Lawyer Reviews EVERY Change in the NAR Settlement
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- čas přidán 25. 06. 2024
- The NAR just settled a massive case that could greatly affect how real estate agents do business. If you're a realtor and are wondering how this could affect your commissions, in this video I break down all the changes in the 108 page settlement.
The National Association of REALTORS® (NAR) announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. The agreement would resolve claims against NAR, over one million NAR members, all state/territorial and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.
The settlement, which is subject to court approval, makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule) that was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation. Under the terms of the agreement, NAR would pay $418 million over approximately four years.
Tiffany Webber is a real estate attorney and owner of Thomas & Webber, a real estate law firm in Mooresville, North Carolina. They handle both commercial and residential real estate closings, estate planning, and business formations.
If you'd like to work with Thomas & Webber, please email info@thomasandwebber.com
00:00 - The Settlement
02:10 - Practice Changes
07:45 - Buyer Agreements
12:00 - MLS
14:19 - Next Steps - Zábava
Seeing a lot of first-time visitors on this one! If we haven’t met yet, I’m Tiffany, a Real Estate Attorney from North Carolina. I’ve got some more videos coming about these changes. Would love to have you subscribe!
DONE and I'm not even in Real Estate, but an "informed citizen". Thank You Tiffany
Great video! Do you do your own video editing? Looks great!
@@RichFlemingRealtor gosh no. I have a marketing team.
Subscribed! I just got my RE license just in time for these shenanigans! Lol
Hi Tiffany. I’m Adam. Thank you for posting the video
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People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.
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Next lawsuit: sellers sue nar because they were prohibited from offering compensation, stifling their 1st Amendment, and resulting in lower and/or less offers hurting their net when all is done. They'd actually have a point, unlike sitzer/burnett.
they are not prohibited of offering commissions, everything is negotiable, you can ask in an offer to have the seller pay for the commissions, what is gone is to have the offer in the MLS or any place the commissions that are paid buy the seller to entice buyer agents, that by the way I do not think it was wrong because was there in the open! that is free enterprise. Now it is making more difficult for both seller and buyers. I feel the solution would have been more simple, disclosing both commissions in the contracts....
My Concern is that an agent is working with a Buyer like a Veteran that can NOT pay a REALTOR Commission, and that Veteran does not have the funds to pay an agent, so that means what that the Veterans can only see part of the homes they want to see, unless the agent wants to work for Nothing? How is that fair to either party? Same with First time buyers or any buyers that do not have much money to work with? Who wins then? The market where the people paid way too much for homes, more than they appraised for by a LOT of money is the main reason housing is so OVERPRICED! Has nothing to do with commission, as the property is worth what it is worth no matter if a home owner or a REALTOR sales the home! The appraiser does not look at value based on was it listed or not?
@@sandralenins4094 I think that eventually everything is going to go back to normal becasue nobody is prohibiting the commission been paid by the seller, still is negotiable, the difference is that has to be clear and disclose in the agreements.
My concern is what happens when you have a buyer that CAN NOT pay an agency fee, they want to see 8 homes, 6 will pay me and 2 will pay nothing.
So are I expected to work for free if they want to see the 2 homes that there is NO money for? Is that going to be some kind of discrimination? After I have put in my time and effort what stops the buyer from firing me and going to the sellers agent? We are right back to Dual Agency that gives the buyer no representation.
My effort to help point them in the right direction for the best loan type, educate them in the whole process, discussing things like Home Inspections, Termite Inspections why they need the well or septic checked, just the whole bunch of things that you do as a buyers agent. We already work for free for many months lots of time. This will just make it worse.
?
Thank you for doing this. Us Realtors appreciate you taking the time to do so...
Absolutely thanks for watching
I’m in California and practice commercial real estate. I started in residential and noticed NAR sold old out their members years ago when Zillow, Trulia, etc. we’re on the rise. Other than the MLS and purchase and other forms, there’s no reason to be associated with NAR. And that is where the problem lies. Residential agents all use the local association forms because they are all familiar with them. The solution I see is form another association and create new standard forms and MLS.
that solution will lead to having another incompetant trade group.
@@albundy3929 what’s your alternative?
@@heybrowhatup fix NAR. Agents fault for letting NAR run wild. More agent oversight to make sure NAR is capable and spending in the correct places.
@@albundy3929 There are 3 reasons Agents continually waste their money on NAR:
1. Their Broker forces them to. They can't do that now, but they can still terminate their relationship with the Agent.
2. It's the only way to gain access to the MLS and the contracts.
3. The ability to call themselves a "Realtor".
I do commercial real estate and it's the wild wild west. Nobody was forced to belong to organizations and we don't have to rely them supplying contracts. We can purchase contracts without being a part of the organization that supplies them. This is the problem I see for residential agents as they are trapped staying with NAR. They don't want the hassle of creating contracts and all the disclosures for their transactions.
As a practicing real estate agent in NC, I would appreciate you producing a video that would walk us through, from start to finish, how a transaction might flow under the potential new rules. Your service to the Realtors of NC is very much appreciated. As a BIC, I recommend that our agents use your CZcams channel as another resource for sound real estate law and interpretation. Thank you!
Amen
Once the NC Association of Realtors gives their recommendations and guidance, I will for sure make this.
Again, how can you agents understand anything when you are asking CZcams to tell you how to do your job? Please educate yourself. This is why a lot of you will end up quitting the field. You have to be smarter than the next guy.
27 year Realtor-Broker here. Tiffany, you and I share the same dark cloud worry about unrepresented buyers. It is not just a worry but it is sure to become a reality and maybe even the norm for future US residential real estate transactions. In a twisted way, it will probably become something of a boon for lawyers because the new rules will just as surely bring more lawsuits as the certainty that fewer buyers will be represented. Thank you for your insightful summary of the upcoming rule changes.
great point. time to get a law license and specialize in real estate. lawsuits = money printer.
we already have enough dishonest, compromised lawyers. They’ve been given much too much power without oversight. Our Land Records reveal everything
If your value can’t survive telling your customer how much they’re paying you, are you actually providing any value?
@@brianbelgard5988 That is not the problem at all. My point is many buyers are hitting their limits on cash-to-close to include down payment on their loan, title company fees and title policy costs, and loading up their escrow accounts. Adding a commission to pay their buyer agent may not be feasible.... even if they see the value of representation, which many buyers fully grasp. Sadly, one roadblock in presenting our value is a seller's or buyer's prior experience with agents who have not done a good job.
@@brianbelgard5988 huh?
Absolutely the best and most complete understanding if the Nar settlement.
I sure hope so. I'd be a pretty terrible attorney if I couldn't interpret a legal document well. 😁
I retired 5 yrs ago after being a Realtor for 40 years. I am glad I am out of the business.
So tell me from your perspective do you really think it’s fair that your fellow American pays $18k of there hard earned money on a $300k house to a middle man?
I am glad you retired. Changes always scare weak professionals. We need less of those in our industry
You are lucky. Younger generations are struggling. This is another example of how life here in the USA is becoming harder for all.
@@jonlj77it's all negotiable, but I've netted my sellers and fsbos more than what they would have realized. If it wasn't for our guidance, sellers unknowingly leave a lot more on the table than they thought.
@@jonlj77yes. Just like anything, it costs money to do business.
We have been desperately trying to buy our first home for years. We finally have not only good credit, but great credit. We have a solid downpayment that we saved up throughout our entire 20s and early 30s. JUST WHEN we are in a good position to try pulling the trigger again in this market after Covid already moved the bar further away, the rates went back up above 7% and NOW we have to pay our agent commission too….That’s even more money that we now have to scrape up just to get our foot in the door. The asking prices are crazy. And we “make too much” to qualify for a FHA loan or first time home buyer grants. Combined we make $121,000 without OT. If this was 2019 we would be looking at getting a modest middle class, decent, and safe home in our area. Today, we are stuck with resorting to these horrible properties in unsafe neighborhoods with minimal land that are located in horrible school districts. The bar keeps moving and it’s breaking my heart. What was the point of all of these years of sacrifice and saving?? We wanted to provide a stable and middle class life for our future kids. So we have been waiting to have them. It feels like that dream is gone.
Even if the seller paid the commission before in reality the buyer pays for everything so you aren't actually paying anything extra that you would have in the first place.
You don't need to use a buyer's agent. Just take your offer straight to the listing agent. That's the way many buyers already bought their homes. Virtually every country in the western world has NO buyer agency involved in a home purchase -- the real estate process in USA is a giant money-milking con! Glad it's been dealt a kick in the teeth. In the UK, the commission at close of sale is typically 1% TOTAL, with NO buyer agent involved at any stage of the sale.
You have always paid your agents, they just have to explain that now.
@@lanialost1320 if you dont know anything about houses you can always hire a property inspector your buyers agent doesnt always have your best interests in mind he wants the deal to go through so he gets paid
@@girlonlaptop correct. it's in the price of the home.
NAR needs to buy a lot of ads educating buyers the value of an agent.
NAR committed suicide!
@@istandcorrrected2661 representation was not good. It's going to cause more law suits when sellers can't sellers will complain against agents not showing based on commission again. UGH!
It is more about the vagueness and problems caused behind the intent of the settlement. The lower end buyers will be without representation. It is now a pay to play world.
Correct
Unless we can start allowing buyers to finance their agent fees and change the rules for VA buyers.
Do you really believe a buyers agent represents just their buyer? In my opinion NO they do not because their commission from a sale generally is the ONLY way a buyers agent is reimbursed. A buyers agent has, in my opinion, an automatic conflict of interest ....the buyers agent wants his/her thousands of dollars commission so the buyer is on his own.
Before showing a home the Buying Agent will I believe need a legal document signed by the buyer agreeing that they should receive a specific percentage of the purchase price, or a specific amount of money, from the proceeds upon the sale.
Not only that, the seller will need to agree in writing to that too.
This all needs to be done before showing the home.
Maybe the selling agent can have his/her seller agree to allow him/her to sign for the seller,
but why should a selling agent agree when he can sell direct.
Selling agents I think are going to be competing with more brokers for each and every listing, driving their commissions down.
In my opinion the number of realtors is going to fall dramatically and quickly.
@@pia9343 Why should a buyer use a buyers agent?
For thousands of dollars maybe tens of thousands, what does a buyer agent offer, especially when they have a conflict of interest because they only get paid if a sale is completed?
@@CeruleanSky1111 Possibly. BA has a choice of what they'd like to do...it will be interesting to see the models that come from this.
Sure, a buyer can go unrepresented. Already happens. It's usually a painfully difficult transaction.
Won't be long until IT entrepreneurs put together websites not connected with NAR or MLSs where listing agents can post their buyer Realtor compensation offers. All I see from this ruling is more buyer/seller confusion and more complications for Realtors. Thanks a lot NAR and big RE companies. Your greed hurt the entire industry AND consumers. IMO, it's time to shake up the NAR and get some better people in control.
Wow!! just what I was thinking. 🤔 they say it’s about the Realtor, but the realtor didn’t make the rules in the MLS. It’s falls on the members. Also who’s responsible to pay the settlement in 4 years Also what about dual agency.
100% agree
I agree with your first sentence. I was thinking that myself. However, how were NAR and big RE companies greedy?
@anita34d IMO, the big real estate companies skirted or ignored the rules and the NAR did not crack down on them.
@@cliffvictoria3863 But which rules were skirted or ignored? The NAR is nothing more than a trade association. They also lobby on behalf of their membership at all levels of government. They have no legal authority over companies or agents. That is borne by the states. However, what they do well is to encourage a code of ethics amongst their members. Only those agents who are aligned with the NAR and constantly take and pass their code of ethics classes have the right to call themselves "Realtors". If one of its realtors was found to have committed something unethical, through an investigation and review, they could be sanctioned in various ways from re-education, fines and/or expulsion. If illegality was found, they could even refer the findings to the state for further legal review and possible repercussions.
As a potential buyer, I suggest using an agent and subtracting 3% from all offers made.
This is the most comprehensive video that has been made. Very informative. Thank you!
Great explanation, I have watched many and this one is a lot more clear and direct to the points then most.
Nice job , thank you for providing the detail on the settlement.
Thank you, I hope it helped!
This was a great summary, thank you for posting.
Glad you enjoyed it!
Great video!! The actual language from the agreement was very helpful, thank you!
Glad it was helpful!
Excellent video and description of the settlement. Thank you for this. I agree. Most of this isn’t a huge shift it comes down to agents educating and disclosing.
Sad that this removes transparency and we will now have these underground discussions of compensation, makes homeownership harder, shrinks buyer pool for sellers and makes an already low inventory market even lower primarily for the low to middle income buyer, FHA, VA and low down payment buyers. The codeword is CONCESSION or CREDIT. Thats the new codeword for compensation which again is removing transparency. WHo is NAR or anyone to tell a seller who owns a asset that they cannot publicly state what they what to offer an agent who brings a buyer. How does that make a seller feel about this being the best vehicle for the sale of their largest asset. This is so poorly thought through and doing the very opposite of what the settlement is saying it is doing.
Let me help your transparency. Talk to your buyer and ask them how much they will pay you because the seller will no longer pay for the buyers agent.
This is so simple.
@scientificapproach6578 my understanding is that the Seller can still choose to pay the Buyer's agent...it just can't be stated on the MLS.
@gabrielahiggins6965 you are correct; the seller can pay for the buyer up to the amount you, the buyer, contracted with your agent. But given the choice, sellers will default to not paying for the buyer's agent. Of course, the buyer can ask for concessions, but the seller paying for the buyer's agent will not be the default.
Buyers will soon realize that if they are to become competitive with their offers, they will seek out the lowest-cost buyer's agents.
Ultimately, the seller paying for the buyer's agent will become the exception, not the rule. So what I said still stands.
I totally agree with you 100%. This settlement is going to hurt consumers, both buyers and sellers, more than helping consumers in the long because most buyers are not willing to pay agents to represent them. If you don't believe me, ask around among your friends and family; you will find out that over 90% of them will say "NO" to paying a buyer's agent a commission to represent them even if you tell them that " You're worth it" like what the industry is trying to tell agents to say to buyers right now. For the sellers, they will lose dearly on the outcome of the purchase price because this settlement will eliminate a lot of buyers including first-time buyers, FHA, VA and even middle-income buyers if sellers are not willing to pay the buyer's agent commission. Currently and in reality, the buyers set the fair-market purchase price and pay for the commission, NOT the sellers. For the industry, there's no incentive for people to become real estate professionals and therefore, NAR will lose current members and fewer future members. I think NAR did a poor job of defending the industry which has been in practice for over 100 years. NAR did not do anything to protect the image of its members because they were too busy dealing with recent scandals.
Ditch the buyers agent. Problem solved. This will be the future, just watch.
The DOJ and these greedy attorneys have disregarded WHY Buyer Agency Representation cane about in the first place. Remember the days of Let the Buyer Beware? What about Low income buyers, FHA buyers, etc. The News and these greedy attorneys are telling them they are going to have to pay for their own agency representation and if they can't afford it and the seller refuses to help ... oh well, let the buyer beware. Sellers who refuse to share will simply have their homes sit stagnant on the market with high days on market and will end up with price reductions equal to or surpassing the amount they think they save refusing to offer compensation not to mention if those sellers need to buy another home they will need to pay their buyer agent fee? Would that not be a total wash? Who benefits from all this? The attorneys and plaintiffs who used Realtors to sell their homes (which sold thanks to the agents). Who loses? Homebuyers who already have been abused by the corrupt federal reserve international banking cartel.
So true. The amount of unlawful dispossessions stemming from fabricated, forged documents fabricated and forged by law firms and attorneys. These docs are filed in our Registries across the country and used for the sole purpose of stealing homes.
What you say about how transactions flow depends on the quality of the agents is absolutely true. Thank you for mentioning that. Right now I have a difficult transaction just because the other agent is terrible. He ignores emails and messages, react too late creating problems that would not be there if he knew what he was doing. I wish the clients of this type of agent knew the damage they bring to their own clients. Thanks for the review!
You’re exactly right, we see it all the time in our firm. So many avoidable issues.
Lets be Honest . Anyone with a brain or who doesn't like to lie knows that the real estate game is extremely prejudice. It's racist. has nothing to do with skill more to do with who The buyer or seller likes and want to share their money with . Most likely it will be with a white person because they own the most real estate. That was purposely done a long time ago.No need to lie about that or ignore it... So I can see the only possible positive thing Is the mandatory buyer's agreement that way A buyer can't get all the information from one agent and then go work with another one ,because they like them for whatever reason.
@@HilltownClips lol. wrong.
THANK YOU for making this informative settlement, as I know there will be SO MANY agents that are naive or not-knowledgeable about how to operate going forward.
thank you! I really appreciate your straight forward explanations of the document
I'm a realtor in NC. I've pieved together most of this from other sources but this is BY FAR the best, most comprehensive, and well laid out source of information. Thank you so much for doing this. I really appreciate this video!
In North Carolina this is so much of the stuff we already do in practice. It's frustrating to think this is to increase transparency. Removing compensation from the MLS seems to me like the opposite of transparency. While I understand the not allowing for compensation over the agreed upon amount I do think this will work to standardized compensation because agents will not want to miss out on the extra percent so they will most likely write compensation to the highest they can get away with.
Once again I really appreciate this video it is by far the best video I've seen on the subject. However I don't think this judgement will help the industry with transparency like it seeks to do.
Thank you Tiffany. Very well laid out presentation that is clear and articulates what the NAR settlement entails.
I’m very grateful to have your input! Thank you.
My pleasure!
In the NAR handbook, an offer of compensation IS required. "In filing property with the multiple listing service, participants make blanket unilateral offers of compensation to the other MLS participants and shall therefore specify on each listing filed with the service the compensation being offered by the listing broker to the other MLS participants"
Thanks for explaining it and making the whole document this easy to understand
EXCELLENT explanation! Thank you from TEXAS!
Thank you for creating this video so that the changes are digestible.
Excellent video! I’ve been a realtor for 16 years and I’m not excited about some of these changes. Thank you for simplifying everything and explaining it so well! I really appreciate your video! One of the best I’ve heard!
Excellent
Your words are gold 🥇
Thank you so much 😀
Thank you! This was a great summary.
Glad it was helpful!
I know exactly what is going to happen. Buyers who are unwilling to commit to paying any dollar amount toward their agent's commission will not sign a buyer/broker agreement and will attempt to buy a property on their own without represention. This means buyers will contact the listing agent directly to buy the property leaving the buyer's agent without a job.
And listing agents will then have the additional legal liability of dual agency or assisting an unrepresented buyer...crazy.
Exactly! Buyers may just pay for a lawyer if the state does not have promulgated contracts to review and skip the buyers agent totally. The sellers agent does not have to take on dual agency if the buyer represents themselves. We’ve been doing this for years on homes we buy and even selling we have had buyers just make us an offer, we accept it and get everything to our title company and close the deals. It’s been easy.
Or just cut out the listing agent as they should? Use an attorney instead. They don’t charge as much as realtors!
@@JCMasterCraftsman for something as important as buying a home a lawyer needs to be involved. This law paves the way for that.
Yes I agree. And comparatively a lawyer for a several hundred or a thousand dollars brings value not matched by tens of thousands of dollars spent on commissions to agents. 😢
Great explanation without all the panic! Thank you!
That was great, thank you...subscribed!
Thank you so much!
Thank you so much for this video! It was so informative!
Thank you for sharing your knowledge.
Thank you for reviewing this!
Of course!
Excellent explanation. I think its important to also emphasize that this settlement does not mean NAR has done anything wrong.
Here’s the problem that agents are having. We aren’t talking about the difference between having a buyers agent or not being a few hundred dollars, at least historically.
It’s like you blow out your tire, have a spare in the trunk. If I have AAA, it’ll cost me $20 to get it changed. If I don’t, I have to consider whether it’s worth it for me to pay $450 or do I suck it up and watch a CZcams video and figure it out myself? Sure, $20 is worth it. But $450? I can do it myself. This is the problem for buyers agents. They aren’t worth what can often be tens of thousands of dollars. Maybe if they are paid a flat rate it may be worth it to some people. I have done it. It’s not that hard.
You bought for sale by owner or you reached out to a listing agent who then represented you and the seller?
Well I agree with your paying for the service or doing it yourself and you can also shop around for the best deal. That is exactly what you have always been able to do with Real Estate......Commissions have always been negotiable, you chose the Company/Agent you want to work with, if not happy with what they charge, then go to another one, NO one forced you to work with a certain company or agent. No one even Forced you to work with an agent period. Sale it yourself. Just for the record I work a lot harder, spend more time with buyers than I do Sellers. Buyers look at multiple homes, sometimes for months. It is a business You CHOOSE to use, not like the stuff we have to have and have no choice!.
FANTASTIC JOB! You did an extraordinary job breaking down this suit on this video :)
An excellent presentation. By far one of the most clear and really nailing the topic from all sides. I also do agree that the buyers (who were one of the parties actually supposed to be helped here) may end up being harmed inadvertently in the process. I think the buyer agency situation should have been thought through a little better so as to ensure buyers don’t miss out and pass up on potentially amazing buyer agent representation ensuring they close on a property and helped from beginning to end, and now either opting out of that representation and or can’t afford that representation and then getting stuck along the way with no one to help them and worse case even losing a deal.
Thank you for providing such a clear translation of the settlement. I share your concerns that FTBs are going to be the most harmed.
I've been a broker since 2008. I've been preparing my agents for these changes for 2 years. Not that I saw these specific changes coming but I felt agents needed to add other lines of business to their services. We're all so glad I took these steps so they'd be prepared for these shifts.
Thank you for explaining
Excellent! Thanks so much.
Video is very informative and easy to follow. Keep up the good work.
This was a wonderful. Here in Los Angeles, I've heard much of what's in this video, but you break it down so simply and clearly. As just one of the vast majority of "good" agents in this business, I'm very grateful for this content. Thanks!
Glad it was helpful!
Great info, thanks for explaining it, I loved the part about relying on uncle Jim's experience instead of hiring a Realtor.
Thank you so much for your clarification!
Glad it was helpful!
Sounds like NAR caved! What’s the point of this? We’re going backwards! They admit it’s a lack of education from the agent to the seller so why not just have a form educating the seller and have them read, understand and sign it. I remember my dad had sellers offer a boat in the garage included! Are appliances going to be prohibited in the MLS? NAR needs to fight this not cave. 😡 When do we vote these guys out?
Thank you Tiffany for this awesome presentation. It is very informative
I agree with you. I commented to our local page exactly to these points. It certainly will create a better salesperson. Back to old school real estate. I also created a backend compensation website in less than an hour as example. Thanks for the accurate detailed info!
In my humble and experienced opinion, the vast majority of buyers have little available cash to pay commissions and are dependent on seller commission splits with buyer agency. Otherwise, they will be dependent on lenders agreeing to roll such obligations into loans. This settlement represents a revolutionary change in the industry because a significant number of low to middle income buyers will lose representation and protection. Although it may seem easy just to switch the expectation of buyer agency commission from the buyers, that switch has severe financial issues.
I’m not sure you listened to video. Seller can still pay it
@@InvestingWithAdamKonly if it does not exceed what they buyer previously agreed to pay their buyers agent.
The buyer can not even make an offer with their agent until they agree on the price they will pay their agent.
I became a broker associate two years ago. Before that, I bought over 10 properties and sold 5 (personal and investment ). During that time I can honestly say I have no recollection of any agent ever telling me that fees were negotiable on either end. That doesn’t mean somebody didn’t mention it in passing. But I have no conscious recollection of the fact that as a buyer or seller that this was negotiable. Maybe I need to be a better listener. But I certainly need to be a better explainer now. After becoming an agent I have had other agents point-blank tell me if I didn’t offer 3% commission on their end they wouldn’t even show the property. So how did we get here? This is how.
More people need to read this...because this is exactly how we got here.
Absolutely. A Berkshire Hathaway agent in Pinehurst, NC told me he would not bring a buyer to my home for a 2 % buyer fee - sighting 2% on a $795k home was just not enough. RIP buyers agents fees - finally you are getting what you deserve.
This is the wrong take. A commission rate doesn’t need to be negotiable by any agent in particular. A listing agreement and/or buyer agency agreement simply contractualizes the terms of compensation. An agent has the right to stipulate how much money they are willing to work for. (Sometimes the negotiation looks like this:
Seller: “what’s your commission rate?”
Agent: “6%”
Seller: “will you do it for 5%?”
Agent: “no”)
Are we going to sue attorneys and doctors because no one told us their fees were negotiable?
This hurts the sellers as much as it hurts the buyers. If a seller is unwilling to pay the buyer brokerage fee, they will have a much smaller pool of buyers, which creates less competition and ultimately less offers and lower offers.
If sellers want to have their cake and eat it too, home values in the US just lost 3% of their value. This is because a buyer who would have previously paid $200k for a home wherein they had no out of pocket expense for representation will now only value the home at $194k once they factor in the buyers brokerage fee.
Dumbest lawsuit ever.
Interesting , that’s exactly why the DOJ is saying commission should be negotiable. What ever was published in in secretive MLS was in in fact CARVED IN STONE. Agents were mining the data base and showing only those homes that met THEIR commission standards.
spoken like a real life realtor@@keithlehman2764
I’m all for change. I’m ready to see what the future holds, but this whole law suit just feels backwards. I can’t believe NAR settled. I don’t understand why an MLS wouldn’t disclose to participating members if there is a commission being paid. Now this will turn into a sh*t show for buyers and buyers agents. I feel bad for them. There is going to be a lot of uncertainty. Buyers won’t be able to pay a realtor.
yup. it will be business as usual. seller pays both sides. just with a few extra steps. backwards indeed.
Nailed it. Definately taking a step backwards.
I wish we had an attorney like you here locally in Mississippi. Great video and breakdown!
Great video, but I disagree that "not much will change." This is a MASSIVE change in the way transactions will be conducted---MASSIVE. Buyers will be shocked that THEY now have to agree to pay an agent, before they even look at a house. Many will not do that, and many agent will accept SUBSTANTIALLY less than before, because it's either LESS than before, or nothing. (This is the opinion of someone with three decades in the business).
It’s good you guys are already so honest and God-fearing in North Carolina (and I believe it!) but I’ve seen all the shenanigans listed and more in Boston and NYC. This was long overdue
Excellent review, thanks for sharing!
Thank you so much!
@@TheRealEstateLawyer You are very welcome. Hoping you don't mind I shared this!! Very well done.
The commission was always baked into the cake. And BTW the brokerage takes a HUGE chunk so it is not like the agent gets a $15,0000 check on a $500K sale. But what will happen now is a 300K house that used to offer 6% to pay both sides will now get an offer for 291K since the other 9K has to be paid by the person making the offer - Even if the buyer goes without representation the seller is going to see 3% less so this just makes it more complicated for homebuyers and not going to save anyone money buying a home... just my two cents...
Less money going to the agents = more for the seller.
lol at savings for buyers.
Thank you for sharing.
I am a Realtor in Florida. How are we supposed to find out what the seller is willing to pay on a listing if it is not allowed to be posted. The settlement is a nightmare because it mat allow listing agents not to be truthful about the amounts the seller is willing to pay. When it is in writing, unless changed based on the offer, it is usually written. Now they are going away from disclosure, and not punishing the people who caused the problem.
you have to contact the listing agent and have them send you something in writing. just will take longer now. Your buyer agreement, make sure you have the buyer sign a document (drafted by your real estate attorney) that says he does not want to see any homes where he will have to pay more than x% to you
Excellent presentation.
My frustration is that I am a seller going to be selling within the next month and I literally have had multiple agents tell me I have to list with 6%. If I offer less than 3% for the buyers agent that my house won’t have enough buyers and agents won’t sell the house because the buyers won’t want to pay the difference between the amount offered and 3%
The of course in the last few days they cover and say at the end but of course it is negotiable
I do 4.5%, half to the buyers agent- 3.5% if someone from my team brings a buyer and 1% if the buyer calls you and we still do everything. Commission is always negotiable
@@KateEarley do you get to decide your commission without getting it approved by your broker
Commission can be negotiable, but just as it's up to you to accept a number with the agent, the agent has to be willing to work for that amount as well. If you don't offer a commission to a buyers agent, then that means buyer would have to pay. A majority of buyers don't have more cash to pay for an agent. So, you can, not offer one, but the buyer may choose to look at other homes that do offer it instead of yours. Note I said BUYERS not agent.
Use a lawyer to draft a sales agreement , done ☑️
Excellent information. Mahalo!
Great work!
Keep in mind, these new rules will not apply to a buyer's agent who is not a member of both NAR and MLS. This means a buyer's agent could ignore all these new rules and still represent their buyer in purchasing a property as long as he/she is currently licensed in their state and in good standing.
But how are they gonna get paid from the transaction?
@@HilltownClips in writing, agency disclosures.
let's see how doj factors into this.
Thank you for this Tiffany; the information you provided here confirms my views on this lawsuit…not much changes in terms of how REALTORS practice except in the perceived value that the buyers agents now need to be able to communicate to their clients as well as the sellers who agree to compensate them in a transaction.
Awesome job!!!
Great video 🎉 You explained it well and got clicks without all the fear mongering I’m seeing from CZcams agents for clickbait. I would like to say, I see more lawsuits coming for failure to perform, where’s the appliances? I need to get out of my contract!!! type of suits. Some buyers will go it alone and really it won’t be fair to go against a seller AND professional agent guiding them on the sellers side.
This is disastrous. Lower income people are going to be pushed out.
This video is excellent. She mentions NC several times
Yes, that’s where my law office is
I’m confused about the practice changes in section 58 terminating in 7 years.
What happens after that point? Things revert to what it is currently?
What’s the point of all this then?
Right...this was not explained
I think it's not known, all we know is that NAR isn't obligated to follow the agreement after 7 years but that doesn't mean they will want to go back completely. My guess is they will end up somewhere in between. One thing they will likely keep in mind is that if they aren't careful, they could end up getting sued again.
@jon9103 Local, state and national Realtor dues were about $700 annually when I retired in 2018.
They are laying ground work for the big corporations to take over the market and the mls to become irrelevant as well as agents in general. The government is not your friend.
What about first-time buyers who are short on funds. They barely have the down payment???
Most definitely agreements will be worded in such a way that commissions are rolled into the price of the home so it can be financed much like when a buyer rolls closing costs into their offer. Only time will tell if banks and appraisers play along.
@@dpky7333 this will require higher rates becuase of higher risk.
@@dpky7333 The only way that Buyers "roll closing cost " into the price of the house most of the time today, is to offer more than listing price and ask for the seller to pay the closing cost and hope it appraises for that extra money. Banks are not going to make loans for more than a home is worth.
thank you.
Having worked for multiple brokers, some are DEFINITELY more ethical than others. One broker that I worked for promised training, but all the training was essentially how to get clients and had essentially no information on how to actually be an effective fiduciary for clients and ensure that you are providing value as an agent. I had to switch to another broker to actually learn how to effectively advocate for my clients, what to do to protect my clients, and to make sure my clients are adequately informed about what is in the contracts they sign. So I can fully see agents not being trained well enough to actually help their clients adequately.
Well done!!
Thank you for breaking it down! I had to reread this agreement a few times so this help clarify the verbiage in real words. How will this affect builders in offering compensation and /or bonuses?
You're very welcome
Just silliness, no one can constrain what you pay another private party...if I was Realtor I'd drop out of NAR and start my own state association...
that's what they hope for, to track and audit you as well.
Thanks for this awesome and comprehensive video on the NAR settlement! If I don't practice dual agency, and I do not wish to be a party to a real estate sale with an unrepresented party am I allowed to tell a seller that there is No requirement for them to compensate a buyer's agent but that they will have to find another brokerage to handle their sale, because I'm not willing to incur the additional liability that comes with dual agency or an unrepresented buyer? Thanks for your time, and the great video!
Of course you can. You don’t have to work with anybody
This is a great question and unfortunately one I’m not sure how to answer yet. I think we have a lot more questions than answers from the settlement document alone. I think if your local association doesn’t address this specifically it is an amazing question to pose to your commission to get an official stance.
@@TheRealEstateLawyer Thank you very much. Unfortunately, the 2 real estate agents I have seen debate Mr. Ketchmark regarding this class action lawsuit were both terrible. I wish I could ask Mr. Ketchmark one very simple question... Would he be willing to tell every single seller in his class action lawsuit and all potential home sellers across the country that having an unrepresented buyer when selling their home will not increased the liability they could face after their home sale? I would love to hear him dance around that answer. Oh well thanks again.
Why not take the listing and advise buyers that they must hire and pay their own agent? I'm struggling with this dual agency/unrepresented situation too, and would value your thoughts on this.
@@HomeportResidential Another person on there saying we need 3% + 3% or disaster will result. A buyer can choose to pay for a agent, and there will be many flat fee agents to help out, assuming the buyers have picked the house and the price.
Thank you for such a great video. For the commission section of the settlement-where you stated that a buyer's agent has to outline their stated commission but can not receive more than stated? So if a home builder is offering say 4% to a buyers agent, but you agreement with the buyer says 3% you can collect the other 1%? What if you state in your contract with the buyer up to 6% could you collect all the commission from the home builder than?
Great vid!
Love it !
Listing agents come to get your listing and have no intensions of selling your home they know a buyers agent will sell it and they will get a commission and some of the buyers agents comission.Now all the agents will do is call each other or text to find out what the sellers are offering in comissions to decide if they will show the house sterring.Agents are worried that because of these lawsuits more people are going to know that they do not have to pay a buyers agent and agents are going to lose some commission.
Yup. The 6% gravy train ride is over!
wrong. again. buyer agent will have an agrrement with buyer about what their fee will be. buyer agent then calls listing agent and reports to their buyer if any commish coming from seller. buyer then choses to see the house, or not. you have no clue about real estate and you continue to embarr/ass yourself.
lol it’s not a requirement that sellers must pay buyers agents. Anyone who has ever sold a home knows you won’t sell a home without doing this
LOL...She is ignoring the obvious fact that 6% and paying the buyer agent was always pushed as the Norm. It is a dishonest representation by her.
@@theowl3756 I have done over 10,000 closings. Of course it isn’t required, it’s just common. Far from dishonest, just speaking facts and experience.
@@TheRealEstateLawyer But you are giving the impression that there was nothing wrong with the old system, and that the listing agents told the sellers that it was totally voluntary if they wished to give anything to the buyer agent. !!! But you must know this cannot be further from the truth, because the sellers were told that paying 2.5% or 3% commision to the buyer's agent was the way to sell their property.
Please note that I have nothing against the buyer agents. In Fact, if anything, I think the buyer agents deserves bigger commision than the listing agent, because they are the ones that sell the property. I think there should be a flat fee for the listing agent who puts the property on MLS, and most often is not even present when the buyer agent is showing the property.
@@theowl3756 Good agents already explain that. Some don't, hence why there was a lawsuit. In NC it's very common for Buyer's agents to have a signed Agreement with a buyer prior to even looking at houses outlining the terms. For those agents, the NAR settlement changes nothing.
As a closing attorney, in my office we charge a flat fee. Sometimes we do well with it while other times we lose money. Pros and cons to every model. No need to degrade my character behind a keyboard.
@@TheRealEstateLawyer Thank you for explaining your approach to closing, and how the real estate transactions are done in NC. Please note that as an attorney, you are not responsible for the misconducts, and for the games played by real estate agencies and their agents. The bigger issue is why the Sellers and Buyers often resent paying the commision. You may be too close to the issue to fully appreciate the sources of resentment. Please consider the perception of most people about real estate Agents. This is not to say that such perception is always accurate, but it is rather pervasive.
The real estate transactions in the U.S. have often been associated with unsavory activities and Ponzi Schemes. Consider the following:
1) In most countries, the commission is around 1-2%. But in the U.S. It was decided to demand 6% commission..!!! Yes, it was always supposed to be negotiable. But in reality, 6% was pushed as the Norm.
2) In the view of many people, the seller and the buyer agents work together to fleece both the seller and the buyer, and share the loot with the Brokers and the Realtors. This encourages collusion among real estate companies to provide sellers and buyers for each other and laugh all the way to the Bank.
3) The game starts with seeking a listing by telling the seller that without a listing agreement the property cannot be posted on multi-listing, and thus trapping the seller into a listing agreement. And to tighten the trap, they encourage some cosmetic work and "staging" for the property and offer $50,000 or more interest free loan for 1-3 months. This set the stage for pushing the seller to lower the original price, or face the additional cost of paying interest.
4) The next step is to ask other agents to visit the property and provide the so-called "Feedback", which is intended to highlight the negative aspects of the property and push the seller to lower the price even further. For every $10,000 reduction in price, the reduction in commission is only few hundred dollars, which the agents are happy to let go to get their money fast.
Thank you for doing this! I have heard in other videos about this settlement that😮😮 part of it will include no longer mandating Realtor membership with MLS membership. In other words, has this settlement addressed allowing non realtor members, but still licensed salespeople, access to the mls?
great video! we met with a buyer agent the other day and my husband thought she worked for the seller agent because they were saying all the same stuff. Like “the price seems fair”. if i’m going to pay for a buyer agent they are going to need to represent my interest, not the sellers.
The “price seems fair”?! 😂 There are comps that factually determine if the price is fair!
Perhaps the comps did show the price was fair. Hence helping you understand that if you want the house , you need to offer more not less.
You want your agent to tell you its overpriced , when it isent?
Than you offer less and you loose the house?
Taking a sales person’s word for what is fair is not advisable. That’s what the big picture of this case is all about.
That is why you walk through each of the comps you go through all of the photos you compare all of the different aspects with the client as they review each of them, they ask questions you answer questions. Ultimately, they can choose for themselves by their own facts and eyes, which property is most similar to the one their purchasing, and what it closed for.
That would be one expensive photo review slideshow, that most people can and would do themselves if they had to pay 3% of the purchase price, meaning they would save $15k on a $500k property if they reviewed the public info themselves.
Thanks for this. What kind of camera do you use?
My husband does this and he has so many cameras I can barely keep up 😂 but he says this one is the Panasonic LUMIX S5iix that he has been experimenting with.
It’s a huge change Having the buyers own the compensation in Chicago as currently the compensation always comes from the seller side.
The seller can still pay it.
Any time I have bought and sold houses, I was never told about not having to pay something. It was just written up as if it was required.
Exactly!! We’ve bought and sold many homes in various states and we’ve been ‘told’ “if you want this house sold you must offer the buyers agent 3% no less or else you won’t have showings” we switched to selling now using flat fee listings on the mls to save the sellers agent and have more control over what we choose to offer the buyers agent. We’ve offered 1-2% and had no issues selling the homes.
Generosity generates more generosity.
Commissions and anything related to the transaction have always been negociable . You just didn’t read what you signed.
did you not read what you were signing?
@@melaineanderson6022 does anyone read the 500 pages in the sales contract. I expect the realtor that is working for me to be honest and open.
Thank you for this! For an off-market deal.. What do you think of the BNA? Can you just represent the seller, get full commission from seller, and let the buyer on their own (but maybe just provide them with forms)? Or do you have to clarify with the buyer what commission the seller has offered you?
Not required is bullshit, of course agents say it's not technically required as if that somehow washes their hands for forcing sellers into "customary " commissions. Name one market where there is actually significant variation in commission rate for the buyers agent for a given home value, as would be the case if the "customary " commission wasn't the de facto standard. To be clear, I'm not saying i disagree with the customary structure, just saying it's very misleading to pretend it's not required.
Still not required, but is obviously in the sellers best interest to offer compensation to buyers. it’s kind of the same Situation that we have right now with for sale by owners. If they're not offering buyers agent compensation, they're significantly limiting their buyer pool is the main reason why the majority of them end up hiring an agent or conceding to offer a commission to a buyers agent if they bring them an acceptable offer. At the end of the day compensation to a buyers agent has never been required. The seller can always say, no even if the listing agent is firm on their price the ability to negotiate a commission does not mean that the seller has to list the price or that the listing agent has to reduce their commission. The seller can say no and go and find someone else that is willing to list without offering any buyers agent commission, but the market will ultimately determine how well that is going to work out for them
Question and sorry if I missed this. Does this include agents under the same broker?
I'm a real estate investor and have 35+ deals. One thing I have learned, there are so many dishonest people in real estate that the industry is constantly coming up with new ways to increase profit. The biggest scams are radon, and home inspections and environmental contractors. I have replaced serviceable waterlines, had to prove there is no radon in home for sale (charcoal test), prove inspectors they are wrong about life safety electrical issues and it goes on and on. Real Estate Agents are not investors and should be paid just as any other employee. Real Estate is highly government controlled and regulated through zoning, building codes and supply chain.
Do you have a link to the document?