Seismic shift in residential real estate commissions now underway (Cape Coral: flat fee, sales)

[beach43ofus]

https://www.newsnationnow.com/busine...ousing-market/

I've been saying for years here that Real Estate Commissions are way too high at 5%-6% because home prices have grown so much, & technology makes being an Agent & handling the transactions so much easier.

The high rates were legislated into the industry...by lobbyists. Now, the bad laws have been reversed.

This will save buyers and sellers Billions, & even Trillions over time.

$1M homes are common now, so $50k-$60k commissions became common too.

I paid $32k as a seller once, & vowed to never do that again, so I started doing deals myself...w/ a Real Estate Atty, inspector, & discount broker. I saved $17k on my last sale alone.

I think the number of Buyers Agents will slowly be dramatically reduced to mostly 1st time buyers, & Listing Agents will get 3% tops only on lower end homes.

These changes in the laws were way overdue. Commissiones were costing homeowners (who move every 8 years on avg) way too much of their stored wealth, appreciation, and retirement nest eggs.

[Sunshine Rules]

There's a thread covering this topic over on the general Real Estate forum that's been running for over a year now -- it's at 28 pages of replies and counting, which goes into great detail as to what has been going on regarding these class action lawsuits, both sides of the debate.

https://www.city-data.com/forum/real...e-sellers.html




Noticed the media was very quick to come up with headlines that either do not present the settlement terms factually or are going for sensationalism.

CNN: The NAR settlement could slash home prices for many Americans
Washington Post: Realtors’ settlement could dramatically change cost of housing sales
CBS News: National Association of Realtors to cut commissions to settle lawsuits.
NY Times: Powerful Realtor Group Agrees to Slash Commissions to Settle Lawsuits

I've been a licensed real estate agent for 25 years now and realistically, what sellers will "slash" home prices if they are no longer offering a buyer's agent compensation?

Do FSBOs "slash" their prices because they are not paying real estate commissions? Of course they don't, the sellers generally hope to pocket the extra cash for themselves.

How is that going to benefit buyers?

There's actually the potential for buyers to PAY MORE as a result if sellers don't lower prices and buyers now have to pay separate commissions or fees to their buyers agents for services rendered -- even if those fees are technically lower.

My second question pertaining to these "news" stories is just how is NAR supposed to cut commissions? Isn't that anti-trust in itself, dictating what commission rates brokers/agents can charge? While the lawsuits have accused NAR of price fixing, isn't commission rate fixing just as wrong?

By the way, commission rates were never legislated.



Many agents in our area have flexible commission rates, 5 or 6 percent is not "standard" and any agent that tell sellers it is are bending the truth. I look at the MLS every day and buyers commission offered are all over the map, including those offering a flat fee instead of a percentage. Listing agents even have the option of offering zero co-broke in our MLS. There are both discount brokers for sellers and those that offer commission rebates up front to buyers in our area. If consumers wish to go that route they can easily find these types of companies on the internet.

My broker's listing agreement contract has blank spaces for sellers to select what percentage or fee they wish to offer for buyers agents. The sellers decide. That portion of the listing agreement is the same now as it was when I went to work under this broker over 14 years ago. But then again, I work for a local, independent real estate company, not a big box company that charges their agents franchise fees on top of the broker's cut.

I do agree that the fallout to NAR's actions may be substantial, but not necessarily in terms of what sellers and buyers pay to do business. I think it's more likely that NAR will implode and a new trade organization replace it. I think it is likely there will be less real estate agents staying in the field, especially those marginal and part-time agents. It would not surprise me if some brokerages go to a fee for service type of arrangement where customers pick and choose what services they deem necessary. However, in the process, it would not surprise me if those agents willing to provide fiduciary duties under exclusive buyer agency agreements for their customers fade out of existence. Who gets hurt? First time buyers, inexperienced buyers, those who cannot or will not take the time to pick up the slack themselves for services no longer provided by their agents. Also inexperienced sellers who have maybe sold only once or twice in their lifetimes and have no clue as to how things are done here and now.

In other words, I would save the celebrating until we see how things truly shake out, because what the headlines are screaming today and what actually happens as a result of this lawsuit may be entirely different.

[beach43ofus]

Most prospective home sellers and home buyers come to forums like this, not the real estate forum (which I would see to be more appropriate for Real Estate professionals).

I wanted to create awareness for prospective sellers and buyers, in this forum area, that there are new commissions laws/rules/guidelines they need to learn about; if they want to save Thousands of Dollars on their next r/e transaction.

The days of 5%-6% are fading, 3%-4% are a likely next step. For $1M+ homes, I think 3% total will become the new normal.

1% listing agent fees are taking hold in Atlanta, where I moved here from, for discount brokers, if consumers are willing to do most of the work. Discount Broker Rhonda Duffy, has taken Atlanta by storm, & I knew it would spread nationwide eventually:

https://duffyrealtyofatlanta.com/duf...ng-commission/

I saved $17,000 using a discount broker like Duffy in Atlanta. Sold our home quickly, & w/in the comp price range. I estimate I spent 40 hours doing the work a full listing agent would have done.

Woould you work a week for $17,000? Most would...but you must be willing to learn new things.

This is great news for consumers, that will save them a lot of money, & create a more open marketplace...which I think will drive down prices becaue sellers are not paying agents 5%-6% anymore.

The competition between sellers who are saving Thoudands on commissions, will drive prices down.

[joshan]

When this blows up in 5 years and people are actually paying more it will be interesting. There have always been low cost agents and options available, people choose the agents they do for a reason and it is rarely price.

Much like anything in life, you usually get what you pay for.

This opened the door for now charging both parties instead of just one.

[beach43ofus]

The real estate market in my area is so strong, several sales occur by neighbor word of mouth, w/o any agent involvement at all. Thise have 0% agent commission, & they are not rare anymore in desireable communities.

If I were to sell our home right now, I'd sell it myself by word of mouth, & an HOA approved sign. I might pay a buyers agent 2%, if I was in a hurry.

"By owner" is especially easy to do when there's already a listed home nearby bringing traffic past your home w/ your own sign out front.

Contingencies are also going away in the more desireable communities in my area os SW FLA. A sale doesn't have to be contingent upon an inspection, or anything else.

Sellers who have not sold in many years should start reading up on all these changes. If sellers are willing to learn some new things, and adapt, they can save Tens of Thousands.

[MOforthewin]

Originally Posted by beach43ofus

The real estate market in my area is so strong, several sales occur by neighbor word of mouth, w/o any agent involvement at all. Thise have 0% agent commission, & they are not rare anymore in desireable communities.

If I were to sell our home right now, I'd sell it myself by word of mouth, & an HOA approved sign. I might pay a buyers agent 2%, if I was in a hurry.

"By owner" is especially easy to do when there's already a listed home nearby bringing traffic past your home w/ your own sign out front.

Contingencies are also going away in the more desireable communities in my area os SW FLA. A sale doesn't have to be contingent upon an inspection, or anything else.

Sellers who have not sold in many years should start reading up on all these changes. If sellers are willing to learn some new things, and adapt, they can save Tens of Thousands.

Why do you think the market starting about 30 miles south of you is the opposite? Lee County and Charlotte county is cold. Cape Coral been making the news A LOT about the TONS of listings there and in other parts of lee county and the price chopping going on. Saw another article today about it. Here in Charlotte County it's the same thing tons of houses listed and they're not moving.

Many people are blaming it on Ian. The areas taking the beating right now are in Ian's hardest hit areas like mine and in Lee County around Cape.

Sarasota only got cat1 winds up there. Ian was far different here in Charlotte County. You can still see the scars from Ian on the foliage and structures as well. Signs that a major hurricane came through here. Had Sarasota got cat3 and the cat4 winds I think the market would be a bit different up there right now.

[rfomd129]

The OP makes a good point about commissions. I think many home sellers just accept a certain commission rate that they've been accustomed to hearing for many years and don't question it. Buyers are more independent now and many, myself included, find the homes we're interested in and if an open house isn't available to view the property, we ask an agent for access.

There is so much info available online now that the compensation rate should reflect that. I use agents when buying or selling because of the paperwork involved, not for finding or marketing a home. Anyone can see the commissions offered for a certain property on Zillow (just scroll down and it's listed in the lower right hand side) and if an agent tried to dissuade me from a property with a low commission, it would make me question their motives.

I would never sign a buyer's agreement but I understand the need to have a signed agreement when listing a house. Sellers need to be aware that they don't have to agree to 5% or 6% anymore for full service agents.

[joshan]

It appears starting In July you will have to sign a buyers agreement to walk through the front door and the commission will not be listed on Zillow as it pulls them from the MLS where they will be no longer allowed.

[rfomd129]

Originally Posted by joshan

It appears starting In July you will have to sign a buyers agreement to walk through the front door and the commission will not be listed on Zillow as it pulls them from the MLS where they will be no longer allowed.

That might just make more buyers go to FSBO. If the commission rates are removed from public sites it's even more important that sellers know that they should be negotiating for what's in their best interest.

I am not against using agents. A good one who puts their clients' needs first is a gem. I don't want to put in the time and effort to learn the ins and outs of the paperwork involved so I use RE agents but with so many clients doing much of the legwork before an agent even gets involved, I think the compensation should be reflective of that change in the industry.

[Above Average Bear]

Does anyone know how much realtors make hourly on an average sale? I’m guessing it’s pretty damn good! Especially in an up market.