There has been a media frenzy around the issue of Real Estate commissions, andthe National Assn. of Realtors (NAR) proposed settlement. As cable and othernews services have a tendency to do, they have cranked up the misinformation theyput out in their quest for eyeballs and clicks. If you haven’t heard anything aboutthis, you certainly will!
As always, I’m going to shoot straight and tell you what the facts are at this
moment. Keep in mind that this is a complex, evolving issue and this is just Part 1of my coverage of this topic. As things become clearer, I will update you.
Firstly, whatever is agreed will not go into effect until July at the earliest. The mainchange affecting us here in SC, is the elimination of the field on the MLS listing which tells buyers agents what the seller (in agreement with their listing agent) is offering to them. The media has reported, incorrectly of course, that this means sellers will no longer offer to pay something to a buyers agent.
First big revelation for the media (and, unfortunately, for some homeowners whoseprevious agents may not have been articulate). Commissions have always been negotiable, and you never have to offer a co-broke for the buyers agent. Now, as I said, less skilled listing agents may not have communicated this to their clients in a clear way, and that might be why we are now facing this upheaval. Offering a portion of the listing commission to buyers agents has been a successful strategy for both home buyers and sellers for a long time. It is a marketing tool, we as listing agents use to help our clients get maximum exposure. It incentivizes buyers agents, who often are dealing with first time home buyers. If they had to go out of pocket to pay their agent, they might not be able to buy the house. At the same time, sellers recognize, that while they might be subsidizing the buyer when they sell, that when it’s their turn to buy, the new seller will be subsidizing their
buyers agent commission. It usually all comes out in the wash, so to speak.
What will the “new” real estate world look like in July and beyond? Will sellers still offer concessions to buyers if their competition is? Of course they will, at least, I’d advise my clients to do so.
Now, will some buyers agents have a more difficult time explaining their value to clients? Yes, they will. My guess is that a significant number of them will be forced to leave the real estate business.
That’s a good thing.
Agents, like me, who work mostly with sellers, will have to skillfully steer their clients through what will be a more complicated negotiation involving concessionsthat might be appropriate. These negotiations will start at the listing appointment, and continue intensely after an offer is received. My guess is that buyer agent commissions will still be a part of those negotiations in some form, even if not expressed on the MLS.
In the end, a good listing agent finds ways to give their client an advantage over the competition, whether it’s pricing, concessions, or just hard work. Eliminating that field on the MLS will just require greater us to step up our game.
I’ll be writing about this more, as the situation clarifies. One thing’s for sure... Don’t believe anything you see or hear in the Media on this subject. If you have any questions about anything you think might affect your real estate decisions now or in the coming months, call, email or text me with your concerns.
Have a great weekend and a terrific upcoming week
Sal Busacca, Realtor
864 952-7251
