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If you’ve been following the ongoing saga of the buyer’s agent lawsuits, you may be experiencing a roller coaster of emotions. You may be worried about what’s next and how it will affect the way you run your business.
You may see it as having a major impact on the way commissions are paid, or you may think the whole thing is overblown. Whatever your point of view, one thing is sure: We’ll all be waiting, and watching, with bated breath for the next move.
So we wanted to know: How do you see the buyer’s agent lawsuits shaking out? Are you scared of what’s ahead, or do you think it’s all much ado about nothing? Do you have ideas for how the industry’s commission structure should pivot? As always, you had thoughts and you shared them with us:
- I think the lawsuit is more that the Moehrl attorneys get a large paycheck than what reflects on the real estate industry. as a whole. The call sampling that was done was on a single group of Realtors, and is not indicative of the entire industry. Most Realtors and brokerages are extremely careful and train and train and teach their staff about their staffs about their fiduciary responsibilities to their clients.
- I think buyer representation will suffer in the end. You will have a model that only benefits the seller. Buyers will be unable to pay the buyer rep fee and will choose to work directly with the seller’s agent, who looks after the seller’s benefit. This will have a disproportionate impact on minority buyers. I think mortgage guidelines will end up changing to allow buyers to roll commission fees into the loan. I also think the fee for services to the seller will be due at the end of the contract, regardless of whether a sale is completed.
- Definitely concerned
- I think if the lawsuit is won, it will hurt the real estate industry. Seems to me the industry is trying to lower our commissions lower and lower, thereby making it harder to make money. Hopefully, we have someone out there who will represent the agents and their livelihoods.
- In the end the parties will settle, the lawyers will all get paid and we’ll have a new disclosure for sellers, clarifying in even more boilerplate that will essentially say “any commission paid by the seller to buyer agent is negotiable and seller understands that it is their choice to pay, or not, and no listing broker has forced them to pay” etc. Sellers, of course, already have the freedom to negotiate commissions, or even not use a broker, and in the end, this will just be one more form that we all have to sign to CYA.
- The end result will be a radical restructuring of how real estate agents are compensated for assisting in home sale transactions, ultimately lowering the fees associated with buying a home and separating quality agents from low-quality agents.
- The commission structure works and the fact that sellers can negotiate what that commission will be. I don’t believe the lawsuit holds water. It could go either way, though, since there are so many people who believe Realtors make too much money and sellers should be able to use a Realtor for free.
- It could be argued that the buyer is paying for both commissions as they are bringing the money to the table and agreed to a sale price that included both commissions. However the fact is, all are paid from the proceeds at closing as agreed by all parties. Who brought the pile of money to closing…the buyer.
The mortgage secondary market allows for brokers to be paid from the proceeds at closing, both listing and buyer brokers now, and they set no rules on how much.
The only change I see required will be for the Buyer & Listing Broker fees to be included in detail on the offer and purchase agreements.
Same as now, just transparent and clear on who gets what from the pile of money on the table at the closing.
This would require MLS compensation be abolished, as it is archaic and far overdue as the listing broker should not dictate or set buyer brokers compensation, just as buyer brokers do not dictate listing brokers fees with their clients.
So it is really just semantics and about time for transparency and all will benefit. - If the Justice Department requires agents to disclose their commissions we will all have to execute buyer/broker agreements to stipulate the commission. The end result is that the sellers will pay less, but buyers will end up paying the difference. This will have a significant negative impact on buyers ability to purchase. So this is all very bad news for buyers. The federal government is stepping into deep stuff and will result in less protection for buyers, making home buying even more difficult.
Responses were edited in some cases for length and clarity.
Didn’t get a chance to weigh in? Keep the conversation going. Share your thoughts in the comments below.