OP/ED from CNN: Opinion: How to make sure the 6% home commission really does die | CNN Okay, so right now a home seller can: 1. Work with a full service Realtor and pay the commission in the listing agreement 2. Work with a discount Broker and pay a flat $1,500 (or thereabouts) for minimal service. 3. Work with an online Brokerage, like OpenDoor. 4. Work for yourself and do a For Sale by Owner, FSBO. Whoa, the horrible, terrible awful Real Estate market that only gives people four different ways to sell their home. How can we as a nation survive? Oh, according to this Professor, more training for Realtors, more paperwork documenting all that they do, and more government involvement to oversee the process. I'm shocked that a government employee (UW-Madison) recommends more government. Another class action lawsuit in search of a problem. Professor states that homes paying a buyer's agent a higher commission sell faster and at a higher price than those who pay little or none at all. Once again, a colossal breakthrough of unbelievable proportions. A commissioned salesperson has an option to work on selling a $500,000 home and earning 3% ($15,000) vs. selling a $500,000 home for $3,000 flat. If all you have to sell is your skill and your time which one would you focus on? Good news: people who dabble in RE will be soon exiting the stage and professionals will have to justify their value. Bad news: potentially VA buyers are left on the street as settlement calls for buyers to pay their Realtor and VA loans prohibit buyers from paying brokers. Oh well.
I see it getting to the point where the seller pays all the commissions at closing as part of their closing costs. Agents will have to decide how to negotiate the commissions. I paid 4% negotiated at the start of my listing. Buyers agents were aware of it and made their own decision to show or not.
100% My wife has used a Buyer's Representation Agreement for many years - disclosing what she gets paid and what she does for her clients. This ruling has no effect on her at all. Having said that, do you have any comment on the lawsuit and/or this opinion piece?
The issue is really about transparency and monopoly power. The fee was kind of hidden and if you didn’t go the route of the monopoly you lost access to MLS. There is nothing stopping both sides from charging 3% in the future if the value is truly there. The reason people like you are complaining is that fees will be negotiated and become more competitive because real estate agents don’t add anywhere near 6% of value.
Fees are negotiable now. I'm complaining because people can negotiate full service fees, have options to go w/ minimal service flat-fee broker, FSBO or Tech/RE play. You're right in that most RE agents do not add the value - I agree with you there. So, this will shake out the weak Realtors won't be able to survive.
