By Living Room Realty, March 21, 2024
A lot of people have been reaching out to me about the recent National Association of Realtors lawsuit settlement and what this might mean for them and for me. I’ve seen a lot of headlines like this or this that would make it seem like a huge shift is going to happen in real estate. I tend to lean more in agreement with this Housingwire Opinion piece. Anywhere, here are my thoughts on it.
What does this settlement and rule changes mean for me, Tony Le?
The big change I see coming for me is how I operate my Real Estate business. Before these rule changes, when I represented a buyer and they sent me a property, I could instantly see on the Multiple Listing Service how much commission the listing agent was offering to me as a buyers’ agent. After the rule changes, promoting BAC (buyer’s agent commission)on the MLS system is no prohibited. It will be more upfront communication with each listing agent for each home our buyers are interested in. Also, now communications with buyers before starting the process will be more similar to communications with sellers. We’ll establish agency and have agreements signed before touring. We’ll also have conversations regarding commissions, and what would happen if sellers’ and listing agents do not offer commissions. Honestly, it could get harder for buyers out there, but it would be a home by home scenario.
What does this settlement and rule changes mean for you, a current or future home buyer?
As I mentioned, things could get a little harder. You’ll start to hear from your realtors’ about commissions. If your realtor ever told you that they represent you for free (and I’ve been guilty of this many times) that is (perhaps) no longer the case. The way I’ve structured my buyer broker service agreements is similar to how I’ve always run my business. If the listing agent and seller are offering at least 2% buyer agent commission, I will not ask my buyers’ to pay me any commissions on top of that. I know if every agent does that, it could slowly lower the “average” BAC from 2.5%, but that’s been happening even without these changes. On the extreme side, if a listing agent and seller are not offering BAC at all on a home my buyer is interested in, it will be a conversation. Real Estate is not one of my volunteer services, unfortunately, so if buyers’ want to tour and purchase a home with zero BAC, they may have to cover my commission (2.5% of purchase price). I’m all for buyer advocacy and I know I do a lot for them, so I think I’m worth the price, however I believe it to be utterly unfair to put my payment on the shoulders of a buyer taking on the biggest purchase of their lives. There are ways to be creative, we can work it into the offer to finance the commission (which is basically how things work right now). Otherwise, it would be an additional closing cost for my buyers. Again, this is on the extreme side of a particular listing agent and seller not offering any BAC. I don’t believe we’re going to see a wave of these coming in the near future. Sellers, hopefully, understand the benefit of marketing to other realtors to bring their buyers to their homes.
What does this settlement and rule changes mean for you, a current or future home seller?
Again, probably not a lot, but this mostly depends on you. You’ll hear a new disclosure during listing appointments, that you do not have to offer BAC. You’ll also likely hear that your agent still strongly suggests offering one as a way to maximize your attention, showings, interests and pricing for the time you’re on market. It’s your decision on if, and how much, you’d like to offer. We can’t say shit like “industry standard” anymore, but sellers that work with me will still see 6% on listing contracts, knowing that some of that is going to a buyer’s agent. I’m probably going to lose some listings due to that, but as someone who cut my teeth as a first time buyers’ agent, they just simply work too hard and do too much to be doing shit for free.
Anyways, these are just my thoughts. Not the thoughts of Living Room or every other realtor out there. Maybe I’m wrong. Maybe BAC goes away completely and agents that are buyer specialists will fade into different jobs. Maybe going forward every single transaction is double ended by a single agent representing both seller and buyer. Both sound pretty fuggin bleak to me, but who’s to say.
Lastly, earlier this week I went to see a friend’s sister perform at Albert Street Pub, she read parts of her middle school journal and it was hilarious. The show’s headliner was a band called Glitterfox, whom I had never heard of, but they really blew me away. Here’s a song called Portland –
