December Real Estate News to Use

Happy Holidays!

Whatever you are celebrating this season, I hope it is full of cheer and joy! Wow, it’s hard to believe how quickly this year flew by. From a housing perspective it was, in a word: interesting. As we know, pendulums swing and that was certainly the case with interest rates having gone from historic lows rates the highest they’ve been in over two decades. This hit to purchasing power – where every 1% change in interest rates represents a 10% shift in a buyer’s affordable price - did quell buyer demand significantly changing the heavily seller-favored market dynamics that the Covid epidemic spurred. Sellers experienced longer market time and often price drops and/or concessions before properties got under contract.

Yet despite this, 2023 fared pretty well. In fact, at its May peak, 50% of all listings fetched above asking price and as of November, 26% of sales were above list price for a median difference of 4%. So, it seems demand is still strong despite the higher interest rates, as savvy buyers realize that getting into a home at today’s rates and refinancing when they go down, makes better sense than waiting for rates to go down because during that time, home values will continue to rise.?

Regardless of market conditions, having an experienced professional to help you understand the nuances and best tactics to be successful is ALWAYS important. Which is why in this month’s?MARKET MINUTE?video I want to address some of the headlines regarding the commission lawsuit against the National Association of REALTORS? (NAR). The plaintiffs claimed that real estate commission rates are too high, buyer brokers are being paid too much, and that NAR rules and corporate defendants’ practices lead to price fixing. NAR is appealing the verdict and in the meanwhile, will continue to work hard to prioritize the needs of their consumers, support market-driven pricing and promote business competition.

As I explain in my?MARKET MINUTE?commissions have ALWAYS been negotiable, and consumers have always had a choice on whether to have representation and what to pay for those services (see the article below about?For Sale By Owners, as one example of the variety of choices in the marketplace).?But it’s important to understand how we got here.?There used to be no such thing as a buyer’s agent.

Prior to the 1990s, all agents who weren’t directly working for the seller (i.e. their listing agent) were considered sub-agents and had a legal and fiduciary duty to protect the seller’s interests. Buyers touring a home with an agent mistakenly believed that agent had their best interests at heart, when in fact they owed loyalty to the seller. Buyer agency was born out of the critically recognized need for buyers to have their own representation vs. expecting their interests could be represented by someone working for the seller.

A key issue in the wake of the verdict, (still pending appeal which could take years), has to do with the cooperative compensation agreement. This is where the seller, in determining the compensation they will pay their listing agent, also sets a “cooperative compensation” amount that will go to the broker representing the buyer. This has never been a fixed amount and for years now Washington state has displayed this amount on the MLS as well as public facing sites like Zillow and Redfin , and has even allowed that amount to be $0. When there is no compensation being offered, or if what is being offered is less than what the buyer and their broker have agreed to in their buyer agency or brokerage services agreement, buyers have a duty to make up that difference. If a buyer cannot afford to do this, they might be tempted to seek assistance directly from the listing agent which undermines the entire concept of buyer agency.

In a situation where a listing agent is acting in the capacity of limited dual agent, liability may increase for all parties while buyer may experience less than ideal support and advocacy if the transaction hits a speed bump – a recent example of which I share in this month’s?MARKET MINUTE?along with other implications impacting buyers or sellers.

I adamantly support individual representation while standing by the value that we provide consumers as they seek our assistance in either the purchase or sale of their most important asset. As a proud REALTOR?, I take seriously my responsibility to represent your interests to the best of my ability. My track record and hundreds of satisfied clients (especially my most recent buyers!) demonstrate that whether you are a buyer or seller, quality, professional representation matters. You deserve the best and my team and I look forward to helping you be successful in any market!

Questions? Please reach out, we are happy to discuss further or anything else real estate related.

In the meanwhile, have a joyous, healthy and happy holiday season!

Cheers,

Gina

MARKET MINUTE

Tune in to this month's Market Minute?to learn about agency representation and why it's critical for both buyers and sellers.?Watch

REAL ESTATE INSIGHTS for BUYERS

Buying a home can be intimidating if you’re not familiar with the terms used throughout the process, which is why knowing key housing terms and how they relate to today’s market is important.?To point you in the right direction, tune into this video to hear the most common language you’ll hear along the way.??Watch

BUYERS

Data from NAR?shows?the median down payment hasn’t been over 20% since 2005. In fact, for all homebuyers today it's only 15%. And it’s even lower for first-time homebuyers at...?Read More

SELLERS

Home sellers reveal why they decided to bypass professional representation—and the mistakes they made without a trusted adviser...Read More

LOCAL NEWS

The Eastside is making it easier for space industry leaders to shoot for the moon. The demand for rocket and satellite components continues to...Read More

MARKET NEWS

When it comes to what’s happening in the housing market, there’s a lot of confusion going around right now. You may hear...Read More

REGIONAL UPDATE

Just like December temperature variations, our local real estate market continues to feel up and down. Interest rates, regional economic conditions and seasonal market shifts have meant rising home prices in some areas and drops in others. While the expected...Read More

MONDAY with MATTHEW

On the final Monday with Matthew, he peers into his crystal ball to bring you his top 10 housing market predictions for the coming year. Will mortgage rates drop? Is there going to be a housing bubble? What will happen to home prices? Read More

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