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As you’ve likely heard, there’s a potential shake up coming to the real estate industry. If you’ve been following the buzz that’s been circling about the controversial National Association of Realtors’ settlement, you’ve probably heard something about sellers no longer being required to pay both commissions. I put the word required in italics for good reason.
You see, in California where we practice, it’s always been abundantly clear, both in the contracts themselves and in ALL of our conversations with sellers, that commissions are NOT set by law – period! Sellers frequently request that we discount our commission, ask how we feel about discounting the buyers’ agent’s commission, tell us that we are competing against agents or brokerages who are only charging a 1% fee or a flat fee and so on. We engage in these conversations because they are appropriate, customary and, less we forget, mandatory! So when a few unscrupulous individuals in another state fail to engage in these conversations or resort to unethical behaviors, they inevitably corrupt and potentially disrupt our livelihood.
So what’s going to happen now? What changes can we expect? To be honest, we’re not sure and we may not know for some time. There’s a ton of speculation though! Many believe the recent lawsuit will weed out a substantial number of Realtors who are newer to the industry, part-time, and/or entered real estate with the misconception that it is fast, easy money. And, on that note, let me dispel those misguided thoughts about real estate agents having it easy. Trust me when I say, we don’t. The amount of stress and work that goes on behind the scenes (never mind on the scene) is exhausting and never-ending! We’re essentially “on” 24-7 answering questions, trying to avert disasters, performing tasks for other agents or their assistants because they lack experience, negotiating, problem solving, driving in all weather and traffic conditions (often long distances), showing homes, holding open houses, spending time away from our family, re-arranging schedules at the last minute and also serving as a great listener, a friend and even a therapist all while looking out for our clients’ best interests while protecting their money, assets and legal liability. We’ve never taken a vacation or trip where we weren’t working – ever!) But I digress…and none of this is a complaint BY ANY MEANS!!! We absolutely LOVE what we do and are incredibly grateful that we found this career to share together but I had to address one of the major fallacies about our profession. WE WORK VERY HARD!!!
The bottom line is that we will need to continue doing what we’ve always done; proving our value and our worth. And, as always, we will do this with both our sellers and our buyers…and I’m confident that we can based on our reputation for integrity, honesty, professionalism and a genuine desire to look after our clients’ needs. The old adage holds true – you get what you pay for. There’s a strong chance that the buyers and sellers who opt for the discount won’t be satisfied with their service. This brings me to my final point –
The alleged goal of this commission shift is supposed to make housing more affordable…which we find completely laughable! At least in our Southern California real estate market, sellers aren’t likely to reduce the price of their homes as long as buyers are able and willing to pay today’s prices. Buyers, who are already facing high mortgage rates, fierce competition, huge down payments and considerable closing costs may now also be put in the position of additionally paying their agents out-of-pocket, making the house they pursue even LESS affordable!
We’ll have to wait and see how these changes unfold once they take effect, and we’ll update accordingly. In the meantime, please reach out if you have questions – we’re always here and happy to help! We do what we do because of you and for you!
