[Shipping up to Boston]

Originally Posted by frayedends

It is interesting to see how this plays out in the long run. There’s lots of things that could happen. Buyer agent may offer a flat fee rather than commission.

The VLS thing is interesting too. If they now charge 6% commission on resales and MLS agents lower their commission to 3% then that would definitely incentivize VLS needing to compete.

How the MLS buyers agents get paid going forward will be interesting. No one works for free.

Correct. They don’t work for free and thus...may drive some (agents) from the profession

[GoRedSox!]

I’m not sure how this settlement benefits anyone.

In the real estate transactions I have had, the commission was 5%. I paid 5% whether the buyer had an agent or not.

When I was the buyer, I had an agent because it cost me nothing and was a huge convenience. But I am not going to pay a buyer’s agent thousands because I can do it myself and their service is not worth me paying over $10,000 on top of the price of the house.

It will be interesting to see how this shakes out but I don’t see who the winners are here. It doesn’t seem to be realtors for sure, or buyers, and sellers only benefit if the commission significantly drops.

There may be more to this than I can discern from reading the news articles.

[frayedends]

Originally Posted by GoRedSox!

I’m not sure how this settlement benefits anyone.

In the real estate transactions I have had, the commission was 5%. I paid 5% whether the buyer had an agent or not.

When I was the buyer, I had an agent because it cost me nothing and was a huge convenience. But I am not going to pay a buyer’s agent thousands because I can do it myself and their service is not worth me paying over $10,000 on top of the price of the house.

It will be interesting to see how this shakes out but I don’t see who the winners are here. It doesn’t seem to be realtors for sure, or buyers, and sellers only benefit if the commission significantly drops.

There may be more to this than I can discern from reading the news articles.

You say it cost you nothing, but you paid the buyer's agent by paying for the house. The seller included the 5% in the price and their agent paid your agent from those proceeds. So it was all built in to the house price.

Going forward, will selling agents decrease their commission because they aren't paying a buyer's agent? Maybe, and maybe they will tell the sellers to plan on paying a buyers agent if the offer requires that. Maybe the seller agent lowers the commiss. to 3% and the buyer's agent is on their own. The buyer may have to offer less if they can't afford to pay their agent. If they don't have cash they will ask for cash back at closing. Lots of ways this could pan out and I think this result only makes everything more complicated.

[GoRedSox!]

Originally Posted by frayedends

You say it cost you nothing, but you paid the buyer's agent by paying for the house. The seller included the 5% in the price and their agent paid your agent from those proceeds. So it was all built in to the house price.

Going forward, will selling agents decrease their commission because they aren't paying a buyer's agent? Maybe, and maybe they will tell the sellers to plan on paying a buyers agent if the offer requires that. Maybe the seller agent lowers the commiss. to 3% and the buyer's agent is on their own. The buyer may have to offer less if they can't afford to pay their agent. If they don't have cash they will ask for cash back at closing. Lots of ways this could pan out and I think this result only makes everything more complicated.

At least in CT, I agreed to pay a 5% commission when I listed the house. It was standard, really not negotiable in most cases. If the buyer didn’t have an agent, the listing agent kept the entire commission. If there was a buyer’s agent, they split the commission. This all tended to balance itself out as most agents are agents for some buyers and agents for some sellers. A lot of realtors won’t let the seller’s and buyer’s agent come from the same agency as there is some kind of special rues around this.


I do not have a fluent understanding of all of this or the new rules that are going into play, so it will be interesting to see how this plays out, but one thing is for sure, if commissions come down, there is less money to be made and some realtors and agencies may not fare as well as before.

[frayedends]

Originally Posted by GoRedSox!

At least in CT, I agreed to pay a 5% commission when I listed the house. It was standard, really not negotiable in most cases. If the buyer didn’t have an agent, the listing agent kept the entire commission. If there was a buyer’s agent, they split the commission. This all tended to balance itself out as most agents are agents for some buyers and agents for some sellers. A lot of realtors won’t let the seller’s and buyer’s agent come from the same agency as there is some kind of special rues around this.


I do not have a fluent understanding of all of this or the new rules that are going into play, so it will be interesting to see how this plays out, but one thing is for sure, if commissions come down, there is less money to be made and some realtors and agencies may not fare as well as before.

You're definitely correct. It will be interesting to see how it plays out for the buyer's agents. There does seem consensus on a few news stories on this that it will result in fewer agents. Can't be sure that will happen but certainly how they work commissions will change in some way.

[Pairadocs]

Originally Posted by Plinker

If VLS does not reduce their commission to 3% on pre owned homes, their listings will plummet. If the average pre owned home sells for $400,000 and VLS sells 3500 pre owned homes annually, this adds up to $84,000,000 in commissions at 6%. This law is long overdue and prevents double-dipping where the selling brokerage keeps the entire 6%, if they represent both sides of the transaction.
Consider the savings: A $400,000 home generates a $24,000 commission at 6%. I have never had a problem negotiating a 5% commission and this law will now allow me to pay only 2 1/2% to the listing agent. This would reduce the selling agent commission on a $400,000 home to $10,000 allowing the seller to pocket an extra $15,000.
I agree with the post that the seller may be asked to provide cash back to the buyer to compensate their agent but the seller has the option to agree, refuse or raise the price of the home by the cash-back amount.

A little levity here (since some readers will always frown on a bit of light hearted humor), But should all this happen can you imagine a person selling only one house every OTHER month trying to live on only 60K a year, or an agent who averages one per month trying to get by on 120K ?

[manaboutown]

‘The Knee-Jerk Reaction Is Concern’: Real Estate Agents Are Fretting Over the NAR Commission Settlement.