Redfin CEO reacts to NAR's $418 million commission lawsuits settlement
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- เผยแพร่เมื่อ 14 มี.ค. 2024
- Redfin CEO Glenn Kelman joins 'The Exchange' with CNBC's Diana Olick to discuss the implications of the National Association of Realtors' settlement on the real estate industry, how the settlement could affect Redfin's business, and more.
Listening to a massive corporation owner say he’s “advocating for lower commissions” is bull. He’s advocating for trying to take more of the market for himself rather than letting thousands of independent contractors earn a living. Most realtors sell 10-15 homes a year. They pay a percentage of their commission to their broker, a percentage to taxes, and for marketing, healthcare, etc. Most Realtors don’t make much money. This lawsuit will just serve big corporations and it will make a lot of first time home buyers/lower income individuals completely clueless as good realtors aren’t going to work for free and those people can’t afford to pay them and bring a down payment. Idiots
This mess is what happens when the feds get involved in anything. A collossal shitshow!
I feel horrible for all the home buyers out there. Home buyers will naively go unrepresented to save money. I see lawsuits in the future from home buyers.
that i agree with.
No
I can't wait to see how many buyers without representation get screwed out of their escrow deposits left and right because they went directly to the listing agent and or seller. Its sad but this is going to happen alot more now.
Especially for first time home buyers who have no clue. If you’re a good agent then one of your jobs is to educate your client about the process.
No because someone, likely mortgage brokers will take up that side for an additional 500-1000 dollars and make the money on volume. What it does is get rid of the half ass realtors who sell 4 houses a year. Like Commercial real estate it will be a career and not just a part time job for 15k people
Redfin won't show you all the properties you want to see. Their service is equivalent to low-cost airlines service.
Very true. You get what you pay for.
yeah its my understanding there is a minimum $$$ price point they are willing to help with
Creepy, I never thought of that!?!
Low cost airlines destroyed the flying experience
they make money on ancillary businesses.
This CEO is not a honest broker of information. Redfin makes most of its money from buying side of commission offered in MLS.
Exactly, he couldn't hide that scary smile
IMHO Redfin agents always accept buyers commissions when other brokerage’s listing agents place the 2.5 to 6% etc on listings. Not once have heard or read that a Tedfin agents, “Oh no please don’t give thousands of dollars yet please only give me 200 USD like we offer all our Tedfin listings.” Why the double standard? They should get paid what they offer as a company. IMHO
Bingo. Twice in the last 5 years I had buyers who looked at my listing with me, the listing broker, only to bring an offer with RedFin because they kicked back some of the COOP to the buyers.
So, if your house is on the market for 90 days and I have a buyer I can ask for 5%...🤷🏿♂️. This can go two ways
Agreed - all these extreme takes are nonsense. Commissions will still be paid, they’ll simply be negotiated on a deal by deal basis going forward…
@@jeffhambro ", they’ll simply be negotiated on a deal by deal basis going forward…" Not only that, but the final purchase price will still include all commissions paid by everyone.
@@jeffhambroThen they’ll be crying racism and discrimination until we beg for more government regulation. This is the vicious cycle to more government control.
Sure seller can just hire new agent. See how that also works?
@@joshhoward1289How did you manage to bring race into a conversation that has absolutely nothing to do with race?
If you want to talk about racism in the housing industry (which this post has nothing to do with), while your already here on TH-cam, search for Redlining created by the FHA, Restrictive Covenants that prevented Black people from buying certain plots of land FOREVER, and Blockbusting practiced by Realtors.
Another thing to ban is tips in restaurants industry
Especially for non waiter services.
It’s a racket, they even ask for the tip before they wait on you at some restaurants… is it a tax then?
@@Penny-mk7fv recently when I visited a restaurant, their suggested tip started at 25% then 28% and 30%.
What are they thinking????
@@rammanohar8161 they should have been real estate agents, even less work for more profit. 😂
That's right, bad service sometimes and charge you 25 % tip
@1:47 Buyers don't decide how much to pay their agent, if the buyer doesn't like your commission, they're moving on to a new agent, simple as that.
TOOK THE EXAM 2 TIMES
ITS A JOKE
WOULD NEVER WORK IN THAT INDUSTRY
Correct. They'll be only wanting to see homes where sellers are paying the buyer agent commission so the buyer doesn't have to....thus changing nothing.
@@ekop1778 I guess not ,since you failed the exam.
@@mizzury54 TEST IS HARDER THAN YRS AGO
GARBAGE JOB
@@mizzury54 I ALMOST PASSED
GOT 67 ON IT
KNEW A LADY HERE IN CT WHOS A NURSE NOW
TOOK ESTATE TEST 6 TIMES AND FAILED
The goes first to the plaintiff's lawyer fees!!! The attorneys are the real winners here.
absolutely
I wonder what the attorneys percentage of the settlement is ?
Isn't it usually 30%
I thought it was 40%
@@leahaustin7604
Seems to me there should be a class action suit against the Bar Association and the fees the charge
The only true statement from this CEO is that prices will not come down because of this new changes. Seller will always want the max value for their home but now they have a greater chance to keep 2% more of what they used to get... Only as long as seller does not pay a buyer's fee.
if i offer $490000 for a $500000 house with no buyers agent and you offer $500000 if the seller pays your agent $12500 . i get the house and the price just came down $10k. plus the comp for the next house in the neighborhood just came down $10k
@@SteveDaniels-vi7zw no
@@SteveDaniels-vi7zw not that black and white. The value of the home is the value of the home with or without realtors. A good buyers agent is in tune with their local market and can outsmart an unrepresented buyer with the right terms of the offer. Also, low ballers can often come with baggage and the listing agent will be performing double the work if you’re unrepresented
@@LJMarte8 Well innhis case it is. But not in every case and most likely in that exact scenario the buyers agent would take say 7500 instead of nothing
my last 3 closings was with non-represented buyers the buyers paid at least 5% more than the seller was willing to do but all my duty was to the seller to get them the most. I was shocked at what the buyers gave up in negotiations they have no clue about the "hidden cost" but they wanted to be non represented so I was cool with that.
1.5 million American real estate agents just lost half their income.
welcome to the real world
I have heard this verdict will push a lot of real estate agents to quit
Realtors don't get the full 6%, only one side, unless they serve as an intermediary. So, no, they didn't lose half their income. Only on the buyer's side being paid by the seller. It's basically decoupled the Buying / Selling commissions. The ones that suffer are the home buyers.
At least your student loan was paid for.
Just lost their JOB!!!
Good news for Realtors as well! No more working for free with buyers until the close of escrow. A flat fee to represent buyers will probably be the norm.
Yes I agree I have charged my last 2 clients $2,000 up front
Remind me again why I need an agent to buy a house? Many agents are empty heads.
@@bravehats you don't need one but good luck representing yourself.
Unless you work where buyers don't have the $ to pay for representation. Buyer agents won't exist in these markets.
@@bravehatsYou don't 'need' one, but if you choose not to have one I certainly hope you know the ins and outs of real estate deals, contingencies, how to cover your own ass in a contract and the right people you should involve in a deal. Do you know what to do if the appraisal comes back low? Do you know what an appraisal is? Do you know what all contingencies to include in your offer to protect yourself and how many days each one should be? Do you know good local closing attorneys and what their fees are? Do you have a trusted inspector who won't charge you out the A and do a terrible job? Who can come out the next day if needed? If so, great! Represent yourself! However 99.9% of buyers are absolutely clueless and can get screwed from a contract/purchase having no clue what to ask for or offer. Don't choose a doofus agent, there are plenty that know what they're doing.
the seller are not going to come off that price.
Then they can cram it
Exactly!
More for me to sell W agents are useless inspectors 600$ door openers 6% 20-40,000$? Idiot world
now the buyers will ask the realtors to work for free so they will be treated less than garbage lmao and justified@@albertoacosta6788
@@albertoacosta6788 What agent selling the average home gets 20k? The buyer's agent splits it with their broker, which they MUST have by law. 5% is split 4 ways.
Definitely a lot of misconception on this video regarding the $5000 flat fee, this is only pertaining to the sellers and not the buyers and redfin agents make their money off of an average 2.5% commission of the sales price which is not $5000. I don't think the reporter even knows how redfin is charging for the $5000 fee.
Exactly, Redfin's lowering of commissions has had to deal with primarily the seller's side, not so much the buyer's side. They took the commission in the MLS.
Thank you. This CEO is cherry picking his information.
This CEO is not a honest broker of information. Redfin makes most of its money from buying side of commission offered in MLS.
But they do offer listings for 1-1.5%.
His smile at the beginning. 😂
I'm a retired Florida RE broker. I'd like to see real estate agents get paid like attorneys get paid. Retainer up front, paid by the hour and a percent at settlement. I agree that commissions should be negotiated. At the same time, real estate agents aren't paid until they close on the property, and that needs to change. Before I retired, I had my own discount brokerage firm. This is long overdue, and so is the way real estate agents are paid.
I like the way you think. More skin in the game = more qualified buyers = less wasted time.
Buyers can work with a client for months, no pay, and the client at any time can switch agents.
Very interesting take
Agreed. Imagine representing a buyer for a couple of months showing them home after home and then decide not to buy or get them into escrow and they end up not closing. No pay day for the agent.
I totally agree with 110%
You’re dreaming. First time buyers especially cannot afford to pay for buyer representation.
Home prices have gone up 2-300% but realtor commissions ranged between 1-5% of the equation. Media outlets really need to be careful about the narrative that commissions had anything to do with home prices going up.
Haha my home went up 10% in 15 years. I bought it pre-2009 crash.
@@globalfamily8172 a 10% increase in home value over 15 years seems really low
Blood sucking parasitic realtors finally being controlled.
@@globalfamily8172 translating to your 150k house now costing 300k so IF commissions are scrapped does that mean you'll consider selling your house for lets say $200k?? Most likely not! Sellers will stick to their guns because commissions had absolutely zero correlation to property “values” to begin with.
Doesn't admit guilt, but $418 million is pretty clear on admitting guilt.
Guilt of what? Selling a service and charge a fee for it?
There is no guilt. Just because the justice system doesn't understand that realtors actually already hold a pretty competitive line for commission is not guilty. What people don't understand is that the commission for land and commercial use to be twice as much back in the 90's because prices were so low. Nobody was willing to provide the service because there was no money to be made on land and commercial was considered the big gamer in town.
@@VENEBOSTON awww, we found a butthurt snake, i mean realtor, who is sad they wont get paid an exorbitant amount of money for doing jack sht.
@@VENEBOSTON guilty as sin
There are no set commissions since agents are independent contractors..I used to own real estate offices, I couldn't force agents to charge a specific commission..they could charge as high or as low as they want
Realtors should be compensated a flat fee or an hourly wage. They shouldn’t get stiffed when putting in hours opening doors for a buyer who’s kicking tires.
They bring it on them selves, they’re prohibited from getting paid last time I worked with one and wanted to just pay the agent an upfront fee. She ended up putting in a lot of work for nothing saying she wasn’t allowed to get compensation without a sale.
That's call time investment for getting paid top money at the end. If this is happens than people aren't going to hire realtors specialy we all know how they like lie to get the commission.
lol you as the customer will suffer with less agents trust me
@@Light_Workerthat’s a stereotype. I’m a realtor and we have a lot more to lose being dishonest and why would we be? We’re 1099 independent contractors who are only paid when we close a deal. Then we have to account for business costs.
If anything the consumers have a duty to make sure they’re informed and working with an agent that operates in complete transparency. I tell people up front how I do business and leave up to them. My time, both personal and professional, is valuable. That’s why I don’t punch a clock and work as a W2. If I’m working with somebody who acts like a person throwing a fit at the Wal-Mart customer service desk I usually just fire them and move on to the next person who’s actually serious about buying a house or selling.
@@ColinPMcEvoy agents should set their rates. The best agents can charge more than the dumbest opportunist rookie looking for a quick buck.
The idea they all just get paid 2.5-3% of price is nonsense.
Might as well go the Redfin route and that all realtors are to be paid hourly. I love working with first time home buyers. But if we’re talking about a drop to 1-1.5 percent commission rates for those transactions. I honestly will probably not take the work and focus on listings. First time home buyers is a lot of work but was the most gratifying. It was fun while it lasted
All you said is very true.
I concur!
Platforms like redfin will do to home buying/selling what Abnb and expedia did to travel and vacations. It will actually make the process more efficient and ultimately more income for the players who survive. The future will be services from realtors who charge for things like staging, advisory etc... the whole process will be a la carte and the good realtors will make more money in the end. I know lots of realtors who don't make enough money to make a living because the market is too saturated with realtors. If ppl are willing to buy a car via carvana then buying/selling a home via redfin is a no brainer. think about how painful the car buying experience was via dealers that ppl are willing to buy a car sight on seen... insane... same thing. Too many realtors (NOT all) make the process so painful with their manipulation and intimidation sales tactics. There are many wonderful realtors but more that are terrible at their job. I had a realtor once sue me and send an email to my employer accusing me of crazy stuff because I refused to buy a home after the 3rd showing. The realtor said he doesn't show more than 3 homes because he is so good... since he didn't want to show me any more homes I hired another person for future home visits... I hate the process so much that I found my house on my own via redfin, ask the seller agent to show me the home and told them what I would offer and the seller accepted and deal was done. best experience ever.
This is such good news for consumers.
I feel sorry for Realtors, now sellers can list their houses on Zillow and just pay the buyers agent or pay Zillow and Redfin and do the work yourself to sell the house…everything will be online, just click the service you want, inspectors, appraisers. No wonder this guy is soooo happy. Corporate America wins and the realtors lose.
@@narindersandhu8753, yep, the working class takes another blow. I’ll wait and see what happens in states where it’s illegal for the listing agent to represent both parties. The buyers will be left representing themselves.
I don’t really understand this law suit. In the listing agreement between seller and listing agent has a line where total commission will be paid for the listing agent to take the listing and another line where it shows clearly how much of that total commission will be split to the buyers agent. It’s in black and white in the agreement and the seller reads and signs the agreement agreeing that the listing agent will compensate x% of the total commission that seller have agreed to pay for the listing agent to be split to buyer’s agent. Done seller agreed to that the seller was not being misleading
That's exactly what the lawsuit is about. Sellers do not want to pay the coop commission to the buyer's agent. The seller's say, and the courts and the NAR have agreed , that the buyer should pay the buyer's agent. So there will no longer be an offer of compensation for the buyer's agent on the MLS. So why would an agent want to be a member of the MLS or NAR?
@@ArmandoRodriguez-wo6cv
Break the association/ break the industry. It’s an attack on the industry and zero f’s given to the consumer.. same seller who doesn’t pay a buyer commission on their sale will pay out of pocket (one way or another) during their purchase. Listing Agents will need to increase $ to cover more expenses in dealing with unrepresented buyers… who now we must educate and insulate ourselves & our clients from frivolous lawsuits.. 😤
Attorneys win.. no one else … agents work more and have the same inflation costs the rest of America does.. but I bet the 32hr work week saves us all! Can’t wait!
@@ArmandoRodriguez-wo6cv "...that the buyer should pay the buyer's agent. " I remember this from RE school "The buyer is the one who pays for everything". And it's true for any transaction for anything. In practice what this will do is that a property will list for a certain price that does not include the buyer agent's commission, but the actual purchase price will include all commissions.
@@RoughNeckDelta What this will do is drastically reduce the number of agents, especially those that don't list much. The NAR may eventually cease to exist. The main reason I've been a member of the NAR and FAR (FL) is to have access to the MLS where I "had" access to listings that I knew I'd be paid if I procured a buyer for a successful closing. That won't exist anymore after July.
@ArmandoRodriguez-wo6cv and do you see no MLS as a good thing?
I am a Real Estate Broker in Southeast Florida and sadly this is going to hurt the industry in some way or another, and I have always said when this initial lawsuit started that someone higher up was behind bringing this lawsuit to the stage its in. Meaning that someone is going to benefit from this change and sadly the smirk on Glenn Kelman's face shows how happy he is this lawsuit happened and it will only make his business even stronger in the long run because they can offer lower commissions charged to seller, its competition for sure, real estate agents have to go out and prove to the sellers and buyers why they should work with you as an agent and not someone else. The Strong 🏋will survive just like in any other market or business.
I'll bet he went out to celebrate tonight.
If you think that then buy Redfin shares, they seem dirt cheap right now.
my last 3 deals the buyer insisted on being no represented ... so I collected full commission and made a great deal for my sellers .. I had the buyers pay doc stamps and no pro rated taxes :) on one of them we had the buyer do a $2,000 electric repair before closing .. but the buyers walked away thinking they got a better deal so whatever :) they were happy my sellers think I'm the bees knees ... in honesty I wold say the buyer paid about 5-10% for the purchases by being non-represented " judging by just those 3 deals...because no buyer's agent would have let us present that kind of one-sided agreement.
This is whats going to happen to more and more buyers, if you are a listing agent you need to look out for your sellers best interest and get them the most money in their pockets at the end of the day. I would have done the same exact thing :-) @@christopherknight1890
If buyers will have to pay their agent's commission, how is this change going to help them or the market?
it's not.
Any buyer with a competitive disadvantage will have to pay their agent more to handle their transaction becuase it will take more offers and work to get their offer to go. This is any FHA, VA, Credit challenged, the first time home buyer program in california, these buyers will have to pay more to be represented.
honestly, i'm primarily a listing agent, I do work with buyers but I'm very selective... its going to not end well for buyers they truly need someone to help them through the process " finding a home isn't even the hard part " its keeping the deal together for 45 days when no one else involved is doing their job.. a buyers agent is more like a transaction manager so many road blocks along the way
This is just going to make it that much more difficult for first time homebuyers of the next generation.
Oh for sure..
Isn't that what this administration wants??
Sorry, how?
And his stock is down over 40% for the year. Continue to listen to him.
Average sellers didn't know they could negotiate. This is good. NAR is a monopoly
Besides the fact...its written in the listing agreements already.
@@3joewj Right if people learned to read the fine print they would actually know quite a bit about what they are doing.
@Some0ne001 its in BOLD print. It says it multiple times in the agreement. Sellers already can even entirely waive buyer agent cooperation.
In California the writing is in big bold letters and it clearly states that the seller is paying their agent a commission. If the sellers agent finds a buyer the seller still pays the same commission rate. Basically the seller pay 6% or 5% regardless if the sellers agent finds a buyer or not.
@@3joewj and then nobody will show the house. thats the whole object of the lawsuit. pay your own realtor or negotiate it in the offer. not the listing
You didn’t answer the obvious that she asked you. What’s the success rate of your buyer agents redfin
Ok fine. They can remove the buyer's agent commission from the listing and put it in showingtime. That'll shut everyone up.
XD
I will say this. After 25 years in this ridiculous industry, I DO NOT, AND *WILL NOT* NEGOTIATE MY FEES. END OF STORY. If you want someone who will protect you, with years of experience and unparalleled integrity, you will pay the price as a buyer in order to not get screwed on the biggest purchase of your life. To my colleagues across the country, *DO NOT STAND DOWN AND DO NOT SETTLE FOR LESS.* So help me God you'll all see eventually that NAR wants nothing but your money. They didnt fight for their members or stand beside them. They EXCUSED THEMSELVES FROM LAWSUITS WHILE SCREWING YOU IN THE MEANTIME.
That's okay. I am sure someone else is happy to negotiate their fees.
I’m actually looking forward to buyers freaking out about the lack of transparency about the fee structure and demanding that sellers pay up for their buyer agents anyways.
Lack of transparency? That's why you have a buyer's agent agreement that discloses the fee structure.@@MichaelChengSanJose
I didn't lower my fees ... when I struck out on my own I said if i'm just going to be a discount broker then I will go back to a big box brokerage. my average commission is about 2% higher than what the news keeps spouting off as the "standard" .... I also have a flat fee so if you sell a 30k home I make the same as if it was a 200k home ... once you drop below 200k is not longer a % and now the flat fee kicks in.
@@unclejesseandtherippers4047 I've talked more people out of buying homes than I've talked into buying homes. There are colleagues of mine in this industry who would sell their own mothers if the price was right, and they are sleeze with no moral compass. You have no idea how bad you'll be screwed if you don't use an agent/broker who's willing to give up a sale to protect you. I have a 5 star reputation for nearly 25 years in this sesspool of an industry. I'm surrounded by people who should've had their licenses revoked years ago and shouldn't have made a dime on a single deal but they knew exactly how to screw people using the right sales pitches. Do you know why they didn't have their licenses revoked? Because they screw buyers and sellers without them ever finding out. And I'm the one who can smell the rats from a mile away. I am highly, HIGHLY protective of the client, which is why I'm NOT one of the top agents. I'd rather lay my head on the pillow at night with a clean conscience after losing over 100K in a year, due to *talking people out* of disaster. And that is why people like me struggle. The lazy people who would do anything for a dollar are a thorn in my flesh and the very reason I can't wait to retire. So you are correct in saying we have all been offered the same amount on a deal, regardless of our years of experience (or lack of it) and that is hopefully what will now change. Anyone who goes with the "discount" will likely never know how bad they're about to get screwed.
Redfin and companies like it or the real issue. They offer reduce commissions because they buy the homes and drive the prices up and flip them. That’s what driving. The pricing up is large companies buying up all the inventory instead of actual families. This spin that commission is what drove the price up is insane. If it was agents driving, the price up, the homes would never appraise and never be financed in the first place. What’s really driving the price up is companies paying cash whether there is no appraisal in selling it for 100 K more than they paid for it
First and most payout goes to the lawyers, and then the class. How does the consumer benefit? This was addressed many years ago, and now some new lawyers decided it was time for another money grab.
That is another scam from the shark lawyers. I bet the attorneys is getting a lot of money from the law suit and I wonder how much actually the plaintiffs will get
yep the lawyers are the only ones winning here and are bringing in lots of $$, which is ironic given what the basis of the lawsuit is.
That's right. Consumers are losing on this deal. The plaintiffs will get just a few bucks.
Long over due, it contributed to the housing price inflation. Every time house is flipped it had to appreciate by 6%+ to cover the commission. Unsustainable.
They were always negotiable, and a seller, as they always have, will have to decide if paying listing agents and buyer's agents helps them sell their house and for more. The same they always have.
@@kharithoughts2679 then nothing for them to worry about right?
@@kharithoughts2679so if nothing changes nothing changes. If buyers agent commission collapses it shows the market was anticompetitive before 😂
You don't understand the process. If you only knew the fires I put out, the comforting of helping someone sell their parents home after they pass away, the intricate detail of dealing with structural issues that arise, the first time homebuyers need for understanding the process and making sure they are not buying something that is too much for them. The countless hours of finding contractors, solving problems, handling negotiations with personal items and what conveys. the issues that arise with surveys, roofs, basements, mechanicals, pools, fencing, encroachments, septic issues, well issues, the list goes on. Dealing with appraisers, lawyers, and mixed in with all of this is emotion, stress, and tears. It is much more than you think and none of it is in a book. It is an ongoing education for life.
@@user-zl6uz3ks6w Stop 😭😭😭
It just passes the cost to buyers. I don’t think it’ll lower the price
Exactly.
I think Mr. Kelman's happy-talk is to sooth Redfin investors and keep the stock from further drops (down 15.91% in the past week).
Redfin built its business partly on the tactic of "rebating" part of the agent commission to the buyer. As I understood it, the seller still paid the full buyer's agent commission, but part of it got passed through to the buyer. Not a better deal for the seller, and potentially the buyer is only getting back some of the money he financed into his loan.
Redfin just announced their "Sign & Save" program rebating 0.25% to 0.5% of the sales price. Not clear where the money comes from or what criteria have to be met, but with seller paid compensation now an unknown variable, it will be interesting to see what the play is here.
Has anyone noticed the demand in the real estate market lately? That is what is driving up cost. People know they can sell their house for really high prices since people are desperate for houses . There is not much product on the market. I don't see this lowering home prices just hurting buyers that are already hurting trying to find decent houses. Now buyers will have to pay fees up front for a real estate agent to help represent them and traverse negotiations, deadlines, contracts, etc. So as a buyer, why would I deal with a seller that would not help pay for these fees that I eventually will pay for anyways when I buy the house? The seller then loses marketability. You answer, just use an expensive real estate lawyer that charges per hour to negotiate all of these deals. Great if your rich. Bad idea if new buyer or low income. I get it if your familiar with real estate and wealthy but this sucks for low income, new buyers.
Agreed. You can negotiate a deal where the buyer pays you over time like 2-3 years. Markets will adapt, new models will emerge, but one thing is given that buyer side commissions are going to come down overall.
How about "Free Market"... To late for that though. Commission is and has been negotiable. I wonder if the attorney's fee is negotiable?
Never.
Sellers will suffer with less exposure and much less showings. Buyer agents are not going to waste gas, showing the listings
No
@@ebutuoy5088 yes?
Buyers can still ask the seller to pay the buyer's commission.
Wrong. Agent compensation will not be made public until an agreement is signed.
Agent compensation will not be shown on the MLS. Buyers compensation will now be discussed between buyers and agents directly. They will know immediately what they will or will not be getting paid
Buyers are not that dumb to just pay their agent a fee. They can freely go to another agent or straight to the seller to make an offer. Get rid of the middle man!!!
Kelman nailed it at the end. No, prices won’t come down even if commissions get reduced. The market will bid to what it will bear and the sellers keep any savings, until buyers get wise to that and demand a return to the current split commission system.
Haha so the billions of wasted money go into the pockets of the people who earned it is a bad thing?
This will lower prices in some instances. Seller A offering no buyers agent compensation can list his house at 490k and make more than his neighbor Seller B, who lists at 500k and is paying buyer agent commission. Obviously assuming it sells at that price. A seller not paying that buyers agent commission can position themselves better, meaning lower price. I think sellers will feel the need to compete. Certainly buyers can drive those prices back up.
@@TheFloundering another way of looking at it, is you get a %3-6 tax deduction on your purchase.
The buyer is going to need more expensive legal representation when things go awry.
@@Penny-mk7fvWasted where? Going into the pockets of the sellers is better for buyers?
Real estate agents may eventually go the way of the travel agent. There will always be agents available for those whom value their service and can afford it. Everyone else can do it themselves or see how good AI is at it.
I agree, some of my best friends are agents but all you need is a good bank and good credit. I would feel really stupid to let someone do my talking for me. I have great communication skills. Buying a home would be a good learning opportunity for so many people. Do it yourself
Just shifting the fees
Anyone tracking appraisal costs
It used to be $300to $500
Now $1500 to 1800
Unbelievable
tripled in my market
As a builder, this is great news
Can you explain where exactly is the good news for you as a builder?
@@VENEBOSTONpossibly reducing the amounts paid for a broker co op now. Possibly removing that to 0 if they steal a client
@@VENEBOSTON They can charge the buyer more and keep more money
As a builder and agent, I see you paying the most. You will have DRs of the world offering 3+3 incentives. You tell me that won't steer clients? Builders will inevitably offer the largest concessions. It's already been in my market. 😂
So are you lowering your prices to reflect the lower cost to you? I’m in the market for a new build - you can be sure I’m going to ask about it.
If a house is listed on the internet why do I need a buyer's agent?
You don't
This is the dumbest thing ever. The fee that a sellers agent charges the seller has always been negotiable. It’s going to stay 6% because that’s what realtors need to be paid in order to survive. Yes, they are paying the buyers agent 3%.
HUD foreclosures played with different amounts to listing agents and buyers and eventually settled on that amount because the data showed it just worked
Sellers do not want to pay the coop commission to the buyer's agent. The seller's say, and the courts and the NAR have agreed , that the buyer should pay the buyer's agent. So there will no longer be an offer of compensation for the buyer's agent on the MLS. So why would an agent want to be a member of the MLS or NAR?
so my real estate board sent an email out that said that you can still pay the coop commission, you just can't advertise it on the MLS.
If that's true, then the industry doesn't actually fundamentally change here. I think this is a huge media campaign to make the public think one thing in an effort to change the industry through social change because legally, they didn't actually do away with commission sharing.
So, ok, I just call listing agents ahead of time, send them a broker to broker agreement for the split, and everything is as it was before.
Seriously, without outright banning commission sharing, this doesn't actually do anything except cause a lot of anxiety
@@easylivingaustin512Then there is no point for the MLS or NAR. The whole point of both is to share information and foster cooperation & transparency. Having to call every listing agent to learn the commission split is stupid af.
The buyer is the one ultimately paying the commission. Without their purchase, seller doesn't have squat. Its not difficult.
I am waiting for someone to sue Redfin and Zillow for using agents hard work, for stealing intellectual property without our permission.
@BhagyaWijewardane Exactly, you forgot to mention that Zillow is acting as a monopoly. They are brokerage agency, use our mls data and sell back to us, owns showtime and dotloop (any real estate agent who use dotloop and showtime are given away all their data, all info of our clients, contracts, everything for free)
have anyone wonder why dotloop doesn't have a delete buttom in their system? they use only archive buttom, meaning they never delete these data and nobody say o do nothing
I'm surprised that Zillow bieng a broker in all 50 states with the money they have ....that the lawyers didn't target zillow it has way more $$$ than nar
With commission compression comes PRICE COMPRESSION- this preludes what’s to come, volume of inventory- where real estate services will make less, yet making up in volume to move service the next “cycle”.
this settlement offer is a trojan horse crafted by the NAR that keeps the monopoly of higher commissions in place. The only settlement that will fix the problem is the complete decoupling of seller/ buyer commissions. Buyer agent compensation should not be allowed in the listing agreement. if you want to negotiate it in the offer, thats fine. The statement " buyers compensation will not be listed in MLS" is useless.. who cares, do you think realtors don't have phones. "what are you offering on the buyers side. Oh nothing or 1% , never mind, ill show my buyers something else." Then theres the requirement of a "buyer agent/ customer agreement " . Its simply a way of locking a buyer into an out of pocket payment they cant afford, if the realtor doesnt make what he/she wants.
Commission is always and should always remain fully negotiable. If a seller won't cover the buyer broker commission, it's reasonable for the buyer to be required to cover that cost. It'll be interesting to see how it plays out, but I wouldn't be surprised if seller's agents still encourage sellers to cover the buyer's agent commissions in order to remain market competitive. If not, and the buyer is responsible for their agent's fee, then it will be added into the total purchase price and closing costs and could put downward pressure on home prices because of it, albeit likely minimal.
A lot of people can’t afford even the down payment.
Sellers are going to see comps which include all commissions paid and will want to list for that price which will not include the buyer agent commission. But the final purchase price will still include all commission paid.
This will actually cause huge issues for buyers. Example: 2 buyers going for the same house and approaches selling agent on their own (using no agent). Buyer 1 offers full price (has little money extra to pay commissions), Buyer 2 offers full price and offers to pay agent $10k in commissions through closing cost. Which Buyer do you think the Selling agent will push for? Seller chooses buyer #2 and gives the seller a kick back of $3k as a gift with closing cost. So many other examples where this falls apart and eventually leads back to a similar place where there's an unwritten rule for commissions that everyone plays by.
That hypothetical agent doesn't operate ethically. They should go with the first buyer. Problem is the agent will pick and choose whose offer there presenting to there client. But that's really no different to whats going on currently
Buyers agents are needed. The listing fee isn’t needed in my opinion. Since I own the home I have leverage but I do need help finding a buyer. Now the buyers agent has to work and learn how to analyze comps. The skill is the ability to crunch numbers.
So funny thay Redfin is weighing in on this topic. They are going to be put out of business! 😂 One of their key offers is a rebate on the buyer agent commission offered on each listing. That is GOING AWAY! How will Redfin make money now? 🤔
The buyer already pays for the loan origination fees, appraisal, credit check fee, inspection fee. They pay the down-payment on their loan. Now they have to pay for the realtor too???? Who's going to represent the buyer? The seller???? This is evil!
Agreed this just screws buyers, and now they will be less likely to use an agent, so they are more likely to get ripped off by the sellers agent
Pay your own bills
I predict overwhelming number of lawsuits from buyers.
Commisions have always been negociable .you dont have to be on the MLS .to sell a house .analogy save money on dentist buy pliers lowes and do it your self and see what happens
Sellers could always negotiate 😂 Yeah, try something less than 6% and see if you get any traffic.
What a liar, you have to list with them and buy from them…that’s how they make double the money
List agents still get their money... Most big list agents get 6% and keep out competition they will not change their ways.... Getting rid of the compensation field doesn't get rid of the compensation... Buyers agents typically do all the work, they work with a buyer and take them to hundreds of homes point out any defects or issues (legal or otherwise) negotiate price, coordinate with inspectors, appraisers, (the mom and dad that want to see the house), multiple attorneys and their paralegals, land surveyors, the endless line of people that work for the bank, and the aloof list agents... Often times to hit a dead end and start all over again to head on the road for more showings all without pay.... The compensation was to let buyers agents know if they sell the house they will be getting paid, no one will try and weasel them out of a check after they spent a year and a half working with the clients.... The idea that you would sue to remove pay for the person that works for the best interest of the buyer is insane.
the best part is the local and federal goverment will bakance out for the savings in a few years in the form of new capital gains taxes
Let's just face it: the buyer broker works for the seller, not the buyer. Otherwise the buyer would pay the broker for their time, not only for the final sale. I think the problem isn't that the brokers can see the offered commission by the seller agent, resulting in 'steering', but that the buyer and seller cannot. That is what's preventing competition. I mean if you can keep negotiations 'amongst yourselves', let the suckers pay, right? Also they probably need to advertise how much they are going to charge for a deal up front, not only once you found the right house, and most of it a fixed price, with only a fraction being percentage commission, at least that would be more competitive if everything was transparent
Redfin is at 5%...they offer 2.5 to 3% to buyers agents...same exact thing this lawsuit is about. What is redfin talking about. Such slim balls.
Bringing the 'redfin' guy into this conversation is a complete joke...
hes a snake
The smile on his face. 😂
This will mostly hurt first time and low income home buyers. Most of them don't have money for a down payment and closing costs, so how will they come out of pocket to pay a Realtor?
I can see a new FREE multiple listing service springing up in competition with the existing MLS.
Just remember...the buyer is the one bringing the money to the table.
Because you need a house.
Why would a seller "lower" the price. This is ridiculous. The issue has always been buyers trying to get into a home. Sellers would just earn/keep more by having to pay less on the buyer side. Make no mistake, the big losers are buyers if they have to pay anything more out of pocket.
Buyers agent sniping the lowest commissions are going to lead to a lot of legal problems from inexperienced agents.
You pay for what you get.
What a mess!?! Ok, we just do advertising, 2 free RE ads every 48hrs., no cookies, very easy to use. Very soon FSBO, realtors, and brokers will need affordable alternatives. We are just getting started and we are happy to help.
Redfin stands to make a lot of money off mass sales the power will go to corporate rather than the local agents.
exactly? Would someone tell me why they are more comfortable giving a tech company thier money than a local member of the community?
@@livingnorthofatlanta I think money. Like the same reason people buy from Temu. Never trust the spin off of a CEO.
This is going to be such a disaster I have a feeling it will go back to the old system quickly. Especially in a place like Florida where Buyers are moving from out of state, many don’t speak English, don’t know the area. Buyers agents are needed and they won’t work for free.
So let's say one seller is offering 3% to the buyer's agent and his neighboor who is also selling his home is not, who do you think is going to sell it first for more money? You also have to pay your own agent another 2-3%. If Realtors were useless everybody would buy and sell without agents.
All of these brokers are making false statements regarding how commissions and representation work. Buyers HAVE NEVER been required to pay a commission to a Buyers agent (a Buyer Broker fee). This guy just said that Buyers have never had the ability to negotiate the fee they pay to a Buyer agent. What the heck is he taking about??? You don't need to negotiate something that you don't have to pay for!!
With the technology available today, all any buyer or seller needs is one Realtor involved Period. Change contracts to read different. Lower cost is what it is all about. Agent's don't get it, their taken it the wrong way. Agent's will not lower their fee's on their own so, here you go. Appraisal companies need to be next. No Agent's should be able to talk with a appraisal company. Increasing values for too many reason (buyers closing cost, more commissions, etc.) change, change change we need thank you
Commissions do NOT drive up the price of a home - it's worth whatever fair market value of it is - the home appraiser does NOT factor in what the seller is paying commissions. FSBO should be outlawed as well with this reasoning.
I have been wondering for a long time about this ridiculously high commissions. Finally, it changes. Showing the homes with keys can be paid that much?? Customers are required to pay all the other fees as well..... buying homes is getting expensive, and I personally gave up in Los Angeles. Hopefully, lowering commission could open up more opportunities to young people who want to buy their nest easier!
Actually a Realtor told me about a great deal on a home in a town I never heard of. Otherwise I would still be renting. Hopefully this nonsense will get resolved. Realtors are not to blame for high prices and they actually help first time homebuyers.
If the argument was that the commissions caused home prices to be inflated (by realtors encouraging/manipulating both sellers/buyers to higher offers), then wouldn't lowering the %commission make this problem worse? There should be a flat fee for home sales, not a percentage.
You will have thousands of agents leaving the industry & you’ll be left with 25% of the current agent base which will ultimately drive up commissions all as part of the unintended consequences of this action!!
Probably not. There will always be people willing to do that job for a lower wage. White collar people are often grossly overpaid.
Cool, so now after realtors were a target, is the car sales industry next target?
Commissions are always negotiable. I don't see that this lawsuit's fine for the NAR is going to do anything except pay some lawyers for forming up a class action suit for buyers who got what they knew they were getting beforehand and were ticked off afterward about. It's not the agents that are making home prices high. It's the Fed and the mortgage companies and the real estate investors that are keeping real estate prices high. And that is not a bad thing. I see a lot of properties for sale that are in need of rehab that are going very cheap. Many people invest time and effort into these properties and get a profit out of selling them. Grow up, people. If you want to have something worth having it will take effort.
My question is who (sellers) gets some of that settlement $$?
I sold my home in 2021, it was listed and under contract the first weekend!
I paid 6% 😡😡
Serious question here, when you bought another place, did you pay your agent a commission or did the seller of it cover the full commission? I would imagine you didn’t pay commission on your buy side and if that’s the case, then it’s a wash from paying 6% on your listing.
This is exactly what I said on a different report
Buyer brokers will submit the commission agreement to sellers first, before any offer, no agreement, then no offer, it is going to be really simple for smart agents
What if buyer really wants the house? You’re going to deprive the buyer of their “dream home” because of your commission?
The buyer will pay the fees.
It's not really less it's 1.5% flat for refin n 2.5% for sellers agent, so it's still 4% commission you give.
Sucks if you depend on VA because your not allowed to pay your agent as a buyer if using a VA loan
The final sentence is the key to it all. The buyer has to scramble, and the seller gets to keep more. As if they don’t already get a ton of money with how high prices are. The buyer is who is the loser.
This is a pretty horrible decision. It’s only going to result in the following outcomes:
Buyers spending MORE money to buy a house.
Sellers NOT SELLING THEIR HOUSES FOR MARKET VALUE. Why? Because if buyer’s agents don’t have buyers because the buyers now have to pay more money to purchase the house and they don’t have it the house doesn’t get sold. Also, a listing agent will invest more time and money trying to get a qualified buyer for the house which means less money to their business and a drop in services offered in order to maintain profitability. Or…you get what you pay for.
This move will ultimately hurt consumers because it doesn’t factor in how things actually work. It focuses on the perception of realtors getting paid too much to do nothing. Believe me there are realtors that go above and beyond and then they barely make any money and leave the business because of it.
This will hurt home sales and the economy in the long term. Get ready, rent is going to skyrocket over the next 10 years to the point that a majority of the country will be renting and housing conditions will go downhill because there will be zero incentive for landlords to maintain their properties because they’ll be making BANK off of slums.
What’s really going on here is that homes that are are selling it at all-time high and the sellers are getting greedy. They’re saying that they’re paying more than they would’ve paid 10 years ago even though they’re making twice as much as they did 10 years ago so has been for the sellers to pay the commission because quite frankly, they’re the ones making the money off the transaction, so it’s just gonna shoot themselves in the foot when they sell and then have to buy elsewhere
all attorneys get thirty three and a third plus expenses, non negotiable, justsayin.
but at least your not required to pay the other lawyer thats suing you.
This actually has the potential to make it more expensive for a buyer to purchase a home.
Pushing individual Agents out so only the Large Quantity Companies are left. Just like Every Other industry
So many unrepresented buyers will get screwed by unscrupulous sellers and their agents. The only winners here are the lawyers. I notice they get paid first, and then the plaintiffs. What a shock…
Can't wait for all the dual agency lawsuits lol just have to let it play out for a while then buyers will come around and realize they need a buyer's agent
You chose the worse company to speak to on this.. Speak to ACTUAL realtors, not redfin.
Redfin does care more then this sounds I think.
That this will end up hurting consumers in the long run. Other countries already do this and it hurts the consumer and they WANT a system like the US has.. not to mention, we USED to have a system where the seller does not pay the buyers agent, and it was terrible and that is WHY the industry adopted cooperative compensation with the MLS to begin with. @@DaleH2o
Hi Samantha, I think you are missing the point and a little tone deaf. I mean no disrespect, you are probably awesome. Most people put realtors in the same bucket as used car salesman. If realtors had not abused the system then this awesome change would not have happened. You may be a great realtor and add value worthy of 5-6% but most are not. The industry only has themselves to blame. Just like the car industry (carvana), travel industry (expedia), lodging industry (Abnb), medical industry (health insurance) and the list goes on and on... when there is abuse, someone comes along and disrupts the system. In this case NAR was so powerful with their abuse and monoply that the gov had to step in. I have bought and sold 7 homes in my long life and there has only been one realtor who I can say has earned his money... I would gladly pay him full commission, the rest are not worthy of the gum on my feet... I was scammed by 2 of the 7 realtors... terrible... my current realtor was supposed to find me a home in FL so that I can use as a rental property when I don't use it and she would only give me properties after she vetted it and didn't want it for herself... WTF... should I not fire her for that... I called many realtors in FL and realized they were all doing that.... one realtor told me, all the good ones will get snatched up by a realtor so there is no way around it. at least he was honest hence I started using redfin only.
Actual relator will say, “ the old system was so beautiful. why change it?” lol.
No, it wasn't beautiful, I will agree with some changes being made, but this is going to HARM the consumer. @@sing10278
Sellers will see less buyers come and look at their house because they won't be able to afford to pay a buyer's agent. Buyers bring the money to the table. Think about that....
I don't understand how this is going to benefit honest people. A buyer, without a good realtor, is likely to sign for a fixer that looks good on the outside, and has tons of issues because he's talked into skipping the inspection process. That's just one reason to have your own realtor. If the seller isn't going to pay for that realtor, the buyer has to pay somehow...that's weird, and most could not possibly do this up front, they are near broke after such a purchase etc.. Someone found a solution to a problem that did not exist IMO.
That's a joke, this will NOT lower home prices! Sellers will still sell for as much as they can get for their home, and experienced listing agents will be able to effectively communicate to their sellers that buyer's agents will simply request it in their offers. If the seller does not accept the offer, then either the buyer will pay their agent directly per the contract, or they'll just move on to another property in the area.
Nothing is going to change, sellers will still pay buyer agents 2% - 3% commissions to bring them buyers and 5% - 6% commissions to sell overall. If you pay attention to the details, the only change is that agents cannot list the buyers agents commission in MLS. Listing agents are still able to share the commission they charge sellers and offer buyer agents commission to bring buyers. Nothing has been stated that commissions need to be lowered or that buyers need to pay their own commission, that is not going to happen. The only thing that will change is there will be a new way that listing agents communicate how much commission buyers agents are receiving. That will be the only change. Also New Construction Builders will continue to pay commissions to buyers agent to bring them buyers, so the resale market will need to stay in line and pay buyers agents as well. No major changes will happen
This will only hurt first time home buyers or buyers with not a lot of cash for their deal. If a buyer can’t pay for representation, they will be left with trying to navigate the transaction by themselves.
So we’re supposed to hide broker compensation. Anytime you’re hiding how does that sound good? You know discrimination is going to happen now in a place where there wasn’t any.
When asked why he robbed banks, Sutton simply replied, “Because that's where the money is.” Buyers have no extra money. The equity in the home is where all the money is. When buyers can’t afford to buy, sellers can’t sell. This is a loose, loose, loose, loose situation. If you want to get a sold sign on your home, sellers will offer to cover the cost of the buyer’s agent. Sold! Same as it always was.
Redfin CEO could use a professional backdrop, common sense
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