August 17, 2024, our real estate paperwork has had an edition for buyers and sellers of property. Due to the settlement via the DOJ against the National Association of Realtors, additional forms are required for buyers and sellers to show and list their property for sale. Buyers must review and sign paperwork before going out with an agent to look at properties.
This is either a non-exclusive agreement on a specific property or an exclusive agreement on all properties shown that explains what commission an agent will request from the buyer. If the seller does not consider paying a buyer’s agent, then the buyer will be obligated to pay their fee.
It is a confusing and somewhat complicated situation for all the parties with current and future transactions. I surmise that this came about because one issue was that the DOJ had some complaints and lawsuits from homeowners.
Supposedly, some companies conspired to fix commissions. Another important issue was that homeowners didn’t understand that all commissions are negotiable.
In the past, an agent would verbally disclose their commission to the seller beforehand. This information was also noted on the listing agreement so the homeowner could read it before signing any paperwork.
It also was noted what a buyer’s agent and other agents would be paid on the MLS listings. This was the standard method that agents handled disclosing their commissions to a seller. The new law says that commissions are no longer noted in any MLS listings throughout the U.S.
I had never heard of any companies getting together to fix commissions. It is unfathomable to believe this is a normal occurrence; which I am sure doesn’t happen.
Punishing those who might have done this seemed the common sense way to go, but to punish 1,500,000+ agents with more paperwork seems seriously unfair and unnecessary. From my perspective, it has confused agents, who had enough to deal with transacting a sale.
Ascertaining our fees on each transaction is another monkey wrench added to our business. We are now responsible for providing the new paperwork to buyers and sellers and having them sign agreements before performing our duties.
Every once in a while I had homeowners who received verbally what I would charge and then (without even coming back to me) engaged another agent with a lower fee. I found this out when I saw the listing. That was their prerogative and choice; as no one hits homeruns 100% of the time.
However, I found out later, that the whole situation was a catastrophe with more responsibility resting on the seller to perform open houses and other pertinent tasks. No training or education was provided and I am quite sure paperwork was not handled in the most legal fashion. I call it penny-wise and pound-foolish.
There is an adage, that cheap is expensive (many times), and what one might believe is expensive, is quite cheap. One must take into consideration what listing agents have to do between the amount of paperwork, photos, videos virtual tours, open houses, printing brochures, meeting home inspectors and appraisers, making sure the buyers are qualified with lender commitment letters or proof of funds if paying outright for their purchase and so much more.
I am not always convinced that homeowners truly understand the sheer weight, responsibility, and capacity that we play in searching for the most qualified buyer and the number of hours that we put in. Most importantly, we don’t get remunerated when it doesn’t sell.
If we were to be paid by the hour, similar to what your lawyer, (who may charge $400-$600 per hour no matter whether he wins or loses your case) or any professional charges, are we not to be considered in the same group? When a broker and/or agent has 10-40+ years in the business there is a value that many of us know we are worth.
In my professional opinion, given the choice to pay or not pay a buyer’s agent, not paying them is like shooting oneself in the foot; especially if a buyer also will not pay any fees. A seller wants as many showings as possible to determine and receive the most offers.
Eliminating those who represent buyers by not paying them, reduces the potential best offers that might be provided. Buyer’s agents are providing a most critical service to the seller; in bringing even one more offer that can make a difference in whether or not a sale takes place.
With prices being as high as they are today and the cost of financing still out of reach for many buyers to compete, it is crucial for the seller to understand and realize, that paying a buyer’s agent; via their listing agent’s ability to provide a fee is still the most prudent and right thing to do. Many sellers are reaping a large windfall and paying a commission should be considered for a buyer’s agent.
Buyers are being stretched financially and for the most part, may not have the financial ability to pay their agent. Working out a fair and reasonable commission will create a win/win situation for all.
Those who are at the top of their game deserve to get paid and make a living as we are self-employed independent contractors.
We are surely not minimum wage earners, by any means, who take zero risk in their daily jobs. However, we are risk-takers and get up each day with no guarantee in earning any money. We must do our business consistently day in and day out in the most professional and expert manner.
We are responsible for handling the sale of the most valuable asset that the average homeowner has in the U.S. This requires knowledge, skill, expertise, discipline, and the sacrifice of our valuable time to get to the closing table. If you have any questions, feel free to contact me.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. For a free 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com or via https://WWW.Li-RealEstate.Com
