Rumors about NAR settlement

[srfdude]

My wife and I have sold 3 dental practices over the years. For the first one we used a standard commercial realtor; learned from that to get a specialist realtor as the ramifications are many. But regarding the dual agency deal, once the buyer finds out that he will not have to pay the agent for his share, it all falls on the seller. 20%; and I think that is typical from the search I did. While they did a lot, $200K is simply outrageous. CA is simply outrageous

 

[Owen Lucas]

Trust me - AI will replace realtors for a lot of reasons, but the transparency part might be the biggest one.

I think it is a perfect time for real estate attorneys to cash in at the sake of realtors. Have a website with a template for the homeowner. A checklist to perform and the tools to employ the inspector, title company etc.

This is prime time for industry disruption by using the media coverage to one's advantage. The RE attorney I spoke to has a similar suite of tools as you mention.

OK I undertand then but realize that the cost basis (you call day of death) could vary drastically from an appraised amount based on a sales contract.

Our accountant advised to use a licensed appraiser which is what the IRS supposedly recognizes and the authority here. The appraiser cannot be influenced to swing the valuation, he disclosed this from the beginning. So if we make a profit, we'll pay the tax through a K-1 IIRC.

I would also dvice you to seek out a qualified perfessional to advice you in ways to avoid having to pay capitol gains on this inheritance, if any.

Thank you for the advice, we have a financial advisor who is aware of the situation. How will he offset this? I don't know, maybe tax lost harvesting? I'll talk to him to clarify.

There is no immediate need or urgency in a cost basis approach where as with a sale, its time sensitive and if an appraisal needs to be a little higher to cover the contracted price, usually it will go. It also helps when an agent is on site with his/her comps to provide the the appraiser.

We were going to get a second appraisal just to be sure but the second appraiser reviewed our report and said it was fine. He earned himself a 5 star review for doing it on the house. The guy is an expert witness in court cases and seemed very knowledgeable FWIW.

My gripe with the report is that the appraiser could not inspect the interior of the comps used and it did not appear photos of the interiors were available. We believe ours to be superior due to recent renovations. Though the appraiser adjusted sales prices x inflation from the respective dates of sale, we think we can squeeze more with a 20% markup based on similar quality homes for sale even though they are in a slightly better neighborhood. I'll see how the market reacts. I'm tempted to double check my numbers with a realtor though.

 

[alarmguy]

My wife and I have sold 3 dental practices over the years. For the first one we used a standard commercial realtor; learned from that to get a specialist realtor as the ramifications are many. But regarding the dual agency deal, once the buyer finds out that he will not have to pay the agent for his share, it all falls on the seller. 20%; and I think that is typical from the search I did. While they did a lot, $200K is simply outrageous. CA is simply outrageous

The buyer is represented by the agent with a signed agreement, the buyer knows the commission he has to pay the agent, also in that agreement the agent can make the buyers agent commission fee contingent on the homeowner paying it
I understand you’re talking about commercial property though, and that can be a whole different ballgame on multiple levels and scale

 

[Hillbilly Deluxe]

I think a lot of you can't do simple math, forget about business expenses, taxes, insurance and have never really given much thought to the things the RE agents do during a "simple" transaction.

Let me say that I'm not a fan of most RE Agents. Most jump into that industry THINKING they are going to make millions, very easily, that they are smarter than most, but they couldn't sell a bottle of water in the desert.

On a typical $400k home sale - the 6% commission is $24,000. We are not in a period of 2020-2022 anymore. Outside of DC and a few other areas, a $400k home isn't selling very fast today.

That $24k gets split into a buyer's broker and seller's broker. Usually it gets split 50/50 with the buyer's broker and buyer's agent and I think in some areas it's 60/40 with seller's agent and broker, some might do 50/50. The seller's agent has to pay for pictures, ad space, MLS fee, ya, ya, ya. The buyer's agent probably has some costs outside of showings and such.

So at best, the seller's agent and buyer's agent are grossing $6,000 each. Let's take away $1,000 in expenses each. $5,000 taxable. That means they take home about $3500 and many pay for their health insurance out of that, additional 7.65% payroll taxes, etc. If they are lucky, they will close on one of these every 7-10 days. I bet there are 5 weeks a year of ZERO contact from clients. That means there's no new listings, buyers, or potential closings for 5-6 weeks. Probably leaves them with 25 closings at best. I am sure any real estate agent would love to close 25 $400k houses a year. Truth it, many are $180-250k homes.

Do some of them make a quick buck? Yep. But there's also hard, hard times for them.

Again, I am not a fan of most. The ones that do their job on a top tier level, they will absolutely make your deal happen the best for you.


A friend of mine and I do share the same conundrum of ethics for them - why on Earth would my buyer's agent want to sincerely negotiate the price down, effectively reducing their commission?

 

[levi]

Let me tell you who is over paid in this world in my opinion… And this is not to imply that my opinion is right. I mean that sincerely.

It’s just what I think.

Anyone making huge money playing a darn professional sport….

Baseball, basketball, football. . Etc etc

Hollywood … actors… film makers etc etc..

Television cable people… Especially certain networks… Of all stripes…


But …. This is supposedly a free country.

So it is what the market is. At least for now.

I am ok with that at the end of the day.

oh hill, yeah.

 

[Tharber]

Yawn....so tired of arm chair quarter backs.

An agent with comps is there because they are the ones that priced the home and can easily prove how they arrived at that price. In the age of hiring the chaepst appraiser possible, many times the appraiser is coming from out of the area and might not know the nuances of a given property. Like anything else, its an education. In my market for example, appraisers coming out of Orlando are here to value waterfront properties with unique features and might not otherwise understand. A navigatable canal brings a muich higher value than one with a 1ft draft for example. It's still waterfront though, right? As someone posted, there is a huge difference in types of construction and wind loading capabilities. Would a local appraiser need this? NO.

 

[SC Maintenance]

Well, justice department is re-opening a 2018 anti-trust investigation against the NAR. 8 hours old.

https://www.reuters.com/legal/litigation/realtors-association-must-face-us-justice-dept-probe-us-appeals-court-says-2024-04-05/

"The ruling was a setback to the NAR, which has fought a series of class-action antitrust lawsuits seeking billions of dollars in damages from home sellers."

 

[Bill Judson]

will write a contract only and provide no help or expertise in any other part of the transaction.

Once should have an attorney look over the paperwork to make sure all is fair