There is a big conversation in the world of real estate that most people have become aware of in one way or another at this point: Buyer Agent Commissions and the lawsuit that was recently settled by NAR (National Association of Realtors) that will take effect in July (or maybe August) of this year. The headlines are eye-catching and dramatic, and that’s not surprising since that’s what people respond to, but I would say there are a lot of misunderstandings and incorrect assumptions that people are making here.
There is no such thing as a standard 6% selling commission. Commissions have always been negotiable between the seller and the agent. While it is true that, in general, there would be a commission amount somewhere between 5-6% paid by the seller, with a portion of that going to the buyer’s agent, there are all sorts of variations that break out of those generalities. It has been tradition that the buyer’s agent would be paid out of escrow from the seller’s proceeds at the close. That number also varied, but most agents would agree to share at least 2-3% of their total commission with the buyer’s agent, and this agreement was solidified in the listing agreement that is signed between the seller and listing agency/broker.
The NAR settlement now makes it so that it’s not allowable for the commission amount going to the buyer’s agent to be advertised in the MLS. It would still be allowable for the seller to offer payment to the buyer’s agent, they just can’t put it in the MLS – so, that will create a lot of confusion until a new system of communicating this effectively falls into place or is created by a different platform. I think that transparency is very important and I’m all for the buyers knowing how much is being paid to their agents, and for the sellers to be able to negotiate how much they would like to (or not) offer to the buyer’s agent. I am concerned that there will be many unintended consequences to this decision.
Here are MY CONCERNS:
All of that said, THERE ARE GOOD THINGS that will come out of this once the dust settles, and here’s what I think those things are:
Ultimately, after the storm passes, those agents who show their value will still be valued – both by sellers and buyers. I believe they will be paid commensurate with their value. I’ve worked with agents in various states and areas, and I have to say that San Francisco has a very large concentration of professional, dedicated, collaborative, passionate agents who work incredibly hard for their clients. They take their fiduciary responsibility to their clients very seriously. I feel fortunate to have these people as my colleagues. The real estate landscape is evolving, and while challenges lie ahead and we may have some choppy water over the next year, I’m optimistic about the lasting benefits this shift can bring to our industry.
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as posted in Glen Park Association
A big conversation in the world of real estate that most people have become aware of in one way or another at this point.
as posted in Glen Park Association
as posted in Glen Park Association
as posted in Glen Park Association
as posted in Glen Park Association
You’ve got questions and I can’t wait to answer them.