Likely and unlikely outcomes of selling a house under the new rule.

bobcat said:
Here is a quote from Real Estate News on the new rules:
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This looks like the article you're quoting. Here's the part that confuses me. They say that buyer's agents can be compensated by the buyers themselves or the listing broker can offer a portion of compensation to the buyer agent.

But since the agreement is signed before the listing agent is even known, how will the buyer's agent know how they will get compensated, and how will the buyer have any assurance of whether it will come out of his pocket or if the buyer's agent will find a listing broker who will split the commission with them?

Seems to force the buyer to sign into some uncertainty, which seems unfair.

Although listing and buyer-broker compensation will be decoupled, NAR said there are three main ways buyer agents can still get paid:

  • Buyer clients can pay their agents directly
  • Sellers can offer compensation in the form of a concession
  • The listing broker can offer a portion of their compensation to the buyer agent
However, all forms of compensation have to be negotiated between agents and their clients directly.
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What agents need to know about commission rule changes
 

Forget about those pushy, aggressive R.E.agents..
It's FSBO
live in a community..that sells itself.
Everyone wants to live here.
In fact, my neighbor said" if ever gonna sell".they'd make an offer as her girls would love to live here.
Can't even imagine how.many offers would come in... putting 'A For By Owner' sign on the lawn.
 
caramel said:
This looks like the article you're quoting. Here's the part that confuses me. They say that buyer's agents can be compensated by the buyers themselves or the listing broker can offer a portion of compensation to the buyer agent.

But since the agreement is signed before the listing agent is even known, how will the buyer's agent know how they will get compensated, and how will the buyer have any assurance of whether it will come out of his pocket or if the buyer's agent will find a listing broker who will split the commission with them?

Seems to force the buyer to sign into some uncertainty, which seems unfair.


What agents need to know about commission rule changes
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When a prospective buyer signs a buyer-broker agreement, the purpose of it is to guarantee that IF a buyer finds a home they like and it finally closes escrow, the buyer's agent will get paid (one way or another) for their services in all the work they do (Negotiating agreements, coordinating inspections, working with the title company, working out good faith money and deposits, explaining all paperwork, finding solutions to any problems that may turn up, dealing with lending agencies and their demands, helping buyer find insurance, etc...)

However, in the process of showing homes, if none are found that a suitable, then the prospective buyer doesn't owe their agent anything. It's the same with the listing agent. If the home doesn't sell, the listing agent doesn't get paid either. It's a gamble that both are willing to take, and it may end up as just wasted time that is made up for when one does sell. Same as a car salesman.

If a buyer has their own money to cover their agents fee, then they can look for whatever home they choose, and perhaps offer less money to the seller. However, if they don't have their own money to cover that fee, then they should be looking for a home where the listing states something like: "Buyer's agent commission negotiable with strong offer". Under the new rule, you can't put any amounts or percentages in your listing on the MLS, but you can hint that it can be negotiated with a separate agreement outside of the MLS listing.
 
When we bought our current home, in 2017, we were asked to sign a Buyer's Agreement, stating that our Agent was acting strictly for us (the buyers) and had no conflict. Same with the Selling Agent for our house in TN - she was acting strictly on our behalf.

I would NEVER use the same agent for buying AND selling! Conflict of interest and how do you know you're getting the best advice - as a buyer?? It would be too easy for the Agent, acting for the seller, to just gloss over any issues with the house and "assure" you everything is "fine!" Sometimes those buyers are "young and dumb" and their agents should be educating them. Not every agent is at the top of their game.
 
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When I sold my mother's house 8 years I negotiated 5% with the selling realtor. 2-1/2% to him, 2-1/2% to the buyer. It was still highway robbery in my estimation. $1.62 mill for a house that sold in 7 days, all cash, no contingencies. $80K came right off the top to the realtors. Believe me, they did nowhere near $80K worth of work.

If I were selling a house now, I'd give a try mightily to negotiate their fee to 1-1/2% but would pay no more than 2%. Even at 1.5% the realtor wouldn't be putting in anywhere near $18K+ worth of work. $5K would be closer to the mark. If my house was worth only $300K, the selling realtor would get $6K at 2%. Why are people expected to pay 4 times that amount simply because our houses will sell for 4 times that price?

When my FIL died, my son bought his house. Easy-peasy - son's mortgage broker and mortgage company guided us through the process, telling us what was needed and how to do it. No realtors needed. Closing costs were very low.

With Zillow, Realtor.com and Multiple Listing Services, not sure how necessary buyer's agents are - most people do their own house shopping these days anyway.
 
p.s. I'd like to see flat fee realtors. Buy a house through us and we'll take care of everything for X dollars. Ditto on the selling end.

The market sets the price, as I learned with my mother's house. We listed it at $1.1, it sold in a week for $1.62 --- and that was years before the pandemic and crazy hot market.
 
Myquest55 said:
I would NEVER use the same agent for buying AND selling! Conflict of interest and how do you know you're getting the best advice - as a buyer?? It would be too easy for the Agent, acting for the seller, to just gloss over any issues with the house and "assure" you everything is "fine!" Sometimes those buyers are "young and dumb" and their agents should be educating them. Not every agent is at the top of their game.
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And not all agents are honest. They are looking after themselves.

In BC it’s not allowed anymore after some uneducated homeowners lost out.
 
I absolutely would not want to be tied to one agent from a sales office. You are given the first agent available that day and that doesn’t mean they are the best for you.

I’m no longer up to date on the fine points. If any agent had shown me a house and I tried to do a private deal with the seller within a few months, he would be responsible for paying the agent the commission that should have been earned. Real estate companies watch the official sales data like a hawk.
 
Jules said:
I absolutely would not want to be tied to one agent from a sales office. You are given the first agent available that day and that doesn’t mean they are the best for you.

I’m no longer up to date on the fine points. If any agent had shown me a house and I tried to do a private deal with the seller within a few months, he would be responsible for paying the agent the commission that should have been earned. Real estate companies watch the official sales data like a hawk.
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Just to clarify. You can choose whatever agent you want from any brokerage. You can get references from others who have sold homes, or from those in the process. Next, you set up an interview with that agent the same as you would someone interviewing for a job. If you don't sense that they are just what you're looking for (Years of experience, knowledge, successes, and a pleasant personality), then keep looking.
 
bobcat said:
If a buyer has their own money to cover their agents fee, then they can look for whatever home they choose, and perhaps offer less money to the seller. However, if they don't have their own money to cover that fee, then they should be looking for a home where the listing states something like: "Buyer's agent commission negotiable with strong offer". Under the new rule, you can't put any amounts or percentages in your listing on the MLS, but you can hint that it can be negotiated with a separate agreement outside of the MLS listing.
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This part sounds like it has a lot of wiggle room for miscommunication. Buyers now have to look for agreements that have statements "something like" the right ones, which if they already knew, they wouldn't probably need agents. And making a "hint" on MLS doesn't sound too straightforward.
 
VintageBetter said:
Why are you mad at her?

Is she a Realtor and how many years has she been in business?
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I don't know if she is a realtor. I guess I should, please don't berate me for not knowing. I think she's been around awhile.

I let that last place go when I had a offer accepted. It was very stupid. If she had just spoke to me a bit but she didn't. Also when I looked at it originally, I asked that the wet floor boards on the deck not be installed and a few days later when we went back they were. She didn't pay attention to anything I said.
 
bobcat said:
Just to clarify. You can choose whatever agent you want from any brokerage. You can get references from others who have sold homes, or from those in the process. Next, you set up an interview with that agent the same as you would someone interviewing for a job. If you don't sense that they are just what you're looking for (Years of experience, knowledge, successes, and a pleasant personality), then keep looking.
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I should have clarified that happens when you don’t know anyone in the city. We were travelling around looking in four cities and chose a real estate company in each. In the small town I moved from, I knew something, good or bad, about many of them. We sold our house ourselves.

The people who we sold to were never taken down our street by their agent, even though it was one of the most travelled routes through the city.
 
@Remy But you can't ask for something to be changed/ not done at the house unless you ask in writing once the offer has been accepted.

Plus, you don't know how many clients/deals she had going on at the time. Maybe she just forgot.

You're going to find Realtors and RE agents who are human - they forget. Maybe they don't have a lot of experience working with the 55+ crowd. Maybe they don't have a lot of experience selling mobile homes. One way to overcome the forgetting is to remind them.

I suggest with your next agent, make a list of questions you want to ask him or her. Plus, if you're going to buy a mobile home, you should be reading all about them and watching YouTube videos on how they are constructed and major systems repairs. They are different from regular houses and condos. Not a lot different, but they are still different.

If you don't want to know/learn how they work, then have a big pile of money saved up in case something major breaks. OR, buy a home warranty every year, but read the fine print in that too.
 
caramel said:
This part sounds like it has a lot of wiggle room for miscommunication. Buyers now have to look for agreements that have statements "something like" the right ones, which if they already knew, they wouldn't probably need agents. And making a "hint" on MLS doesn't sound too straightforward.
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Well, the reason for the new ruling is, in the past it was expected for the seller to pay for the buyer's agent commission. This never made any sense. Why should a seller pay for a buyer's agent? This needed to be corrected where the buyer pays for someone they enlist to work for them.

Under the new rule, a seller cannot put in the MLS listing that the seller will pay the buyer's agent commission. They can put in the listing that it is negotiable, which has to be handled in a separate agreement outside of the MLS listing. The advantage of placing that "hint" in the MLS listing is to let buyers know that the seller is open to covering it if the offer is strong enough. The separate negotiated agreement will make it clear how much the seller is willing to cover so the buyer's agent knows exactly the amount they will receive. This gives the seller a little better bargaining position, because if the buyer wants it covered, they have to come in with a stronger offer than in the past.
 
VintageBetter said:
@Remy But you can't ask for something to be changed/ not done at the house unless you ask in writing once the offer has been accepted.

Plus, you don't know how many clients/deals she had going on at the time. Maybe she just forgot.

You're going to find Realtors and RE agents who are human - they forget. Maybe they don't have a lot of experience working with the 55+ crowd. Maybe they don't have a lot of experience selling mobile homes. One way to overcome the forgetting is to remind them.

I suggest with your next agent, make a list of questions you want to ask him or her. Plus, if you're going to buy a mobile home, you should be reading all about them and watching YouTube videos on how they are constructed and major systems repairs. They are different from regular houses and condos. Not a lot different, but they are still different.

If you don't want to know/learn how they work, then have a big pile of money saved up in case something major breaks. OR, buy a home warranty every year, but read the fine print in that too.
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I hear you. But my stepfather has not had a bunch of problems with his, a 2001. He did replace the water heater because it was the original. My agent has had mobiles listed. I do get she is probably handling multiple listings on both sides.

But this is a really hard area for me with many mistakes I've made and I could use someone one my side. I was so wrapped up in getting the park approval which she said I needed ASAP, I forgot other things.

This is one area I really don't need a lecture.
 
@bobcat The old rule of the seller paying the buyer providing agent's commission only made sense in a Buyer's Market. When the average time on market for a home was six to nine months, then the seller pays both commissions because they are so happy to have finally sold!

We have not had a Buyer's Market for many years. Now we are in a constant state of shortage of affordable housing stock and no one in Federal or State government seems motivated to change that.

They blame it on "the market", the "invisible hand of the market" but anyone who has been watching the housing market since the 1990s can tell you whose hands are controlling the levers. The hands are not invisible.

But, radical me, I think the whole silly home selling process should change. I think agents should be paid wages and when they sell something, they get a bonus. I'm not anti-competitive . I'm pro-fairness. When people work, they deserve to be paid.

A Buyer's Agent can take people all over town to see 20 homes and then drop them. How does the agent get compensated for those hours spent helping them before they changed their minds? Anyone acting as a Buyer's Agent should get paid an hourly wage for that time.
 
@Remy I'm sorry. I don't mean to lecture. There's just so much information on the Internet now about home buying and the process that I figure most people are already asking questions about the process online. But that is a wrong assumption and I apologize.

I have been a home buyer in the distant past. If you have questions, you can ask me.
 
VintageBetter said:
"The old rule of the seller paying the buyer providing agent's commission only made sense in a Buyer's Market."
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I disagree. The old rule made no sense in either a buyer's market or seller's market. Why should I be expected to pay for someone you decide to hire to represent you. Under the new rule, I have the option to do that if I so choose, but it is not expected.

As for agents being paid by the hour, it would be rather difficult to track, since they are on call 24/7 no matter where they are or what they're doing. If their phone goes off, and it's a client or their brokerage, they pick up and deal with whatever it is (If they're a good agent).

They also put in additional time going to functions and gatherings to meet people, socialize, get their name out there, and follow up on any leads. If a house goes off the market after it's listing expires with a different agency, they get on the phone, to see if you still may want to sell, but list with them.

I have even had an agent come and spend a day planting flowers to dress up my house for showing and even offer to come by and feed my cat if I needed to leave town for a day or two, and also come by to help clean if there was a sudden request for a showing. This and many other things that go on behind the scenes are what a good agent does. It would be hard to track.

They even attend septic pump-outs to make sure nothing is left to chance before an inspection. Often eating lunch on the run, or picking up something last minute for emergencies is their life. Sometimes it's boredom waiting for the phone to ring, and at other times, it's chaos with all kinds of fires to put out. The best ones leave behind a stellar reputation that brings in new clients through word of mouth.
 
VintageBetter said:
@Remy I'm sorry. I don't mean to lecture. There's just so much information on the Internet now about home buying and the process that I figure most people are already asking questions about the process online. But that is a wrong assumption and I apologize.

I have been a home buyer in the distant past. If you have questions, you can ask me.
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Thank you. This is a really hard thing for me. And I've made so many panic mistakes. My mind doesn't work right when I'm stressed like I am looking and considering buying a place. I've made multiple offers that didn't work out or I decided no, when I should not have. I cannot do this again. And for weeks nothing decent has come up on the MLS.
 


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