The news has home buyers and sellers wondering what's next.
A landmark settlement in the real estate industry could impact the nation's housing market and leave uncertainty for many in the industry. Experts say only time will tell, as home prices remain high in North Texas and competition heats up heading into the spring buying market.
This all stems from a huge settlement made last Friday.
The National Association of Realtors, which dominates the industry through multiple listing services, has agreed to pay $418 million to settle multiple class-action lawsuits.
These lawsuits allege that homeowners are forced to pay artificially high brokerage fees when selling their homes, which industry groups deny, but in addition to the settlement, They have agreed to make policy changes.
Under NAR's proposed settlement, brokers representing sellers would include a package offer of cooperation compensation to prospective buyers' agents when advertising properties on the NAR-affiliated multiple listing service, where the majority of U.S. homes are sold. I won't be able to do that. Listed for sale. This is intended to remove the incentive for buyer's agents to steer customers away from home listings that do not include cooperative compensation offers.
The industry group also agreed to require agents and others who work with homebuyers to enter into written contracts. This is intended to ensure homebuyers know how much their agent will charge for their services.
Some housing experts say this is like hitting the reset button on the housing market. However, it is still too early to know exactly how this will affect buyers, sellers, and the agents they deal with.
Since news of the settlement and policy change broke, there has been some buzz and some misconceptions about the settlement, including details that NAR will eliminate its fee standard, which is typically set at about 6 percent. This raised concerns that real estate agents would lose income.
But local real estate experts said these fees are always negotiable and not set by NAR.
“This has always been negotiable,” said Ashley Massey, a DFW real estate advisor and author of Fast Track Agent. That means it was possible.” So we're now basically restoring information on this and trying to make both sides understand that it's always negotiable from the beginning. ”
The industry group issued a statement this week saying, “Following recent inaccuracies in media coverage, including false statements and suggestions that the National Association of Realtors requires a standard 6% commission rate,” clarified that it has not been set.
“NAR does not set fees. Fees are negotiable. This rule, which is the subject of litigation, only requires that listing brokers communicate offers of compensation. This offer includes zero It can be any amount. Also, other rules throughout the MLS Handbook and NAR Policy explicitly prohibit MLSs, associations, and brokers from setting or suggesting amounts that should be included in that field. ” NAR said in a statement.
Massey doesn't expect the North Texas housing market to be affected by these changes anytime soon.
“Real estate is an ever-changing industry, there's always something new happening and something you always have to adapt to as a professional in any business, in any industry. This will continue to be the case.” “How the company handles it and how the state handles it will be very different,” she said. So we'll have to see how that goes as the summer progresses, as each state will look at the situation differently. ”
The new rules are not expected to take effect until July, and the settlement must be approved by a federal court before then.
Several real estate brokerages, including Anywhere Real Estate and Keller Williams, have reached separate settlement agreements that include provisions to increase transparency in brokerage fees for homebuyers and sellers, according to the Associated Press.
Experts said spring buyers will not be affected, but those considering buying in the summer or fall should consult a real estate professional about how the policy change will play out. .
“In the United States, representation has always been optional. You don't have to use a real estate agent to buy or sell a home. But many people feel that real estate agents put them at a disadvantage. There are a lot of legal ramifications to buying and selling a home, so hiring someone who understands contracts and understands both sides really helps everyone involved,” says Massey. Told. “Again, between seller and buyer, everything has always been negotiable. Brokers negotiate what commission they will charge, and agents receive a commission based on that commission. Part of it goes to the buyer to get as much attention as possible.As the seller's agent, my job is to sell the house as quickly as possible, and one of the ways I do that is to get buyers to come see it. We do that through those fees.”
But some experts believe these changes could disrupt things in popular markets like North Texas, making home prices even lower.
Professor John Byrne, director of UNT's real estate program in the College of Business, said the buyer's agent is typically included and built into the price a seller receives.
“The question is, if it's not embedded, who's going to get that extra 2% or 3%? And all I can say now is that the sellers will want it, and they will. “We would like to have additional funding.'' In the current environment, more affordable housing is available, but they are currently in such short supply that this will be a deterrent to purchase,” he said.
According to the Associated Press, the proposed rule change would allow individual home sellers to negotiate such arrangements with purchasing agents outside of the MLS platform, essentially creating a loophole for agents to maintain the status quo. It is said that it was completed.
Home buyers can also ask home sellers for concessions, including funds to cover the buyer's agent fees.
However, if the seller is unwilling to pay the buyer's commission, the homebuyer may be left shopping around for a broker that can afford it. The policy change also requires customers to sign a contract with an agent before using the service, specifying how much the agent will be compensated.
Behn worries that some homebuyers may opt out of representation to save money in an already expensive and complicated home-buying process.
“I don't buy anything without someone's help. I want someone on the outside looking over my shoulder. Typically, a listing agent's job is to get the highest price to the seller, and the buyer's representative is the most “Offer a low price,” he advises. Prices and all benefits for buyers. So who is going to pay for a buyer's representative if it's not built into the price of the listing contract? I think the buyer has to pay it, but it's an additional down payment . ”
Behn said everyone will have to wait and see how the NAR settlement impacts tough housing markets like North Texas over the next year.
“Standard or traditional commissions are being introduced into the market. If I were a seller and I said I'm not going to pay a 6% commission, I'm only going to pay a 4% commission, okay. That way, all the other 10,000 agents in Dallas-Fort Worth aren't going to show my house for half the price, 4% vs. 6%,” he explained, “so in a tough market. I pay more fees. And if the market was easier, I might pay less fees. But the reason NAR did this is because there was a lawsuit against NAR. And they're going to settle the case and let the market monitor itself. And I think the market always does, because unless they offer the full asking price, the commission rate. Because you can't pay the full price. It's negotiable anyway.”
