NAR Lawsuit Settlement Coud Be The End Of Buyers Agents

In this eye-opening video, I delve into the potential consequences of the settlement stemming from a lawsuit filed against the National Association of REALTOR's (NAR). One consequence may very well be the disappearance of buyer's agents in the real estate industry and how homebuyers may suffer.
Here is a couple of questions for you.
1. If you bought a home, did you use a buyers agent?
2. Would you use a buyers agent if you had to pay the agent out of pocket?
Write your answers in the comments below.
Link to white paper from AB Scnare Associates
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[@lifeonmars478]

In Australia you don't have buyers agents and it's weird that you do. We read the contract and we have solicitors that go over it. This is at a reduced fee to regularly getting a solicitor. Ours cost $800 and made sure all parties did what they needed to do. Regular contact over the 6 week closing. We also have clauses like the contract is void is after pest and structural checks show any pest and structural defects are found.

[@NativesunrealtyJacksonville]

Thanks for the info. I, of course, am not familiar with how business is done in Australia. I will have to look into it.

[@DailyStalkerUpdate]

@@NativesunrealtyJacksonville And what did you find out?

[@NativesunrealtyJacksonville]

@@DailyStalkerUpdate That they don't perform the same services as a US real estate agent, hence the lower fee.

[@DailyStalkerUpdate]

@@NativesunrealtyJacksonville How much less than a US agent could they do? 🤣

[@bennyaries973]

The 47,000 per year annual salary statistic is ridiculous. Many women do this as a part-time job. This system has been found illegal because the real estate agent industry was too greedy. The fees per transaction were way way too high. You created a system where people could not sell their homes without your incredibly High fees. Don't worry about us buyers, we will survive without problem.

[@NativesunrealtyJacksonville]

Thank you for your comment, Benny. I don't think that greed is the issue here since greed itself is not illegal. I agree that there are too many part-time agents, though. Unfortunately, part-time agents lack the experience for effective representation, particularly in a difficult transaction.

[@laurachau1847]

I’m an agent and I happen to agree with you. Will you do me a favor and tell me how buyers will handle buying homes in the future? Maybe just speak for yourself and how you as a buyer will buy a home, especially in this market. For the past 2 years I’ve had to fight for my buyers because there were multiple offers on every listing. I called the listing agent on every offer to ask the important questions and to sell them on the idea of accepting my buyers offer and their circumstances and I was also selling them on me. I wanted them to know I will make sure to get this to closing as smoothly as possible. I offered to use their title company to close. I offered to pay for a cleaning crew so their sellers wouldn’t have to worry. Etc etc. on the Sell side I had to sift through 7-15 offers each time and usually there were 30-50 showings. Every good agent knows when you list a house on a Thursday you are on the hook for the weekend to be available to answer every call that comes in no matter what you’re doing. I have taken a call at my daughter’s wedding and written up offers at a restaurant. That was the market we were working in. We only had so much time to put an offer in. On the sell side I felt terrible for not accepting certain offers but at the end of the day I had to look out for my sellers and always encouraged them to accept the offer with the highest down payment and the best agent for us to work with. If an offer came in incomplete, messy, and inexperienced that wasn’t an attractive offer. You as a buyer have to remember if your plan is to go directly to the listing agent there will be others just like you. That agent will pick the best buyer in his mind, so you as a buyer have to know how to sell yourself. Like I’ve said, even with how demanding my job can be, I agree with you. There were occasions where I felt I did get paid too much and I have credited some of my commissions to my buyers to help them with closing costs. The discussion I want to have is an educational one now. Let’s move past the commission. We’ve heard you. Now we would like to know what is the realistic plan for consumers for buyers and sellers, as well as our industry?

[@NativesunrealtyJacksonville]

@@laurachau1847 Thank you for commenting Laura. As an agent yourself you understand what is involved in bringing a deal together and getting both parties accross the finish line. Good agents do whatever is required to make it happen. There are so many obstacles to overcome that just don't fit into a neat box of duties an agent is expected to perform. Inspections, appraisals, underwriters, etc. I refer to these people as the "sale prevention team". Knowing how to deal with these situations is where the real value of an experienced agent comes into play. Sellers want to get their home sold and buyers want to buy them. Successfully bringing the two parties together so each get what they want is very satisfying. Like winning the superbowl in overtime. 😃Not all transactions are difficult, which makes up for all the deals that make you wonder why you are in this business at all. Benny recoginzes that we, the REALTOR community, created the most effective system of marketing and selling homes but he is wrong in saying "people cannot sell their homes without your incredibly high fees". There is no requirement to use a real estate agent to sell or buy a home. No one forces anyone to use the services of a real estate agent. If someone does not want to pay an agents fee then they are free to go about it on their own, and may people do.

[@bennyaries973]

@@laurachau1847 I will be happy to pay a reasonable fee to a buyers agent. I love my agent. His advice is worth cash value to me. I do not think now that buyers are doing most of the shopping online versus an agent taking them out for multiple days of back-to-back viewings, the old fee structure was fair. I also welcome an online platform that takes the role of the buyer's agent to help you with the paperwork and process. You might lose out to someone who's willing to pay a higher fee to buyer's agent. That's life. To my real estate agent friends, the issue isn't that your work has no value. It's that you created a system that people couldn't buy and sell without you, and you charged fees that were too high. You completely avoided the internet Revolution that affected almost all other markets.

[@Apexplyr]

Firstly, good video. And good points. But the average buyers agent is not on the side of the buyer. There is 100% a conflict of interest that needed to be addressed one way or another.

[@NativesunrealtyJacksonville]

Thanks for commenting. If eliminating a conflict of interest is the objective, then this settlement has missed the mark. In a real estate transaction, the conflict of interest is that the fee of both agents is dependent on a closed transaction. If agents were to charge fees like attorneys who get paid, whether successful or not, then the conflict issue would be resolved.

[@Runwithme418]

If buyers can't put their agent fee on the loan, this will drive fees way down.

[@NativesunrealtyJacksonville]

Adding various fees to the loan is already done. Up front title insurance, VA funding fee, USDA guarantee fee, and others. The ability to add those fees to the loan allows cash constrained buyers to purchase homes. Would those fees be reduced if buyers paid them out of pocket? Would buyers be better off as a result?

[@NativesunrealtyJacksonville]

I think it will drive buyers out of the market and enusre they keep paying the mortgage of their landlords.

[@larryjones9773]

@@NativesunrealtyJacksonville Buyers who can't afford a buyer's agent's fee, shouldn't be homeowners. If they can't afford a fee, they certainly can't afford a home. These type of people caused the 2008 housing crisis. Driving these poor people out of the market, IS A GOOD THING.

[@NativesunrealtyJacksonville]

@@larryjones9773 Thanks for the comment Larry. What actually caused the 2008 housing crisis was loose lending standards. Just because people have money does not make them good borrowers. Lenderrs have severely tightened their lending criteria. Since home ownership is one of the surest ways to build wealth over time, making it more difficult for first time buyers to become homeowners will negatively impact their financial well being. Removing buyers from the market will decrease demand for homes and result in declining values for current homeowners as well. So you see, driving these "poor people" out of the market is not good for anyone.

[@larryjones9773]

@@NativesunrealtyJacksonville The primary cause of the housing crisis was borrowers defaulting on their loans. The loose lending standards was certainly an added factor. Your statement, 'just because people have money does not make them good borrowers', is illogical. It's actually the primary reason people are good borrowers. The biggest problem with America's housing crisis is the illegal fees that you are charging. Your industry was found GUILTY by a jury of your peers. You are an unindicted co-conspirator.

[@timp024]

Yea, but maybe something reasonable like 1500.00 on a 500k house.

[@NativesunrealtyJacksonville]

I appreciate what you consider reasonable only because you don't understand what is involved in getting a deal closed. To anyone who feels real estate agents are overpaid then I would encourage them to get a license and start making the big bucks.

[@bennyaries973]

@@NativesunrealtyJacksonville I like your Market forces perspective. However the previous system was a monopoly and did not allow Market forces. It seems like real estate agents only want Market forces when it benefits them.

[@NativesunrealtyJacksonville]

@bennyaries973 I disagree that there is a monopoly of any kind. In fact, the lawsuit is not even about a monopoly. When you consider the number of real estate companies throughout the country, it's very clear that no single company has a monopoly. When I first entered this business in 1998, I soon realized how intensely competitive being a real estate agent was and continues to be. There have been many new business models that came and went. The model that has stood the test of time is the traditional real estate agent that provides superior service to buyers and sellers. The market has spoken and decided this business model is what was desired. Bringing the government in to force compensation lower is the opposite of a free market.

[@bennyaries973]

, @@NativesunrealtyJacksonville MLS was the monopoly. It is almost impossible to sell outside the system. Don't worry, if agents have real value, like 6% of a 1.2 million home, people will still be HAPPY to pay it. If they feel 72k might be a bit high, they can go in other directions.

[@NativesunrealtyJacksonville]

@@bennyaries973 Thank you for confirming that the current MLS system is by far the most effective system of selling real estate. The issue is not whether sellers are happy to pay a listing agent. The real issue is the negative impact it is going to have on home buyers. First time home buyers in particular. Adding more out of pocket costs to a buyer trying to buy a home is obviously not good for them or the market in general. Oh, just so you know, the MLS is not going away and will continue to be the most effective way to sell homes.

[@DailyStalkerUpdate]

You failed to mention that the reason why average agent pay is so low is because many agents are working in the field part time. Selling homes is a side gig.

[@NativesunrealtyJacksonville]

That is true to an extent. But is the part time agent ony part time becasue working as an agent full time does not put food on the table? It is also true that it takes a lot of time to work through a transaction and there are times when all those hours and money are wasted when a deal does not close. I have spent months working with a buyer that suddenly buys a car or opens a new line of credit and can no longer qualify. Or, they simply can't find a home that meets their needs and they give up. Since you were an agent I am sure you are familiar with that scenario.

[@DailyStalkerUpdate]

@@NativesunrealtyJacksonville I said I had a license. I wasn't an agent. My POINT is that the NAR's claims about low agent pay are very misleading. Agents use this misleadingly-low number to convince the clueless public that agents are underpaid. Teachers pull the same stunt.

[@NativesunrealtyJacksonville]

@@DailyStalkerUpdate I'm curious why you spent the ime and money to get a license but never went active. Seems likie a waste. You should have at least given it a chance.

[@DailyStalkerUpdate]

@@NativesunrealtyJacksonville I got it at the suggestion of a co-worker who said his wife just got hers and was making more than him at his professional job in just a few months. I was making too much money at my regular job to just quit. I thought it might come in handy as a back-up but it never happened that way. I was also interested in learning what is involved in a RE transaction from a legal standpoint. I let it lapse but retain the knowledge. Now when a RE agent blows smoke up my ass I know what's up.

[@DailyStalkerUpdate]

No, buyers don't have to save up money to pay their agent. They submit their offer subject to the seller paying the buyer broker fee.

[@NativesunrealtyJacksonville]

If I were working with a buyer I would certainly attempt to negotiate my fee into the agreement but here's the rub. Before I can even show a home to the buyer, the buyer MUST sign a buyer agency agreement (contract) that obligates them to pay my fee. If the seller refuses then the buyer must pay.

[@DailyStalkerUpdate]

@@NativesunrealtyJacksonville But the necessity to pay your fee is negotiable.

[@NativesunrealtyJacksonville]

​@DailyStalkerUpdate The necessity to pay is not negotiable. The buyer may ask the seller for a concession. That money goes to the buyer. The buyer can then use that money to pay his real estate agent.

[@DailyStalkerUpdate]

@@NativesunrealtyJacksonville The necessity to pay depends on YOUR contract with the buyer. It's only necessary if you wrote it into the contract and they signed. You could just as easily written a contract that says "If the seller doesn't agree to pay my fee, you owe nothing".

[@NativesunrealtyJacksonville]

​So you think the agent should work for free? The settlement mandates that a buyer agency must be signed before showing a home. That buyer agency agreement must clearly state how much the buyer will pay their agent. The agent cannot receive any more than what is agreed to in the buyer agency agreement from any other party involved in the transaction.