all I got out of this is everyone will be paying their own agent fees and it might lower the fee rate … is there more to it?
Article is paywalled.
no just click the x to get past it i thought so too but just in case : MSN
Paywalled for me too. No “X” to click past.
I would say these changes will narrow the realtor market a lot. It was (is) quite easy to get a realtor’s license so loads of people do so.
I think these changes will limit the number who try to get into the game so each realtor will make less per sale but they will make more sales (fewer competitors). That also suggest those left in the business will be more professional and better at their jobs.
ETA: I can read the MSN article. Not the one in the OP.
Inherently the settlement changes nothing. Buying and selling agents and their employers can still run a price fixing cartel. And will certainly try to do just that.
What it does do is rope the buyer into also being interested in how large the total commission is. Used to be only the seller cared about the total. The incremental consumer pressure towards lower total commissions may eventually be large, but initially will be substantially zero.
The MSN article was essentially propaganda from the real estate industry that buyer’s commissions will simply disappear. That’s not what they’re telling their agents.
Opening the MLS to direct consumer use and unbundling all aspects of agent assistance with the legal / admin aspects of closing from agent assistance with the marketing, counterparty search, and sell/buy negotiations would have been far more powerful at destroying this cartel.
“The best part of the settlement is that moving forward, buyer’s agents will have to explain what they do to add value to a transaction. The professional agents will do better than ever, and the less-professional agents will have a hard time getting clients,” he said.
Buyers don’t necessarily need to pay their agents, Downer added, and may “choose to pay for the services of an agent who can help them find a great place and at the best price and terms.”
My feeling is, this will get rid of a lot of buyer’s agents. Buying a home vs. selling are very different processes. Back when I was looking to move from my first condo apartment to a house, I spent well over a year looking, with the help of an agent, with no guarantee that I’d find something I’d like that I could afford. If I had had to pay him up-front for that, I likely wouldn’t have.
But in selling, as long as the market hasn’t recently tanked, and the house is in good shape, you tend to get action much quicker, so getting an agent is much less speculative. as the seller, you know you’re going to have money in hand to pay the agents’ fees in very short order.
I had a similar experience. The details were different but it was near enough.
My agent drove me around every weekend looking for a place for5-6 months (I forget…maybe longer). If I had to pay her for every trip I am pretty sure I would have refused.
IANA real estate expert. But have talked a bunch with them.
It seems that “buyers agent” is the apprentice or entry-level position. Obtaining listings is where the money is, but that takes reputation and local knowledge. So how to build reputation and local knowledge? By being a buyer’s agent. It’s not a formal apprenticeship, but rather a de facto one. If you don’t have any selling listings to your name, you are either a buyer’s agent or an unemployed agent.
Heck, I can remember when the term “buyers agent” was invented. In Ye Olden Tymes of Yore there was no agent on the buyer’s side at all.
At least here in FL a lot of people have RE sales licenses who don’t practice. Instead they serve as their own agent in the house flipping and real estate empire building game they’re playing as an entrepreneur. That avoids paying somebody else 2-3% of your transaction. And also puts you on the “inside” of each deal which alters your relationship with the counterparty agent at least a bit, nudge nudge wink wink.
I haven’t read the details of the settlement yet, but I will be interested in how it affects consumer-driven technology related to buying and selling real estate. I have thought for a while this industry is very ripe for disruption, and the comission game is close to being a scam. Might there be technological solutions coming that simplify and streamline the selling of property, as well as control comissions?
When I sold my house and bought a condo here in Montreal, the commission was 4% and the agents didn’t seem to starving.