It definitely seems that in real estate this year.The year started out so promising with mortgage interest rates dipping below 6% and inventories of housing on a slow but steady increase.
The Sky is Falling - Again?
Dated: August 6 2024
Views: 134
The sky is falling...Again?
Henny Penny and Klucky Lucky are at it again, running around the barnyard instilling fear in all the inhabitants. This seems to happen every couple of years or so. Due to a recent lawsuit and settlement with the National Association of Realtors and several large real estate companies, the barnyard this time is filled with a lot of chickens who happen to have real estate licenses. The lawsuit and settlement are somewhat complex but I will try to tell you how I see it.
1) Sellers-some sellers believe that on August 17th they will no longer have to pay the buyers' agents commission. While it is true, that sellers now will have a choice as to whether to pay the buyers' agents commissions or not, not many buyer's agents will work for free? So unless the buyer is willing to pay the agent themselves, your home will not get sold.. How many buyers do you know, that have enough resources to pay the down payment, closing costs for their mortgage and now come up with another approximate 3% for their agent's compensation. Buyer agents work hard to get the consumer in the home they want. It has certainly been my experience, after 39 years in the business and after helping people buy and sell homes that most buyers do not have the excess to do that., especially first time buyers. So, as a seller, if you do choose to not compensate the buyer's agent, you will get very few showings on your property and probably take a much lower price for your home.
2) Buyers-Many buyers believe that they can now negotiate a much lower fee to pay their agent, saving them some amount of money. But the old adage that you get what you pay for, will still apply in the future. If you do find a rookie agent or a part timer to accept a lower fee, I can guarantee you that you will also get much less in terms of service. It is my sincere opinion that most buyers will still want the sellers to pay the buyer agent commission.
So who wins then? Not buyers or sellers, that is for sure. Not real estate practitioners who now have to learn and understand new forms and requirements. The actual plaintiffs will not gain much after attorney fees etc. The attorneys who executed the law suit will come out with a huge amount of the $400 million plus settlement. In the end consumers need to negotiate with their agent, understanding the vast amount of work a good agent does for their compensation. Nothing will really change much for the consumers nor the practicing agents except for the need to understand a lot more about the complications that will ensue. The plaintiff's attorneys will be the big winners as usual. The good news, there will still be knowledgeable, concerned agents to help you navigate the new landscape.
Dave and Ann Feerhusen
"Experience you can trust!" I am very fortunate, along with my partner and wife, Ann, to have spent my career of 41+ years helping people successfully market their homes in the Twin Cities. We have ha....
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