When the news broke this past spring about the lawsuit out West and the national changes to how some elements of real estate were going to be done as a result, I wondered like everyone else what this might mean for my business as well as the industry as a whole.
The media loved the story. Their take on it seemed to be that real estate brokerage as we've known it was about to be turned completely on its' head. That home prices were about to drop, that the way we've done things for years was all going out the window.
Before I had an opportunity to see what it really meant, what the suit and ruling actually meant, I won't lie, I worried.
I've been in this industry so long that I wasn't sure where everything would land or how much I'd have to relearn.
Turns out (at least so far) not much. And in North Carolina in particular, even less than in some states.
I'm not going to go into much detail here, that's not the point of this post which is more about the commission rate part, but in a nutshell Realtors/Agents/Brokers have to have a signed "Buyers Agency Agreement" before showing any homes to perspective buyer clients & the MLS can no longer indicate what commission (if any) is offered to buyers agents by sellers. There may be a few more small changes dealing with access to the MLS by those licensees that aren't members of the Realtors Association (a private, non-goverment group) but really that's about it.
AGENCY AGREEMENTS
I'll only touch on this for this post. The North Carolina Real Estate Commission has required these here in our state for decades. We didn't have to get the buyers go sign until at least before presenting an offer, but we could show homes without one - though that, in practise, isn't what most did anyway. They got them signed at the get go. So no real change here.
COMMISSIONS & COMMISSION RATES
The plaintiffs in the case argued that brokerages colluded to keep commissions 'inflated' and high. They implied or stated that commissions weren't negotiable. Maybe that was the case somewhere and many brokerages certainly restricted their agents & brokers from negotiating commissions that their particular company had set - but that wasn't anything mandated by either the Real Estate Commission (government) or the Realtors Association (private memebership association).
While there were some standard rates, agents and brokers and brokerages have always had the ability to charge their clients whatever those chose to.
SOME brokerages will likey have a hard time with this. They have been unbendable with their rates, but many many many others have been easily negotiable for years. For many years I've seen properties listed with all sorts of different rates.
Personally my rates have always been flexible. For the past 10 years I've worked from home, so my overhead is quite low. I don't have, and pay, transaction coordinators or assistants, etc. I charge what I feel is fair and worthwhile and worthy of my experience, but it's not been, for years, what many have considered the "standard" rate. I've advertised this for many years as one of the selling points with choosing my services: more experience than most and lower commissions than many.
MLS AND COMMISSIONS
One major change, and somehow this will be worked out, is that agencies and brokers can't post anywhere on the MLS how much commissions the seller is offering buyers agents, if they are offering a commission at all. So there will be a bit more leg for for us brokers, and we'll have to communicate those offerings in a different way...but that's it.
In the end, for me and for many others, these changes likely won't change much in how we work and operate. The lawyers for the plaintiffs argued and the media amplified that this would somehow lower home prices, but my experience and opinion is prices won't be affected by this at all. I don't believe that if sellers are able to negotiate lower commissions to list their properties, and buyer agents are offered lower commissions (again, if any) from sellers, that they'll lower their price as a result. I think they'll happily pocket that savings from the sale...at least that's what I've seen in the past.
Anyway, my two cents. Come August 1st and after we'll see.
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