There are already buyer's agents out there who work on a flat fee. Our first buyers agent had a fee of $2500 which made us feel more like they weren't trying to upsell us and like they actually negotiated to help us. After we bought they wrote us a check for the amount over $2500 that they got from the closing. Best agent we ever had. Only time we felt like our home buying process wasn't a scam.
How many homes have you bought to feel like every time you were scammed? Thats just picking shitty agents on your part. Besides, this new law is affecting buyers, it used to be free for anyone on the buying side
Call a local title company and they will get you all the paperwork you need to buy or sell a house for free. Then tell your lender, your buying a house without a realtor and they will also get you a list of things that need completed for free. You do not need a agent. Do your research and don’t lose confidence.
@@joelballard4955it’s true that you don’t need an agent but it’s 100 times harder to buy or sell a home, especially if you haven’t done either before. A lot of agents suck but good ones are worth their weight in gold and make the already frustrating process bearable.
I love this. Javi is definitely working clean up. So here’s how you do it: discuss tiered pricing with your agent and work in a percent for yourself (you are now working on negotiating closing costs so you should be compensated). You, the buyer can work this in your favor. Here’s a sample offer what you can negotiate with an agent: 1. Up front/ sunken cost, let’s say 1.5k 2. Commission based bonus - if the agent can get the seller to pay for buyer’s agent, they get x%, let’s say 1%. This would REPLACE/ cover the sunken cost. 3. If they reach 3%, the. The agent can walk away with 2%, buyer gets 1%. 3. If they can get over a certain amount off of the purchase price by percentage, the buyer concedes the final 1 percent to the agent. MAKE THEM WORK FOR IT and Do not give them a cut of the total off. Lazy agents should be a thing of the past. This does not suck for you unless you are lazy.
I've bought and sold numerous houses myself with my lawyer, no agent. If you think what these agents do is worth $24,000.... you're completely out of your mind.
@@alycat9186 to be honest, the process is so easy, I wouldn't even worry about finding "a good lawyer"... "Good lawyer" is an oxymoron... Anyone practicing real estate law will be fine. Make sure they charge a flat fee. We pay our lawyer about $400 and they facilitate most of our side of the transaction.
Honestly, I am a new agent, and I strongly agree that agents should NOT be getting paid this much in commissions! I think $5,000 per transaction sounds fair. I mean, the transaction stuff I have done thus far doesn't seem like rocket science in order to justify earning $15,000 in commission. I am also a special education teacher and I can honestly say that teaching is "harder" more "stressful" than real estate transactions. AND!!! I have 2 master's degrees and two credentials and I still don't make nearing enough to compensate for the VALUE and EDUCATION I provide to special needs students. So YEAH, real estate agents, stop complaining!! lol
You're part of the problem. Why did you get your license? Let me guess, to make some easy extra money, right? You're not a professional, that's why you think agents make too much money. I think it should be a lot harder for people to get their license and work as an apprentice for a year before they can go out on their own. You're helping people make the largest investment of their life and you don't even do it full time, there's something wrong with this. I'm not picking on you because there's close to 450,000 part-time agents in the US. If NAR wants to do something right for once, they need to change the requirements for getting a real estate license.
Its not a set amount, its a commission on average of 5%. The seller is the one paying for it, and statistically the extra money someone makes using an agent offsets that 5% anyways. The brokerage also takes a big chunk of that. Its also running your own business and so you have to pay for insurance, marketing, etc. It’s not easy to find clients. You’re not seeing the point because you’re not an agent yet, buyers were getting service for free, which is good because they are already spending a shit ton on a house, now they are no longer getting this for free, along with having to pay closing costs. The sellers are the only ones winning, and sellers off the jump can lower commission as low as they want, commission was always negotiable. If someone makes 5 grand on a 250,000 house, with the buyer not having to spend anything, and the seller’s commission price being offset by the increased price from using an agent, nobody should be complaining, especially you. Good-luck finding clients, the actual work is not that hard. Being a teacher you know your salary and its constant
In CA, commissions should be capped at 1.5% maximum if home is sold within 6 months. When we purchased our home we went with redfin because we had previously sold our home with redfin and their fees were very reasonable. We interviewed 3 other realtors and they all wanted no less than 3% and not once did they mention it was negotiable (i already knew it was negotiable, but they wouldn't budge).
I think buyer's agents (and to an extent selling agents) have been overpaid for a long time with the 2.5-3% average. With everything so readily available online, the buyer's agent in particular is doing far less work than they did 20-30 years ago but they are getting paid far more with how far housing prices have gone up compared to inflation. This resets the playing field and I believe sellers will still be paying the buyer's agent in most cases, but the fees won't feel forced at 2.5 and instead can be reduced to a more reasonable agreement based on actual value of the work being done.
What is actually going to happen is that buyers will be more inclined to go without an agent and be rewarded with a lower price for doing so, OR buyer agents will move to a more fixed priced instead of commissions, where they'll get paid less but more consistently as those who didnt buy would still pay a fee. Both of this scenarios are a win for everyone, including good agents as they will have less competition.
If a house is selling for 400k and two offers show up: 1 400k and you pay 3% for the buyer agent, the other 390k no agent costs. The 390k offer IS more competitive because 3% is 12k and the one making the offer is getting the house for 10k less. Both are true.@@BoldWittyName
@@Hammer.J.Helmer a fine theory until agents drop out and listing agents realize they have to deal with John and Joanne Q Public requesting showings and written offers. Then listing commissions will go up.
You could always do flat fee for commission, something you should have negotiated with your agent off the jump. Plus now those buyers buying the “1 million dollar home” now have an extra expense
Fear seems to be at all time highs amongst buyers. I think the best time to buy will be in the next 12-24 months. I think in 4-5 years, it will be another case of everyone saying "I wish I would have bought a home". With that being said, nobody should be overpaying for homes. Buyers should be looking for the best deal and only buying if they have great credit. I'm speculating... However, fear hasn't been this high in over a decade.
This agreement gets at the fundamental issue: Buying agents should be working for the buyer and therefore should be paid by the buyer. That's it! Buying agents being paid by the selling agent is a blatant conflict of interest.
In other countries, there is only 1 agent for the buyer and the seller either supplied by the buyer or the seller but people generally go out and inquire on their own. For example: A house is for sale (for sale by owner). The owner has a real estate agent working for them. When a "direct buyer" wants to buy it, the seller's agent prepares all the paperwork and handles the transaction. The buyer has insurance for the purchase and has a contract prepared by their lawyer that the buyer agent would need to agree to. Then the rest is the same.
I'm so glad that your channel helped me buy my first home last May. Even if we got a 6% interest rate, it was the time we were ready and financially prepared to buy. This new rule sounds really confusing and negotiation is actually scary to a lot of people.
You only mentioned the negatives of this new law. Without mentioning any potential benefits, I know you have a vested interest. But sometimes, most of the times in my perspective $15,000 for two weeks worth of work on a few documents that are prefilled an exorbitant amount. $5000 flat, for each one is fair. Especially because a lot of the paperwork is pre-filled, and all your changing is a few items.
@@RyanTreks then you hit them with the lawsuit. A civil suit will easily handle any false filing issues that will lead to your house not being brought, loss of deposit or having to have a short sale due to an error. Unlike when McDonald’s(known for getting what you pay for type of establishment) messes up, a home loan which is hundreds of thousands of dollars is worth suing over..
Seems like any percentage model on the buying side gives the agent an incentive to find the highest price house you can afford, and incentive to NOT help you negotiate the price down. I like your viewer comments about fixed price + splitting what the agent can get the seller to pay in closing costs or buyers agent costs. Smart! Hoping for more videos on this!
Just offer the agent what you’re willing to pay. If they don’t like it then find an agent that does. If they comprise a deal then move to a new house and new agent.
My previous buyers agent, who I didn't think was offering much value to the process, wanted me to sign a 6 month buyer-broker agreement after 3 months of us making multiple offers and not being successful. I refuse to tie myself to any one agent that I don't really know how well they will represent me.
I heard some agents saying they will charge an extra percentage for representing both the buyer and seller in the same transaction, like double dipping, I have a feeling lawsuit will arise.
I've seem where that (dual agency) works better for the seller. The listing agent, if allowed to do dual agency, will decrease the commission by 1 to 2% because they are doing everything for both sides of the transaction. But it not all brokerages allow dual agency because the question arises...."who are they actually representing?". It is nearly impossible to be 50/50 in anything in life.
There's a fix... just educate ppl in high school about buying houses and show them how to just use a lawyer instead of an agent. Agents provide about $500 in value while getting paid $12,000...
I appreciate your honesty. So many agents I watch assume buyer's agents will still insust on 3%.I disagree as those who do not make attractive offers to potential buyers will lose clientele to agents who will negotiate. The whining seems to be coming from a very biased direction.
Would the future be just a flat rate fee for a sellers agent? Like 3k per house sold, regardless of price. The selling agents currently who work on percentage, wins the lottery if a super rich person sells their mansion and chooses them.
I was speaking with an agent friend. What you say it true but at $3,000 I think you will get "run of the mill" agents that will do their minimal work because all of the good agents either need a 2nd job OR decide it isn't worth it. My agent friend says the market is flooded with agents, so maybe there will be less competition, thus more houses for a single agent to sell. But currently, unless you are either well networked or just been at it for a long time....agents will make minimal scraps. I mean,$3,000 sounds great but the agent gets (currently) only keeps an average of 60% or so. If they want an office in their brokerage, they need to pay $50 to $100 per month...otherwise they can work from home. They have monthly MLS fees, office/brokerage fees, have to take classes in order for their license to stay "active", pay their local city MLS office ($430+ for his area). Just to stay active (not including the classes, he pay $2,000 annually. The classes are not very expensive and can be free if they are able to make time to go to the free classes...but 36 hours required. And the amount of fuel required to show houses. He showed 1 client over 20 houses. In the end that person didn't buy. I feel like their will be less agents wanting to represent buyers....but who knows.
@@dpayne1943And if everyone was a cash buyer it wouldn't matter. But with limited resources buyer will have to choose between representation or saving for another year.
So, I just want to make sure I understand - this buyer commission that a buyer works out with their realtor, are these funds I would have to pay out of pocket when buying a home and these are not funds a part of the closing process. So, if I buy a home in July 2024 or beyond - I would have my down payment and closing costs as a part of the "closing process" but in addition to that I would have to pay separately out of pocket whatever agreed upon amount to my agent that represented me as the buyer? I've only been through one home purchase in the past (still in that home, bough in 2008), so just trying to understand the financial implications of this new ruling for me as a prospective future buyer. These agreements that a buyer is going to have to sign, are we going to have to pay some type of fee regardless of being able to find a suitable home to the buyer realtor (i.e., if a home isn't found and the agreement time is set to terminate, will there be fees for time spent showing homes, etc.)?
So you’re telling me. I need money for down payment, closing costs, my agent and have emergency fund? Who sway? Where I’m going get extra $5k-$7k after trying save of everything thing else the comes with buy a house. It just shows they don’t want people to own homes and just rent forever
Why can Realtor figure out a hourly rate and we pay for their services hourly + services? IE - 100$ hour to tour houses, if you want to submit an offer flat rate to submit of $500, maybe it covers negotiations or maybe that is a billable extra again we can change the way it all works why do we think it makes sense to pay someone 15k to help you buy a house ?
Its about time, yes! No more bone head realestate agents pressuring first time home buyers into purchasing something out of their budges for a bigger commission or hesitancy with negotiating lower price purchases because it directly impacts their commission. No more conflict of interest stuff, woooo! How about no more "worrying" about that buddy?
They should have never done that in the 1st place. If a buyer , or seller, at any time feels they are not being properly represented, they should either cancel the contract OR (if thry got an offer and are under contract with a buyer/seller) contact the agent's broker.
That's because buyers go with the first agent they run into or because their kid's first grade teacher got her license and she's so nice. People, interview your agents, don't go with just anyone. My clients are a long term investment. If I screw them over, how many referrals are they going to send me? I'm guessing none if I treated them the way you described. If it's their first home and I think they're biting off more than they can chew, I tell them. Just because the bank approved you for a $2,000 a month house payment, it doesn't mean you need to go that much. If you do that right thing and take care of your clients, the business will come to you.
@@cherokeelaketennessee7895 how about we just fix the system so it never happens huh? How about we stop blaming others and take accountability for the problem. Wait a minute, we just did.
If you had a bad experience with a Realtor, I'm really sorry but I promise you, we're not all like that. Some of us truly care about our clients and take pride in the service we provide. People who don't like or trust agents, aren't going work with one so it is what it is. There's nothing I could say that would change your opinion of Realtors so I wish you the best. Cheers
Lol just get a lawyer and a mortgage broker and represent yourself. The buyer agent is gonna milk you as much as the seller agent will because both their commissions are based off what you pay.
How is this going to affect VA loans? Per VA guidelines, you are not allowed to pay any commission or fee to Realtors/Brokers or agents when using VA loans.
I just don't understand the justification to approve this change. maybe they are doing this to scare away corporate buyers but i feel like it has the opposite effect, like First time home Buyers are going to be more discouraged to buy a home and these big corporate property investors can afford to pay the commission fees.
Need a video over here escrow and whether it is worth opting out of it. Are there advantages or disadvantages? Should you if you have the money to do so. Can you save money in the long run if you do? Etc
Here is my experience so far with different buyer's agent as a first time home buyer. I worked with four different realtors and none of them worked to benefit me under the current system because even though they are supposed to represent me, they are actually working for their comission. They (listing agent and buyer's agent) will make sure you always pay over asking price because they know the seller is paying them when the house is sold and the higher the price, the bigger comission they both get. Hence inflating house prices and screwing both buyers and sellers in the process. Buyer's agent will have to adapt or disappear all together.
And your agent failed to tell you that you don't have to pay over asking. If they couldn't negotiate asking price or even below, then they weren't looking for your interests. I am a new agent, and I hope that those types of agents leave the industry because they ruin the reputation we all have.
Most agent make very little at the end, They pay upfront cost and drive around a client. Take care of legal issues and on and on. Buyers agents will not work for free.
I disagree that the seller is the one who benefits. Yes, the buying agent's payment is coming directly from the buyer and the seller doesn't pay it. But that is money that cannot be spent on the house. That is money the seller doesn't get. And what's more, housing purchases are leveraged. So the buying power is substantially reduced for all financed buyers and the market price is lower.
Lenders will have to make sure they have enough money to cover also the agents commission, in this economy people have a hard time saving money for a downpayment and closing cost, imagine now the commission too. But I also don't think is fair for the seller to pay for the buyers agent's commission, they could be using that to buy their next home.
Great video! As a realtor of 20 years and a buyers agent, this is a lot to take in. Buyers have enough to take care of just to get them into their dream home. And as a seller, I will definitely pay the buyers agent since they do most of the work out of the two.
As a realtor, what would you recommend we first time homebuyers do right now if we are able to buy? Should we buy before 7/1 or wait after? What would you do if you were a first time homebuyer right now?
Written agreements have been required in my market since I’ve been an agent so the conversation isn’t much different. All this does is makes me want to negotiate even harder on behalf of my buyers.
Honestly Im pretty sure it will just end up costing buyers more overall. Sellers like affordable housing, until they’re the ones selling the homes. If they can make 3% more they’re gonna take it
Thanks for the breakdown of how this could play out in real life right now. It all sounds manageable right now in this market. I do have to say I’m still worried about what happens when it’s a seller’s market again and they are willing to pay zero toward anything.
You said commissions probably should have started to adjust as the price of homes went up. Maybe I'm missing something... are real estate agents and brokers somehow immune to inflation, unlike everyone else? Why shouldn't they remain proportionate?
There should be a model where a buyer agent's commission is reduced for every dollar bid above the asking price and is increased for every dollar bid below the asking price. This way there is an incentive for the buyer's agent to bid for a lower price.
The bid is always ultimately the buyers decision. An agent can provide factual data to help a buyer make the best decision, but should never be "incentivised" to decide a bid for a buyer either way.
This was just sellers being mad that they have to pay both ways. Buyers, just lower whatever offer you were going to make to adjust for your agent fee. This was a stupid ruling
The is another options #3, pay me buy the hour or find some other agent. $2500 is not worth it to work with any buyers, if you have to show more than 1 home.. & #4 Find another agent
How is this any different than when you walk into a new build without an agent? The seller agent writes the contract with agreed price. Buyer has attorney review it for less than 1k. And no buyer agent needed. Plus im sure there will be tons of new legal services popping up to represent buyers if needed. Its really not that difficult
You are seeing the future. I think, at first, they will start with buyers agents that get a low commission or a flat fee. At some point, the sellers agent will become the person that shows the house/condo to the potential buyer and then the buyer will pay a flat fee to a real estate attorney for document review.
@@dpayne1943that’s more work on the seller’s agent and their team. I don’t think they are going to volunteer to do that for free, when it’s not something they have to do now. Over time it could become a way to differentiate themselves and compete to earn more customers, but only hungry agents are going to do that and a lot of agents aren’t that hungry, from what I’ve seen.
It’s not that much different but it’s easier to do that with a new build because there are fewer things to worry about and fewer things that can go wrong. It’s a new house, so no worries about maintenance/repairs for a while. No one has ever lived there so no worries about title issues creeping up during the buy process. Etc. Buyers buying a non-new build home may need more hand-holding and expert advice & help to make sure they are not buying a terrible property for their first purchase, or over looking certain red flags that can arise.
"The sellers are going to pay for the buyer's commission" yeah...just like sellers always pay closing costs--except when the market is neutral or favors sellers which is MOST OF THE TIME and then hell no they're not going to pay those costs for buyers because they'll be accepting multiple offers.
Im confused, why would I as a potential seller pay for the buyer's agent if I dont have to? If the buyer's agent works something out with my listing agent thats between them. I've also always fully covered all my own closing costs so if I am selling the buyer is going to have to cover their own closing costs. This all kind of sounds like a bunch of nonsense that really wont change anything except less agents being available as they switch to other career fields.
The key is, if you don’t have to. If you don’t have to, then you won’t and it would not make sense to do so. But sometimes there are great people out there with great credit and a stable job but they don’t make a ton of money, so they don’t have all the cash saved up to purchase (unless they qualify for a program that helps offset some of their costs OR the seller offers to help offset some of their costs). So if your home isn’t selling right away, and you really want to or need to move, as a seller it can make sense to reduce your profit a bit to just help get the house sold. This is usually the case in areas where the price of homes are well above the median income needed to afford those homes. But if that’s not the case in your area, then more money for you as a seller.
@@InvestWithFFI That makes sense I suppose. Never met too many people with excellent credit and stable jobs who didnt also have at least some savings but I see your point.
@@zaifaxian and? I guess if as InvestwithFFI said, I am in a hurry I might try to sweeten the pot as it were to settle things quickly. It doesnt matter if they bring the money, I am bringing the home to the table. Thats how a transaction works.
I disagree with the premise of buyer and their agent share closing cost credits. That doesn't work. The way im hearing this is "hey Mrs Buyer Agent, go negotiate the best closing costs you can, and we'll split it per our agreement." It's the buyer's offer. Not the buyer's Agent's offer. Thinking through this example the BA would just default to asking for max closing costs everytime leaving no room for inspection issues etc. Also sellers may be hesitant to concede closing costs (which don't improve their net) if the appraisal is at risk. Did i understand correctly what was being suggested?
All the actual economists (Moodys analytics, etc) are saying this will lower home prices as sellers will factor in only a 3% overhead hit not 6% and the buy side commission will now be lower with increased competition in pricing. But CZcamsrs are saying the opposite so I’m not sure who to believe - the PhD’s in economics or the people who graduated high school and took a 40 hour real estate course.
Closing cost model doesn’t work most times because it’s all dependent on the appraisal, you can’t say I’m gonna pay 430 for a house that’s only worth 415 or you have to come up with an extra 15,000 which defeats the point again
What happens if all the buyers just push back and say they’re not paying it? If everyone pushes back and refuses, the buyer’s agent wont make any money unless the seller agrees to pay the buyer’s agent commission? I will not be paying any commissions as a buyer going forward or I wont be buying.. period.
@@user-oh6ox9hz9calso no equity being built over the course of time, and you have to decide between paying more money every year when the landlord increases the rent or moving every year instead. And moving is not cheap by any means.
Sellers were getting scammed previously so I think its ok they are saving money through this. Before 2020 I sold with my ex and we paid over 20k for those greedy agents. They did not do 10k each worth of work. I plan to sell again and drop my price a little to sell fast. I am forwarding my savings to the buyer. This benefits buyers snd sellers.
Real estate agents are one of the most worthless profession to seal with all the tools available to general public. No way they deserve making over $10k on a house. It should be a falt fee per home sold.
Sounds like more work on buyer but in reality I think it’s more work on buyer’s agents. They will have to differentiate themselves and stand out now. And it should benefit the buyer because one of the easiest ways for them to compete is going to be on their fee. Competition should help drive the fees down to a reasonable level across the board.
The buyer will now have to keep in mind that on top of the home price there is extra 2-3% commission money on the table to negotiate for. Seller can't have cake and eat it too. My guess is that the option #3 where, the seller covers a % of buyer's closing costs will be taken, at lease until the dust is settled. In the long run Option #2 where, the buyer gets a minimum from buyer + flat fee from the seller, would work to attract buyer agents. Good content, Javier!
I actually am more inclined to take a flat fee up here in Utah. Home prices have gotten out of control and I think depending on the house and the buyers. My fee adjust accordingly to match the work put in. For selling a home I don’t want more than 15k on the high end. For buyers I don’t want more than 7 on the high end.
For single first time home owner people struggling already this could be a show stopper.. don't leave much choice for someone who has to move and like the only neighborhood I can afford rent is literally higher than a mortgage..
No, you will see 1 -1.5% buyer commissions as your business will become competitive (negotiate with the seller or lender to fold it in) . Of course the attention and services to the buyer will reduce. Saying that, I also see open houses becoming the main way to see homes as the buyer. At this time open houses are mainly used to drum up new business for the sellers agent. None of my houses or condos that I have sold (just a seller here) went to someone that showed up to the open house. Not that it doesn't happen, but the percentage is low. It will be interesting going forward.
You are correct. The open houses are NOT solely for the purpose of getting a buyer. It is for getting leads for the listing agent. That is why you as the seller shouldn't allow open houses. If you had a buyer who was really interested, they tell their agent to take them for a showing. I'm a new agent and I am learning the that is the purpose for open houses.
Generally speaking, I think that agents should be paid a flat fee. They should be able to negotiate "add on" services with the client. You cannot convince me that the commission taken out of a $1,000,000 home (normal in many states) should be $60,000 to be split between the two agents. Four years ago (before the prices of homes exploded) RE agents were making a decent living. Now I just see their commissions as ridiculous. This new rule allows newer or fair-minded agents to compete by lowering their commissions to small percentages or a flat fee.
I’m currently in the process of looking for a home with the same realtor. Is this something new we need to negotiate now? They haven’t mentioned it to me yet and we’ve been putting offers in on homes.?
This does benefit the buyer even though they have to pay more. A flat fee will keep realtors honest knowing that the price will no longer determine their commission. Predatory Buyer and seller agents are the reason why we are in this housing situation to begin with, they drove the prices through the roof.
Home prices have nothing to do with agents, and it is stupid to even think so. Agents make a small percentage of the overall value, and they aren't driving up values. Values skyrocketed because of your dumba$$ politicians driving our economy into the ground "to stop the spread" and the Fed dropping rates to zero to keep the economy alive on life support. That pushed mortgage rates to 2-3%, along with folks who had more money than ever before to buy a home.... THAT drove prices through the roof. Not agents.
Short term every change is painful. My hope is that in the long run this ends up resulting in low-cost buying agencies (like the current 1% listing agencies). Now, 1% listing agencies can exist because the selling process for an agent is consistent and relatively low workload. The buying agent's job is horrible, though, and 3% commission barely keeps these people floating. Well, if the new open information can result in buyers (not the agents) doing their own legwork, then a buying agent can just take over the paperwork part at a much lower fee. Or they could offer tiered pricing based on the service level you want or something. It's a theoretical win-win. That's my dream world anyway.
This completely hurts the middle and lower classes of people. We know the majority of homes are owned by investors and corporations and so now when these a-holes are gonna offload their properties because they aren't making money on them anymore, they won't have to shell out buyer agent commissions. This was ruled in favor of them to not lose more money on their investments. There should be a law... two properties per household. No seller agents and no buyer agents... only one real estate attorney to negotiate contracts. Why? Because investors and corporations are still going to list properties high and won't budge in negotiating a better price for repairs. The other thing is all this going to do is set a higher price/flat fee in areas where properties are more expensive and only rich people can afford. If you want to live in the sticks your commission to pay would be $2000 but if you want to buy near a beach your commission to pay is $10k. I'm already seeing it here in my city where even houses in the ghetto are priced pretty close to houses in the nicer areas... commissions would be similar. I'm already noticing there is no negotiating with these seller/investor/corporate dicks.
Im selling and buying another house soon in July. Should I sell my house after july to save on comm from buyer agents. And buy the house before july to save on comm as a seller. Thanks
you can negotiate now based on the new market expectations - you were always free to negotiate. So as a seller, tell your agent you aren't paying a buyers commission. If they insist you still must, tell them $1. And as a buyer, you can look for homes that have listing agreements that pay a buyers commission. Anyone who signed a listing contract before these changes is bound by that contract unless the selling agent will renegotiate the contract (many will).
Why would anyone want to pay an extra 5 to 10k on top of their closing cost when there will be so many other options that will help with the offers and paperwork. With today's online technology buying real estate agents will be a thing of the past. Most will not want to pay out even more just to have someone represent them when we all know most of the work is paperwork.
There are already buyer's agents out there who work on a flat fee. Our first buyers agent had a fee of $2500 which made us feel more like they weren't trying to upsell us and like they actually negotiated to help us. After we bought they wrote us a check for the amount over $2500 that they got from the closing. Best agent we ever had. Only time we felt like our home buying process wasn't a scam.
Who is the agent?
Yes, this is True. I was contacted by 1 for a flat rate of $2100
@@twerk5954 probably no longer in buisness.
How many homes have you bought to feel like every time you were scammed? Thats just picking shitty agents on your part.
Besides, this new law is affecting buyers, it used to be free for anyone on the buying side
Agree, this new law is affecting buyers @@ZackAbusharif
Just seems like another hurdle us first time home buyers have to face along with limited homes and soaring prices.
Yea, everyone will be ok. Learn and adapt.
Call a local title company and they will get you all the paperwork you need to buy or sell a house for free. Then tell your lender, your buying a house without a realtor and they will also get you a list of things that need completed for free. You do not need a agent. Do your research and don’t lose confidence.
I prefer that, in hard time you can negotiate their exorbitant fee down.
And also limited support and information from knowledgeable realtors.
@@joelballard4955it’s true that you don’t need an agent but it’s 100 times harder to buy or sell a home, especially if you haven’t done either before. A lot of agents suck but good ones are worth their weight in gold and make the already frustrating process bearable.
People actually think that the sellers are going to pass on the savings to the buyers lol.
I love this. Javi is definitely working clean up.
So here’s how you do it: discuss tiered pricing with your agent and work in a percent for yourself (you are now working on negotiating closing costs so you should be compensated). You, the buyer can work this in your favor. Here’s a sample offer what you can negotiate with an agent:
1. Up front/ sunken cost, let’s say 1.5k
2. Commission based bonus - if the agent can get the seller to pay for buyer’s agent, they get x%, let’s say 1%. This would REPLACE/ cover the sunken cost.
3. If they reach 3%, the. The agent can walk away with 2%, buyer gets 1%.
3. If they can get over a certain amount off of the purchase price by percentage, the buyer concedes the final 1 percent to the agent.
MAKE THEM WORK FOR IT and Do not give them a cut of the total off. Lazy agents should be a thing of the past. This does not suck for you unless you are lazy.
I've bought and sold numerous houses myself with my lawyer, no agent. If you think what these agents do is worth $24,000.... you're completely out of your mind.
What are you tips for finding a good lawyer? Or anything else helpful you would want to know as a first time homebuyer using a lawyer?
@@alycat9186 to be honest, the process is so easy, I wouldn't even worry about finding "a good lawyer"... "Good lawyer" is an oxymoron... Anyone practicing real estate law will be fine. Make sure they charge a flat fee. We pay our lawyer about $400 and they facilitate most of our side of the transaction.
How much does a lawyer charge? A flat rate or percentage?
I hear crickets chirping
@victorandrade7940 flat rate.... It's a few hundred.
Someone needs to start a lawsuit to end tipping “standards”
It was my shower thought to counter tip, somehow. Make the restaurant tip me for being there
enjoy your macdonalds and jack in the box cheap asses. Dont want to tip? don't go places where tipping is standard
YESSSS!! Please!! I hate the tipping culture!!!!
Now this is the real problem that American courts should be tackling.
100%
Honestly, I am a new agent, and I strongly agree that agents should NOT be getting paid this much in commissions! I think $5,000 per transaction sounds fair. I mean, the transaction stuff I have done thus far doesn't seem like rocket science in order to justify earning $15,000 in commission. I am also a special education teacher and I can honestly say that teaching is "harder" more "stressful" than real estate transactions. AND!!! I have 2 master's degrees and two credentials and I still don't make nearing enough to compensate for the VALUE and EDUCATION I provide to special needs students. So YEAH, real estate agents, stop complaining!! lol
Teachers get paid enough.. so you can stop complaining too.
How many transactions have you done?
I have a special needs youg adult.. thank you for what you do. I can easily say you do not make colse to enough doing what you do.
You're part of the problem. Why did you get your license? Let me guess, to make some easy extra money, right? You're not a professional, that's why you think agents make too much money. I think it should be a lot harder for people to get their license and work as an apprentice for a year before they can go out on their own. You're helping people make the largest investment of their life and you don't even do it full time, there's something wrong with this. I'm not picking on you because there's close to 450,000 part-time agents in the US. If NAR wants to do something right for once, they need to change the requirements for getting a real estate license.
Its not a set amount, its a commission on average of 5%. The seller is the one paying for it, and statistically the extra money someone makes using an agent offsets that 5% anyways. The brokerage also takes a big chunk of that.
Its also running your own business and so you have to pay for insurance, marketing, etc. It’s not easy to find clients.
You’re not seeing the point because you’re not an agent yet, buyers were getting service for free, which is good because they are already spending a shit ton on a house, now they are no longer getting this for free, along with having to pay closing costs. The sellers are the only ones winning, and sellers off the jump can lower commission as low as they want, commission was always negotiable.
If someone makes 5 grand on a 250,000 house, with the buyer not having to spend anything, and the seller’s commission price being offset by the increased price from using an agent, nobody should be complaining, especially you.
Good-luck finding clients, the actual work is not that hard.
Being a teacher you know your salary and its constant
In CA, commissions should be capped at 1.5% maximum if home is sold within 6 months. When we purchased our home we went with redfin because we had previously sold our home with redfin and their fees were very reasonable. We interviewed 3 other realtors and they all wanted no less than 3% and not once did they mention it was negotiable (i already knew it was negotiable, but they wouldn't budge).
I think buyer's agents (and to an extent selling agents) have been overpaid for a long time with the 2.5-3% average. With everything so readily available online, the buyer's agent in particular is doing far less work than they did 20-30 years ago but they are getting paid far more with how far housing prices have gone up compared to inflation. This resets the playing field and I believe sellers will still be paying the buyer's agent in most cases, but the fees won't feel forced at 2.5 and instead can be reduced to a more reasonable agreement based on actual value of the work being done.
That’s good. I was purchasing a home in 2022 and it’s seemed like “my agent” was representing the sellers interest over mine. F that
What is actually going to happen is that buyers will be more inclined to go without an agent and be rewarded with a lower price for doing so, OR buyer agents will move to a more fixed priced instead of commissions, where they'll get paid less but more consistently as those who didnt buy would still pay a fee.
Both of this scenarios are a win for everyone, including good agents as they will have less competition.
They're not going to be "rewarded" with a lower price. They're going to be rewarded with a more competitive offer which may win the house.
If a house is selling for 400k and two offers show up: 1 400k and you pay 3% for the buyer agent, the other 390k no agent costs. The 390k offer IS more competitive because 3% is 12k and the one making the offer is getting the house for 10k less. Both are true.@@BoldWittyName
I think you'll also see listing agent commissions fall, because of the # of agents out there along with the opening of pandoras box.
@@Hammer.J.Helmer a fine theory until agents drop out and listing agents realize they have to deal with John and Joanne Q Public requesting showings and written offers. Then listing commissions will go up.
You can’t buy a house without an agent, especially if you are using an FHA loan or a bank loan
In Cali where a cheap home is $1 million, flat fee is a dream. Even paying 1% 10k is a joke. Would happily pay 3-5k flat
Why not have a rendered services fee instead of a percentage like a menu of services
You could always do flat fee for commission, something you should have negotiated with your agent off the jump. Plus now those buyers buying the “1 million dollar home” now have an extra expense
Fear seems to be at all time highs amongst buyers. I think the best time to buy will be in the next 12-24 months. I think in 4-5 years, it will be another case of everyone saying "I wish I would have bought a home". With that being said, nobody should be overpaying for homes. Buyers should be looking for the best deal and only buying if they have great credit. I'm speculating... However, fear hasn't been this high in over a decade.
This agreement gets at the fundamental issue:
Buying agents should be working for the buyer and therefore should be paid by the buyer.
That's it! Buying agents being paid by the selling agent is a blatant conflict of interest.
In other countries, there is only 1 agent for the buyer and the seller either supplied by the buyer or the seller but people generally go out and inquire on their own. For example: A house is for sale (for sale by owner). The owner has a real estate agent working for them. When a "direct buyer" wants to buy it, the seller's agent prepares all the paperwork and handles the transaction. The buyer has insurance for the purchase and has a contract prepared by their lawyer that the buyer agent would need to agree to. Then the rest is the same.
Every thing is negotiable but it’s rarely negotiated
I'm so glad that your channel helped me buy my first home last May. Even if we got a 6% interest rate, it was the time we were ready and financially prepared to buy. This new rule sounds really confusing and negotiation is actually scary to a lot of people.
You only mentioned the negatives of this new law. Without mentioning any potential benefits, I know you have a vested interest. But sometimes, most of the times in my perspective $15,000 for two weeks worth of work on a few documents that are prefilled an exorbitant amount. $5000 flat, for each one is fair. Especially because a lot of the paperwork is pre-filled, and all your changing is a few items.
Hopefully it doesn't become "you get what you pay for."
@@RyanTreks then you hit them with the lawsuit. A civil suit will easily handle any false filing issues that will lead to your house not being brought, loss of deposit or having to have a short sale due to an error. Unlike when McDonald’s(known for getting what you pay for type of establishment) messes up, a home loan which is hundreds of thousands of dollars is worth suing over..
Seems like any percentage model on the buying side gives the agent an incentive to find the highest price house you can afford, and incentive to NOT help you negotiate the price down. I like your viewer comments about fixed price + splitting what the agent can get the seller to pay in closing costs or buyers agent costs. Smart! Hoping for more videos on this!
Just offer the agent what you’re willing to pay. If they don’t like it then find an agent that does. If they comprise a deal then move to a new house and new agent.
Oh my wow 😮 . We 1st time home buyers are done ....... 😢
Can't catch a break
My previous buyers agent, who I didn't think was offering much value to the process, wanted me to sign a 6 month buyer-broker agreement after 3 months of us making multiple offers and not being successful. I refuse to tie myself to any one agent that I don't really know how well they will represent me.
I heard some agents saying they will charge an extra percentage for representing both the buyer and seller in the same transaction, like double dipping, I have a feeling lawsuit will arise.
I've seem where that (dual agency) works better for the seller. The listing agent, if allowed to do dual agency, will decrease the commission by 1 to 2% because they are doing everything for both sides of the transaction. But it not all brokerages allow dual agency because the question arises...."who are they actually representing?". It is nearly impossible to be 50/50 in anything in life.
There's a fix... just educate ppl in high school about buying houses and show them how to just use a lawyer instead of an agent. Agents provide about $500 in value while getting paid $12,000...
Laywer vs agent? More explanation please
I’d rather pay a lawyer 500 dollars than an agent 120k
I appreciate your honesty. So many agents I watch assume buyer's agents will still insust on 3%.I disagree as those who do not make attractive offers to potential buyers will lose clientele to agents who will negotiate. The whining seems to be coming from a very biased direction.
Would the future be just a flat rate fee for a sellers agent? Like 3k per house sold, regardless of price. The selling agents currently who work on percentage, wins the lottery if a super rich person sells their mansion and chooses them.
I was speaking with an agent friend. What you say it true but at $3,000 I think you will get "run of the mill" agents that will do their minimal work because all of the good agents either need a 2nd job OR decide it isn't worth it.
My agent friend says the market is flooded with agents, so maybe there will be less competition, thus more houses for a single agent to sell. But currently, unless you are either well networked or just been at it for a long time....agents will make minimal scraps. I mean,$3,000 sounds great but the agent gets (currently) only keeps an average of 60% or so. If they want an office in their brokerage, they need to pay $50 to $100 per month...otherwise they can work from home. They have monthly MLS fees, office/brokerage fees, have to take classes in order for their license to stay "active", pay their local city MLS office ($430+ for his area). Just to stay active (not including the classes, he pay $2,000 annually. The classes are not very expensive and can be free if they are able to make time to go to the free classes...but 36 hours required. And the amount of fuel required to show houses. He showed 1 client over 20 houses. In the end that person didn't buy.
I feel like their will be less agents wanting to represent buyers....but who knows.
Buying a home just got even more unaffordable.
Yes
The buyer pays one way or the other. It is just folded into the price of the home.
@@dpayne1943And if everyone was a cash buyer it wouldn't matter. But with limited resources buyer will have to choose between representation or saving for another year.
So, I just want to make sure I understand - this buyer commission that a buyer works out with their realtor, are these funds I would have to pay out of pocket when buying a home and these are not funds a part of the closing process. So, if I buy a home in July 2024 or beyond - I would have my down payment and closing costs as a part of the "closing process" but in addition to that I would have to pay separately out of pocket whatever agreed upon amount to my agent that represented me as the buyer? I've only been through one home purchase in the past (still in that home, bough in 2008), so just trying to understand the financial implications of this new ruling for me as a prospective future buyer. These agreements that a buyer is going to have to sign, are we going to have to pay some type of fee regardless of being able to find a suitable home to the buyer realtor (i.e., if a home isn't found and the agreement time is set to terminate, will there be fees for time spent showing homes, etc.)?
That will be negotiated by each buyer/realtor so it is possible but not stipulated
So you’re telling me. I need money for down payment, closing costs, my agent and have emergency fund? Who sway? Where I’m going get extra $5k-$7k after trying save of everything thing else the comes with buy a house. It just shows they don’t want people to own homes and just rent forever
It just shows that we need more competition in real estate fees so it doesn’t cost 3% of home value regardless of what your buyer agent actually did
I rather get 10k off the listing price
Why can Realtor figure out a hourly rate and we pay for their services hourly + services? IE - 100$ hour to tour houses, if you want to submit an offer flat rate to submit of $500, maybe it covers negotiations or maybe that is a billable extra again we can change the way it all works why do we think it makes sense to pay someone 15k to help you buy a house ?
Its about time, yes! No more bone head realestate agents pressuring first time home buyers into purchasing something out of their budges for a bigger commission or hesitancy with negotiating lower price purchases because it directly impacts their commission. No more conflict of interest stuff, woooo! How about no more "worrying" about that buddy?
They should have never done that in the 1st place. If a buyer , or seller, at any time feels they are not being properly represented, they should either cancel the contract OR (if thry got an offer and are under contract with a buyer/seller) contact the agent's broker.
That's because buyers go with the first agent they run into or because their kid's first grade teacher got her license and she's so nice. People, interview your agents, don't go with just anyone. My clients are a long term investment. If I screw them over, how many referrals are they going to send me? I'm guessing none if I treated them the way you described. If it's their first home and I think they're biting off more than they can chew, I tell them. Just because the bank approved you for a $2,000 a month house payment, it doesn't mean you need to go that much. If you do that right thing and take care of your clients, the business will come to you.
@@cherokeelaketennessee7895 how about we just fix the system so it never happens huh? How about we stop blaming others and take accountability for the problem. Wait a minute, we just did.
If you had a bad experience with a Realtor, I'm really sorry but I promise you, we're not all like that. Some of us truly care about our clients and take pride in the service we provide. People who don't like or trust agents, aren't going work with one so it is what it is. There's nothing I could say that would change your opinion of Realtors so I wish you the best. Cheers
Lol just get a lawyer and a mortgage broker and represent yourself. The buyer agent is gonna milk you as much as the seller agent will because both their commissions are based off what you pay.
I agree. Neither of the agents really care about your best interest. They just want the deal to close.
Every other vendor in the sales transaction charges a set fee...why not the realtor?? Percentage is a total scam
How is this going to affect VA loans? Per VA guidelines, you are not allowed to pay any commission or fee to Realtors/Brokers or agents when using VA loans.
Simple. Either the VA has to change its policy because it's a new law. Or realtors will no longer do business with VA loan buyer
VA will update, although it will take longer than it should.
What typeface is the "flat fee" "no standard commission" in? I really like it.
Similar to going to a restaurant and pay a percentage tip for the total price of tab
I just don't understand the justification to approve this change. maybe they are doing this to scare away corporate buyers but i feel like it has the opposite effect, like First time home Buyers are going to be more discouraged to buy a home and these big corporate property investors can afford to pay the commission fees.
Agree completely
Need a video over here escrow and whether it is worth opting out of it. Are there advantages or disadvantages? Should you if you have the money to do so. Can you save money in the long run if you do? Etc
Here is my experience so far with different buyer's agent as a first time home buyer. I worked with four different realtors and none of them worked to benefit me under the current system because even though they are supposed to represent me, they are actually working for their comission. They (listing agent and buyer's agent) will make sure you always pay over asking price because they know the seller is paying them when the house is sold and the higher the price, the bigger comission they both get. Hence inflating house prices and screwing both buyers and sellers in the process. Buyer's agent will have to adapt or disappear all together.
And your agent failed to tell you that you don't have to pay over asking. If they couldn't negotiate asking price or even below, then they weren't looking for your interests. I am a new agent, and I hope that those types of agents leave the industry because they ruin the reputation we all have.
This happened to us too. Caught the seller (also an agent) trying to offer a kickback bonus to our agent if our agent got our price higher.
@@grumpyschnauzer That is grounds for a lawsuit if you have proof of it.
@@grumpyschnauzerhow did you catch them?
Most agent make very little at the end, They pay upfront cost and drive around a client. Take care of legal issues and on and on. Buyers agents will not work for free.
I disagree that the seller is the one who benefits.
Yes, the buying agent's payment is coming directly from the buyer and the seller doesn't pay it. But that is money that cannot be spent on the house. That is money the seller doesn't get. And what's more, housing purchases are leveraged. So the buying power is substantially reduced for all financed buyers and the market price is lower.
Lenders will have to make sure they have enough money to cover also the agents commission, in this economy people have a hard time saving money for a downpayment and closing cost, imagine now the commission too. But I also don't think is fair for the seller to pay for the buyers agent's commission, they could be using that to buy their next home.
Well said.
Great video! As a realtor of 20 years and a buyers agent, this is a lot to take in. Buyers have enough to take care of just to get them into their dream home.
And as a seller, I will definitely pay the buyers agent since they do most of the work out of the two.
As a realtor, what would you recommend we first time homebuyers do right now if we are able to buy? Should we buy before 7/1 or wait after?
What would you do if you were a first time homebuyer right now?
I’m not a realtor but I went to the library and am reading books about real estate
Written agreements have been required in my market since I’ve been an agent so the conversation isn’t much different. All this does is makes me want to negotiate even harder on behalf of my buyers.
Honestly Im pretty sure it will just end up costing buyers more overall. Sellers like affordable housing, until they’re the ones selling the homes. If they can make 3% more they’re gonna take it
THANK YOU AMERICA! This law should’ve been changed years ago
Thanks for the breakdown of how this could play out in real life right now. It all sounds manageable right now in this market. I do have to say I’m still worried about what happens when it’s a seller’s market again and they are willing to pay zero toward anything.
You said commissions probably should have started to adjust as the price of homes went up. Maybe I'm missing something... are real estate agents and brokers somehow immune to inflation, unlike everyone else? Why shouldn't they remain proportionate?
Well, you got till June or July to buy a house or have to put up an extra one to 3% on top of your down payment.
There should be a model where a buyer agent's commission is reduced for every dollar bid above the asking price and is increased for every dollar bid below the asking price. This way there is an incentive for the buyer's agent to bid for a lower price.
The bid is always ultimately the buyers decision. An agent can provide factual data to help a buyer make the best decision, but should never be "incentivised" to decide a bid for a buyer either way.
This was just sellers being mad that they have to pay both ways. Buyers, just lower whatever offer you were going to make to adjust for your agent fee. This was a stupid ruling
The is another options #3, pay me buy the hour or find some other agent. $2500 is not worth it to work with any buyers, if you have to show more than 1 home.. & #4 Find another agent
It's just going to be adding into the cost of the house and mortgage
How is this any different than when you walk into a new build without an agent? The seller agent writes the contract with agreed price. Buyer has attorney review it for less than 1k. And no buyer agent needed. Plus im sure there will be tons of new legal services popping up to represent buyers if needed. Its really not that difficult
You are seeing the future. I think, at first, they will start with buyers agents that get a low commission or a flat fee. At some point, the sellers agent will become the person that shows the house/condo to the potential buyer and then the buyer will pay a flat fee to a real estate attorney for document review.
@@dpayne1943that’s more work on the seller’s agent and their team. I don’t think they are going to volunteer to do that for free, when it’s not something they have to do now. Over time it could become a way to differentiate themselves and compete to earn more customers, but only hungry agents are going to do that and a lot of agents aren’t that hungry, from what I’ve seen.
It’s not that much different but it’s easier to do that with a new build because there are fewer things to worry about and fewer things that can go wrong. It’s a new house, so no worries about maintenance/repairs for a while. No one has ever lived there so no worries about title issues creeping up during the buy process. Etc.
Buyers buying a non-new build home may need more hand-holding and expert advice & help to make sure they are not buying a terrible property for their first purchase, or over looking certain red flags that can arise.
"The sellers are going to pay for the buyer's commission" yeah...just like sellers always pay closing costs--except when the market is neutral or favors sellers which is MOST OF THE TIME and then hell no they're not going to pay those costs for buyers because they'll be accepting multiple offers.
Im confused, why would I as a potential seller pay for the buyer's agent if I dont have to? If the buyer's agent works something out with my listing agent thats between them. I've also always fully covered all my own closing costs so if I am selling the buyer is going to have to cover their own closing costs. This all kind of sounds like a bunch of nonsense that really wont change anything except less agents being available as they switch to other career fields.
Because the buyer brings the money to the table?
The key is, if you don’t have to. If you don’t have to, then you won’t and it would not make sense to do so. But sometimes there are great people out there with great credit and a stable job but they don’t make a ton of money, so they don’t have all the cash saved up to purchase (unless they qualify for a program that helps offset some of their costs OR the seller offers to help offset some of their costs).
So if your home isn’t selling right away, and you really want to or need to move, as a seller it can make sense to reduce your profit a bit to just help get the house sold. This is usually the case in areas where the price of homes are well above the median income needed to afford those homes. But if that’s not the case in your area, then more money for you as a seller.
@@InvestWithFFI That makes sense I suppose. Never met too many people with excellent credit and stable jobs who didnt also have at least some savings but I see your point.
@@zaifaxian and? I guess if as InvestwithFFI said, I am in a hurry I might try to sweeten the pot as it were to settle things quickly. It doesnt matter if they bring the money, I am bringing the home to the table. Thats how a transaction works.
Amazing. Congratulations with the guild
I disagree with the premise of buyer and their agent share closing cost credits. That doesn't work. The way im hearing this is "hey Mrs Buyer Agent, go negotiate the best closing costs you can, and we'll split it per our agreement." It's the buyer's offer. Not the buyer's Agent's offer. Thinking through this example the BA would just default to asking for max closing costs everytime leaving no room for inspection issues etc. Also sellers may be hesitant to concede closing costs (which don't improve their net) if the appraisal is at risk. Did i understand correctly what was being suggested?
Commission here in Buffalo from Keller Williams is 8% total as a seller. Like WTF!
All the actual economists (Moodys analytics, etc) are saying this will lower home prices as sellers will factor in only a 3% overhead hit not 6% and the buy side commission will now be lower with increased competition in pricing.
But CZcamsrs are saying the opposite so I’m not sure who to believe - the PhD’s in economics or the people who graduated high school and took a 40 hour real estate course.
You should listen to them for sure and not dumb CZcamsrs like me
Is there a separate listing for haunted houses? I know this is not october 😂 Just curious because the homes may be cheaper than the current market 😢
Its about time.
Closing cost model doesn’t work most times because it’s all dependent on the appraisal, you can’t say I’m gonna pay 430 for a house that’s only worth 415 or you have to come up with an extra 15,000 which defeats the point again
What happens if all the buyers just push back and say they’re not paying it? If everyone pushes back and refuses, the buyer’s agent wont make any money unless the seller agrees to pay the buyer’s agent commission? I will not be paying any commissions as a buyer going forward or I wont be buying.. period.
Realtors are parasites that offer no value. Mine didn't do anything but unlock houses I viewed.
that's unfortunate. the good ones do provide value
i gave up as a first time home buyer. renting an apartment in April
You're smart. It's much cheaper and you can move whenever you want with no house to sell or commission to pay. Also, no repair bills.
You’ll need a house eventually.
@@user-oh6ox9hz9calso no equity being built over the course of time, and you have to decide between paying more money every year when the landlord increases the rent or moving every year instead. And moving is not cheap by any means.
Can’t you simply state in the agreement that the commission is contingent upon the seller paying?
I can wait to see the lawsuits FLY!
Could buyers just use Redfin or Zillow agents, to show them houses? They are still free right?
What I assumed is gonna happen is that sellers or sellers agent will raise prices to cover buyer’s agent fees
Would it be cheaper to pay a lawyer and just contact the seller agent to look at home?
Pull realtors from lower cost parts of town or the boonies to buy in the Ritz. Race to the bottom?
Is that the same for a new construction
This is spot on
Sellers were getting scammed previously so I think its ok they are saving money through this. Before 2020 I sold with my ex and we paid over 20k for those greedy agents. They did not do 10k each worth of work. I plan to sell again and drop my price a little to sell fast. I am forwarding my savings to the buyer. This benefits buyers snd sellers.
Lol no, good on sellers while buyers get royally screwed with high interest, high price, and sure extra money for buyers agent
Will new build construction still pay the buyer’s agent?
Yes they have been! So new construction for the win.. but way more work goes into a resale.
Real estate agents are one of the most worthless profession to seal with all the tools available to general public. No way they deserve making over $10k on a house. It should be a falt fee per home sold.
Now we have to shop for buyer real estate agent.
Buyers always had to find their own agent
This was always the case
Don’t worry, they will be a dime a dozen. Of course, you’ll need to do your due diligence. It will be low commission or flat fee.
Sounds like more work on buyer but in reality I think it’s more work on buyer’s agents. They will have to differentiate themselves and stand out now. And it should benefit the buyer because one of the easiest ways for them to compete is going to be on their fee. Competition should help drive the fees down to a reasonable level across the board.
@@dpayne1943 I think the same thing
The buyer will now have to keep in mind that on top of the home price there is extra 2-3% commission money on the table to negotiate for. Seller can't have cake and eat it too.
My guess is that the option #3 where, the seller covers a % of buyer's closing costs will be taken, at lease until the dust is settled. In the long run Option #2 where, the buyer gets a minimum from buyer + flat fee from the seller, would work to attract buyer agents.
Good content, Javier!
The buyer can negotiate the commission with his/her agent. It does NOT have to be 2-3% ! They have the right to negotiate!!
I actually am more inclined to take a flat fee up here in Utah. Home prices have gotten out of control and I think depending on the house and the buyers. My fee adjust accordingly to match the work put in. For selling a home I don’t want more than 15k on the high end. For buyers I don’t want more than 7 on the high end.
Yeah, he was good, I remember that beautiful wall.
What if i didn’t go with the first agent do I still need to pay or I only pay when I closed the house?
For single first time home owner people struggling already this could be a show stopper.. don't leave much choice for someone who has to move and like the only neighborhood I can afford rent is literally higher than a mortgage..
Great video. Thanks!!
This is how it works in Europe, but there's no MLS in Europe
What do another countries do? I doubt the whole world follows the prior rules.
Flat fees. US is more about the money.
No, you will see 1 -1.5% buyer commissions as your business will become competitive (negotiate with the seller or lender to fold it in) . Of course the attention and services to the buyer will reduce. Saying that, I also see open houses becoming the main way to see homes as the buyer. At this time open houses are mainly used to drum up new business for the sellers agent. None of my houses or condos that I have sold (just a seller here) went to someone that showed up to the open house. Not that it doesn't happen, but the percentage is low. It will be interesting going forward.
You are correct. The open houses are NOT solely for the purpose of getting a buyer. It is for getting leads for the listing agent. That is why you as the seller shouldn't allow open houses. If you had a buyer who was really interested, they tell their agent to take them for a showing. I'm a new agent and I am learning the that is the purpose for open houses.
Have we forgotten that home prices are still extremely high!
Generally speaking, I think that agents should be paid a flat fee. They should be able to negotiate "add on" services with the client. You cannot convince me that the commission taken out of a $1,000,000 home (normal in many states) should be $60,000 to be split between the two agents. Four years ago (before the prices of homes exploded) RE agents were making a decent living. Now I just see their commissions as ridiculous. This new rule allows newer or fair-minded agents to compete by lowering their commissions to small percentages or a flat fee.
I’m currently in the process of looking for a home with the same realtor. Is this something new we need to negotiate now? They haven’t mentioned it to me yet and we’ve been putting offers in on homes.?
Right now my realtor told me that sellers are paying the commission.
This does benefit the buyer even though they have to pay more. A flat fee will keep realtors honest knowing that the price will no longer determine their commission. Predatory Buyer and seller agents are the reason why we are in this housing situation to begin with, they drove the prices through the roof.
Home prices have nothing to do with agents, and it is stupid to even think so. Agents make a small percentage of the overall value, and they aren't driving up values. Values skyrocketed because of your dumba$$ politicians driving our economy into the ground "to stop the spread" and the Fed dropping rates to zero to keep the economy alive on life support. That pushed mortgage rates to 2-3%, along with folks who had more money than ever before to buy a home.... THAT drove prices through the roof.
Not agents.
Short term every change is painful. My hope is that in the long run this ends up resulting in low-cost buying agencies (like the current 1% listing agencies). Now, 1% listing agencies can exist because the selling process for an agent is consistent and relatively low workload. The buying agent's job is horrible, though, and 3% commission barely keeps these people floating. Well, if the new open information can result in buyers (not the agents) doing their own legwork, then a buying agent can just take over the paperwork part at a much lower fee. Or they could offer tiered pricing based on the service level you want or something. It's a theoretical win-win. That's my dream world anyway.
Keep on spinning.😂😂😂
Is July timeframe confirmed?
What about new home builds
Thank u
This completely hurts the middle and lower classes of people. We know the majority of homes are owned by investors and corporations and so now when these a-holes are gonna offload their properties because they aren't making money on them anymore, they won't have to shell out buyer agent commissions. This was ruled in favor of them to not lose more money on their investments.
There should be a law... two properties per household. No seller agents and no buyer agents... only one real estate attorney to negotiate contracts.
Why? Because investors and corporations are still going to list properties high and won't budge in negotiating a better price for repairs.
The other thing is all this going to do is set a higher price/flat fee in areas where properties are more expensive and only rich people can afford. If you want to live in the sticks your commission to pay would be $2000 but if you want to buy near a beach your commission to pay is $10k.
I'm already seeing it here in my city where even houses in the ghetto are priced pretty close to houses in the nicer areas... commissions would be similar.
I'm already noticing there is no negotiating with these seller/investor/corporate dicks.
Im selling and buying another house soon in July. Should I sell my house after july to save on comm from buyer agents. And buy the house before july to save on comm as a seller. Thanks
you can negotiate now based on the new market expectations - you were always free to negotiate. So as a seller, tell your agent you aren't paying a buyers commission. If they insist you still must, tell them $1. And as a buyer, you can look for homes that have listing agreements that pay a buyers commission. Anyone who signed a listing contract before these changes is bound by that contract unless the selling agent will renegotiate the contract (many will).
Why would anyone want to pay an extra 5 to 10k on top of their closing cost when there will be so many other options that will help with the offers and paperwork. With today's online technology buying real estate agents will be a thing of the past. Most will not want to pay out even more just to have someone represent them when we all know most of the work is paperwork.
Changed of editing style?