This is the 2nd of 6 part in this series topic.
I think it is important to put all things into perspective. Since March 15th, and even before with all the speculating, it has made or at least suggested that Realtor's are incompetent, crooked, or simply greedy. There is always room in every industry for policing, and I am a big fan of that, and have been directly involved in Real Estate Ethics, Fair Housing, Representation, and the like for 18 of my currently 28 year career in real estate. I also think it is important to shed the light on a number of these Media Spins.
The media has stated that the settlement prohibits sellers from paying a commission to a buyer’s broker and relieves sellers of the financial burden.
That is False.
One of the new requirements is that any offer of buyer broker compensation offered by a seller can be displayed on any “public” media site but can no longer be displayed on any association-owned MLS. Any other form of marketing is acceptable. Sellers may still elect to pay buyer broker compensation to differentiate their properties. Sellers can also elect not to pay buyer (cooperating) broker compensation.
Conversly, the concept that not requiring something does not mean it is a good tactic for all sellers to do that. The concept is simple. If buyers want representation, why should the seller pay for it? Well, on its face that does make some sense. In practice, if they buyer does not want one agent involved and actually wants a professional to advocate in their best interest, then it gets a bit muddier, as most buyers really want to put as much down and lower their cost, as it is expensive to buy a home, especially with interest rates being about double what they were 3 years ago.
So, how might that work as a matter of practice? A buyer could choose to write into any offer a contingency requiring the seller to cover any number of costs (agent commission and/or closing costs are most common) or request other concessions (such as "points" which would reduce the interest rate on their mortgage).
This is all part of each negotiation, which may become more confusing for buyers and sellers with more "moving parts". However, with more options, comes more discussion, and more hypotheticals, which of course has a bearing on their eventual sale price, which is the statutory obligation of the listing agent to negotiate vigorously on the sellers behalf.
Comments(8)