RMP vol. 3.5

Hello RMP clients & friends! It is officially August and as I say every single month, time seems to be flying by at such a rampant rate I can hardly keep up!

This will be an important one, packed with a LOT of info, but I wanted it to hit your inbox today and I am always available if you have any questions, concerns or comments. I don’t know how many of you have been following along with the NAR (National Association of Realtors) lawsuit that was “settled” earlier this year, but the gist of it was this, the association that I am a part of due to the Spokane MLS, essentially lost by settling in a landmark case where the charge was price fixing on commissions. Now I want to be very clear about this, commissions in the real estate industry have ALWAYS, always been negotiable and since I’ve been in the industry (8 years), but way further back than that, the commissions for both buyers agents and sellers agents have been paid by the seller, with the list agent negotiating the fee in total and then splitting it between their firm and their buyer’s agent’s firm. The firms then take out their commission splits, any fees the broker/realtor owes, and the rest goes to the agent for providing the services of a trusted real estate agent and advocate for their clients.
In Washington State, we’ve already started the process of “uncoupling” commissions, {per the lawsuit}, meaning the list agent negotiates their own fee/percentage with the seller and then asks the seller if they want to pay their buyer’s agent’s fee as well. If you’ve done a transaction with me this year, we’ve already gone over this, and I wholeheartedly advise the seller to offer compensation to the buyer’s agent and will continue to do so. The reason is this- if you’ve purchased an on-market home or property in the past 30+ years, as a buyer, you did not have to pay for your agent’s commission. The sellers priced their property per the comps of being an “on-market” home, which included the commissions. At this time though and moving forward for at least the foreseeable future, if you are a buyer, you will need to sign a buyer’s agency agreement form with your broker (hopefully me!) before you see any homes, stating that if the seller will not pay for your agent’s commission (whatever you negotiate), then the buyer will be the party paying for their own agent.
In my eyes I see this as a huge deterrent for buyers as they already have to come up with all the cash anyway- between their down payment, closing costs, inspections, appraisal & lender’s fees, if you add in another few percentage points, it may be a real struggle for buyers (especially first-time homebuyers) to be able to afford a home. And as we all know who’ve purchased a home before, having an exceptional agent on your side, advocating for you and representing your best interest during the biggest purchase of your life, is a tremendously important thing. The other thing that will happen for sellers is that if the buyer chooses not to view properties where a commission is not offered to their agent, {also negotiated on their buyer agency agreement}, the buyer pool for sellers will shrink substantially. In a market like we have now, which is honestly very buyer-sided, this is not an ideal way to sell a home.
*****You want the HIGHEST amount of buyers available to buy it!*****
The other part of the lawsuit is that it states the new rules will make commissions more transparent for the future, which is a half-truth. This will make commission conversations more transparent between myself and my buyers, however, per the agreement, the cooperating commissions (what the seller is offering to the buyer’s agent) is no longer allowed to be displayed on the MLS, which means that for every home you want to see, your buyer’s agent will have to call the listing agent, ps I usually do this anyway, and ask if there is any cooperating commission being offered. Hopefully they answer their phones!
We will have to do this because if there is none, our buyers may not be ok with seeing the property. However, the list agent could very well say yes there is commission offered but not tell the buyer’s agent what it is- making the transparency on this side exactly none.
I’ll be honest, I think it’s going to be a wild couple of months in the real estate industry while things shake out. I have my own process down and will continue to work it as such. I have a buyer consultation meeting, we go over everything from start to finish and then we have a “learning day”, where we can see houses together before signing anything. This gives all parties the ability to feel one another out and see if we’ll be working together well or if we need to part ways before we get into the thick of it.
For my sellers, I will continue to advise providing compensation to the buyer’s agent so that our pool of buyers is as large as we can get it so we can sell your home fast and for what we put it on market at!
If I do have buyers who cannot afford to pay for my services, and a seller unwilling to pay for my services as well, there is always the option of bumping up the price to include it- which is honestly what is already taken into consideration when you price an on-market property.
Will sellers start pricing their homes under market value if they don’t want to offer the buyer’s agent a commission so that they can allow for an over the list price offer to offset it?
I don’t know… but I doubt it.
Will buyers start being on the hook for their own agent’s commissions?
Some maybe, but for a majority of people, I doubt that as well.
Will there be an appeal that turns this entire thing upside down again?
That’s a possibility as well.
Lots of unanswered questions and who-knows-what-will-happen scenarios that I see playing out in my head.
As for me and my clients, I will continue to offer my very best services for my negotiated fee. I love this career so very much, but I also have a mortgage and utility bills and loads of children who need food to eat too, so I can’t do it for free ;)

If you have any questions, or just want to chat through it all, please don’t hesitate to call! This is certainly not a complete deep dive, but something to let you at least know what’s coming.

Until next time friends~ Stay safe, cool & drink your water this weekend!!

~Robyn