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My take on the NAR settlement

Hey All!

I am sure most people have seen the news about the National Association of Realtors, NAR, settlement that came out Friday. I wanted to make some points that the media is not fully reporting.

1- Realtor commission is NOT 6%. Most transactions I work on, and I have worked on a lot of them, are between 4-5%. About half going to listing agent, half going to the buyers agent.

2- That commission has ALWAYS been negotiable. As a seller, you can find folks that will list your home for a lot less than this..but as with ALL things, you get what you pay for. You work with someone that just puts your home in the system? That's ALL you are going to get. No extra marketing, no open houses, no advice on how to get your home ready, no help going over offers, no help in evaluating the lender that is helping the potential buyer, no help with negotiations, no help with contractors doing repair worked required by the contract, no help in following up with the buyers agent, lender, title, etc.. Again, you get what you pay for.

3- Let's say you decide to not pay the buyers agent. You will 100% be changing the number of people that will come to look at your home. A buyers agent may come to a buyer, and say look, I know you like that house, but I make no money if you write on it, because the seller is not paying anything to the buyers agent. You can either pay me to help you, or you are at the mercy of the other agent. (Side note: your LOAN OFFICER is not a licensed realtor. I will help my clients as much as I can..but I will not stick my neck, or license, out to help my buyers in this regard). As a seller, you want as many people wanting to write on your home as possible, not paying the buyers agent WILL reduce the number of buyers, and your potential amount to make on the sale of that home.

4- I'll say this part a licensed LOAN OFFICER, I will help where I can..but I will not lose my license (livelihood) to play your real estate agent. As much as I want to help, my license is very important to me.

5- I do see this hurting a lot of folks. Those folks? Usually the lower income, minority, and Veteran clients. These folks, for the most part, do not have the extra money to pay their real estate agents. They can easily afford mortgage payments, to own their own home, but that up front cost of down payment, closing costs, AND a buyer's agent? That will be a step too far for lots of folks. For VETERANS, they are not allowed to pay their own agent..what's going to happen with them? They will only be relegated to homes that are helping to pay the buyers agent.

6- As lenders, the big minds that set guidelines and pricing, may come up with something to help this situation.. I bet some of our lenders are even thinking of ways to help, only time will tell.

7- There is an interesting parallel between what is happening with real estate agents, and what happened to lenders after the great financial crisis, GFC. We were regulated to the max, including compensation. Everyone thought the sky would fall, even me. But, we all adapted, or died off. But, agents, I know what you are going through, and the stress this is bringing. Just know that your trusted loan officers are here to help in anyway we can.

The main point of all of this is that there is a TON of misinformation out there. And, there is a lot to sort out, IF it goes into effect. The judge still has to decide this.

Those in real estate are very adaptable, and we evolve with the situation. I do think we will be may take some changes, but we will figure it out together.


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