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How Does The NAR Ruling Affect Real Estate Agents
How is the National Realtor Association ruling affect real estate agents making money especially buying agents. Thank you in advance.
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27 Replies
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S ?Many real estate agents are losing sleep 😴 over the NAR LAWSUIT and ruling which is supposed to affect buyers real estate agents. How do homebuyers real estate agents supposed to make commission
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Here is a link about what the NAR settlement means for consumers, real estate agents, and loan officers.
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I think that it might affect the number of agents in that profession, but as it always has been, typically, the best will keep doing so. It might be more challenging to fight for your commission percentage per buyer, but providing value in expertise will be more critical than ever.
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Attached is a recent article on NAR LAWSUIT and ruling and how it will affect home buyers and home sellers
https://www.sarasotamagazine.com/home-and-real-estate/2024/03/realtor-lawsuit-settlement-commissions
sarasotamagazine.com
How a Major Real Estate Lawsuit Settlement Could Affect Your Search for a Home
The National Association of Realtors is settling a federal lawsuit over realtor commissions and transparency. Here's how industry locals are responding to the news.
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Isn’t it illegal for homebuyers agents to get paid as a real estate agent. Confusing and whoever I ask I get different answers.
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Brent, Dr. T. went into contract. $669,000 purchase price. Justin file is getting submitted.
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Realtors Settlement already taking effect on how the housing industry will get and change for homebuyers, homeowners, real estate agents and loan officers
https://www.cnn.com/2024/03/30/economy/nar-settlement-home-buyers-and-sellers/index.html
cnn.com
The Realtors settlement is already changing the way some Americans buy and sell homes | CNN Business
The seismic settlement announced by the National Association of Realtors earlier this month has not yet been approved, but it is already sending shockwaves through the real estate industry.
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What is interesting about this ruling is that there has never been a set rate of 6% commission concerning buying and selling Real Estate. Real Estate commissions have always been negotiable. It may have been a standard rate for many, but I have known many brokers and agents that consistently listed or was a buyers agent for less than 6%. Whatever the commission negotiated, it was split between the buying and selling agents and then those agents paid their brokerage whatever fee they had negotiated with their broker. People think that agents make a lot of money with commissions and some do, but many have high brokerage fees to pay. When selling New Home inventory for years in Dallas there were times I made 6% on the buying side from the builder. Then I went to selling residential in Florida right after all the foreclosures and short sales and some were offering as little as 2%! That is a big difference, and those are the markets that will harm the agent most if there is further adjustment.
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You are correct Ronda. Each transaction is negotiated and always has been different.
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Received this from a fellow RE agent. If you’re a Real Estate agent, please feel free to copy & paste and continue to share this information.
Long post… This may be eye opening to all who think realtors are overpaid…
There is a lot of talk in the news about real estate agent commissions. Top Producers make it look easy ~because we do this at a very high level and we love it! Mistake 1 could be social media only showing the Highlights… but trust me this is hard work- grinding it out 24/7 and if you do it well, trust me it is NON STOP
Realtors and Lenders LOVE what they do and they do it because they LOVE helping people but there is almost always a huge misconception on what they do and how they get paid. It’s not a secret so here ya go…. In no other industry does the consumer ask the service provider to give up their paycheck to help them either!
The average FULL TIME Real Estate agent earnings last year was $31,900 @ 40+ hours a week. (Notice I wrote full time 40+ hours not 0-20 hours a week) which is well below the living wage. As a REALTOR they do not get paid a hourly wage or salary and they only get paid if they sell a home and it closes. They can only get paid by broker to broker. As an agent you could work with someone days, weeks, months, or years with no guarantee of a sale ever.
Essentially they wake up each day unemployed going on Job Interviews and they deal with constant rejection. They dedicate time away from family, use our time, gas, pay for babysitters, miss dinner and weekends and rarely take vacations. They are on 24/7!
You constantly need to be on, or you could miss an opportunity. Once they do close a home, there are upfront expenses that must be paid out before they can get paid:
Broker Splits and Fees
Office rent and utilities
MLS Fees
NAR Fees
Local Association Fees
E&O Business Insurance
Extended Auto Insurance
Self-Employment Tax
State Licensing Fees
Advertising Fees
Showing Service Fees
Website Fees
Assistant’s Salaries
Showing partners
Transaction coordinator
Yard Signs
Photographers
Videographers
Office Supplies
Business Cards
Property Flyers
Electronic Lockboxes
Continued RE Education
Legal Fees
Gas
Income taxes are not taken out so they have to put that aside around 25-30%.
Don’t forget health insurance if you don’t have a spouse who provides it.
As a listing agent they have lots of tasks that can extend well beyond selling a home:
1. Prepare Listing Presentation for Sellers
2. Research Sellers Property Tax Info
3. Research Comparable Sold Properties for Sellers
4. Determine Average Days on Market
5. Gather Info From Sellers About Their Home
6. Meet With Sellers at Their Home
7. Get To Know Their Home
8. Present Listing Presentation
9. Advise on Repairs and/or Upgrades
10. Provide Home Seller To-Do Checklist
11. Explain Current Market Conditions
12. Discuss Seller’s Goals
13. Share Your Value Proposition
14. Explain Benefits of Your Brokerage
15. Present Your Marketing Options
16. Explain Video Marketing Strategies
17. Demonstrate 3D Tour Marketing
18. Explain Buyer & Seller Agency Relationships
19. Describe the Buyer Pre-Screening Process
20. Create Internal File for Transaction
21. Get Listing Agreement & Disclosures Signed
22. Provide Sellers Disclosure Form to Sellers
23. Verify Interior Room Sizes
24. Obtain Current Mortgage Loan Info
25. Confirm Lot Size from County Tax Records
26. Investigate Any Unrecorded Property Easements
27. Establish Showing Instructions for Buyers
28. Agree on Showing Times with Sellers
29. Discuss Different Types of Buyer Financing
30. Explain Appraisal Process and Pitfalls
31. Verify Home Owners Association Fees
32. Obtain a Copy of HOA Bylaws
33. Gather Transferable Warranties
34. Determine Need for Lead-Based Paint Disclosure
35. Verify Security System Ownership
36. Discuss Video Recording Devices & Showings
37. Determine Property Inclusions & Exclusions
38. Agree on Repairs to Made Before Listing
39. Schedule Staging Consultation
40. Schedule House Cleaners
41. Install Electronic Lockbox & Yard Sign
42. Set-Up Photo/Video Shoot
43. Meet Photographer at Property
44. Prepare Home For Photographer
45. Schedule Drone & 3D Tour Shoot
46. Get Seller’s Approval of All Marketing Materials
47. Input Property Listing Into The MLS
48. Create Virtual Tour Page
49. Verify Listing Data on 3rd Party Websites
50. Have Listing Proofread
51. Create Property Flyer
52. Have Extra Keys Made for Lockbox
53. Set-Up Showing Services
54. Help Owners Coordinate Showings
55. Gather Feedback After Each Showing
56. Keep track of Showing Activity
57. Update MLS Listing as Needed
58. Schedule Weekly Update Calls with Seller
59. Prepare “Net Sheet” For All Offers
60. Present All Offers to Seller
61. Obtain Pre-Approval Letter from Buyer’s Agent
62. Examine & Verify Buyer’s Qualifications
63. Examine & Verify Buyer’s Lender
64. Negotiate All Offers
65. Once Under Contract, Send to Title Company
66. Check Buyer’s Agent Has Received Copies
67. Change Property Status in MLS
68. Deliver Copies of Contact/Addendum to Seller
69. Keep Track of Copies for Office File
70. Coordinate Inspections with Sellers
71. Explain Buyer’s Inspection Objections to Sellers
72. Determine Seller’s Inspection Resolution
73. Get All Repair Agreements in Writing
74. Refer Trustworthy Contractors to Sellers
75. Meet Appraiser at the Property
76. Negotiate Any Unsatisfactory Appraisals
77. Confirm Clear-to-Close
78. Coordinate Closing Times & Location
79. Verify Title Company Has All Docs
80. Remind Sellers to Transfer Utilities
81. Make Sure All Parties Are Notified of Closing Time
82. Resolve Any Title Issues Before Closing
83. Receive and Carefully Review Closing Docs
84. Review Closing Figures With Seller
85. Confirm Repairs Have Been Made
86. Resolve Any Last Minute Issues
87. Attend Seller’s Closing
88. Pick Up Sign & Lock Box
89. Change Status in MLS to “Sold.”
90. Close Out Seller’s File With Brokerage
As a buyers agent they also have many tasks:
1. Schedule Time To Meet Buyers
2. Prepare Buyers Guide & Presentation
3. Meet Buyers and Discuss Their Goals
4. Explain Buyer & Seller Agency Relationships
5. Discuss Different Types of Financing Options
6. Help Buyers Find a Mortgage Lender
7. Obtain Pre-Approval Letter from Their Lender
8. Explain What You Do For Buyers As A Realtor
9. Provide Overview of Current Market Conditions
10. Explain Your Company’s Value to Buyers
11. Discuss Earnest Money Deposits
12. Explain Home Inspection Process
13. Educate Buyers About Local Neighborhoods
14. Discuss Foreclosures & Short Sales
15. Gather Needs & Wants Of Their Next Home
16. Explain School Districts Effect on Home Values
17. Explain Recording Devices During Showings
18. Learn All Buyer Goals & Make A Plan
19. Create Internal File for Buyers Records
20. Send Buyers Homes Within Their Criteria
21. Start Showing Buyers Home That They Request
22. Schedule & Organize All Showings
23. Gather Showing Instructions for Each Listing
24. Send Showing Schedule to Buyers
25. Show Up Early and Prepare First Showing
26. Look For Possible Repair Issues While Showing
27. Gather Buyer Feedback After Each Showing
28. Update Buyers When New Homes Hit the Market
29. Share Knowledge & Insight About Homes
30. Guide Buyers Through Their Emotional Journey
31. Listen & Learn From Buyers At Each Showing
32. Keep Records of All Showings
33. Update Listing Agents with Buyer’s Feedback
34. Discuss Home Owner’s Associations
35. Estimate Expected Utility Usage Costs
36. Confirm Water Source and Status
37. Discuss Transferable Warranties
38. Explain Property Appraisal Process
39. Discuss Multiple Offer Situations
40. Create Practice Offer To Help Buyers Prepare
41. Provide Updated Housing Market Data to Buyers
42. Inform Buyers of Their Showing Activity Weekly
43. Update Buyers On Any Price Drops
44. Discuss MLS Data With Buyers At Showings
45. Find the Right Home for Buyers
46. Determine Property Inclusions & Exclusions
47. Prepare Sales Contract When Buyers are Ready
48. Educate Buyer’s On Sales Contract Options
49. Determine Need for Lead-Based Paint Disclosure
50. Explain Home Warranty Options
51. Update Buyer’s Pre-Approval Letter
52. Discuss Loan Objection Deadlines
53. Choose a Closing Date
54. Verify Listing Data Is Correct
55. Review Comps With Buyers To Determine Value
56. Prepare & Submit Buyer’s Offer to Listing Agent
57. Negotiate Buyers Offer With Listing Agent
58. Execute A Sales Contract & Disclosures
59. Once Under Contract, Send to Title Company
60. Coordinate Earnest Money Drop Off
61. Deliver Copies to Mortgage Lender
62. Obtain Copy of Sellers Disclosure for Buyers
63. Deliver Copies of Contract/Addendum to Buyers
64. Obtain A Copy of HOA Bylaws
65. Keep Track of Copies for Office File
66. Coordinate Inspections with Buyers
67. Meet Inspector At The Property
68. Review Home Inspection with Buyers
69. Negotiate Inspection findings
70. Get All Agreed Upon Repair Items in Writing
71. Verify any Existing Lease Agreements
72. Check In With Lender To Verify Loan Status
73. Check on the Appraisal Date
74. Negotiate Any Unsatisfactory Appraisals
75. Coordinate Closing Times & Location
76. Make Sure All Documents Are Fully Signed
77. Verify Title Company Has Everything Needed
78. Remind Buyers to Schedule Utilities
79. Make Sure All Parties Are Notified of Closing Time
80. Solve Any Title Problems Before Closing
81. Receive and Review Closing Documents
82. Review Closing Figures With Buyers
83. Confirm Repairs Have Been Made By Sellers
84. Perform Final Walk-Through with Buyers
85. Resolve Any Last Minute Issues
86. Get CDA Signed By Brokerage
87. Attend Closing with Buyers
88. Provide Home Warranty Paperwork
89. Give Keys and Accessories to Buyers
90. Close Out Buyer’s File Brokerage
Whew…exhausting isn’t it!?!
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This reply was modified 1 month, 2 weeks ago by
Sapna Sharma.
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This reply was modified 1 month, 2 weeks ago by
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Thanks Dino for your insight to this shakeup changes in real estate agent compensation. I think great experienced realtors are underpaid. They don’t get compensation until the deal is closed. All the above expenses adds up. You need to take into account gas expenses, auto expenses and the biggest expenses are payroll, rent, and marketing. Realtors can kill it by becoming dually licensed realtor and loan officers and target 50 states and becoming referral realtors in states out of their driving distance.