
Is a Residential Real Estate Revolution Coming?
The National Association of Realtors (NAR) settled a series of lawsuits that is being trumpeted as “a radical change” in commissions paid to real estate agents for the purchase and/or sale of a home. There is so much misinformation being spread on this issue it boggles the mind. Let’s clear up some things. First, the misconceptions. The seller of the house is paying the buyer’s broker. Yes, the commission comes out of the sale proceeds of the house. But who is paying for the house? The buyer. When you go to a shoe store does the store pay the person who delivers the shoes to the store? Technically, yes; but the buyer ends up picking up that cost as part of the purchase price of the shoes. The buyer always pays. When the buyer does not use the current system and engages a separate buyer’s broker they will have that much more to come up with at closing. An additional $10,000 or more out of pocket will make the deal that much more difficult to close. Next, there is no fixed commission at 6%. Agents certainly try to get that rate, but it is always negotiable and can vary dramatically, particularly with increased home prices. Most agents… Read More