Working with real estate agents is about to change
through a different medium. This compromise walks a fine line with the new restriction.
Seller-paid “buyer credits” is my favorite idea bumping around. Buyer credits would be offered on the listing, and could be distributed as the buyer sees fit at the closing table. The buyer could use the funds for themselves, their broker or both.
If buyers are responsible for the buyer broker commission on top of other purchasing costs, the sales prices will have to come down. Lower sales prices should not affect the sellers’ net proceeds in this instance, since the sales price deficit should roughly mirror the now absent buyer broker’s commission.
In short, even though most sellers think they should be celebrating right now, these new rules probably won’t affect sellers much, if at all, once the dust settles.
Emily Ross Guest columnist
What does the NAR settlement mean for buyers?
Gone are the “Let’s go tour this house for fun!” days. A signed Buyer Representation Agreement is now required before a property showing. This has always been best practice. For some states this will be a big change.
For example, I usually complete a buyer consultation and one or two property tours before requiring a buyer’s agreement. I do this to be sure we’re a good match for each other. A successful client-agent squad requires a lot of trust and a common communication style.
Take the tours off the table, and I think things are going to get awkward. Now I spend one hour with a potential buyer and then prompt, “So do you trust me to guide you through your biggest life purchase? Sign here.” I’m sure thankful many of my clients are referrals.
How will the commission change affect real estate agents?
The part-time agents and small brokerages will likely diminish over time, which will either be great or horrible for the industry. Agents will have to do more with less, and our 60-70 hour work week will feel impossible without high sales volume.
Once in escrow, the brunt of the work usually lands on the buyer’s agent, too. If there are more transactions without buyer’s agents, then the seller’s agent will have to pick up the slack.
I often joke that as a 1099 real estate agent, I’m either overpaid or underpaid on each property. Still, my annual income mashes up into a worthwhile sum despite the work-life balance.
Without that 2-3% buyer’s commission propping up half my income, I am not sure the 11:30 p.m. phone calls, 6 a.m. texts, missing my daughter’s basketball game for an impromptu showing, and never having paid time off or maternity leave will be worth it. Maybe I ought to go back to copywriting.
It feels like most brokers and Realtor associations are strategizing how to make the buyer agent obsolete with new technologies. I think they’re focusing on the wrong solution, but that’s a story for another day.
Emily Ross has been a real estate agent in Austin, Texas, for 10 years and a writer for much longer. Her background is in copywriting and editing, and she holds a master’s degree from Arizona State University’s Walter Cronkite School of Journalism.