Tutorial: Understanding the new commission rules in real estate

[@julieanne4real]

Such a fantastic video!! It's the best one I myself have seen so far, and I think it will remain the best in describing the recent changes. Thank you very much!!

[@CameronFussner]

People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.

[@Franklin-gq4si]

Buy now, home prices will not go lower. If rates drop, you can refinance

[@CharlesArthur-fq5sx]

The government will have no choice but to print more notes and lower interest rates

[@williamDonaldson432]

Well i think, home prices will need to fall by at least 40% before the market normalizes. If you do not know whether to buy a house or not, it is best you seek guidance from a well-experienced advisor for proper portfolio allocation. So far, that’s how I’ve stayed afloat over 3 years now, amassing nearly $1m in return on investments.

[@foreverlaura-fq4eu]

this is quite huge! what have you invested in ? much more info needed please ...I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.

[@williamDonaldson432]

Finding financial advisors like Annette Marie Holt who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@Mr.Moneybags40]

i dont get it , at point 5:00, you said the buyer pays for the buyer agents commission.....isn't the seller paying for the buyers agent commission ????....you literally wrote it on the white board., ....and why would the buyer care what the buyer agent is making if its not coming out of their (the buyers) pocket ????

[@restez1963]

That’s pretty much what I had mentioned proceeds come from the sale price of the home. Thank you for commenting and clarifying.

[@stacydemcher6343]

This is the best explanation of the source of the CPEA - I have been trying to find the most generic/basic way to explain to consumers and this is definitely the best explanation

[@BoogieBoyBrown]

So well explained. Thank you!

[@OnlineRealEstateAcademy]

Glad it was helpful!

[@exltd001]

If the buyer pays the buyer agent separately. The problem is that is going To have to be out of pocket. The old system and the new less strict way of doing the arrangement would allow the commissions to be put Into the loan and financed . The strict way would mean the buyer would have to come Up with a lot of cash for the commission not To mention the down payment

[@RMF-w6t]

Seems to me that buyers will now simply find their own properties via internet and Open Houses and deal with listing agents only. Thoughts?

[@OnlineRealEstateAcademy]

Some segment of the market will, but I'd consider that a business opportunity.

[@JCTJCT-e8h]

It seems like the lawsuit was in favor of sellers but not really seeing how this can actually hinder a seller from getting their property sold. Seems like a serious case of oxymoronic. If a seller want/need to sell their property then they should be glad to pay the buyer's commission, period. Otherwise, they may be sitting on their unsellable property indefinitely. In contrast, I actually like the option where the seller pays the seller's agent whatever is agreed upon and the buyer pays their agent whatever is agreed upon with an optional clause stating that the buy's commission can be incorporated into the loan rather than being required to pay it upfront. After all, the burden is all on the buyer to come up with all these costs at closing which is already a bit excessive. Does this apply to commercial real estate as well or is this only for residential real estate?

[@gregboudreau5778]

Great video Jack Hope you are having an awesome 2024!!

[@OnlineRealEstateAcademy]

two offers accepted today, so doing well, one day at a time

[@vin461]

How does a buyer agent enforce their payment from the buyer when in a buyer's agreement? Can a shady buyer go to closing, then close on the house and all that and try to never pay their agent?

[@sharonkennedycroft]

Thank you, Jack. It was a great video.

[@Extremeboys3D]

Yes, you can take more than is written in the buyer agency agreement as long as it is approved by the buyer and the agency agreement/addendum is updated.

[@BulletSpoung]

From this point on should both buyers and sellers have attorneys involved? It seems to be the only way to move forward after watching video after video about this topic.

[@makedas944]

yes it is getting so so so complicated and seeming to solve little.

[@ReverendSnedley]

The transaction is actually very simple it's the parasites (agents) who perpetuate the "it's so complicated and confusing myth" then since the buyer parasite now has to switch to a fee for service agreement the seller parasite should do the same ... this seller commission model based on sales price rather than actual work done is so yesterday and nothing more than outright thievery similar to the financial parasite (advisor) basing their fee on portfolio value rather actual work done now to be sure there is no need for these real estate parasites to begin with ... attorney, title company and home Inspector is the future Let the parasites go scam elsewhere ...

[@NickJames-y8e]

By this logic of the buyer “unknowingly” paying their buyers agent because they brought all the money to the table, wouldnt that mean they are also paying the listing agent as well since again, they are bringing all the money to the table? The listing agent doesnt get paid until the home closes. The seller isnt paying “out of pocket” for this, it comes out of the buyers said money. Without the buyers money the listing agent also doesnt get paid. Should a buyer have the right to dictate the listing agents commission as well? Or is this all a sham, and a buyers agent commission was always paid by the seller, as a seller expense for the agent bringing them a qualified buyer. Seems like the suit had some backwards thinking and im surprised the NAR lawyers lost this.

[@deedewockenfuss3889]

@@NickJames-y8e A world is coming where all this will no longer matter. When I want to purchase a home the LAST thing I am concerned about is how the agent is paid. As a BUYER, NO ONE can tell me I HAVE to do anything. I am under contract to no one, so my goal is to SEE the property. If an agent refuses to show me the property, I’ll be sure to let the Seller know about it. It’s going to be more work for the listing agent. I suggest a well advertised Open House to allow buyers to see the property WITHOUT COMMITMENT. Remember, ONLY licensed agents must follow these draconian rules. The buyers are under no obligation to participate.

[@KenNeumeister]

thank you for the education-entertainment, it clarifies enough to be have a more constructive discussion with the agents on either side of the sale. Does this have implications on what the loan covers and the additional out-of-pocket expenses the buyer needs to close the deal?

[@vin461]

Can a buyer's agent get paid from the buyer with the buyer agreement-cap fee AND from the seller when the offer is made? Also, someone has to be extremely naïve and/or ignorant to not ever wonder or know how the buyer agent was getting paid in the old system.

[@luckieone28]

I worked my tail off for buyers who 1. Didn’t show up 2. Cancelled last minute A touring agreement will hold them a little bit more accountable. But it also sets the because now they feel they don’t have to do as much as what I’m seeing. I have seller agents get the contract signed and I never see them until they get a check. I still do the majority of the work for both of us, especially the flat fee agents let’s not start omg!!……

[@jenniferhodgson7640]

What happens if we decide to no longer be NAR members? Can we do whatever we want with Offering Compensation(Finders fee,cooperating agency)

[@OnlineRealEstateAcademy]

If your broker is a Realtor, you must be a Realtor too. So you first might want to check that out. Not every broker is a Realtor. But if your MLS opted into the settlement you'll still need to comply. And you might consider, as we have, to take a position even more conservative than the settlement to minimize liability.

[@makedas944]

@@OnlineRealEstateAcademy this is just all so so much more confusion added to an already confusing process lol!

[@darlingkelly100]

You are awesome!!! Thank you! Just got it! haha

[@OnlineRealEstateAcademy]

thank you!!

[@ExecutiveAutomotiveSociety]

Sorry to go off-topice, but those cameras in the back are awesome. You also get a bonus point for the Valvoline hat.

[@OnlineRealEstateAcademy]

Kyle Larson is my favorite driver. The Pentax K1000 is my go to, not just an ornament. Yashica is a simple range finder with solid lens.

[@ExecutiveAutomotiveSociety]

@@OnlineRealEstateAcademy you'll like this then. I'm from Martinsville VA. My grandfather worked at the clock factory and yes, the hotdogs are all that. I called Larson for being the next great probably three years before he took off. Funny enough, my wife is a bigger NASCAR fan than I am. That's pretty cool on the camera too. That's one thing I've loved about getting into real estate is the camera guys are even worse than we video production folks when it comes to photography. I feel like I'm going to learn a lot.

[@Mr.Moneybags40]

this is f*ct up for the buyers agent, as a ex, rental agent for NYC, I feel for the buyers agents...this will make them leave , guaranteed

[@GenialGeek]

If they do, that’s okay. I think the people can now make their own offers and listing agents can decide if they want to show the place or not.

[@makedas944]

@@GenialGeek gonna force a lot of new offshoot variations of FSBO..with lawyer etc.

[@danielb7660]

Jack, I am a Broker in Massachusetts but not a Realtor. Where are you getting your new forms? Great video.

[@OnlineRealEstateAcademy]

I own my forms, have for several years.

[@danielb7660]

@@OnlineRealEstateAcademy I have my own as ell. I am just curious if we need to use updated forms with this new commission set up? Thx for your reply.

[@joeinbloomfield]

If one is selling to then move and buy, why one must be paying double commission . The seller should pay their agent only. When I become the buyer, then I’ll enter the agreement you mentioned. Otherwise, I’ll be force to pay the commission for both when selling, and the commission to the buyer agent when buying. Darn, If that would’ve been the case, just lost $60K which could’ve allowed me to buy more house. I will not be paying buyer agents for sure.

[@kernelkorn6545]

Here’s a question. A buyer signs an agreement with an agent which stipulates the buyer must pay a 2.5% commission. The buyer is on the hook unless the agent can negotiate with the seller to cover the 2.5% commission. Say the home is listed for $400,000. The buyer agent puts in an offer for full asking price plus 2.5% commission to the buyers agent. The seller rejects the offer to pay an additional 2.5% commission to the buyers agent. What would happen in that scenario?

[@ucjjg6752]

Depends on the contract the buyer signed with their buyer’s agent. I suspect most buyers wouldn’t notice that they signed that they are responsible for the buyer’s agent’s commission and will find themselves surprised that they need to bring a massive pile of cash to the table at closing. Bet many deals will collapse at the closing table. Especially since a buyer can’t bake buyer agent commission into the mortgage (at least I don’t think they can).

[@mayursharma8305]

Can the seller's agent add in the listing description, on behalf of the seller, that the seller is offering x% commission to the buyer's agent?

[@OnlineRealEstateAcademy]

MLSPIN does not currently (early Aug 2024) have fields to post seller to buyer agency fees.

[@anthonydooley3616]

4:34 Free to the buyer because the seller is paying both agents. There was no cost to the buyer for using an agent. The money comes from the buyer, but taken out of the profit of the seller. The conversation never happened between the buyer and agent because the buyer literally didn't pay the agent for the services. So, other than not putting the fee on the MLS and a Buyer/Broker agreement, which already existed, there isn't that much of a difference. Agents are not going to work for free, so someone, probably the seller, pay both agents.

[@alouise3557]

It's about time I see someone with a brain on youtube! 99.9% of people have absolutely no idea how this works. Sellers WILL STILL PAY. I just signed a new agreement tonight with a seller and she's paying the entire commission. There will be NO CHANGE.

[@larryjones9773]

Effective 8/17/24, no informed buyer is going to sign a contract with a buyer's agent. Buyer agents will (effectively) be fired on 8/17/24.

[@Hugh3rd]

​@@larryjones9773 Why would that happen? How would a buyer see a house without an agent?

[@larryjones9773]

@@Hugh3rd Through the seller's agent (if the seller wants to feed her children and pay rent). Hunger & a roof over head are great motivators.

[@DaveAnderson-ic6oo]

Yes, if the seller is desperate or starving they can still offer to pay the buyers commissions. If the seller isn’t starving or desperate, like me, then they don’t have to pay anything for the buyer. I’m not offering anything other than a house at a firm price. The buyer can negotiate whatever they want to with their agent. I’m not paying anyone but my agent. Buyers can always buy a different house. Maybe they’re desperate or starving. I’m offering nothing and no one gets in my house without a signed agreement with their agent.

[@williamcady9652]

Good video Jack.

[@OnlineRealEstateAcademy]

Thanks!

[@moneymaker0525]

Many don’t realize how much work goes into a real estate transaction-pricing, marketing, negotiating, and handling all the paperwork. Agents bring expertise and protect your interests, ensuring the best possible outcome. While commissions may seem high, they reflect the value agents provide in saving time, stress, and often money in the long run. Selling a home isn’t as simple as it looks, and professional guidance makes a huge difference.

[@ReverendSnedley]

Typical real estate parasite scammer trying to justify their existence just go away it's over find something else to do

[@jennalindsey5290]

And when you learned how to do it yourself, they still try to intimidate you

[@_.ian.]

It’s important to explain why they can’t use the LMS because you had piece of shit real estate agents who were not showing their clients certain houses if they weren’t going to get paid for their efforts so the client could’ve loved the house, but the agent was not going to show them that house, no matter what, that also came out in court Via phone recordings

[@makedas944]

the whole thing set up a serious conflict of interest

[@eduardoflores2120]

Now the Seller Agent will get the 5% alone... is not going to work this law... Buyer will be paying the same price...

[@kevinkirkpatrick-o7k]

In describing the old way buyers paying commission is misleading the value of realtor services in the past. Because now weights a buyer, especially a buyer with limited funds having to possibly make a decision having to go direct to a listing agent, locking the buyer to him regardless of satisfaction in the hopes of financing the commission vs paying any portion out of pocket. Everything you purchase pays an employees salary, commission etc. however, you don’t pony up direct funds to pay the car sales person. Oh you may give a tip at Starbucks. I don’t believe forcing duel representation to the less cash fortunate buyer is free market

[@Blazenetwork1990]

I’m still confused

[@redryder1312]

Screw commission, 6% for a 100k home or 500k home. Place realtors at there own fee. Then you'll see who's successful in selling. Let the employer hand out commissions like a car salesman gets

[@jondutra1474]

Thanks for the information

[@OnlineRealEstateAcademy]

My pleasure

[@marlenekaplan7695]

Is not better, if is more paperwork,

[@alouise3557]

You are incorrect. It was, in fact, FREE for the buyer (and will continue to be because the seller will continue to pay commissions.) The seller is the principal dispersing payments. The buyer is paying what the house is worth. The seller nets PP minus commissions, but that's not akin to a buyer paying out an expense. If commission was a tax writeoff, the seller gets the writeoff-- not the buyer. The seller may have borrowed money from their uncle to pay commissions for all you know. If there was a concession to escalate the price and figure it into the mortgage, and then have the seller pay out of the proceeds, then the buyer is paying extra and it's costing them. But no, they are paying for the cost of the house first & foremost, and as an expense, the seller pays a fee. The BUYER does not pay the fee.

[@OnlineRealEstateAcademy]

You are incorrect. See verdict in Sitzer case, proves you wrong.

[@alouise3557]

@@OnlineRealEstateAcademy the NAR lawsuit is complete bs. Are you saying that because NAR lost, that the lawsuit was correct? It's ridiculous to say that an outcome on a lawsuit is a reason you're correct. I stand by what I said. The buyer is not paying the expense. Not on any chart, and not on the closing statement.

[@SamTankko]

@@alouise3557 You're wrong, and standing by it. 😂Nar lawsuit isn't bs because you're sitting here watching a video on it.💀

[@alouise3557]

@@SamTankko What an intelligent response.

[@VENEBOSTON]

I think the main question is, will home prices go down 2%-2.5% because sellers decide to not pay a buyer's agent? All this conversation evolve around this question. If prices continue going up, then sellers always paid for buyer's commission, no the buyer. There is not study that says prices were increased 2%-2.5% because seller added buyer's compensation to the price. In fact, and correct me if I am wrong, all agents before discussing commission, first discuss property value and listing price before discussing commission. This math will not change at all with all these new rules and as always the seller will continue making the decision on paying the buyer agent or not. All this maremoto was a HUGE Win for the seller and a BIG Loss to the buyers. Inf fact, the cost of properties for buyers will go up because sellers will not reduce the 2%-2.5% from the price but buyer will need to pay their agents which means that total price paid for the house will be higher. Honestly, I do not understand why at this point there is not a consumer advocate organization advocating for the buyers... Cause they really got screwed here bad....

[@goldsbyruggs4614]

They’re just moving the goal post again

[@misslilly7379]

The seller should pay their agent, and the buyer should be pay their agent. Sellers should NOT pay both agents!

[@jennalindsey5290]

It seems like everybody’s paying for it because at the end of the day the buyer is buying the house, and the seller is collecting money from the buyer to pay their own agent

[@deedewockenfuss3889]

I was a broker for 40+ years. I am unlicensed now and have my Buyer hat on. IM NOT PAYING A CENT TOWARDS THE COMMISSION! Since I am UNLICENSED, I can knock on the seller door and set up a showing with them. I will provide them a document stating that under no circumstances will I participate in ‘commissions! With 40 years experience, I am paying MYSELF, not a Realtor. And if NAR attempts to legislate my rights away, I will sue for more than the last suit. NAR has legislated themselves into a corner. I am under NO OBLIGATION TO COMPLY.

[@OnlineRealEstateAcademy]

I think that's a reasonable approach. Unless seller signed an exclusive right to sell listing agreement, then you s need to deal with seller agent. But even then, you are under no obligation to have or pay a buyer agent and yes you can represent yourself in the transaction in every state as far as I know.

[@jennalindsey5290]

Where are you gonna get the legal document to represent yourself?

[@jennalindsey5290]

The broker is cocky. He’s trying to make a sound so intimidating so I don’t have self-esteem to do it all by myself.

[@jennalindsey5290]

I’m referring to the broker I talked to today on the phone