I couldn't understand the court case; the article may be implying that cullossion that was illegal was taking place in the real estate industry, and that brokers are.paying million dollar plus settlements.
My guess was only the selling broker is eligible to get paid for a sale , not the buyers agent. But I could not make sense of it.
It's not as big a deal as the media and grandstanding public officials make it out to me. It's more the uniformed media who is clueless on all subjects they report in today's world. Can anyone disagree with that statement?
First let's be clear, there was a settlement offered by the NAR to avoid possibly a VERY costly penalty.
What does this mean to the public? Not much, contrary to many of the posts I am reading here shows that the buying public and so called reporters do not understand agency and fees.
Previously in many states if not all. In a listing the listing agent along with the homeowner would list the percentage of the sell price that an agent selling the house would get. Simple stuff and REALLY that simple.
This is now regarded as price fixing (or whatever you want to call it) Also NAR would require you to join the association to list homes on MLS>
Selling agent fee and listing agent fee, NOTHING CHANGES except it makes is more transparent to buyers and their agents that the agents working with buyers can ask any fee they want now.
SO what does this mean to the consumer and the agent? Nothing.
The listing agent will still get his/her fee of 2 to 3% when the house sells.
The agent that sells the house will get whatever fee that agent has with his now client/customer. Typically 2 to 3%
SO what is the bottom line, it cost the buyer 4 to 6% to buy the house or if you want to look at it the other way, it cost the seller 4 to 6% to sell the house. Either way the commission is eventually built into the selling price of the house most times.
The public and media so uninformed do not even realize, commissions can go higher now. A selling agent can require a 3% selling commission (or any commission) and a buyers agent can refuse to work with anyone who doesnt pay 3, 4, 5, 6 or any number that the buyer agent wants.
The old way, even with buyers agency was known as SBC selling broker commission. It was a suggestion of what the homeowner would pay. The homeowner and selling agent should make out better in this new deal and the buyers agent will only make out if they are good and not work with any buyer for less than the agent wants.
So now the rule change makes it clear, both parties, selling agents and selling buyers can ask any commission that they want and no longer can a homeowner and their agent suggest a fee that they will pay to a selling agent. At the time an offer is presented, the fees will be in the offer, it is at that point that the homeowner can tell the agents yes or no. The homeowner will no longer be able to expect what fee the selling agent is asking in the deal until the deal is presented where previously they sort of knew the selling agent would most likely adhere to whatever was listed as the SBC (selling broker commission)
Quite honestly the homeowner is at a disadvantage now. Listing agent most likely will list a home at 3% (or any number they choose), homeowner wont realize when a buyer comes along, buyers agent could ask for anything they want, meaning even 5%.
It really is a big nothing but attorneys and politicians will grandstand and the public will not make out as the media presents it. In fact in many states it already works like this anyway. An agent who is working in a client relationship with a buyer already has a contract with that buyer on what the selling agents fee will be.