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Will the NAR Class Action Suit ~ Turn the Clock Back?
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Michael J. Perry the problem is that many buyers already need closing cost help and under many loans they won’t be able to add 3% more for buyer agency It’s a dreadful rabbit hole we are heading down and we will get sued
Buzz Mackintosh
Frederick, MD
Brenda J. Andrew
Willis, TX
Anna "Banana" Kruchten
Phoenix, AZ
Great point Lise Howe, lenders will not finance a Buyers portion of the brokerage fee!
Interesting. This could result in buyers who have to put their search on hold if they have the additional commission cost.
Buzz Mackintosh
Frederick, MD
Brenda J. Andrew
Willis, TX
Anna "Banana" Kruchten
Phoenix, AZ
That sounds more like taking a few steps backward and truly creating issues for buyers, especially with the closing cost they already pay.
Buzz Mackintosh
Frederick, MD
Brenda J. Andrew
Willis, TX
Anna "Banana" Kruchten
Phoenix, AZ
Interesting Post Buzz. Thanks for sharing. I will be following this to see how it goes. I've been in business 20 years this year, but most of the comments are before my time as a Realtor. It will be interesting to see what comes of it.
Anna "Banana" Kruchten
Phoenix, AZ
Buzz Mackintosh
Frederick, MD
Brenda J. Andrew in my 38 years, I will say when I started in 1985 it was a more simple time, with a one-page contract, and a much less litigious society. The transactions today move at lightning speed compared to back in the day.
Andrew Mooers | 207.53...
Houlton, ME
Anna "Banana" Kruchten
Phoenix, AZ
Buzz those were the way simpler days by a long shot. 1 page contract and then it was 3.....which we thought was great back then.
44+ years for me and in small rural markets some things don't change. Your home buyer does not need a building inspection. His Dad is a plumber, brother an electrician.
Your buyer works for a contractor who has his boss help size up the place with the rest of his family that all use power tools.
I buy donuts from local bakery, hot coffee and meet up Saturday morning at the home where the group crawl all over the place like spider monkeys. Inspection done before doing a contract. Done.
Case of buying or not instead of let's renegotiate the price, and here is my honey do list I want the seller to perform. No on and off the market and in one morning, the family members size up the property easy peasy.
It still is simpler in small rural markets without layers of players and hands on buyers are way way more savvy skill set and negotiation wise. And now it's the age of full disclosure. Listing inventory is still king in any market Buzz Mackintosh !
Not a lot of agents in small sparse populations so list it, market, sell it and I want the buyer to meet the seller and we mediate not litigate.
Great Summary Buzz … so much drama over the years over issues that should be relatively simpler or address to everyone’s satisfaction
Buzz Mackintosh
Frederick, MD
Anna "Banana" Kruchten
Phoenix, AZ
Paddy Deighan MBA JD PhD the process was much simpler back in the 80's with less paper work and not as intimidating for the Buyers.
This on-going lawsuit needs to be put to bed. I know our Texas licensing laws for real estate professionals include the necessary language for both buyer and seller representation.
Buzz Mackintosh
Frederick, MD
Dr. Paula McDonald this case should have been put to bed in January however the current administration's DOJ appealed to keep the case alive....🤔
Our MLS has no Rule regarding compensation, it can say zero. The only rule is you pay what is listed at the time of offer.
Buzz Mackintosh
Frederick, MD
Don Baker I hope the Buyer agents in your market place have air tight buyer agency agreements!
Thanks for the recap, Buzz, and a good discussion of potential issues depending on the outcome.
Jeff
Buzz Mackintosh
Frederick, MD
Jeff Dowler, CRS hopefully NAR will prevail , I dread the day we have to learn a new business model with a whole bunch of new forms 🤯
Good point Buzz Mackintosh but the potential ramifications go far beyond some forms...costs for buyers and changes in how agency representation works for example.
The bottom line is there is only so much money in a transaction. The buyer has a certain amount, the seller needs a certain amount. I don't think changing the deck furniture around on the real estate landscape will change that. Commissions have been built into the pricing of homes. I'll be watching for the outcome of this legal action.
Buzz Mackintosh
Frederick, MD
CONGRATULATIONS Buzz, on having this blog FEATURED in the Old Farts Club group!
Buzz Mackintosh
Frederick, MD
Myrl Jeffcoat it amazes me the number of people in our industry who still don't understand agency or how to explain it. This is most likely why we are where we are today ! BTW , this Old Fart thanks you for the feature!
Buzz, I am not a fan of this and ironically have a draft post about it , just have been having a hard time tone down my views:) Congratulations on the Feature, Endre
Mark Don McInnes, Sand...
Sandpoint, ID
Buzz Mackintosh
Frederick, MD
Endre Barath, Jr. I'm with you, most seasoned REALTORS® are not a fan of drastic change and this is what could be on the horizon should this case go the wrong way.
Endre Barath, Jr.
Beverly Hills, CA
Hello Buzz Mackintosh . A lot of comments state the 'good ole days' of 1 or 3 page contracts. The contracts only expand from with issues experienced by either buyers or sellers. Our contracts today, for better or worse, still are meant to protect both the buyer and seller. And the changes made came from mostly fradulent actions that loop holes in the 1 to 3 page agreements failed to address. I agree it is a shame we have grown to this stage of litigation. No one wins but a select few...seldom the public overall. I agree with Endre Barath, Jr. , I have a difficult time framing my words carefully. mdm
Buzz Mackintosh
Frederick, MD
Endre Barath, Jr.
Beverly Hills, CA
Mark Don McInnes, Sandpoint-Idaho for better or worse our litigious society has made us live and learn over the years and life was a little easier and less stressful back in the day ☺️ ...
If buyers are going to compensate their agents, then banks need to allow these funds to be included in the mortgage, as they are already via the seller, or else this will block those with less deposits in the bank from obtaining representation if it has to be paid from cash.
Buzz Mackintosh
Frederick, MD
Good point Nick Vandekar, 610-203-4543 ,however I don't think the banks & lenders will do that and the whole appraisal process would need to change also as there is no line item on the form for brokerage fees.
It gets complicated every year. I am confused these days. Sam Shueh
Buzz Mackintosh
Frederick, MD
Sam Shueh if things go the wrong way we just turn the clock back and work like it's the 1980's...
I suppose it can argued that sellers could pay listing agents a flat fee for their services. Buyers could pay buyers agents a flat fee for helping them buy a home.
Buzz Mackintosh
Frederick, MD
Edward Gilmartin Yep, that is an option in today's real estate world. It's called a discount broker and probably not a REALTOR® , and an agent who is not bound by the code of ethics.
Excellent post.Thank you for sharing. Have a wonderful day and a blessed week
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