I know that the settlement doesn't officially go into effect until July, but has anyone put a home up for sale since the agreement was announced? And were you able to negotiate different terms for the buyers portion of the agent's agreement?

I have two properties I need to sell this year. I am not in the same location as one of them, and have issues with the timing of the other sale, so it's not practical for me to do FSBO.

Appreciate any insights.

Your best source is the best broker in town. Call him/her and ask. Or if you know a mortgage banker or lender, ask them. Or your favorite title attorney. Everyone knows the score, they all can add. Cutting a deal for 3% now may be preferable to signing an hourly contract in July. My son in law owns a large title company (19 offices) and has already hosted several classes on commission changes and they're packed.

Commission % is always negotiable, 6% has just been an industry standard.

Your agent could advertise the house with a 1% buyers agent commission but that's just going to reduce the number of buyer agents that want to show the property to their client.

The settlement changes things for the buyers agents as far as I know - which you aren't necessarily concerned with the agreement between the buyer and their agent.

Sims said:

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Commission % is always negotiable, 6% has just been an industry standard.

Your agent could advertise the house with a 1% buyers agent commission but that's just going to reduce the number of buyer agents that want to show the property to their client.

The settlement changes things for the buyers agents as far as I know - which you aren't necessarily concerned with the agreement between the buyer and their agent.

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I know that it's negotiable. The last home I sold (about 6 years ago in NJ), I had a 4/5/6 arrangement, where I potentially paid different buyer agent percentages depending on who actually brought in the buyer. But as far as I know, the buyers fee has heretofore been paid by the seller, and my understanding that is about to (potentially) change. And I am wondering if anyone is able to get it changed ahead of the settlement.

But quite honestly, unless a person is looking for a home from a long distance (a job transfer, for example) I can't for the life of me figure out who needs a buyers agent. The last home I purchased in Maine was long distance, and I used one (actually required by Maine state law). They provided value, to be sure, but not 3% of the purchase price.

The only change (from the seller's standpoint) after the settlement is that the listing agent can't advertise a commission to the buyer's agent on their local MLS.

You have always been free to negotiate whatever commission amount you would like with the listing agent...and dictate how much (if any) of that commission you would like shared with a potential buyer's agent.

Diggity said:

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The only change (from the seller's standpoint) after the settlement is that the listing agent can't advertise a commission to the buyer's agent on their local MLS.

You have always been free to negotiate whatever commission amount you would like with the listing agent...and dictate how much (if any) of that commission you would like shared with a potential buyer's agent.

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Given your experience, how do you see this shaking out, on average over time?

I bleed maroon said:

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Diggity said:

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The only change (from the seller's standpoint) after the settlement is that the listing agent can't advertise a commission to the buyer's agent on their local MLS.

You have always been free to negotiate whatever commission amount you would like with the listing agent...and dictate how much (if any) of that commission you would like shared with a potential buyer's agent.

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Given your experience, how do you see this shaking out, on average over time?

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honestly, your guess is as good as mine,

I think there's a pretty stark difference between a.) what the proposed settlement structurally changes and b.) what people seem to think it changes.

As I mentioned, the settlement doesn't change much on its face, but it has gotten people to debate/discuss/think about commission structures more than ever.

I would say the mere fact that so many people were under the misconception that commissions were not negotiable (and are now realizing that they are) will make those conversations much more prevalent and that will put downward pressure on commissions.

A lot will depend on the prevailing market. In a strong seller's market...I don't always think a listing agent adds that much incremental value....but a good buyer's agent can certainly earn their fee. When the market flips...the relative value of each usually does the same.

I do think buyers agents are important for buyers who are inexperienced (in general or in that particular market). Decoupling the commissions (in theory) should allow buyers/sellers who find value in a service chose to use those services (or not) so that should be a good thing in the long run. We'll see how things shake out though.

I'm reading the DOJ isn't done with their investigation, so It will be interesting to follow for sure.

Diggity said:

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I do think buyers agents are important for buyers who are inexperienced (in general or in that particular market). Decoupling the commissions (in theory) should allow buyers/sellers who find value in a service chose to use those services (or not) so that should be a good thing in the long run. We'll see how things shake out though.

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This will be the part I think that causes the most mix up with lower income buyers - particularly as things move away from a buyers commission.

In a crazy world, I could see where FHA buyers end up having something along the lines of court appointed defender...they have a public buyers agent.

the historic explanation I always heard for why buyer's agents became prevalent is for the reason you mentioned.

Buyer's used to use the listing broker to represent them, not realizing that the fiduciary duty for that broker was to their seller. Not surprisingly, this conflict created issues and the buyer usually ended up on the wrong end of them. The feeling was that buyers needed their own independent representation, so you started seeing to co-op format that we have today.

The argument against decoupling the commission structure is that you'll have buyers that arguably should have representation forgo an agent because they can't afford to pay out of pocket. I think you would eventually see lenders allow buyer commission to be rolled into loan costs.

As for those who simply decide not to use a buyer's agent and represent themselves, I've come around to the opinion that if your service has little to no perceived value, you're doing a poor job marketing your service.

We have agents across Texas and charge just 1.5% for sellers at closing. You can offer buyers agents anything you want for bringing a buyer, but our experience has been that your home will sell at a discount even after factoring in the reduced buyers agents commission, so it's best to offer 3%. We'd love to help you.

jja79 said:

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Is it possible this ends up making the buying process more costly for buiyers?

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I think the more probable outcome is buyers who want a buyers agent will either 1) not be able to find one willing to work without some known remuneration or 2) will have poor representation

A comment on 2...it's not going to made good agents bad or bad agents worse but it's going to make good agents harder to come by.

So how are buyers agents most likely to get paid?

K_P said:

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So how are buyers agents most likely to get paid?

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My projection is that eventually, buyers in America stop getting representation (similar to our European cousins, who do not have buyers reps 96% of the time, and the 4% who do get them are the wealthy). I'm already hearing and seeing some transactions start to go bad with buyers trying to go at it alone, so I also think we are in the part of the pendulum where folks don't think they need a buyer's agent, but when enough bad stuff happens to buyers and the word gets out again why having representation might be a good idea after all, the pendulum will swing back the other direction. In the meanwhile, this will be a great opportunity for sellers to make some great money off unwitting buyers....

jja79 said:

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I don't think this is a win for consumers.

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And yet the USA has the one of, if not the highest, % commission in developed countries.

evan_aggie said:

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jja79 said:

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I don't think this is a win for consumers.

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And yet the USA has the one of, if not the highest, % commission in developed countries.

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How are our home prices and home ownership rates relative to other developed countries?

I'm not sure what that has to do with countries that have cities hundreds of years older and apartment/homes are inherited through families.

Canada and the UK each have their own affordability crisis, and France is great if you want to live in a shoebox or out in the country. Housing in most cities in those countries are out of reach for most normal people until their late 30s to early 40s at the earliest. My former coworkers in Europe were happy to own a flat that was approximately 50 m (roughly 550 SF) once they could finally move out of their parents homes in their 30s. And because there are almost no buyers agents, sellers agents often list homes for prices that are incredibly higher than market value, then just wait for the first goober to come along who will pay more than market, and the cycle continues. The point is, buyers agents help keep pricing (sales and rents) in check. Honestly, I think it would make me a lot of money if buyers agents went away. Same with inflation, just like Trump said. Terrible for the country, but made me and most owners a lot of money.

And I think we can all agree that we don't really want to compare our housing to communist China, Russia, Vietnam, or Romania.

I would imagine you'll see earnest money requirements go up quite a bit on self represented buyers so they seller doesn't get unnecessarily harmed by a buyer who is unable to navigate the process successfully.

Or even better, option money.

As long as you can access an MLS, self representation is fairly easy if you're diligent. We've got a realtor friend who sells/buys in Portugal and France and she is quite envious of the MLS systems in the US. She typically has to visit each brokerage and agent in the areas she is interested to even find out what is for sale.

Jabin said:

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The point is, buyers agents help keep pricing (sales and rents) in check.

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I am an old in my late 60s, have purchased numerous houses over the course of my life, and not once has an agent representing me as a buyer advised that a house was priced too high. In my experience, the only motivation that both seller and buyers agents have is to get the deal closed.

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That's really sad. My agents and I help clients get free closing equity all the time. One of my favorite stories was the time I helped a client get a free 40 acre tract added on to his land purchase. We ended up doing several investments together after that and we've both made good money on those, all because I did a good job on that ranch purchase. Why don't you try working with Red Pear agent the next transaction you do? We have agents across Texas. To give you a concrete example, this was some feedback that Jack got the other day on a deal he will be doing soon:

evan_aggie said:

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jja79 said:

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I don't think this is a win for consumers.

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And yet the USA has the one of, if not the highest, % commission in developed countries.

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Not sure I follow the connection there.

jja79 said:

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evan_aggie said:

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jja79 said:

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I don't think this is a win for consumers.

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And yet the USA has the one of, if not the highest, % commission in developed countries.

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Not sure I follow the connection there.

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Then you're being obtuse. The connection is that the rest of the world doesn't see a realtors worth as 6% of the value of a home.

1939 said:

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jja79 said:

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evan_aggie said:

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jja79 said:

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I don't think this is a win for consumers.

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And yet the USA has the one of, if not the highest, % commission in developed countries.

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Not sure I follow the connection there.

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Then you're being obtuse. The connection is that the rest of the world doesn't see a realtors worth as 6% of the value of a home.

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And like Jamie already explained, it's apple and oranges comparing to the rest of the world.

I don't think I am. What is the connection?

Why did you use an agent then?

Not sure how you connected your reply to my response to someone else. I just don't think this is a winner for consumers but we'll see how it plays out.

If it can save me 2% it's a win in my book.

Most selling agents don't want to deal with the buyer directly. And actually, many make it this way on purpose to basically ensure 85-90% have representation for buyer.

One time the selling agent tried to tell us they would end up getting 6% if we had no agent. And that they weren't going to discuss their commission. Ended up having a friend who had his license come in and finish it up for 1%.

Another time I mailed the seller directly and told them an agent wouldn't deal with an unrepresented seller. They were shocked and showed it to us themselves.

My post much earlier in the thread was my opinion that in the end this won't be a win for consumers.

Glad you're happy with your personal experience.