Not just another Monday...

The world of real estate is in a panic. The NAR settlement in the commission lawsuits has left agents confused, upset and worried about what this means for the future. Of course, what impacts agents also impacts lenders, title, builders... the list goes on and on.

So, I went to my go to for feedback on the latest news and asked for his thoughts.

"I certainly am not going to say that this is not a significant change in our business, but it is just a change. This is not the end of real estate agents, nor is it an automatic massive hit on income potential. It is simply a change in how business is conducted.

Go back in time and there was a point where all agents represented the seller. The agent that showed houses to a buyer legally represented the seller. Imagine that, no buyer representation. Well that was obviously a bad idea and it changed, driven by the government wanting buyers to be represented. This new agreement does not say buyers will be unrepresented. It simply says sellers cannot be forced to offer a commission to the buyers agent.

It does mean that we will have to educate sellers and buyers to the benefits of offering a coop and signing a buyers agreement. It does mean that 6% on every deal is gone, but that has already gone to the wayside as discounts and flat fee services have been around for decades. It does mean that a seller can refuse to offer it, and the buyer will have to work that out with their agent.

I will bet that lenders will soon have a way for buyers to finance the commission by adding it to closing costs. Most sellers are going to be open to negotiating commission as part of the price. This decision does not make agents irrelevant, it changes the way commission is marketed and negotiated. It gives the consumer more options, but it does not eliminate buyers agents, nor does it mean the whole industry is crashing down.

It will be an adjustment and will rapidly become the new normal. So don't panic!"

I get the uproar. But I have to agree. Buyers need help, it is just an extra step in the process. Here is the reality as I see it. First time home buyers are usually the ones with limited funds. Sellers will work with the commission as part of the price, because they will understand it is a part of selling a home. People with cash on hand may well pay their agent directly, but that will be reflected in the offer they make to buy a home. Just a change, I agree... don't panic.