Anyone about to sell their home this year better get ready for a push-and-pull like they’ve never had before.

Now that the homeowner has new negotiation power, they’ll have to get up to speed quickly on what their rights are and what convoluted answers real estate agents may give them back.

“Who really makes the call on commission rates?”

“How low can you go?”

“Who pays for all the stuff like pictures and advertising?”

ConsumerAffairs decided the only way to get ahead of this bowl of spaghetti was to ask real estate professionals what they’re hearing and what they think will be happening as this thing unfurls.

This will be a shakeout for lenders and buyer’s agents, too

Marty Green, a principal at mortgage law firm Polunsky Beitel Green, told ConsumerAffairs that it will take a while for the dust to settle.

For one thing, mortgage underwriters are going to have just as hard of time getting their heads wrapped around this as sellers and agents because mortgage underwriting guidelines haven’t shifted in a long time and are pretty set as to how real estate commissions have historically been paid, Green said. 

Sellers vs. buyers

“We are still in a seller's market, so I can envision some sellers not being prepared to pay the buyer's side agent or limiting the amount they will pay. The question then is whether the buyer has the resources to pay the buyer's portion of the commission,” Green said.

“I am confident that, if the buyer is paying the commission, the amount will be more heavily negotiated and will be reduced. Realtors, though, may now require some payment upfront from the buyer since there will be increased uncertainty about how they will ultimately be paid."

Another potential issue with buyer’s agents could be VA Loans, notes Michael Downer with Coldwell Banker Realty Quesstintial Naples, and those will need to be restructured by law since they do not allow compensation for buyer agents.

You might not have as much leverage as you think

On the surface, the NAR settlement sounds like a dream come true, but one real estate expert ConsumerAffairs spoke with said that home sellers would be foolish to think that they’re going to sit down across the table from a real estate agent with a bottle of wine pushing a legal pad of commission offers back and forth between them until one finally gives in.

“It has been suggested that as a result the amount of commission that has been charged to the seller in the past will be reduced, but I find these predictions to be worth as much as a tarot reading from Ms. Cleo,” said John Graff, CEO of Graff Real Estate, Inc. 

Graff thinks that since few buyers and sellers actually negotiate the commission they offer to their agent to begin with, not much is likely to change, just because the NAR decided to settle its lawsuit.

“If anything, I have seen confusion reign, from consumers, agents, and journalists alike and confusion begets reliance on experts, not confidence to negotiate down. Plus, how excited are you going to be that you negotiated down the person you are supposedly paying to be a good negotiator?” Graff said. 

Graff predicts that consumers will see a new wave of low-fee brokerages emerging, as agents find themselves increasingly squeezed, either due to declining transactions or tightening commissions.

The leverage sellers have been looking for?

If you’ve sold a house in the last few years and thought your agent was a little lazy, these agents might feel some pressure to perform now. Brian Mollo, CEO, at Trusted House Buyers thinks that those agents are going to have to step up or step out going forward.

"Many real estate agents simply don't effectively market the properties they list. They rely on Zillow and other sites to do that for them via an MLS IDX feed,” Mollo contends. “With this ruling, it gives Realtors more incentive to go the extra mile, because the ones that do will be winning the listing contracts.

“The best part of the settlement is that moving forward, buyer's agents will have to explain what they do to add value to a transaction,” Downer said. 

“The professional agents will do better than ever, and the less professional agents will have a hard time getting clients. This part will serve the consumer better than ever in the long run. There are some types of deals, such as VA Loans, that will need to be restructured by law since they do not allow compensation for buyer agents.”

What can buyers and sellers do?

Now that we see that this situation is muddy for the foreseeable future, what steps can buyers and sellers take to reduce some of the confusion over what they can and can’t expect, and do and not do.

“First, muster your courage to negotiate the commission,” is Joanne Cleaver’s, President at Wilson-Taylor Associates, rallying cry.

“Need motivation? Calculate the savings in listing for 1.5% - which is what discount agents require, and which is reasonable given that consumers are probably using the realty-agent-built MLS to list their houses. Then, think about the results you actually want from a buyer's agent. Remember, if you are still paying the buy-side commission, that agent still works for you!”

Cleaver says to think about what exact services you want – and not just "bring me a buyer," but, a buyer with a certain offer, the time to close, and other contingencies – and then ask the buyer's agent how much time they expect to spend on your deal. 

“Their time with their buyers is not your concern. Drill down to the services you need from that buyer's agent and negotiate to pay for what you are getting. It's not your job anymore to support the real estate infrastructure. Pay for results!” 

And if you need help, there’s now a Facebook group dedicated to giving sellers a space where they can share ideas and tactics about how to negotiate real estate deals here in the new Wild Wild West.