Yesterday I read an article that quoted CBS, Fox, and the Associated Press. You may have seen versions of these thoughts as well.
Here are four excerpts from that article.
1) "Katz explained that buyers will now pay their agents while both buyers and sellers will be able to determine a commission amount with their agents, possibly negotiating a better deal."
2) Realty company Home Avenue’s owner Greg Lawrence is all for the idea. "I think it’s a historic moment for the industry. I think this is a big win for consumers, and I’m 100% in favor of it,” he commented, noting that he thinks such changes would lower housing costs and help people save money.
3) Meanwhile, Fox 11 offered a theoretical simplification of the issue. The outlet said, “The seller of a million dollar home could save 20 thousand dollars or more if they didn’t have to pay 3% to their agent”:
4) Robby Braun, an attorney for home sellers in a federal lawsuit in Chicago, recently told the Associated Press (AP), “It may take some time for the changes to impact the marketplace, but our hope and expectation is that this will put a downward pressure on the cost of hiring a real estate broker.”
I commented directly to that news outlet with the following...
It appears that Greg Lawrence from Home Avenue Realty is not concerned about lower income buyers being represented by a quality real estate professional. That’s who this will harm the most. What good will it do someone who has scrimped and saved up $15,000 to buy a $350,000 home with an FHA mortgage if they can’t afford a REALTOR to represent them? You’re telling them to go out on their own to figure it out for themselves. Would you also tell them to go to court without an attorney? The person with the best representation usually comes out ahead. During the insane pandemic era in Sarasota County, my buyers consistently won their bidding wars without making the highest offer because I was their agent and I’m exceptional at my job. Because the commission has been wrapped up in the sales price, all buyers have had equal access to hire the best agent they could find. Mr. Lawrence, have you thought that through? You couldn’t possibly think that only the wealthy deserve quality representation. Do you really believe that a seller will begin to make more profit if they don’t have to pay a buyer’s agent’s commission? Not a chance, cash buyers will now demand an additional 3% off the purchase price. That will then lower the comps that an appraiser uses for mortgage buyers - making it even more impossible to achieve the American dream of homeownership. There is absolutely nothing good that will come from this that will outweigh the bad. I am all for changes to the industry, such as full disclosure as to how long someone has held their real estate license and how many successful closings they are responsible for. That alone would shed some much needed light on a very big problem. Just because you walk into a real estate office, doesn’t mean the person behind the desk is qualified to help you. You only need your license for 1 day to call yourself a REALTOR.
There will be much more to say on this topic. People are not realizing how much this is going to harm themselves and others.
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