My Response to the NAR Lawsuit (Real Estate Is Changing Forever)
Published: 2024-04-10
Status:
Available
|
Analyzed
Published: 2024-04-10
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The recent settlement is expected to lead to lower real estate agent commissions and might encourage some homeowners to forgo using an agent.
"some analysts believe that this rule change will lead to lower agent commissions and could persuade some homeowners to skip using an agent altogether"
Pending
Most real estate agents will need to demonstrate their value more effectively to remain competitive, as simply doing the minimum will no longer suffice to earn high commissions.
"this means that the vast majority of real estate agents are going to have to get very good at demonstrating their value they're no longer going to be able to skirt byy doing the bare minimum collecting 2 and 1 half to 3% and if they can't show a buyer why they're worth what they're worth they're probably not going to last"
Pending
The real estate market is predicted to split into two segments: buyers seeking the lowest upfront cost and buyers who are highly selective about their agent and understand the value they are paying for.
"I believe that this entire settlement will bifurcate the market into two categories one a buyer who decides to pursue a discount service for the sake of saving as much money as possible UPF front or two a buyer who needs to be very selective in terms of the person they work with and understand completely what they're getting for the money that they're offering"
Pending
The settlement is not expected to lower housing prices but will likely increase competition among buyer agents, forcing them to perform better than before.
"I don't think this is going to do anything to bring down housing prices but I do think it's going to promote a lot more competition between buyer agents who previously could skirt away doing the bare minimum not So Much Anymore"
Pending
A potential outcome is that sellers will not offer buyer agent compensation directly, but this cost will be incorporated into the selling price, and sellers will then choose offers based on their net profit.
"it's yet to be seen one possibility is that sellers offer no comp compensation to the buyer agent offers then include Buyer Agents compensation to be baked into the selling price and then sellers could accept whether or not they want to take the offer based on the net amount that they'd receive"
Pending
Another scenario is that buyers pay their agents a fixed fee through a separate escrow contract, ensuring the seller's offer is not affected by agent commissions.
"another possibility is that the buyer agrees to pay their agent a fixed dollar amount and that's treated as a separate contract in escro this way an offer a seller receives is not going to have any additional amounts to be deducted"
Pending
First-time homebuyers may question the value of agent services and opt for discount brokerages or lawyers to handle paperwork, potentially attempting to manage the process themselves.
"the hard part is going to be for first-time home buyers they could look at the service that they're paying for question whether or not it's worth it and then go and pay a discount brokerage or a lawyer to draft some initial paperwork and think they could do it themselves"
Pending
Real estate agents who can effectively communicate their value proposition are expected to benefit and perform better in the evolving market.
"I have a feeling they could actually spend this to their advantage and do better than before if they're able to properly convey their value"
Pending
The majority of real estate agents will need to improve their ability to showcase their value to clients.
"this means that the vast majority of real estate agents are going to have to get very good at demonstrating their value"
Pending
Buyers who can afford to pay their agents directly may have a significant advantage as this could result in higher net proceeds for sellers.
"this suggests that some buyers who could afford to pay their agents directly are going to have a significant Advantage because that winds up netting the seller more money"
Pending
Buyers are unlikely to pay agent commissions out-of-pocket due to financial constraints; instead, these costs will likely be included in the final selling price.
"one I believe that buyers probably wouldn't want to pay a cost like this out of pocket especially when so many buyers are cash strapped to begin with this means that any commissions simply get written into the offer and then baked into the selling price that they ultimately pay"
Pending
The recent National Association of Realtors settlement is predicted to significantly disrupt the real estate industry, impacting buyers, sellers, homeowners, and agents.
"this recent settlement is going to shake up the entire real estate industry and it'll affect everybody from buyers to sellers to existing homeowners and especially in this case real estate agents"
Pending
Certain mortgage types, like VA loans, prohibit buyers from paying agent commissions. This creates a disadvantage for VA buyers if sellers don't offer compensation, potentially leading them to forego representation or miss out on properties.
"however this could get difficult because some mortgage options like with VA loans prohibit buyers from paying their own real estate agent commissions because of this it's said that in situations where no offer of compensation is offered from the seller VA buyers are immediately at a disadvantage potentially forcing them to forgo professional representation or lose a property entirely"
Pending
The National Association of Realtors settlement will remove the requirement for sellers to offer upfront compensation to buyer agents when listing a home on the MLS.
"the N agreed to no longer require a broker advertising a home for sale on the MLS to offer any upfront compensation to a buyer agent"
Pending
The National Association of Realtors' $418 million settlement is expected to lead to revised commission structures, increased competition among agents, and potentially lower prices.
"the National Association of Realtors made the decision to settle for $418 million and in turn they would revamp entire commission structures they would promote more competition between agents and that hopefully would lower prices"
Pending
Buyers will now be able to negotiate their agent's compensation in advance before touring MLS-listed properties.
"buyers can negotiate ahead of time for how much they want to pay for specific Services"
Pending
Analysts predict that new regulations in the real estate industry will result in lower commissions for agents.
"some analysts believe that this rule change will lead to lower agent commissions"
Pending
The majority of real estate agents will need to prove their worth to clients, as simply doing the minimum will no longer be sufficient.
"this means that the vast majority of real estate agents are going to have to get very good at demonstrating their value they're no longer going to be able to skirt byy doing the bare minimum"
Pending
Buyers may still request seller concessions to cover buyer agent compensation, though sellers with multiple offers might decline.
"they even go so far to mention that home buyers could still ask a prospective home seller for a concession that includes money to help cover the buyer agent's compensation"
Pending
While not useless, real estate agents face challenges due to industry-wide incompetence that negatively impacts the perception of the profession.
"I do not think real estate agents are useless but there's a lot of incompetence in the entire industry that makes everybody look bad"
Pending
Buyers are expected to have more leverage to negotiate lower commissions, potentially opting for percentage-based, flat-fee, or hourly rates with their agents.
"a buyer's likely going to have more flexibility to make bigger asks of the real estate agent this could be requesting a 1% commission instead of 2 2 and a half it might be paying a flat rate regardless of what the home sells for or it could be paying by the hour similar to an accountant or a lawyer"
Pending
A potential outcome is that sellers will not offer buyer agent compensation directly, but this cost will be incorporated into the selling price, and sellers will then choose offers based on their net profit.
"one possibility is that sellers offer no comp compensation to the buyer agent offers then include Buyer Agents compensation to be baked into the selling price and then sellers could accept whether or not they want to take the offer based on the net amount that they'd receive"
Pending
VA loan buyers could be at a disadvantage if sellers don't offer compensation, potentially forcing them to forgo representation or lose properties.
"in situations where no offer of compensation is offered from the seller VA buyers are immediately at a disadvantage potentially forcing them to forgo professional representation or lose a property entirely"
Pending
The described model of commission negotiation, where sellers prioritize net profit, is similar to how commercial real estate transactions have successfully operated for decades.
"this is how it typically Works in commercial real estate like shopping centers or warehouses or office space and that industry has been doing well for decades"
Pending
Real estate agents will need to prove their value to clients, as they can no longer rely on minimum effort and standard commission rates.
"the vast majority of real estate agents are going to have to get very good at demonstrating their value they're no longer going to be able to skirt byy doing the bare minimum collecting 2 and 1 half to 3% and if they can't show a buyer why they're worth what they're worth they're probably not going to last"
Pending
The speaker does not believe the recent settlement will have an impact on lowering overall housing prices.
"I don't think this is going to do anything to bring down housing prices"
Pending
The real estate market is predicted to split into two types of buyers: those seeking discount services and those who are highly selective about their agent and the value they receive.
"I believe that this entire settlement will bifurcate the market into two categories one a buyer who decides to pursue a discount service for the sake of saving as much money as possible UPF front or two a buyer who needs to be very selective in terms of the person they work with and understand completely what they're getting for the money that they're offering"
Pending
Real estate agents who can effectively communicate their value will be able to leverage the current market changes to their advantage and potentially achieve better results.
"for all the other agents out there I have a feeling they could actually spend this to their advantage and do better than before if they're able to properly convey their value"
Pending
The speaker acknowledges that their predictions are speculative, as the settlement has not yet been finalized and their views could be incorrect.
"the settlement has yet to be approved and all of this is purely just speculation I could be totally wrong"
Pending
A potential future model involves sellers offering no direct compensation to buyer agents, with compensation baked into the selling price, allowing sellers to choose offers based on their net gain.
"sellers offer no comp compensation to the buyer agent offers then include Buyer Agents compensation to be baked into the selling price and then sellers could accept whether or not they want to take the offer based on the net amount that they'd receive"
Pending
Another possible model is for buyers to pay their agent a fixed amount separately, which would not affect the seller's offer.
"the buyer agrees to pay their agent a fixed dollar amount and that's treated as a separate contract in escro this way an offer a seller receives is not going to have any additional amounts to be deducted"
Pending
The changes are expected to increase competition among buyer agents, who can no longer rely on minimal effort.
"it's going to promote a lot more competition between buyer agents who previously could skirt away doing the bare minimum not So Much Anymore"
Pending
First-time homebuyers might scrutinize the value of agent services, potentially opting for discount brokerages or legal assistance to handle paperwork themselves, with mixed results.
"the hard part is going to be for first-time home buyers they could look at the service that they're paying for question whether or not it's worth it and then go and pay a discount brokerage or a lawyer to draft some initial paperwork and think they could do it themselves"
Pending