This market update is going to be different, because we want to make sure you are kept in the loop of some BIG changes happening in the real estate world that will impact ALL buyers and sellers (now and through the foreseeable future)…
We’ve talked about it before in this blog, but the laws are now in effect – AKA it’s time to pay attention! The lawsuit has received considerable attention, with tons of inaccurate info out there. So, here’s the most important stuff to know:
Background of the Lawsuit:
Once upon a time…there were 5 sellers in Missouri who were unhappy with their realtors. They filed a lawsuit, and it grew into a class-action lawsuit, nationwide. The premise was around realtor commissions. The National Association of Realtors (NAR), the DOJ, many major real estate brokerages, and many lawyers got involved…
What were they suing for? The plaintiffs alleged that certain practices in the real estate industry were anti-competitive and unfair to consumers. Specifically, they argued that there was collusion around real estate commissions.
The Verdict:
Across the country, the DOJ is requiring modifications to NAR’s rules and practices, in order to increase transparency and foster a more competitive market.
Specifically, the goal is to make commissions much more transparent and really reiterate that commissions are negotiable. (For the record, they always have been, but we understand that not everyone felt that way.) Buyers should also have a clearer understanding of how much their agent is being paid and who is responsible for paying those commissions.
Implications for Buyers:
- Before touring a home, EVERY buyer will need to have a signed agreement with an agent (if they want representation vs representing themselves).
- In most cases, you will now be asked to sign into an open house and disclose if you have representation (aka an agent)
- This new buyer-agent agreement will clearly outline:
- What the buyer’s agent will do for you,
- How much they are compensated, and
- How they get paid
- Sellers, who traditionally paid the agent fees for both the buy-side and the sell-side will now very clearly have the option to pay (or not pay) the buyer’s agent. For any offers we make for our clients, we will negotiate with the seller to still pay the fee. And, before touring a home, we will find out for you whether the seller is willing to pay or not.
Implications for Sellers:
- Sellers have often paid both side’s agent fees. This is (and always has been) negotiable – now, the DOJ wants to make that VERY clear. When you sell, you’ll need to decide:
- What you’re willing to pay your own agent AND
- If you’re willing to pay the fee for the buyer’s agent (We will talk with you about the pros and cons of paying.)
- When you get offers on your home, you will need to be prepared to negotiate with the buyer about who pays for their agent’s fees
Forging Ahead
We’re going to be honest…the short term may be a bit bumpy. (The numerous new forms were released only 2 weeks before going into effect, and the rulings aren’t even all final!). However, as you all know, we are ALL about change, and we strongly believe that many of these changes will lead to great, open conversations. Not to mention, realtors (especially buyer agents) haven’t always been held to the highest standards – and that just isn’t acceptable! So, bring it on!
In that vein, we remain committed to living out our mission statement and our key promises to our clients:
Thank you for your continued trust and partnership! As always, reach out if you want to chat more. 😀
