VALUE OF YOUR REALTOR

DISCLAIMER:  This blog post is strictly my own opinion.  I base my remarks on my own decades of working as a Realtor and coaching other Realtors.   I also base my point of view on the results of other so called well intended ideas that did not take the big picture into consideration.

There is a lot of noise in the media about the recent law suit settlement between the National Association of Realtors and other major real estate companies.   Click bait states, this will now lower house prices.   

This is one of those times, it will a “let’s wait and see”.   The good thing that will come out of all of this, is that individual Realtors will have to know the value of their services and will need to convey that to all clients.

The lawsuit is typically complicated and has many caveats.  The basis boiled down to the NAR commission-sharing rule. To list a for-sale property on a multiple listing service – the databases that agents use to share properties amongst themselves – they must offer a commission to the buyer agent and state the amount on the MLS.

According to the Sitzer suit, as well as other litigation, this amounts to a form of antitrust, accusing the defendants of reducing competition and pushing up commissions higher than services warrant.

The other and very important part of the lawsuit, stated that many times the seller and buyer does not understand how they are really both paying for the buyer agent services. 

The settlement ruling DOES NOT require commission fees to be reduced. Two of the main results are:

1. Buyer agent compensation can no longer be listed on the MLS. ( Hopefully, this means more communication between seller, buyer, and agents.)
2. (I have been preaching this for ages)   All buyers must sign a buyer agency agreement before seeing property.

So, what does this mean for the average buyer or seller?   What does this mean for your local Realtor?    Before I tell my opinions, it is important you understand a few things.

There is a difference between someone who has a real estate license and a Realtor.   You can have a real estate license and not be a Realtor.  The National Association of Realtors (NAR) promotes professionalism and has a code of ethics that requires Realtors to place consumers needs first.

Also the practice of compensation by commission was originally designed to help both buyers and sellers pay for services at the end of the transaction and not at the beginning, middle and end.  

Now for my opinion:

• This will weed out less experienced and less professional Realtors. 
• Communication between all parties will improve.
• Many sellers will continue to choose to pay commission rather than pay upfront for services.
• Buyers will be more confused at first, and need to relay on professional real estate consultants.
• Signed buyer agency agreements will include a retainer fee.
• Realtor will be able to describe value of the services they offer and will be able to put a dollar amount on each service.
• Initial buyer and listing consultations may no longer be free.

I will continue to write more about the Value of a Realtor and update you about the lawsuit process. (It is not a done deal yet.)

If you would like a copy of the NAR Factsheet about the settlement results, please email me mary@lovethegreen.org