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True but if you look at it in a strict legal sense the money does not go from the buyer to the agent or the broker. The closing statement reflects that the money technically flows from the buyer to the seller and then from the seller to the broker and then not reflected on the closing statement some of that money is then paid by the broker to the agent.
To me, this is really semantics. ....
I agree with this assessment. The money is coming from the listing brokerage to the selling brokerage. But it's semantics as far as I'm concerned and not worth getting my feathers ruffled over. I have larger concerns than semantics.
I agree with this assessment. The money is coming from the listing brokerage to the selling brokerage. But it's semantics as far as I'm concerned and not worth getting my feathers ruffled over. I have larger concerns than semantics.
Just substitute "at no direct cost to you" for "free" and I believe you're compliant. Seriously I don't recall ever telling a buyer that my services were "free". I have always said I'm paid by the seller's broker which I believe is OK and true.
Just substitute "at no direct cost to you" for "free" and I believe you're compliant. Seriously I don't recall ever telling a buyer that my services were "free". I have always said I'm paid by the seller's broker which I believe is OK and true.
It is common on CD to see consumers AND agents saying, "A buyers agent costs you nothing. They are paid by the seller."
Fun words.
Cost.
Pay.
Transparency.
Integrity.
And, there are four topics dealt with in the agreement. I think all four are of interest, in terms of transparency and service to clients.
Last edited by MikeJaquish; 11-20-2020 at 11:11 AM..
Buyers agent fees are not free to buyers, i.e., undeniably, they pay them and have for years.
This is just a bit of an erosion of the misleading proposition NAR has supported for years.
The needed step is to get Fannie, Freddie, etc, to recognize a drift in integrity and to allow buyers to account for their transaction expense on their side of the ledger.
That will be a hurdle, for sure.
But, almost all comps have that expense baked into the price. It is just an accounting game at this point.
How do you propose that buyers account for the expense of a commission that they inherently don't pay to the buyer's agent? Do you feel that the reason this needs to be moved to the buyer's expenses is for tax reasons, or just to complicate the entire process, or why? To me, I don't see any benefit or non-benefit for having it one way or the other.
One way to possibly solve it is to change the language on the agency agreements that we present to buyers. Right now there's several options of how we collect our fee. Simplify that to say, we collect _____ fee from you at closing. That should simplify the process and allow the buyers to move the fee to their side of the ledger. Put the burden on the buyer to collect the commission from the sellers and then pay it out to their agent.
What this will force agents to do is be good. Good agents will keep clients and bad agents will lose clients. I think when buyers realize how much an agent is making on a transaction, they will balk and negotiate hard for rebates in states that allow those. There will be a lot of buyer agent commission negotiations going on.
Right now, buyer agent commissions are kind of "funny money" because they don't see it as a line item on their closing statement so it is just sort of out there.
I think they are good changes, but I belong to an indie MLS and I'm not a member of NAR. About half of the brokerages are in the MLS.
Colorado’s Exclusive Right to Buy says who pays, how much, whether the buyer is obligated to pay or not, AND we will show the buyer how much if they ask.
What this will force agents to do is be good. Good agents will keep clients and bad agents will lose clients. I think when buyers realize how much an agent is making on a transaction, they will balk and negotiate hard for rebates in states that allow those. There will be a lot of buyer agent commission negotiations going on.
Right now, buyer agent commissions are kind of "funny money" because they don't see it as a line item on their closing statement so it is just sort of out there.
I think they are good changes, but I belong to an indie MLS and I'm not a member of NAR. About half of the brokerages are in the MLS.
Well...
The entitlement mentality supporting "funny money" is strong in the industry.
And, I think "forcing agents to be good" is just tooo wishful.
But, uncoupling buyers agent fees from the funny money game would be great for consumers.
It won't change anything. People are gonna be people. Someone above already pointed out an easy way around it.
I disagree. I think it will take a couple of years, but I think once consumers start seeing commissions on major portals, especially in the higher price points, they will be much faster to dump a buyer agent they don't think is good.
How many times have you read on here about people sticking with a buyer agent because they felt bad about firing them. I think if consumers see the agent is making $15k off of their purchase, they will start to require more knowledgeable service. It will take a while, but I think it will happen.
I disagree. I think it will take a couple of years, but I think once consumers start seeing commissions on major portals, especially in the higher price points, they will be much faster to dump a buyer agent they don't think is good.
How many times have you read on here about people sticking with a buyer agent because they felt bad about firing them. I think if consumers see the agent is making $15k off of their purchase, they will start to require more knowledgeable service. It will take a while, but I think it will happen.
This could be a good thing, and I guess there must be brokerages out there that don't disclose how much their fees are, who pays what, and what duties are due to each party. But I know in my own brokerage and personal business I take quite a long time explaining all of that. I also have a form that states, if you don't like me, send me an email that says I'm fired and you're let off the hook scott free.
If I'm not performing, I expect to be fired and make sure my clients know this.
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