will not pay a BA 2-3%, most won’t pay even 1%. They’ll simply go to the listing agent.
you are correct
Pretty much
Not always true. Some buyers want somebody on their side. Some people appreciate the Middleman!
I’m a new dad, I moved to the Bay Area a few years ago and I’m thinking of purchasing a single family home, but with real estate prices currently through the roof, is it still a good idea to buy a home or should I invest in stocks for now and just wait for a housing market correction? I heard Nvidia and AMD are strong buys.
it’s a personal decision, but according to Forbes, housing activities will remain stagnant for the most part of the year, so maybe hold off a little.
well you could put a downpayment on a home and as well diversify as much as you can into Ai and pharm. stocks like Pfizer and JnJ.
Certain Ai companies are rumoured to be overvalued and might cause a market correction, I’d suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I.
this is all new to me, where do I find a fiduciary, can you recommend any?
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Melissa Terri Swayne” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
There is no way buyers are going to pay to be represented by an agent, not going to happen. If sellers start opting not to pay a commission to the buyers agent it's game over for the vast majority of agents, the MLS's and NAR. I give it 5 years and this industry will be unrecognizable.
oh ye of little faith... remember... "there is always a f_____g way" - an example: NAR creates a national website for open houses... buyers go to the houses on open house day(s) and there are buyers agents there sitting at small tables like a trade show... they talk with the buyers and strike up relationships... if they buy want to buy the open house the sitting agent they choose will help them WITH THAT 1 house for a negotiated commission (far less than typical and probably low enough for buyers to pay out-of-pocket is seller won't))
BA have been telling their buyers for years their services were free. It’s been the number one selling pitch….”why not hire someone who works for you when it doesn’t cost you a thing?” Literally heard that thousands of times over hundreds of videos all over the internet. People don’t value things that are free….and agents think all of a sudden buyers will jump to pay 3% of the price of a house, or be happy to lose a house they love over commissions. 😂😂
@@lennyschwartzthey already do a system similar to this in Australia from what I understand….but without the BA.
@@ashdav9980I'm sorry, but I'm inundated with business & have a large circle of influence. People that I know know I'm well-connected, know about properties BEFORE they are on the market, and have good relationships with other agents in my market. If that is not appealing to someone, that's OKAY! Not everyone can be my client. I only want to work with people who WANT to work with me.
That’s why you do FSBO and. Your buyer will come without an agent
I don’t buy the whole race to the commission percentage bottom to get a listing. That’s already an option. What do all of the coaches tell you? “Don’t be a cheap DISCOUNT BROKER. Charge what you are worth or you will only attract the cheap discount clients.”
Exactly. If a listing agent can’t stand up for themselves and not discount their rate, how are they expected to stand up for the seller?!
Outstanding as always. Thank you for always having the accurate info.
reunited and it feels sooooo good. Good to see you brothers reunited. Good moment with you 2 short and sweet. If you play video faster. Get thru it in half the time. Cool moment for you guys... Thanks for your time
Just learned on a different TH-cam that before this NAR settlement it was only CUSTOMARY to pay buyer's agent and it was never a requirement. WTF?!
BBB says that if you ask a person to do work for you, you need to pay that person. With that in mind, I think a fair buyer's contract is: Buyer will pay agent $100 (maybe $150-200) to see each house. Buyer will pay agent $2000 to finalize the purchase and complete paperwork on closing. That is $200/hour for up to 10 hrs of work; reasonable compensation. The contract is good for 90-180 days, renewable. Either party can cancel with 7-30 day notice. Another version is Realtor will show buyer up to X houses in 90 days; Realtor will assist buyer with finalizing the purchase; buyer will pay realtor 1-2% of closing price. I like the first version best; allows buyers to shop without commitment, and realtor gets paid for their efforts.
I definitely think sellers who offer buyer's commission will sell their home faster. Not offing anything will make a lot of buyers pass up on the home. Especially first-time home buyers.
It's not the buyers it's the agents "steering" them to the highest paid properties.
Amazing how this whole settlement has brought out the commission breath of buyer agents.
It's time for buyer agents to wither prove their worth or find a different industry. The days of part time agents representing friends and families is over!
Many of my buyers would not have the additional funds to pay me since any concessions they may get will be needed to go towards the closing costs for the home. I frequently end up taking a discount just to get the job done for them and I always still represent them to the best of my ability. What truthfully concerns me is how many of these buyers are going get taken advantage of by having no representation and going directly to the listing agent. Personally, I never like to double end any of my listings. I feel the buyers need to have their own representation. I do explain this to them, and, if they refuse it, then fine. I do make sure they understand completely going into it what that means. I just see many buyers getting taken advantage of thinking they can just go it on their own. I don’t see where this will bring down any home values. The only ones benefiting will be the seller since they will be coming out ahead and some unethical listing agents that will be taking advantage of unrepresented buyer’s. Not all are like that but I have seen my share.
in the real world - buyers could sign that they are unrepresented and still sue everybody involved... they will usually win... there IS NO JUSTICE in the court room
I disagree with both of these guys.
The commission law suit stuff is still fresh in the news and almost every listing going into our MLS is still 2.5% to 3% buyer agent compensation. You think that compensation is going to be reduced months from now after it’s been out of the news for a while ? I don’t think so.
I know your trying, but it’s because the lawsuit doesn’t take affect until late July.
@@americanturtle24 it doesn’t matter when it takes into effect, realtor commission has always been negotiable, nothing new. Only difference in July is that it won’t be listed on the MLS. My point is if it’s not reduced now, while it’s still fresh in the news, why would it be reduced in July after people have forgotten about it? Read my comment again.
@@ibrahimf2100BS…realtor commission was never truly negotiated on the buyer side….now it will be. As someone who only works on the selling side, it will take time but things will open up for negotiations and now buyers will be looking more scrupulously at their BA if commission becomes a deal breaker to them loosing a house they want.
Possible scenario: buyer signs BA agreement for 3% and sees a house they love and winds up at the negotiating table asking for 3% commission for the buyer agent and the seller responds with 1% for the buyer agent and 1% closing costs for the buyer. Buyer found the house and BA only showed them a few houses because buyer had been zillow shopping for months and knows it’s a good house in the area they want. Buyer thinks well, 1% should be enough because we only saw two houses and I can get money for closing costs that I couldn’t get paying 3% commission to the agent. Bam….now buyers and their BA are looking at each other and it’s not with love in their hearts….and so many agents are thinking their buyer is just going to jump up offended and leave the house they love so their buyer agent can get a full standard commission….that was supposedly always negotiated to begin with. 😂😂😂😂😂😂 No…..it’s a scenario like this where actual negotiations will happen, and it will put downward pressure on commissions.
What a great conversation!
Great video. Very educational. Thank you both. As a loan agent, we are equally invested in this change.
Greatly appreciate you guys get into creative ways to prep for July,the new normal
Your points it exactly the ideas I have been sharing with my team!
Soon the buyers will just go directly to listing agent for help purchase the property and there will be no more buyers agent!
I've already seen houses listed at 0%
As a BA, There’s also the challenge of listing agents, favorably leaning to accept and push offer they double-end, in order to maximize commission, that’s another layer of competition added to this debacle.
Hey my friend love the talks! Remember the majority of agents do 1-2 deals a year period. So they are going to be happy just to get a listing translation they are not going to pitch the seller in buyer compensation if ever not gonna happen often. Meaning thousands of listings no buyer commission done deal!
During the buyer agent consult, MOST will check box 7.3.3 which say's "buyer is not obligated to pay" and then if the seller refuse's to pay the concession, the buyer and agent will just move on to the next property.
Buyer is just going to move on from the property they love because buyers agent can’t get their full commission? Lol…..sure.
Another scenario….listing agent counters the negotiation with….”well, the seller will offer 1.0% for the buyer agent and 1.0% for buyer closing costs.” Now, buyer is going to think well, I found this house I love and brought it to this buyer agent who only showed me two houses, so 1% should be enough….and I will get an extra 1% for closing costs that I wouldn’t get at all if the buyer agent was paid 3% commission. You REALLY think that buyer is going to gleefully walk away from that home they love not angry at the buyer agent whose commission is going to loose the deal? 😂😂😂😂😂 Nope, the buyer will turn around and tell the BA to drop the commission or kick rocks and they will exit the buyer agreement as soon as possible.
Buyers already get emotional about losing houses for all kinds of reasons….they will feel the same about losing a house to a commission conflict.
Affordability will definitely be an issue. Lack of inventory, super high prices, and higher interest rates will leave a lot of buyers unable to pay a commission.
The commission is 6%, split evenly: 3% for the seller’s agent and 3% for the buyer’s agent. Sellers traditionally pay this 6% commission.
Doubting this arrangement is a mistake.
If sellers refuse to pay the 6%, they will likely see fewer showings and work with a less motivated listing agent.
As an agent, if a seller were unwilling to pay the commission, I would seek out another client.
Agents generally don’t earn a substantial income, and few have retirement savings. Moreover, why is there not more discussion about Wall Street’s role in this lawsuit? And how the promise of a ‘hassle-free and cheaper’ online business model for buying and selling real estate is emerging?
It's 2024, most buyers can get information online. If they really want a home, they'll contact the seller directly. If they want real representation, get an attorney, get all the inspections you need to feel comfortable moving forward with the purchase. Title company handles most of the paperwork. Real Estate agents are not liable for anything if something is wrong with the home.
Brandon, great stuff as always! Head is not in the sand here, can't we see this working similar to our friends in commercial real estate as we communicate with listing party on #'s.? I agree with you the "inverted" being most likely scenario.
As a seller, I’m willing to pay the 3% to the buyers agent as long as no further closing cost are requested by the buyer because we are already paying their buyer agent fee. In a $450.000 home the buyer fee at 3% would be $13,500. I’ve already then came down to $ 436500 for the sell of my
house. Why would I want to give the buyer more compensation since I’m paying THEIR buyer agent fee?
Also, how would open houses be handled going forward?
I think this new change should wake up the buyers to understand what is already being compensated in the sale of a home.
I am glad I am finally seeing someone address the unrepresented buyer actually costing money - I agree that we need to charge for managing that buyer through the transaction.
This lawsuit is brought to you by Wall Street. You know, there are going to be online brokerages business models where buyers won’t need an agent, right?
@@augustoliver2779 what are your thoughts on this being a plan to make it even harder for low income and middle income consumers to purchase a home? They are already being squeezed out by inflation as is and they are all being pushed to be eternal renters. Builders are now building homes for rent but not to own. Wells Fargo used to be the number one bank to offer home mortgages but then they stopped in January 2023.. these companies are all apart of the "own nothing and be happy by 2030" agenda. The only way you own nothing and still have something is if you are renting everything.
Jeff Glover and Brandon Mulrenin in one interview WOWZA This needs to be seen by every agent everywhere!! Jeff- Tara Carter Ft. Lauderdale is my Coach!!!!!
Variable rate commissions need to be disclosed though right? At least in Montana as of now it needs to be disclosed. So if I’m the listing agent and willing to reduce my commission to represent the buyer to like 1%, that’s called a variable rate and that’s also put into the MLS so that buyer agents have the opportunity to reduce their commission to get their clients offer accepted
No compensation can go into MLS at all. Broker websites, social media, flyers at open house, emails, texts, sign riders are all fair game.
What if Zillow and/or Redfin offers the following service that is executed by salaried employees: $50/door, $50/offer written, $500/coordinating inspections, $500 for contact to close. Do you think buyers will opt in? Zillow has the buyer eyeballs and could create a back end to make the logistics super efficient for their salaried employees.
As a consumer I would like to see a home without having to pay to open a door. You don’t pay to see a used car, it should be the same. Once I’m ready to pull the trigger on a home, i would bring in an agent for services I need. I think listing agent will be opening more doors going forward.
@@BushyTop08but you do pay a doctor or attorney before you see them. Not every industry is going to operate like a used car lot.
@@ibrahimf2100 prospective buyers of property don’t pay to see a product. A house isn’t a service like a doctor or lawyer. If listing agents think that opening a door to a prospective buyer is too much work, then maybe they shouldn’t be an agent to begin with. Their job is to sell the house for the seller: the service of opening a door and answering questions about the home should be part of that responsibility. If my listing agent failed to show a property to an unrepresented buyer I would fire them on the spot.
What I’m trying to point out is not arguing whether or not this is a great idea, I am proposing that, if Zillow does this business model, how could you possibly convince buyer to pay you 3% BAC out of pocket.
@bushytop08, I agree with your sentiment that listing agent should be willing to show the property. I’m just pointing this out for buyer agents who are fantasizing about having a great presentation where they convince someone who’s going to buy $1 million property to shell out an extra $30,000 for their expert buying services.
Tbh I wouldn’t pay more than 1% out of pocket for representation as a buyer. But at the same time I don’t expect the same level of service. Also I think the title company works harder than agents, at least from my perspective as a consumer.
Buyer approved for 250k, BA showing homes that are 240k or less. The 250k is the budget so keep it below that or equal to that to make sure BA gets paid at closing so the buyer doesn't have closing cost since the loan is at 250k and everything can equal out
I think buyers' agents will end up having to charge a flat fee for showings and paperwork and maybe an additional fee for negotiation services that will be part of the closing costs or maybe financed. I don't think they will make as much as sellers' agents anymore, but they might be able to have separate negotiations with the sellers' agents for a portion of their commission if they bring a buyer to them. If an unrepresented buyer goes directly to a seller's agent, a designated agency will form and negotiations on how the buyer's agent will get paid will be made between the buyer, seller, and their agents. Either way the buyers will have to pay and the amount they get back in negotiations might offset the buyers' agents' fees.
I’d think most buyers will not be purchasing the first home they view, whether it be a showing or open house. More than likely buyer will have already signed a BSA with an agent prior to viewing. Right? These discussions are very helpful!
I like the conversation and I do believe that a huge part is the listing agent being skilled in negotiations with the seller asn making sure to do a good job of explaining that the seller has never HAD to pay the buyers fee, they did so because it garnered them a higher offer on their home because buyers dint go around with that kind of money.
Us realtors need to do a better job of explaining how important what we do is and how much less the sellers would make if they sold off market which has proven time and time agin that most sellers doing it themselves have lost over 28% min on total sale price and the average lost is 34%.
Now putting 6% isn't even a drop in the bucket with paying both if necessary to get top sales Price.
You are trying to support a dying industry.
Buyer agents need to prove their worth. If not then buyers will simply contact listing agents directly.
I'm really interested to see how this affects veterans (if it does at all).
Problem with this "buyers are just going to go to the list agent" thing is that I feel it's going to open your self up for possible litigation. Dual agency is also asking for it. I think one of the things we have learned from this lawsuit is that we need to be careful of interpretation and really educate our buyers and sellers. Pros cons ect.
That’s why buyer agency came to be in the first place.
Can't you just turn the buyer over to another agent in your office and then agree to a split thus avoiding dual agency???
Good luck with the listing agent trying to make themselves available to show all their properties to buyers. Sales will go down due to not enough time to procure the buyer.
@rhythm28 you want 2 split your 3%?
@dm_1 you are right. I love me weekends😂
duel agency is not allowed on a lot of states then what happens? commissions will half of what they are today commissions will not be close to 4.5 gentleman you be lucky to get 2 good pod cast
Here in TX all agents must respond to inquiring in 48 hours. So listing agents your phone will stay ringing 😂
Listening a house on Craigslist would sell in 30 days with no agent. I’d argue listing agents aren’t worth what they think they are. Houses sell themselves today market I see 2% listing fee and sellers agents split it with buyers agent if one is involved. Dark dark days are coming for realtors. Buys are sending their agents home they found and want to see it’s hard to convince your buyers that you will not show them the house because it does not pay.
Depending on your local market & current conditions you make a valid point. If your homes sell with multiple offers day 1 perhaps it's worth rolling the dice and hoping either the buyer knows what they are doing and everything just goes smoothly or maybe there's a buyers agent on the other side to handle the transaction for a reduced commission.
In the flip side, if homes have multiple offers why not hire someone to rep you for a reduced fee and just not offer anything to the other side? Why pay for someone to negotiate against you.
@@johnchsrealtor my point exactly people will hire a listing agent at a reduced rate and buyer agent is so hungry 1% will at least pay them enough not to starve. Bottom line is if you tell people you don’t have to pay for the other agents THEY WONT! If I go to a car lot and they say you don’t have to pay dealership handling fee anymore I’d be a fool to say yes let’s make this transaction more expensive for me
the market will change that is now in a red hot sellers market . when it changes the seller will be offering huge commission to sell the house
If a seller doesn’t want to pay the consession then the price they were looking for to get will shift to lower, too.
It is a balance on prices and seller’s cost of selling.
If they have less to lose when thet close, then that is the gap buyer’s agent can talk about with the buyers.
In California we all ready have all the new forms the listing contract states what you’re going to charge to represent the seller then when the buyer comes in with their realtor rights an offer up the buyer realtor can put on the contract that the seller to pay them a commission it’s on their purchase contract. Not sure why everybody’s making a big deal about this. Everything‘s gonna work the same as before except for the contracts are going to be different and the buyers agent is going to have to put their commission on the purchase contract. Commissions will not be listed in the MLS. It’s the same, but it’s routed differently. That’s all.
Really good insight from both guys. I appreciate this.
We know three key things:
1. Agents don’t answer their phones so getting access, good luck! You’ll need an agent to succeed getting you in.
2. Listing agents don’t want to show their listing all night, every weekend. They didn’t get into leveraging a listing business to digress. They will be offering variable commissions or concessions as soon as the pain sets in.
3. This isn’t a DIY process so overconfident consumers will get hurt and learn they need a professional. I can pull my tooth out in the garage yet i opt for a dentist like the rest of the thinking world.
Very interesting concepts. Makes sense.
Excellent discussion
Great info. Makes sense to focus more on listings.
As a buyer, isn’t there a conflict of interest when the buyers agents compensation is a percentage of the purchase price? Their incentive doesn’t align with my goal of getting the best price possible.
As an agent; I can't really "sell" you a home. You have to buy it. It's not like I can talk you into the moon roof and leather seats. Furthermore, we know your price range and maximum. We agree to help within a range. Not a price. You then have a due diligence period to negotiate or walk away. You are well protected as a buyer. This settlement on the other hand certainly only makes this market harder and more complex for buyers.
@@MikeGuidoHomes what’s your incentive to negotiate a lower price on my behalf? Don’t you make more money the more money I spend on a house?
@@Cory-hf3jz My fiduciary responsibility is to represent your best interest. Therfore, if you want to offer a lower price I am required to do so. Not to mention; suppose we negotiate 10k off the price. That's 300 bucks out of my pocket. It won't break the bank nor is it incentive enough to lose my license.
I would however educate a buyer as to the best way to get an offer accepted using as many variables as possible. Perhaps a lower price on the purchase agreement while offering to pay sellers title costs. This reduces your interest payments and overall loan amount.
Maybe we pay above asking and ask for a concession to help you pay down payment expenses. This gets the seller what they want and you what you want at the same time.
There is nuance in all of it. As I mentioned, you have a due diligence period. You are buying the house. You are bringing the money. Agents are legally required to do what's best for their clients.
If we make 5k-20k on a purchase or sale we're not wrestling over 300 bucks. Especially considering the cost of doing business in the first place.
The same argument you made could be posed for a sellers agent. If we have an offer on your house 15k under ask and you want to accept it, we take it. If I suggest we decline you have to agree. But I'm certainly not going to keep a house on market longer and risk not selling for $450 bucks.
Very informative, do you think the SFR market might "freeze up" in August/September as the real estate market adjusts to this new norm? I just don't see a buyers agent taking folks all around to show homes if there is ANY chance they are not going to be compensated.
as a buyer agent, i recommend that every buyer that is approved for a home loan they need to look at anything 15k less than what they got for closing and fees for BA fee taxes and home and let the seller pay the Seller agent keep it separate
I would like to know where I could find a script addressing working with buyers and having them sign an agreement when working with new construction. Thank you.
federal funding loans will not allow seller concessions for commissions fyi
Negotiations will be intense now that there's two variables for sellers to consider the highest bid on the property and the lowest seller consession..
buyer agents days are over. commissions will be 2 to 3 percent max for both sides . double end sales will be 90 percent of the market
When the seller finds out that no buyers are coming to view after the open house and there are no offers as well (no free buyers agent is going to do that and buyers don't want to pay for that service). If the buyer has to pay X% to see houses then traffic will come to a crawl.
I will simply contact the listing agent directly. Hire a real estate atty to negotiate the offer. Problem solved
@@rack9458 I get that, most buyers won't.
I see no real change happening besides buyers going straight to the listing agent direct. Buyers agents will continue to not show homes where seller is not offering compensation, therefor sellers WILL continue to pay buyers agents because THEY brought a buyer. You gotta be an INSANE seller to not offer to pay the buyer agent. Might as well go FSBO
without buy side commissions offered there will be seller concessions in offers and if listing clients don't stay open to accepting offers with those they terms their houses will sit way longer due to lower marketing reach.
Unrepresented buyers can pay a real estate attorney $1500 to process the sale. Ppl do it everyday.
Ok, but in multiple offer situations it’s going to be time sensitive, do you think attorneys will write up offers speedy fast like we do, or even negotiate with the listing agent. Not for 1500!!!
How many of these attorneys are going to show you the home several times? Coordinate all your inspections? Negotiate your repairs? Work with your lender? Answer all your questions?
@@LauraStoddardTN the app Attorneys R Us says attorneys compete for your business.. i saw many willing to write up offers and follow til closing 24/7 for as little as $199.99 - it's a tough way to make a living
You're right, but a real estate attorney will want the $1500 whether the offer is accepted or not.
not in nj or pa in the southern states mabey 1500 its 5k in the north east for attoneys and how are the attorney going to show houses on the weekend and at nights ...... you cant get a attorney on phone on the weekends
I love all these sales pitch that agents are doing to try to convince sellers and buyers to pay a commission as if they really need agents. Get an attorney, inspection, and the title company will do most of the work. It's really that simple, this is 2024. I'm sure the taxi industry and Blockbuster was thinking they're untouchable until Netflix and Uber/Lyft comes along.
If you think a real estate transaction is remotely similar to driving from point A to point B or acquiring a movie, you obviously have very little experience buying or selling real property. I'm actually excited about the changes. As soon as buyers realize the risks that they have been shielded from, lose their escrow deposits, and buy properties with expensive deficiencies, they will NEVER try to do it without a local experienced agent.
@@mommom3172 I purchased my first property when I was 19 in 2008. Been investing since. For someone who doesn't know anything about real estate may believe everything you're telling me now. Realtors don't have any control over what is wrong with the house since you're not an inspector. You also can't protect earnest deposit as you have no control over buyers when they backout on a deal. There are plenty of times when they backout after all the inspections are done and loan approval and can't get their money back.
I'M COMPARING REAL ESTATE TO UBER/LYFT AND NETFLIX IN TERMS OF TECHNOLOGY. DUH. . .
If you’re lucky! It’s so much more than just finding the property. With 40 years as a real estate agent, I can tell you I don’t sell real estate, I solve problems. After getting an offer put together, there are so many hurdles and so much work keeping it together to get it to closing. Maybe one in fifty have the experience, the knowledge and even the contacts to fix the problems. I’m happy to be there for those who need my services. You most likely won’t be one of them!
@@mommom3172 Love how these real estate agents are deleting comments.
@@lindmarcella I'm sure your RE buddy will delete my comment just like other comments I've posted. I know how RE Agents operate, and it's a dirty business. I've been buying properties in my late teens early 20's and been doing business without an agent. Feel free to delete this comment too, since you're a coward Brandon.
What’s the point of paying commission board / MLS fees? Everyone got access to that type of information from other sources. And there is not much protection for realtors.
First of all....I THOUGHT WE WERE NOT SUPPOSED TO USE #%%%%% WHEN DISCUSSING THIS! That is what has gotten NAR into trouble to begin with! Maybe using "hypotheticals" would be a REALLY good idea. I have used Exclusive Buyer Brokerage Agreements for 19.5 years! They are as important as an Exclusive Listing Agreement. NOBODY should work for FREE! Not sure why you would say a Buyer Agent should say they will work for free...that makes NO sense at all. Buyers can go to the listing agent, but they will be paying them something in the end.
I dont see what the issue is. Customers can shop different lenders. Customers can shop different realtors if they decide to get one.
The Listing arena is already the most competitive area. It will be 5x more competitive now. No one wants the low lying fruit, but whom ever goes for it will nurture themselves to the top. Another words, for every Listing you get, time spent, and all those appointments, money and advertising, you probably would've gotten 5 buyers, because no one is in that arena any more.
Why should someone pay you if you have a Buyer if you're listing their home? Aren't you supposed to sell it to a Buyer anyway?
In my view, if we are conceeding that a seller will agree to pay the listing agent 1.5% in the less likely scenario that they manage the buyer's transaction who comes directly to them, its wild to me to also make the statement of belief that that seller would be unwilling to pay 2.5% to a buyer's agent in the far more likely scenario that they bring the buyer. We can play the scenario game, where all things are equal - but those 2 scenarios will not be happening with equal frequency.
I think that because sellers already are under the assumption that the listing agent brings the buyer and not the buyers agent, they will be more inclined to pay the listing agent because they do not see the value of a buyers agent, which is especially validated in their eyes after the class action.
@aidanconway2592 well then oh how quickly they will realize where the value in ACTUALLY selling the home has been all along.
@@livinginoklahomacityofficial probably! I am not sure how quickly it will spread though. Many people only listen to advice from others if it already aligns with their own beliefs. I wouldn’t be surprised to see many buyers learning the hard way.
Great video!
Good and very informative video, however there are two elephants in the room that no one wants to talk about. 1. What do you think is going to happen when these buyers start going directly to the listing agents and lose due diligence money because the seller refuses to fix what they the buyer wants. The buyer is going to feel that they are not being represented property by the listing agent. They are going to start filling lawsuits ageist listing agent firms. 2. New construction home builders are going to make a hard push for buyers agent to bring their buyer to them, because they will pay...This could lead to out right steering. Sellers are not going to be happy with their homes sitting on the market because buyer agents are not going to show these homes if no commission is involved.
Are you saying today's real estate agent can't perform dual agency?
@@rack9458 No that's not what I am saying at all. More eyes will be on dual agency and a greater chance for law suits could be coming for those who do dual agency.
@@mistafrank31 Dual agency has occurred for decades without issue. Most new co strutting home sales are done by dual agency without hiccups.
The market will correct itself to account for likely not paying a stand alone buyers agent.
@@rack9458 I am going to have to disagree with you on the dual agency without a hiccups comment. you can just google the lawsuits on that one. Do you know why buyer agency was needed in the first place? In short it was because buyers was suing listing firms about misrepresentations, all I am saying is buyers are going to start suing again.
@@mistafrank31 Correct. Due to bad apples there are lawsuits everyday whether it's dual agency or individual representations.
what about the time we spend with/on buyers that do not result in a commission... used to be the 2.5-3.5% we received thru the seller covered this un-paid time... so.. if in the new world we average 1.5-2.5% it doesn't seem we can work with buyers without some $ paid upfront or ongoing.. ALSO--- i think agents could offer a flat fee to just consult with buyer phone,email,text,zoom...etc.. and review paperwork (buyer fills out)... with itemized line items for things like visit property to ____... etc... ALSO!.... what happens if deal dies near or at closing?... how are we going to get the buyer to pay us then!??!?!?!?!?!?!?!?!? (this type of issue is related to my comment above about un-paid time)... ALSO... it sounds like a 3rd party could jump in with a website for OPEN HOUSE listings... it would make advertising money and give buyers a simple way to see houses... ALSO... what if this site sold open house host positions like a trade show.. they would be able to fully represent buyers that want to make offer on THAT house (for a relatively LOW commission)... ----------- an possibility: NAR creates a national website for open houses... buyers go to the houses on open house day(s) and there are buyers agents there sitting at small tables like a trade show... they talk with the buyers and strike up relationships... if they buy want to buy the open house the sitting agent they choose will help them WITH THAT 1 house for a negotiated commission (far less than typical and probably low enough for buyers to pay out-of-pocket is seller won't))
I will speak out any day of the week against double ending. Those deals are bad for consumers on both sides of the transaction, and I believe that there is going to be an uptick in litigation by unrepresented and underrepresented buyers. No smart listing agent should want to keep all of the liability exposure just on their side of the board.
just be a transaction broker and make sure both parties know your status
I bet the Listing agent will swing those door open every weekend at an open house now 😂😂
Great talks Brandon too appreciate you!
Thank you for sharing.
This whole settlement and rules is very damaging to VA buyers not to mention buyers alone. VA buyers are not allowed to pay any fees period. Therfore this cuts them out of purchasing a home. How do they sign a Buyer Agreement with Buyer Agent fee and still qualify for a VA loan.
A Veteran will simply contact the listing agent directly. Buyer agency is over rated!
How is this going to work when your seller is also buying another house though?!😊
It shouldn’t be about commissions, it should be about the buyer
Are Buyer Agent even needed since the Listing Agent is the only one guaranteed to get paid. 😢
This new law will make home buying even more expensive for the buyers now. Great, just what buyers needed.
Having the buyer’s agent have to negotiate compensation while negotiating the buyer’s offer could open Realtors to Ethics violations
Great vid
That's not going to work! My commission is going to be established up front before I even bring my buyer over to look at the property. The seller will be at a disadvantage because they are the one that NEEDS to sell it; the buyer does not need to buy that home!
Actually some buyers do need to buy a home, others just want to buy a home, and both of these are likely serial house watching on Zillow, even ones they can’t afford. And you think they are going to keep walking away from homes they like so their buyer agent can get top commission. 😂😂😂
The only reason sellers have paid the commission is for fear the buyer agent won’t show their home….it’s certainly not because the majority believe that realtors earn their value. Those are facts you can’t ignore, it’s one of the least liked professions, and that’s mostly because the realtor industry has functioned like a cartel to the point they can’t hide it with propaganda…..people have been on to it….damage control could have helped if realtors were proactive with coming up with new systems and ways to sell. Jmo…..
Let's roll play:
I'm mister buyer;
Hey agent Mr. Livinginmobile I want to see 123 main street. Looks like they are not offering a full commission and I can't pay you. But I want the house. It's within my budget, has been on market for 45 days and they just price dropped by 15k.
@@MikeGuidoHomes Awesome. It sounds like a good deal! I'll be more than happy to assist you with it. Would this be a cash purchase, or will you be seeking financing?
In a heated market buyers will be paying seller's agent a bomus
In the northern Virginia market a buyers agent has to be extremely skilled to get an offer accepted. We see 10-15 offers on each listing with no contingencies quite often. We prepare CMAs for our clients giving them confidence when having to put a “no contingencies” offer together and giving them to the lenders to put in their portal for the appraisers. Where I live the buyers agent is way more valuable than the listing agent. So with that being said we get results and if a buyer wants to work with someone that will get them the result they’re looking for they will be more than happy to pay. Present your value, know your value and win!
If you think through, is the buyers who pay everyone by getting the loan
i am thinking the listing agent has to give some of his 3 percent to the buyer?