NAR Settlement Helps Sellers, but adds a HUGE Burden on Buyers
There are 2 parts to the National Association of Realtors lawsuit/settlement:
- Claim: Realtors colluding on listing commissions of 5.5%-6%
- Claim: Buyer commissions cannot be negotiated
Listing Commissions: The lawsuit claims Realtors colluded to tell sellers they must pay 5.5%-6%, or they are working with a discount Realtor and getting cut rate service. This is false, and I am in full agreement with the lawsuit. In my opinion, 6% commissions can too high for most listings. Some brokerages do not participate in top producer commissions, which allows listing agents and teams to list for less.
With that said, most sellers interview 2-3 agents who compete for listings based on commissions, services, and track records. The lawsuit does help open the eyes of the sellers.
The Casey Samson Team has offered state-of-the-art listings at 4.5%-5% since 2007 and have become The #1 Medium Team and #1 Luxury Team in Virginia.
Buyer Commissions: Here is where the settlement goes off the rails.
The lawsuit claims buyers are unable to negotiate their buyer commission because the buyer commission is fixed by listing agents and sellers. The proposal is buyers pay their buyer commission, so they can negotiate a price, or go unrepresented. The claim is false, and the solution is reckless.
Buyer agents currently offer, and buyers can negotiate, cash back from the buyer agent commission. It is done on a case-by-case basis based on the quality of agent, and current market conditions. This is totally negotiable.
Currently, a buyer pays a down payment, closing costs, moving expenses and whatever they need to spend to make the home their own. All this burden in a market that has limited inventory and 7% interest rates. Currently, the buyer commission is paid by the sellers so there is no additional financial burden on the buyer of paying Realtor fees.
In the real world, buyers are not even allowed to tour most homes without being prequalified by a lender and represented by a professional Realtor. Make no mistake, buyers need buyer agents, good buyer agents. 90% of our listings, receive multiple contracts. The first criteria in the review process is authenticate the buyer agent. Great buyer agents are critical to a successful transaction. They have control of their clients, use top correspondent lenders, contractors and settlement companies that get contracts to settlement.
To allow the buyer to negotiate their own fees, or have the option of going unrepresented, the NAR settlement will try to decouple the seller from paying the buyer commission adding an additional financial burden on buyers of paying Realtor fees. This new burden will prevent many marginal buyers from buying homes. The alternative offered is for buyers is to go unrepresented in the most complicate financial transaction of their lives. Both alternatives are NOT in the best interest of the buyers, and NOT practical in today’s market.
Whether the lawsuit is successfully settled or not, The Casey Samson Team will:
- Make every selling agent aware we will continue to offer 2.5% to selling agents.
- Add language to the buyer agreement that reads: “The buyer requests seller pay buyers company commission of 2.5% of the sales price on behalf of the buyer.”
These opinions do not reflect the thoughts or opinions and Samson Properties, its agents, or brokers.
The Casey Samson Team is #1 Medium Team and #1 Luxury Team in Virginia.
