"Not Good For Anyone"- 6% Real Estate Commission Rates Have Hidden Dangers For Homeowners
Patrick Bet-David, Adam Sosnick, Tom Ellsworth, and Vincent Oshana are joined by Chris Cuomo as they discuss the hidden dangers for homeowners by ending 6% real estate commission rates.
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Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.
Man, this stinks… as hard as I’m trying, I just can’t give my time seeing Cuomo sitting there. PBD is Brilliant but I don’t understand this on any level..
Make it make sense 🤦♀️ Please tell me he’s not going to be a permanent panelist. I know PBD has been itching to replace Adam.
If the media attacks valuetaiment he can at least say "hold up, I literally have one of your guys on my show".
Broooo, who gives a fuck what dying legacy media thinks? That’s like changing your life because a blue check on instagram said something.
@@CindaMurphyRealEstate He is, Pat hired him to be on some shows.
I may not like Chris opinions but it it also great to hear from the other side so that we can understand each other!
You know the drill guys. Let's show them we aren't interested in Chris.
In a previous video, a huge number of top comments were critical about adding Cuomo, I'm glad people are speaking up.
@4gottencrackaz All this hate on Cuomo, but nobody cares Patrick ran a sleazy MLM life insurance scheme where he sold people on the idea they could easily make six figures selling life insurance when the reality is 95% of the licensed sales agents make less than a minimum wage worker making $7.25hr. 😮😮😮
@@4gottencrackaz please tell me Cuomo is just a guest.
@@CindaMurphyRealEstate that would be bad enough in itself but, unfortunately they've hired that idiot. I don't think people realize just how utterly stupid Chris Cuomo actually is.
Because he has a different opinion than you? Loll talk about Echo Chamber
Value = Truth. Chris = Deceit.
Patrick's MLM life insurance scheme = 100% fraud!
You do know that Patrick made his millions with an MLM pyramid scheme called PHP, right? This is just another reflection of his character. If you want truth, go somewhere else.
Should we temporarily unsubscribe?
@@CindaMurphyRealEstate Patrick +MLM=100% Fraud!
Unsub forever so we don’t have to hear you both complain
I’m biased but Tom really didn’t do much research into this. Commissions have always been negotiable and all this does is say sellers are not required to pay a buyers commission. Sellers will still offer a buyers agent commission 99% of the time post July 1st in all likely hood. The biggest change is the buyers commission is no longer advertised on the agents listing sheet on the MLS
Exactly..
Don't let facts get in the way of a story ok?
Exactly what I was thinking lol this doesn’t change the 6% commission
You are right...In my case i didn't negotiate..I outright told them I was not paying the 6%...take it or leave it..I paid 1%
Commissions have always been negotiable BUT we all know that if you don't offer the typical split no one is showing your house...... and this is from a licensed realtor. A true open market will make realtors prove their value..
Great, more Chris. Thought we wouldn't have to deal with hearing him ever again. Dreadful
We gotta temporarily unsubscribe
Patrick hired him on to PBD. Makes you wonder if Pat is getting establishment money now. I am out.
@@CindaMurphyRealEstate Be sure to thumbs down the video.
@@kgm2182dose pbd see the thumbs down?
None of them have a clue of what they are talking about in this one!!
Tom, sellers have always been able to negotiate commission. Also you need to talk to a Realtor to get your information correct. This is all bad for buyers.
NOBODY IS FORCED TO PAY 6% most of my sales are 4-5%.. We always negotiate. This will force many lower income and veterans out of the market because VA and FHA will not allow the buyer to pay a realtor. I appreciate your balanced discussion. The only people that win are the lawyers who brought the suit and guess what they get paid commission.
Commissions have always been negotiable. Shoot… you never had to hire an agent in the first place..
Chris got a spot at the table? That’s gonna cost PBD a lot of viewers
When we sold our home in New York (2018), we were able to settle on a 4% commission. If the real estate agent really wants to sell your home, they will be flexible on the commission.
Pat if you're going to add to the home team, add Rob.... Not Chris. Rob is awesome, Chris sucks
He clearly wants an opposing opinion. Rob is a cheerleader.
Get rid of Fredo
Rob, Please I beg you... cut Adams mic out... please
you must be for censorship shame on you and others who like this
And Vince ☝️
🇮🇱🇮🇱🇮🇱🇮🇱🗑️ADAM VOICE IS ABSOLUTELY HORRIBLE 💯💯💯💯💯🤡🤡🤡🤡🤡🤡
Adam is right though lmao. I can tell you know nothing about the real estate industry.
Adam is a clown. Not into censorship but he just reads twitter and thinks he is cooking.
Mortgage lender here. You should probably talk to someone who knows the industry. Tom is about a million miles off.
This is definitely bad for buyers
Agree! Another lawsuit that has "good intentions" with unintended consequences.
@@TheAndyCruz yes sir. Home buying is already nearly impossible for the average american. Now we’re throwing another 3% cost on top. It’s like the people who make the rules can never be far sighted and take the long view.
I don’t see this being bad for buyers in anyway, I think most negotiations are going to position buyers just fine if the seller wants to sell the home and the buyers agent is asking for an additional 1% or something it’s no different than negotiating the sales price or seller, credit, or a hot water heater it will all get figured out and your average buyer is not going to put any money out-of-pocket to pay a buyers agent.
I know the industry. I buy an sell homes and commercial property as an investor. Real Estate Agents are unnecessary with apps like Zillow. They don't provide anything of value in most of my transactions.
No seller is forced into a 6% commission! Different listing agents negotiate lower commissions. I have been a broker in the Seattle area for over 20 years and J never charge 6%! Usually I charge between 4-4.5% total commissions and split 2.5 selling agent/1.5-2.0 listing agent fee. It is all negotiable!
I don’t know if I can be a part of this challenge anymore with Chris on it.
Cuomo enters and I exit. Won't even click view. BYE Felicia!!!
You can’t comment if you didn’t view it. Sucker!
But be sure to come back and click the thumbs down!
Do you know who Felicia is? Just curious.
@@Harold10ful here in this comment thread it would be you - BYE!
@@Harold10ful Find the GREAT video of Tucker on Gutfeld discussing who is the dumbest CNN host. Chris Cuomo is in the top two.
No one spoke on the actual issue. It’s that seller does not pay for the buyers agent. Everyone talking about the listing agent completely missed the point of the topic.
That actually hasn’t been addressed yet. All they are proposing is that the buyers agent commission cannot be displayed on the MLS and all buyers must now sign a representation agreement BEFORE viewing homes. More changes may be to come but for now, those are the only two changes. Sellers are still and have always been encouraged to incentivize buyers agents to show their homes by offering competitive compensation. The buyer is ultimately the one paying for it. If you don’t get a buyer, your seller can’t pay anybody anything.
Let me guess… Joy, Reid, and Joy Behar are going to be the next guest on the show😂
Noooooooooo!
@@CindaMurphyRealEstate yup it’s unfortunate but I think PBD has been compromised… Everybody falls for the money bait sooner or later
Wonder if PBD was forced to hire fredo?
Don't make excuses for him! That was his decision entirely! 😅😅
Tom's got it wrong. This isn't striking down a six percent commission. Commissions have always been negotiable and have been touted so for decades. It's even written in bold, large print on the listing documents, so don't tell me otherwise. What is changing is the amount paid to a buyer's agent will not be advertised within the MLS. But it can be disclosed elsewhere. A seller can say that he isn't going to pay the buyer's agent, but someone will. No one works for free. Most buyers barely have enough for their down payment. Most of them do not have the 20% down required to avoid PMI or higher interest rates like their ancestors did 20 - 40 years ago. A lot of buyers usually need assistance with their closing costs. So where are they coming up with the cash to pay their representative? Especially, when the market changes, and it will change. Sellers are going to be begging for buyers and will do anything to sell their homes. Even offer to pay buyer's agents. Just like they did between 2006-2012; 1990-1994; 1980-1985 and the early to mid-1970s.
Adam wrong yet again. He's coming from a place of the old school market. This new school market with Zillow, redfin, etc. You can definitely sell your house For Sale By Owner on your own. Title company does all the work anyway. Adam acting like all realtors are built equal. No chance.
Exactly, plus with the roll out of A.I. Virtual realtors are coming very soon with disruptive marketing platforms.
You could sell your own home long before Zillow. The loss of money and liability lawsuits are what convinced people to stick with the professionals.
@CindaMurphyRealEstate 🎯
@@CindaMurphyRealEstate I've had to sue twice because of agents. They cause the lawsuits.
@@SmartestDumbGuy I can’t lie, some agents DO suck! And I’m sorry you had the stress of dealing with two bad ones. But on the whole, more transactions go smoothly with much less litigation than if there were no agents at all. The whole reason they came about was because people kept getting shafted and needed someone knowledgeable to represent their best interests. More lawsuits and litigation are on the way. Buyers are the losers and attorneys are the winners.
that whole class action lawsuit pisses me off, you know who won in this case, the freakin law firm that represented. all the home owners probably got 500 bucks or less. its common sense people the buyers agent has value so pay him through the closing cost ! so pissed.
If you are a VA or FHA buyer, you have no money for paying selling broker directly. So the losers in this deal are those that don't have as much free cash.
It’s true.
Wrong
One way around this is requesting a credit from the seller to cover it.
bro get your agent to request a concession during the offer process- that simple. seller won't entertain it? move on to the next opportunity and DONT GIVE UP, and buy a car lol. that's how buyers fail in ANY challenging market.
This will effect buyers, especially since most are broke, rely on USDA and FHA, and can't pay a buyer agent.
Guaranteed their will be agents that charge 1k or 2k that start lining up. People can afford that. The seller should not be subsidizing home buyers.
You cannot push truth with Coumo on the panel... sorry valuetainment...
I sold my own 1 million dollar home cash after my agent time expired . All you need is the lawyer and they are cheap compared to agents. Sellers are able to sell there own home better then actual agents
If it was easier to sell you home on your own more people would do it. That has always been an option but yet people don’t do it. You are a more savvy seller than most but you are the minority. I guarantee if the majority of people tried to sell their house in their own we’d have massive problems with the system. People complain about bad realtors imagine people doing it on their own that aren’t even in the industry.
1 guy that sold his house… now Realtors don’t have value… tell me you don’t know anything about the real estate world.
You mean... "Find buyers". The lawyers work is incredibly detailed and risk prone. The realtor has no pressure compared to the lawyer, but the lawyers work is hidden and outside the reach of 99% of clients.
@@JacobeKendrick they’ve been led to believe it’s hard. The sales agreement is important. And most realtors don’t understand it. They’re using a form contract.
I agree, we sold our last house with a lawyer, my parents have sold 3 houses with their lawyer, alot cheaper than agents, and theres not that much involved with it. Lawyer does all the paperwork and looks everything over....
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I agree with Tom 100%! I’ve been in appraiser for 20 years now and 80% of the agents in my town have no idea what they’re doing. They might know how to write up a contract, but they have very little knowledge when it comes to evaluation. They don’t even know the difference between above grade, square footage, and below grade square footage… They think it’s all the same
😂 appraisers are 20x worse than agents gftoh lmao
Hard to believe 80% of agents wouldn’t know the difference between above and below grade..
Valuation is a skill that requires a different education.
Because ultimately it’s not about the quality of the building but the location. That’s how the market works, supply and demand is based on location. There is a limited amount of housing. And instead of building more single family homes, investors find it more profitable to build apartments for rent.
This is why we always say appraisers are like middle school boys
This is called open market. They need to drop the mandatory commissions PERIOD. whether it be buyer or listing. All should be negotiable. Realtors have killed deals for sure over commissions.
I am so tired of meeting real estate agents who stumbled into success because of these commissions. Well the hard-working people are forced to pay
6% Commission has never been mandatory.. it’s always been negotiable. Whether an agent will take you on as a client for less then 6% is another discussion
Its always all been negotiable. People never ask though
I’m An agent and I sign clients all the time for less then 6% and offer less to buyers agents to help save my client money.. I’ve been telling my sellers for years already they technically don’t have to offer buyers agents anything but I know if they don’t offer at least something there are agents who will try to steer clients from their listing.. I can’t prove it obviously but you know it happens.
There is never been a mandatory commission, the commission is always been negotiable
I just came to comment boo to chris. Not watching the clip
Be sure to come back and give it a thumbs down.
I was lucky. I bought a home FSBO 2 blocks from Warren buffet. And the seller missed out on $200,000 by not having an agent.
Woop woop! These agents would have prevented that. They’re always saving people from themselves. They need to stay out of it! 😂
@@CindaMurphyRealEstatebecause the seller had no sense or seller didn’t care
exactly, great example of the seller stepping over dollars to pick up pennies
I am not a fan of hiding the numbers. Because that 6 percent this year, will be 15 percent next year if they don't have to tell you what it is up front. That having been said. I'll never forget talking to the realtor that my uncle suggested for selling my gramma's house. When I spoke to her, I asked, "How long is this house going to take to sell?" She turned to me and said, "I have to confirm it..but I think I already have a customer..don't be surprised if you hear from me tomorrow." Sure enough, by that weekend, we were signing paperwork to make the sale final. Totally blew my mind..I had NO qualms about paying her her 6%..
So many people don't realize what a buyers agent does, and agents who work both sides of a transaction are opening themselves up to a major headache. I disagree with Tom's perspective.
🎯
Every deal I buy the sellers agent double represents (i buy more every year.). It's easy. Agents don't do much. I never ever use a buyers agent. Sorry. The only people against this are agents who make their easy money this way.
@@SmartestDumbGuyyeah ive watched several buyers who went alone and then had to resell their home later on and then find out how bad they were screwed. One was sold a "two bed" condo for 1.25M that was legally only a one Bedroom Another recently we listed bought direct and now needs to sell and turns out he paid for 1000 sqft as living space that wont appraise as living space because it's technically a walkout basement valued at a % of living space per sqft Another seller bought a home direct and it had structural issues unbeknownst to her and she now has to fix the issue before listing or risk losing 30-40-% by leaving it as is I dont nor will ever need the money enough to take on clients who dont both appreciate my work and compensate accordingly for my time and experience so im happy to leave behind those who want to gamble on their home purchase. I will still be using a buyside and list side agent when I purchase and sell in areas outside of my market
So, the buyer pays. Thats fair.
@@SmartestDumbGuy”it’s easy” just say you don’t know anything
I have to agree with many of the comments. You guys were way off on not only what the new law changes, but also the implications for the future of the economy. As many have stated, commissions have ALWAYS been negotiable. The new law changes how sellers can market those commissions and makes the process less transparent. Before, buyers agents knew what they would be paid, no longer. Now buyers will have to agree to compensate their buyers agent before they are even shown a property because the sellers cannot tell buyers agents what they are willing to pay or if they are not paying anything. You may not think that is a big deal, but that will eliminate many buyers from the market and create a much smaller pool of buyers. How many first time or lower income buyers can just add another $8000-$10,000 to their home purchase, out of pocket? It cannot come from their loan. Tom may think that sellers get "hosed" for all the buyers fees, but keep in mind, 90% of home sellers become home buyers. So sellers are not saving anything. They are just trading fees from one buyers agent to another. You are also incorrect on how this process started and more importantly why, but that is a much longer answer. The bottom line is that this new law only benefits lawyers, real estate investors, and builders. It does nothing for the consumer and in fact harms both home buyers and sellers. Knowing how crucial the real estate market is to our economy, this should be a much bigger story. The fact that it is not and how it's being misrepresented should tell you who it helps and who it hurts.
Redfin has been offering 1% commissions for years, yet they aren't dominating the market. You get what you pay for.
And redfin isn't the only one. There were a few in so cal
Exactly. Nobody walks away from a Redfin transaction saying, “Man, that was such a great experience! So worth it!” They think, man, that kinda sucked. I didn’t get as much for my house as I thought I should have and it took WAY longer to sell. I prolly won’t do that again 😂
@@CindaMurphyRealEstate🎯
@CindaMurphyRealEstate I'm a pro and I always use redfin for selling. I love it!
Everyone I talk to about redfin commissions are clueless. Most people don't even understand how the commissions work. They just know they call a realtor and he takes it from there. That's the problem.
if your a first time military home buyer you’re screwed until they change the VA rules…
Not just first time homebuyers, ALL VA buyers are not allowed to pay for representation so if the seller doesn’t offer it, that buyer either can’t/wont buy that house or they must do so with NO representation.
@@CindaMurphyRealEstate who are they really helping here ??? I hear you!! that’s intense
6% comission ia insane. Id rather sell lower then to give any money to these theifs
The expenses to obtain and maintain a Real Estate license, requires some sort of commission though. I'm glad you think they deserve nothing...lol
@@WineHouse33 6% is insane. There is no justification it. The average home price in america just hit over 400k. There isnt 24k worth of leg work to do on listing and selling a home.
Well you’ll be selling for a lot lower when you try doing it yourself. If you hate Realtors its probably because you hired a bad one….and thats on you.
@@jonathanjacobs1870 These homeowners end up losing more money than the $24,000 of commission. If I see some Jonathan Jacobs trying to sell his house, I will wreck your profit because you don’t know what you’re doing. Lol.🎉
@@WineHouse33 yeah, that's what's drilled into the minds of agents and that's part of the primary pitch. No different than a life insurance agent and the "what if you die" pitch.
In Texas, I've been able to negotiate fees in the past. This, to me, seems like a strategy to make the interest rate more palatable/ justifiable to the average joe who just really wants the property. "Yeah, the interest rates are a few % than I'd like, but I'm saving 2% on the agent fee so it kind of evens out." Obviously, it's not the case, but you get my point.
The more i look into this incident, the more i see that it should have just been left alone because i see how future home buyers can get screwed. Commissions have always been negotiable, having to pay a fixed % because the MLS or "my brokerage" says so, is completely illegal. Also, people have never had to use licensed agents to buy/sell. People can try to save money by not paying a commission, but if you want to be represented (which does help), you're going to pay something because nobody works for free. Good service isn't cheap and cheap service isn't good
Our team was just talking last week about how this could lead to those with "more means" to have top tier representation while those who may not have a lot of money self-representing, or using a 'discount' broker...no matter which it is, this can once again, become the haves vs. the have-nots.
Yes, it’s like having an attorney. The wealthy will pay for the best and get the best representation. People looking for discounts will get what they pay for. Imagine going to court with a cut rate, limited service attorney.
🎯
Have you ever tried to sell without an agent. I have. Sellers agents specifically avoid showing my properties because of it. That's a fraud since their are supposed to look into their clients best interest. They only look into their own interest. This ruling has needed to happen 10 years ago.
@@SmartestDumbGuy Are you saying that you were in contract with a brokerage in which 1 of their agents who was working with you refused to show your house to possible buyers?
I really like your channel Patrick but what was going through your mind when you decided to hire Cuomo? He reminds me Juan Williams who used to work at fox news and always provided the counter argument to the panel no matter how ridiculous it sounded. I understand having guests on with opposing views but employing someone like him is just going to drive your viewership away.
It is driving my viewership away. This is the last time I will watch a PBD show. Cuomo of all people!!! Has Pat taken establishment money? Is PBD going to go the CNN way? I am out.
This will screw first time home buyers who barely have money for the down payment inspections and moving costs
Nobody was "forced" to use a real estate agent
Where in this lawsuit does it make the commissions negotiable?? THEY HAVE ALWAYS BEEN NEGOTIABLE PEOPLE…
we live in a time where being a doofus is okay- all this click bait is exhausting- 4,5,6% shit even 1.5% discount brokers, consumers SIGN THE AGREEMENT and all parties are disclosed. I swear
@@cremephoto YES!!!! This world of information is a blessing and a curse
I just bought a house without an agent. New construction. I really have no idea what an agent representing me could have done to earn 3% on that deal. The home builder offered a very fair and compelling package and made it clear the deal only worked if they didn’t have to pay a buyer’s agent 3%. So I think I got a better deal by not including another person who would have needed to get paid. That being said, I’m glad I have a realtor helping me market and sell my current house.
You guys are way over complicating this thing. There is a conflict of interest during the transaction. This simply removes that COI and allows the buyer to negotiate rates.. the premiere agents can still command top rates while the others won’t and in the end the seller won’t pay for others ineptitude
Nobody was EVER “forced” into a 6% commission, just the norm. As a buyer, I always used an agent that would rebate me 2% of my commission. As a seller, I used one that did it for a set fee rather than commission and never paid buyer agent 3%. That’s how commercial has always been run. I became licensed to do everything myself (I’m an investor) but there’s always options, most people just don’t even think to look at options and just go with their neighborhood realtor or buddy. That’s not the industry’s fault, that’s just status quo and laziness issue. Always negotiate for yourself ;)
Ppl like myself and my wife can file the paperwork ourselves it’s easier than you think. You have to be diligent but it’s possible. When we sold our house we had to pay 17k for relator fees. Why did I have to pay the buyers agent fees? It makes no sense.
It’s no different than tipping-remove the tipping and the prices get baked into the menu…. The price you sell the home should account for the buyer’s agent fees-if not, then the price of the home should sell for that % less.
You didn’t pay the buyer’s agent. Their fee is baked into the price of the home because 98% of all homes are sold with 2 agents and the comps are based on those sales. The buyer agreeing to pay your list price and put that money in your pocket is the one paying the buyer’s agent indirectly. They understand it’s part of the expense of buying. This arrangement allows them to bring less money out of pocket at closing. If you don’t want to pay the buyers agent, are you going to discount your home by 3%? Without a qualified buyer, you can’t pay ANYONE! That’s why we incentivize the agents to bring every buyer they can to look at your home. Don’t pay buyers agents and you’ll sit in the market and do price reductions and end up losing that 3% anyway. Pay the pros and get it done quickly and efficiently and cut your liability by 95%.
@@CindaMurphyRealEstate - exactly-people think this is some sort of savings but it’s really a reduction in proper representation.
Adam & Chris need their own show !!!!! PBD MAKE IT HAPPEN !!!!! They NEED each other. Turn off their mics and call it a day. I have heard WAY TOO MUCH from those two.
It has never been a 6% mandated commission 😂😂😂😂😂
I’m a 4th generation Realtor There has ALWAYS been an negotiation for commissions!!! 6% hasn’t been around for years!! This is so misconstrued. Sellers don’t have to pay 6%. I totally disagree!!!
Sorry Tom your wrong! there has always been options and it's always been negotiable. As a seller you can list it yourself for free, you can use a limited listing service for 1%, you can use a flat rate listing service for any were between $100- $1000, you can use me between 4 to 5% i never charged 6%. To say all sellers were stuck with 6% to sell is false. This is going to be a big problem for first time homes buyers, they can hardly come up with the down payment, there not going to be able to pay for a buyers agent, so they are the ones that will get the shit end of the stick on this. I have negotiated many sweet deals for first time home buyers that thought they would never own a home.
Tom is acting like he’s an expert on this. Really makes me question everything else he says. Blow hard no-it-all.
I respectfully disagree and I am not a realtor Most deals start off as preapprovals not direct to contract. Buyers who choose to represent themselves will see my lawsuits. Wait for it.
True. This generation has forgotten the whole reason the professional came about in the first place. We will soon remember. Lawsuits galore. Only party that benefits is the attorneys.
@@CindaMurphyRealEstate Exactly. The settlement reads as TRID for Realtors. Buyers Agent to fully disclose services and signed agreement on how those services will be paid %, flat fee, hourly, etc. If a growing percentage of transactions start with preapproval due to short supply and need for competitive offers.... think about what this means for Buyer Qualification... that Fee is coming out of Cash to Close because there is no contract where the seller can make concessions. People are not connecting the dots yet. Just another constraint on an already constrained market. Thank you legal system what would we do without you.
DISCLOSURE and TRANSPARENCY fellas. this is the DODD FRANK of REAL ESTATE- it's simple, buyer side sharpens up or quits, consumers become more aware of negotiations, and the real estate process/approach falls in line with the new practice, of real estate (agency disclosure, buyer broker agreements, so on).
We've had to negotiate commissions for a long time now. Some sellers are like "I'll use you if you can do it for 5%". This has been going on for years, maybe decades
Commissions are and have been negotiable.
I play in the big boy real estate market. Agents are for large part over paid. We are in the process of wrapping up building a 60 mil house that will sell in a few days on the market. It’s a 6.5 year project. The agents will swoop in and make 3 mil in commissions. That is crazy! That being said, we have negotiated commissions with our listing agents for years and they are fine with taking less on a big deal.
As a homeowner, realtor, and investor, this lawsuit and ruling will only hurt buyers and ultimately sellers because less and less people will be able to pay commission on top of closing costs and down payment which is already hard enough for most people
My agent deceived me when listed my home. The dude added a buyer concession for 10K and I missed it until after I closed.
Comes out the sellers money that is payed by the buyer..
Correct. Without a buyer, the seller can’t pay anybody anything. It’s the buyer that brings the money.
There are some good points, but commission is and still will be negotiable. And most of the industry isn’t at 6%.
I worked a large greenhouse with nothing but Venus Fly Traps...thousands of them. Never had a problem with flies.
Okay now everyone stops play hating on Adam and starts real hating on Cuomo...
Can we provide indicators when Chris is speaking so we can fast forward?
Tom is wrong on this and i can't believe I'm going to agree with Adam and Chris. To Tom's points, commissions have always been negotiable. No one is stuck paying six percent, at least not until the listing contract is signed and that doesn't affect a buyer's "bargaining power". Also, a seller only credits or repairs that which is negotiated and proper for the condition that the house is being sold in. Fixers are priced on the low end which reflects their condition while high end properties should be turnkey with no defects. Adam is right that sellers are going to lose more than they will save on commission because a lot of buyers that are just barely able to limp in with enough money for a down payment and closing costs are not going to be able to afford paying their agents commission and they will be cut out of the market. The overall effect is going to be that buyer competition will be reduced and thus market prices will come down which will hurt sellers. Chris is right, the current system is the way it is because that's how it works best. It's not perfect, it could use some tweaks, but this isn't it. For agents, the only thing this is going to do is add a step where they have to pick up the phone and find out the commission before showing a listing. Otherwise this is going to hurt buyers, cutting them out of the market completely, and thus hurting sellers, or causing buyers to go directly with listing agents, thinking they are gaining an advantage, but actually more likely putting themselves at a disadvantage as pointed out in the venus fly trap article.
Truth! I couldn’t bring myself to listen to Chris, but after hearing your comments, maybe I should. Tom was so far off the mark!
You could ALWAYS negotiate your commission. Remember, commission is split 4 ways.
Agents main focus is getting a contract signed because that’s how they make their money. It’s just that simple. I’ve bought and sold several properties without an agent. It’s not that difficult.
The problem is, none of this process is explained to ppl. It's always been negotiable. This is just the tip of what is never clearly explained. I've been a home inspector for years and let me tell you, I have seen great agents and terrible agents. When a typical person hires an agent, they are trusting them to not only help them sell or buy a home, but guide them through the process. A quality agent makes the commission worth it. All this is going to do is thin out the already over saturated agent pool.
Why does everyone think they can haggle Realtors commission? Do you go into a lawyers office and say I don’t want to pay you $350 an hour. I want you to pay $150 an hour. Do you go to the Dr’s office and ever ask them not charge x amount for their services? Don’t bill $500 for the exam I only want you to bill $250 for this. Come on.
But what Tom doesn’t understand is that in several states Dual Agency is illegal, so buyers agents will be needed.
Commissions have always been negotiable. It just happens that most sellers have a greed to between five and 6% for a very long time.
Tom is wrong. I’m a real estate agent and the commission has ALWAYS been negotiable!!! Nobody has been forced into paying any commission. They might not have been fully educated on the process but to say that “buyers are no longer FORCED into 6%” is wrong and misleading because they were NEVER forced into that.
You can always negotiate the commission. The lawsuit just says that buyers agents need written agreements and the commission amount cannot be advertised on the MLS. So now buyers agents won’t know what or if they will be paid if their client chooses certain houses.
The issue is they are still viewing everything through the context of “commissions”. The industry will shift towards a la carte services, 1-10k flat rates to perform different parts of the transaction, based on the needs of the buyer. This can benefit the seller and buyer. The good real estate agents will still be in demand, but the majority will be wiped out.
sure may work, but many issues arise through the transaction, so this "a la carte" could end up costing a lot more
The 6% has always been negotiable
Most buyers have to pay more than just origination fees . Say you have a seller willing to pay 100% of closing cost unless you have a 100% financing loan the buyer will always have to bring their down payment to the table.
Stop...it's not a negative. In fact, buyers won't even know the difference. They'll still hire an agent. That agent will go to the listing agent and say, Hey...I have a buyer. You guys going to compensate me?" Seller agent go to seller and says, "Hey...you want to sell this thing? If so, you need to pay the buyer agent." It won't take too long for the buyer to say yes. Nothing changes. Just can't list buyer commission offer in the MLS anymore. Buyers themselves won't know the difference in any way.
I paid 5% commission on my past 2 sales at full market value. Plan on paying 4% on the next sale.
The VA buyers and low income buyers get hurt by the change. VA loans don’t allow for buyers to pay for the buyers agent representation in the closing costs. Most VA buyers don’t have the funds to pay for a agent. So they will most likely use the listing agent to write up the deal. Not good for the VA buyer !! Most FHA /low income buyers don’t have the money for closing costs, so they ask for help from the sellers to cover closing cost, adding a buyer agent fee on top of the closing cost will just make it that more difficult for the low income buyers to purchase homes. This really hurts low income buyers. A higher percentage of minorities purchase their first home with these type of loans. Down the road we will have more renters and less ownership. Who does this benefit? I think Blackrock and Vanguard will benefit from the change. Look on the bright side, they are lining up the next class action lawsuit for discrimination against minorities and VA buyers.
Why not compensate or have an incentive as a % of the variance from the original listing? Say 2% each and 4% on which way it spreads (you shave 40k off it you get $1600 commission, you bump 40k on the final sale you get $1600 commission).
Most people have no idea what realtors have to go through! I’m in vacation and still working my ass off to keep my deals go through! In my opinion it will affect first time buyers the most unfortunately!
It’s a bit different where I’m from, it’s not as high as 6% and no buyers agent normally. But there are companies that offer 1% commission they don’t seem successful.
The reality that I’ve lived through on multiple occasions is that the realtor gets the listing and does near nothing. Buyers drive past the home and reach out to inquire about the home. On multiple occasions, Ive had buyers knock on the front door. It’s just my experience, but it seems that the selling agent just wants the listing…
Active Duty & Veterans who want to use their VA eligibility are hosed until they make an exception to the VA rulebook - OR - the ruling has a solution for VA buyers.
@TheAndyCruz How so?
@@smitty5362Buyer agent commissions fall under the VA Non-Allowables list of fees and costs VA buyers MAY NOT pay as part of their purchase transaction. We've been covering it on the mortgage side for a few weeks, and are hoping there is an exception or a work around created before July 1.
VA buyers are not allowed to pay Buyers Agent fees or commissions. If a VA buyer wants to buy a home where the seller is not offering to compensate the buyers agent, the VA buyer must either pass on that home, or buy it without any representation whatsoever. The seller has an agent looking out for them and their best interest but the VA buyer has NO ONE! The listing agent is already under contract to represent the seller and only the seller and cannot offer advise or opinions to the buyer. They owe them nothing. Many will get screwed!
I entered the real estate business almost 40 years ago. The Pareto Principle is more applicable to real estate salespeople than any other profession I can think of. The value that a buyers agent brings to a typical residential transaction is negligible. Buyers can use any number of online services to find property, do comparable analysis and educate themselves in most cases better than if they used the services of a Buyers Agent. If they believe they need representation in negotiating they would probably be better off paying a competent attorney for 5 hours of their time to handle the transaction. This game charger will eliminate a lot of the underperformers and part time agents and ultimately thin the over populated herd. Sellers will benefit via lower fees and greater net sale proceeds.
You could negotiate prior to these new laws. And it’s 2.5 to 3 percent per side normally.
ADAM C L E A R YOUR THROAT!!! My god!!!!
This is a perpetual issue with him. WTF?
The 5-6% fee has always been absurd! Especially on high end properties that sell quickly. How can agents justify those fees for minimal time spent!? Agents should be paid equal to the amount of work it takes to sell a property. And Buyer agents don’t deserve much except a fee for paperwork.
If you worked as a buyers agent for a week you would understand why they get paid what they do. How would you like to do a job for 3-6-9 or 12 months and never get paid because your buyer does not buy a home. The buyers agent does more work than the listing agent most all of the time. I have been a broker for over 20 years and as far as I am concerned the listing side is easy. I agree 5-6% on high end properties is crazy but unfortunately often times we work harder to sell the lower priced homes.
@@washingtoncountymarylandre3697 I think a majority of customers want more peer to peer transactions, while also having the choice to add on what they actually need, rather than pay for that percentage regardless of the amount of work that is done. I do not need an agent to show me available properties and then take time to walk me through those properties. Most buyers are savvy enough to do the leg work themselves and then when they find a property, maybe have an agent do final walk throughs, closing docs, etc. NAR has had a monopoly on the system and this needs to be broken up to allow more flexibility for buyers and sellers.
Commission is paid on what you can deliver. NAR ruling or not, commissions were always negotiable. NAR ruling isn't the issue, how the media is spinning it is confusing everyone. July 2024 moving forward, home listings on MLS can NOT advertise commission amount to Buyer Agent. Buyer's Agents are now required to sign an exclusive agreement with Buyers prior to starting to show them homes. Buyer consultation is important and being able to show value as an agent.
Sellers have always been able to negotiate with the agent to decide who to list with
Good Agents will always thrive.
Damn, I can unwillingly and despondingly deal with Adam, but having both Adam and Chris is just too much! Love you Pat, but you’re killing us here! I’m out for the time being! My sanity is more important!
You guys nailed it… professionals in real estate will thrive and the amateurs will leave the industry because of their lack of knowledge and poor sales skills. The new laws will allow for more transparency up front, for buyers and sellers to negotiate commissions. It’s already in our representation agreement, “if a seller is unwilling to pay a buyers broker, then the buyer is responsible to pay an agreed upon commission.” Since the seller typically compensates buyer brokers this language hasn’t been a talking point until now. On a side note, the #1 most litigious filings here in Texas is called “intermediary” where buyers are going directly to the listing agents, in which a listing agent represents both sides when an unrepresented buyer contacts the listing agent directly. This scenario will significantly increase as buyers choose not to, or cant afford to pay for their own representation. After 18 years in real estate, I’m curious as to how all this will play out, I actually am looking forward to the new rules of compensation as it’s more transparent for our industry.
No one was ever forced into that arrangement.
Patrick is talking through his a** here. Convincing a buyer is a professional salesman's job. But when the buyer appears, a good product sells itself.
The winners are investors big or small bcz they dont need an agent AND attorneys who have to clean up the mess after a nonrepresented buyer gets screwed. The loosers are first time buyers and veterans.
Man i wish i had funds for minnect.... Good job guys
the other side of the coin. If I am representing myself as a agent and and the buyer. If I charge myself whats the cap going to be?
The entry to becoming a Realtor (real estate agent) is very low and they don’t stay in business very long. A Great real estate professional does earn every penny and will get their client the best deal. Consumers don’t see all the problems that happen during the process. The seller has had full control and can say no. When the seller offers a buyer’s agent commission they incentivize more buyers agent to bring more qualified buyers
Only first time buyers will need buyers agents. Others? Not so much.