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Pulse is a recurring column where we ask for readers’ takes on varying topics in a weekly survey and report back with our findings.
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Now that a judge has preliminarily approved the National Association of Realtors’ commission lawsuit settlement, brokers and agents are trying to figure out how to get ahead of the curve. Some are offering discounted commissions with no buyer agent split or low flat fees. Others are anticipating a bit of a Wild West period before a return to business (more or less) as usual.
We wanted to know what you’re seeing now: Will listing agents have the upper hand in a post-NAR settlement world? Will dual agency become more prevalent, or will buyer agents still be in the mix? What are clients saying, and what questions are they asking? How do you see it all shaking out? Here are your boots-on-the-ground perspectives from both the original poll and from Inman’s Instagram:
- I expect that buyer-broker commissions will be part of the seller-paid closing costs, especially if the market slows down. It may make buyers only focus on properties that pay a full commission. In addition, NAR will have to remove the implication that it is an ethics violation to include buyer-broker payments as part of the contract. I expect some large brokers to post on their websites that they pay a 3 percent broker commission on all listings unless stated otherwise.
- Listing agents have always had the upper hand (multiple)
- Only if buyer’s agents don’t have their conversations in line. Listing agents will need to have buyers sign agency representation agreements as well, meaning they will have to articulate a value proposition beyond convenience. Buyer’s agents need to clearly explain their value to sellers and anticipate the listing agent’s variable commission rate.
- Yes because they don’t have to have buyer’s rep signed to show a house
- To say that more homes will be sold with dual representation is like saying there is only one attorney needed in a merger or acquisition. That is absurd and naive.
- No, most buyers realize they need a trusted advisor by their side
- No, but hopefully buyers will be more selective about who represents them … so serious agents should get a lift
- Yes, until buyers understand they have always funded the commission and until buyer agents show them how to negotiate the fee other than out-of-pocket
- Listening agents always have the upper hand
- Upon my joining KW NYC almost a decade ago as broker of record, I introduced buyer agreements to our agents. We have used them since, have represented hundreds of buyers who have paid their buyer agent’s commission, and have for years, had monthly Agreements and Contracts classes as orientation to new and review to experienced agents. Contrary to statements I heard years ago from other sales managers at other firms stating “no one in NYC would even use these or be able to secure payment of commission from any NYC buyer,” I have always thought and taught otherwise. We were ready for this day way ahead of time and so many others!
- Yes, unfortunately
- Listing agents have always had the upper hand. This will be exaggerated with the finalization of the NAR settlement. Buyer agents will be viewed more as a concierge option for the higher-end properties as the majority of buyers will work with listing agents directly.
- I don’t believe that much will change. The great majority of sellers will continue to offer a buyer agent commission in order to get maximum exposure of their listings. The exceptions will be very unique properties or listings in extremely high-demand communities in hot markets. Personally, I do not plan to take a listing from a seller who does not offer a buyer agent commission because I cannot anticipate the impact it will have on showings and days on market.
- Listing agents will have to do double the work without getting paid more. It’s like a lawyer representing both the plaintiff and defendant without any payment from the defendant. This creates a problem as each side should have fair representation. In multiple offer situations, unrepresented buyers may not be seen as strong offers, leading to potential lawsuits. #maytheoddsbeeverinyourfavor
- I mean I guess so yes they have guaranteed commission but if a buyer who can’t afford commission and they want that house they will have to tell their agent we are going to the listing agent to represent us. So then they are showing their listing to buyers with no representation and working that entire side, too, when — I’m sorry, I know so many people do dual agency, but subconsciously you will have your seller’s best interest first — but OK. Even with dual agency, the listing agent is going to have to negotiate again about working both sides of the deal — maybe not double, but, technically, worth just paying a buyer agent and having way more options for buyers. Most buyers won’t be able to pay commission and agents aren’t working for free, so that’s the seller’s loss in my opinion, too. First time buyers will be hurt the most. I don’t get the difference between just leaving it the way it is. It benefits you when you buy again that you don’t have to worry about that. You already did your part when selling. So they could pay the same thing if the agent negotiates buyer commission and you paid the listing agent. What is the difference? They just made it more difficult.
- Listing agents will have the upper hand to hold more open houses as info sessions to meet buyers who come in unrepresented. I will continue not to be a dual agent as it’s not in the best interest of my seller.
- Yes, but only if they network and market themselves effectively
- Yes, but in a different way because if a direct buyer who doesn’t want to use a broker thinks that the listing agent will have their best interest in mind when that listing agent has original fiduciary duties to their seller, then direct buyers will be the ones not getting a fair deal.
- Yes, dual agency is definitely on the rise which will lead to more lawsuits and less affordability for buyers. The only winners in this BS case are the plaintiffs and the attorneys representing the plaintiffs.
- No. The buyer’s agents will. They will have leverage to get what’s negotiated in the buyer’s brokerage agreement from the seller. Won’t have the listing agent negotiating the buyer’s agent’s commissions any longer.
- Well, since listing agents typically hold certain advantages, including networks, market expertise and knowledge, I think they still do hold the advantage in a post-NAR settlement landscape, though it may influence the market dynamics and all. But I also think that advantage will depend on the nature of the settlement and probably the skills which the agent possesses to make that happen.
What did we miss? Please share your thoughts in the comments section below.