In mid-August, the new rule takes effect that NO buyer-agent commissions will be advertised on the MLS. Technically, sellers paying commissions to the buyer-agents will still be allowed for now – they just have to be negotiated outside of the MLS. There will be attempts to circumvent the new rule (see above), but sellers are going to think that they don’t need to pay anything.
I think we can expect seller-paid commissions to the buyer-agents to dwindle down to zero in the next 6-12 months. The DOJ has not insisted on this yet, but their attorney said the other day that they want the commissions decoupled, so it’s coming.
What’s next?
Buyers need to start getting used to the idea of paying for their agent.
Buyers will be required to hire a buyer-agent in writing to see homes, an idea that doesn’t sound great to anyone. Buyers don’t think they need an agent when they have Zillow at their fingertips, and agents will struggle to convince you that you need sign any agreement when you’re just looking.
I don’t want to be at your beck and call for the next 6-12 months and have to show you homes that I know you aren’t going to buy. But because we have a contractual agreement, you’ll be thinking……”hey, we hired you to be our agent, so snap to it.”
My Proposal:
You monitor Zillow via auto-notifications, and go to open houses all you want. You will be peppered by agents wanting you to sign an exclusive agreement for a year or two with the promise of showing you off-market deals that you won’t see on Zillow.
If you can resist that shady ploy, then when you finally find “the house” online, then I’ll get it for you. We will sign the agreement when I show you the house, and the agreement will be for this house only.
You’ll pay me 2% at close of escrow, with this guarantee:
If I don’t get you the house, you don’t have to pay me anything.
I’ll be the real estate gunslinger who will take care of business for you!
I like it!
Just a suggestion that would likely keep buyers working with you. Help them to have all their finances in order + ready to go when buyers find the house they want. If you don’t buy and sell houses all the time this is one of the hardest things to get lined up. This would also help with your offers.
Personally I think it would be great if I had someone I could trust that had all the buyers paperwork defined and ready to go when the right house popped up. Not everyone is able to buy with cash.
You’re probably already doing something like this.
You’re probably already doing something like this.
Yes and the industry and I could do better. It happens regularly that buyers get pre-approved for financing and can close escrow in two weeks – literally the same as a cash offer with the exception of the appraisal contingency which you can always waive.
But we don’t make the purchase contracts available in advance.
Most people don’t read them anyway but for those that do want to review the forms in advance, the system doesn’t provide a draft.
I’ll never forget this older guy who had cancer and wanted to set up his soon-to-be widow. Donna and I went out to lunch with them – which we never do – and we were getting along famously.
He wanted to read the forms in advance, so I fill out a sample listing agreement with the price at $1,200,000. I sent it to him with the note – this is just a sample price that I had to input to create a sample.
He blows a gasket and emails me back that he would NEVER EVER sell his home for $1,200,000!!!!
Oh wait, it’s just a sample?
They list with someone else, and you can guess what happened.
He sold for $1,200,000.