The recent NAR settlement may already be altering the real estate market
of ConsumerAffairs
When the National Association of Realtors (NAR) settled a lawsuit that challenged the Realtor commission structure, it apparently caused some buyers and sellers to actually question the need for representation during a home-buying transaction.
A survey conducted for Lance Surety Bonds found that 25% of homeowners who plan to sell their homes in the next 12 months plan to do so without the assistance of a Realtor. Its not clear what impact if any the settlement had on that decision.
The lawsuit stemmed from the unwritten practice of the listing broker charging a 6% commission on the sale of the house and splitting it with the buyers agent. As NAR has pointed out, commissions are not written in stone and are negotiable.
However, some sellers filed a lawsuit, claiming they were being forced to pay the buyers agent and that they were getting nothing in return. But is that really the case?
Real estate agents will tell you that agents for the seller and buyer usually work together to make sure the sale goes through. ConsumerAffairs asked some agents what services both buyers and sellers receive.
What Realtors do
Amy Lessinger, president of real estate brokerage RE/MAX, says real estate agents provide critical services, especially in competitive markets. She says its especially important for buyers.
I moved to Colorado two years ago. Even though I've been in the business for 30 years, I hired a professional in the market to represent me because there are so many nuances that happen at the local level, Lessinger told ConsumerAffairs. That truly is the essence of what real estate agents provide.
Michael Vestuto, an agent at Platinum Real Estate Professionals, says sellers have every right to market their homes themselves but they should understand that home sale transactions are increasingly complex. And thats just as important, he says, for buyers.
Many homebuyers embark on this journey thinking it's straightforward, only to find themselves grappling with complexities they hadn't anticipated, Vestuto said. When they seek assistance, they often turn to the listing broker or the title company. However, the listing broker's fiduciary responsibility lies with the seller, not the buyer. Similarly, title companies, while neutral third parties, are legally restricted from providing extensive assistance.
Specialized knowledge
Seamus Nally, CEO at TurboTenant, says buyers agents not only bring the buyer to the transaction, they are especially valuable to buyers who may not be familiar with the local market or a particular neighborhood.
As experts in real estate with experience in helping clients buy homes, theyll know how to spot ways to negotiate better terms and prices, and theyll know how to identify when sellers are asking for too much, Nally told us. Sellers and their agents are always going to want to sell for as much as possible, and without a buyers agent to negotiate, buyers are more easily taken advantage of and talked into deals that couldve been better.
Oh yes, then there is the paperwork. Agents say there are not only many forms and agreements that must be filled out and signed, it must all be done correctly.
In the wake of the NAR settlement, it remains to be seen how much change occurs in Realtor fees. In one of the biggest changes, the settlement requires Realtors to use Buyer Agency Agreements, which must be in place before viewing homes with buyers.
That suggests buyers will have to pay at least a portion of the sales commission previously paid entirely from the sale of the house, which could reduce what they can pay for the property.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-04-17 15:05:14
