The Real Estate Market is About to Change Dramatically

[stoshuaj]

On 11/9/2023 at 1:33 PM, mcsluggo said:

 it is broken from aft to stern

paging Chief Buzz, paging Chief Buzz or bos’n Mary:

 

I was an Airedale (don’t hate just recognize) so correct me if I’m wrong but aren’t aft and stern kind of the same thing?

Edited November 14, 2023 by stoshuaj

[PleaseBlitz]

This thread loves tangents. 

[tshile]

Ok. So industry experts agree it could lead to higher costs for purchasing a home. 
 

which is what I was saying the other day and everyone kept arguing with me

 

 🤡 

On 11/9/2023 at 1:20 PM, mcsluggo said:

It is absurd to think that this reduction in leaches would lead to HIGHER real estate costs..... 

this reminds me. Need to start that thread on how cheaper drugs means fewer drugs. 
 

 

[skinsmarydu]

34 minutes ago, stoshuaj said:

paging Chief Buzz, paging Chief Buzz or bos’n Mary:

 

I was an Airedale (don’t hate just recognize) so correct me if I’m wrong but aren’t aft and stern kind of the same thing?

I believe the phrase is "from stem to stern", but "aft" is the back part of the ship and "forward" is the front. 

[PleaseBlitz]

14 minutes ago, tshile said:

Ok. So industry experts agree it could lead to higher costs for purchasing a home. 
 

which is what I was saying the other day and everyone kept arguing with me

 

Where exactly did you get this from?

[tshile]

9 minutes ago, PleaseBlitz said:

 

Where exactly did you get this from?

The posts on the previous page including yours. 
 

Quote

Ellis says some brokerages, including hers, could require clients to sign a buyer’s agreement specifying the services the agent will provide, their commission and the buyer’s responsibility to pay the fee if the seller doesn’t cover it. If the buyer has to pay their agent, it could add thousands of dollars to the cost of a home purchase — on top of the down payment and closing costs.

there’s more. The gist of it seems to be it’ll benefit the seller, but could make the purchasing process more expensive for the buy with up front costs. 
 

which is exactly what @TheGreatBuzz’s sister was saying, and I was trying to explain, and people kept posting their math equations that completely missed the point. 

[PleaseBlitz]

Just now, tshile said:

The posts on the previous page including yours. 
 

there’s more. The gist of it seems to be it’ll benefit the seller, but could make the purchasing process more expensive for the buy with up front costs. 
 

which is exactly what @TheGreatBuzz’s sister was saying, and I was trying to explain, and people kept posting their math equations that completely missed the point. 

 

I'm not sure one person saying one thing gets you to "industry experts agree it could lead to higher costs for purchasing a home" but we can set that aside. 

 

I think people were arguing with you because "up front costs charged directly to the buyer" doesn't tell the whole story.  This is like the whole point of the case involving a $5 BILLION penalty.  Both buyer's and seller's agent were colluding to keep commissions higher than they would be where the Participation Rule doesn't exist.  Why would buyer's agents collude with seller's agents if it meant they'd make less at the end of the day?  Why would the National Association of Realtors institute fight tooth and nail to keep that rule in place?  

 

In the end, up front, direct costs to buyers may go up, but the overall transaction costs, including the price the buyer ultimately pays for the home are likely to go down because real estate commissions are going to go down overall, and probably by a lot. 

 

I guess you missed these other parts of the article that just happen to not agree with you. 

 

Quote

Now, everyone from brokerages to independent agents is trying to figure out what the future will look like once the dust has settled. The decision, says Steve deGuzman, CEO of rehavaPress, a software development company for real estate brokerages, could bring benefits “not only to consumers but to the industry all around.”

Quote

When it sells, the listing agent’s commission, which typically averages between 5% and 6% of the sales price and is paid from the proceeds, is split with the buyer’s agent. But the plaintiffs in the lawsuit alleged — and the jury agreed — that this practice unnecessarily increased the real estate transaction cost for sellers.

Quote

A business model based on fixed-fee compensation, where the seller or buyer pays a flat fee for their respective representative’s services, could also emerge and help keep home selling and buying costs down for both parties.

 

And from the Economist article that @mcsluggoposted:

Quote

The current rip-off works like this. The nar has long insisted that any agent who lists a home for sale on a database called a “multiple listing service” must offer to split the commission equally with the agent who brings the eventual buyer to the property. Sellers are often told that if they do not offer the going rate, of 2.5-3% for the buyer’s agent, no one will show up. They have a point: academics have found evidence that buyers’ agents “steer” them away from low-commission properties. Buyers are told they need not worry about the fee paid to their agent, because the other guy is paying it. This is nonsense. Either the fat fee inflates the house price, or the buyer ends up paying a similar fee when he or she sells.

 

[tshile]

6 minutes ago, PleaseBlitz said:

think people were arguing with you because "up front costs charged directly to the buyer" doesn't tell the whole story

Right. I don’t think I ever claimed it did. 
 

I just said it’s a likely possibility. Just like his sister said. 
 

the rest of your post is nonsense arguing with yourself over things I never said or argued against 🤷‍♂️ 

6 minutes ago, PleaseBlitz said:

I'm not sure one person saying one thing gets you to "industry experts agree it could lead to higher costs for purchasing a home" but we can set that aside

It’s not one person, but that’s fine. This seems to be the only thing you’ve said that actually makes sense compared to what I actually said. 
 

I don’t know why pointing out there will be increased upfront costs to the buyer makes you and others automatically assume that means the real intention is to argue this is a bad thing. 
 

I think it’s a good thing. Seems like it should be a good thing. 
 

but it’s ok to admit it’s likely to increase those upfront costs, without feeling the need to make all this other **** up and then argue against it 😂 

Edited November 14, 2023 by tshile

[TheGreatBuzz]

1 hour ago, stoshuaj said:

paging Chief Buzz, paging Chief Buzz or bos’n Mary:

 

I was an Airedale (don’t hate just recognize) so correct me if I’m wrong but aren’t aft and stern kind of the same thing?

 

I was an Airedale also.  But yes.

 

42 minutes ago, skinsmarydu said:

I believe the phrase is "from stem to stern", but "aft" is the back part of the ship and "forward" is the front. 

 

I'd say "bow to stern" is more common unless referring specifically to a body.  But either are acceptable. Unfortunately,  @mcsluggo is not acceptable. 

 

I'm too stoned for the rest of the conversation. 

[mcsluggo]

does this work better..?

 

the system is broken from aft to the anal-retentive buttholes of ex-sailors everywhere

[TheGreatBuzz]

1 hour ago, mcsluggo said:

does this work better..?

 

the system is broken from aft to the anal-retentive buttholes of ex-sailors everywhere

 

Not really.  I feel like you still have the same issue, just with different words.

[The 12th Commandment]

My VP of Real Estate lending banker buddy told me over the weekend that they (the banks board) think the cost to the buyer will be figured into sales price and nothing much will change.  We'll see.  It wouldn't be the first time a banks board got it wrong.

 

Back in my appraiser days I absolutely loathed realtors.  Worked 10% as hard as I did on a deal and got paid 10 times more.  There were good ones but they were absolutely in the minority.  

Edited November 15, 2023 by The 12th Commandment

[EmirOfShmo]

Good news for the consumer...

 

The 6% commission on buying or selling a home is gone after Realtors association agrees to seismic settlement

 

The 6% commission, a standard in home purchase transactions, is no more.

In a sweeping move expected to dramatically reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commissions.

 

https://www.yahoo.com/finance/news/realtor-settlement-commission-fixing-could-141747151.html

[CousinsCowgirl84]

Dramatically reduce the cost… lol, the naivety is precious!

Edited March 15 by CousinsCowgirl84

[dfitzo53]

2 minutes ago, CousinsCowgirl84 said:

Dramatically reduce the cost… lol, the nativity is precious!

Yeah I'm not sure I buy that part.

 

But I think anything to start stepping on the toes of the real estate industry is probably a net positive.

[The Evil Genius]

They will likely just come up with other junk fees/add ons to keep their revenue flowing. 

[Corcaigh]

It seems like one area that the Internet and buyers/sellers having immeasurably more information has not made a dramatic change unlike in many other industries. I think Redfin uses a commission of 1.5% versus 3% and yet has not blown up the traditional realtor industry.

People in the business have for years offered to waive the buyers fee in return for a discount. I can imagine that there will be different pricing packages but traditional realtors will still end up with similar total comp. Their biggest asset is a somewhat warm database of sellers and buyers who they nurture with holiday pies and tchotchkes and as their clients have a transaction no more than once a decade they are more willing to pay for ‘white glove’ service. 

 

[PleaseBlitz]

24 minutes ago, Corcaigh said:

I think Redfin uses a commission of 1.5% versus 3% and yet has not blown up the traditional realtor industry.

Redfin has a 1% listing fee but still pays the typical 3% buyer’s fee. The NAR settlement will bring down the buyer’s fee now that it is negotiable. 
 

I don’t agree with the folks in this thread that are skeptical this is going to significantly reduce the overall costs for realtors. The whole buy side model is ****ed. Nobody is ever going to pay anything close to 3% on a >$400k home again. 

[PleaseBlitz]

https://www.axios.com/2024/03/18/nar-settlement-home-buying

 

Quote

The powerful National Association of Realtors last week agreed to settle a big lawsuit and change the way real estate agents get paid — from effectively a standard commission to something truly negotiable.

 

Why it matters: The deal could open up a tightly controlled market to genuine competition, and create opportunities for new players and business models in a relatively old-fashioned world.

 

It could do for real estate what the internet did for stock trading — bring down broker fees.

The impact: That'll likely mean lower costs for sellers, who brought the lawsuit as a class action. The impact on buyers is more complicated.

 

How it works now: Sellers pay a 5%-6% commission on the sale price of their home.

 

Typically, the seller's agent and buyer's agent split the commission.

It effectively means the buyer's agent is working for the seller — a conflict of interest. (Agents, of course, dispute this characterization and say their reputations depend on them doing a good job for buyers.)

Under NAR rules sellers are required to advertise the buyer agent commission on the Multiple Listing Service, the database where real estate agents put homes for sale.

 

There's even a specific box just for this number.

Homebuyers don't see the number, but their agents do. The risk is that agents are incentivized to steer clients to the higher-fee deals — putting their interest in a higher fee above the buyer's interest in finding a good house.

That box goes away if the court approves this settlement. Sellers could no longer promise a commission to buyers' agents.

 

It seems like a bureaucratic little detail — a box! — but the implications are massive.

Key question: How will buyer agents get paid? A few possibilities:

 

• A flat fee out of the buyer's pocket.
• Buyer agrees to pay a percentage of the sale price to the broker or pays an hourly rate. Maybe they skip having a broker at all.
• The real estate industry is emphasizing that a seller could still actually cover the buyer agent's fee. But that would have to be negotiated later on in the deal process — as a concession. Just as now sellers sometimes offer a cash credit on a deal to cover repairs or other things.

Follow the money: Future home sellers are clear winners here. They should be able to keep more of the proceeds when they sell a house.

 

[Fergasun]

I think this is oversold. 

 

Something that would "change the housing market dramatically" would be:

 

"a large public interest group has teamed with a public sector retirement investment fund and become controlling agent of [Big Corporate Landlord]  tbey have pledged to freeze rents and operate for the benefit of the middle and lower class"

 

"[Billionaire Johnny Techbro has announced a housing development aimed at bringing back cheap housing to America.  They plan on using the new California multi-zoning law to invest in additional property.  They will use a "rent to own model" that will undercut current landlords.  Johnny Techbro said, instead of building a rocket to nowhere, I think this will help humanity more.  Also, my workers have nowhere to live.  And I want to stay in California.  I make enough to pay taxes."

[PleaseBlitz]

@Fergasun  Yea, but the thing that actually happened is realistic.

[CousinsCowgirl84]

I think this will improve service but not lower prices, probably drive some less effective agents out of the market.