Back into the house hunting game. On the ground in Las Vegas for a house hunting trip this coming week. Yesterday our realtor who we have bought and sold with before sends us 3 documents that Berkshire Hathaway is "forcing" him to use.
Some of it is standard stuff but one document is illustrating the recent change in fee payment. Signs him up as our "Buyers Agent", a concept I actually think is an improvement.
What we are unclear about is how the new fee structure plays out in the end. Does it differ materially from the old process at closing?
Will be going over it with him but was looking for any insight from someone who may have recently gone through it.

Yes, in a nutshell, the seller is no longer obligated to offer to pay any portion of the buyers agent fees. It can still be negotiated. But you as the buyer could very well have to come out of pocket to compensate your agent.

Thanks for the reply.

I'm curious how all of this will pan out. I never did think realtors earned what they get paid. I know, there are some here who won't like that but its my limited experience with it. If I had to pay out of my pocket I'd skip a buyers agent and look myself. I'm sure many will do that.

To be clear, the sellers were never obligated to pay any portion to the buyers agent. But the seller agents weren't lowering their commission for that. It was always the seller agent paying a portion of the commission to the buyer agent.

Nothing has changed with the exception of agents being very clear on how they are getting paid.

The difference you are seeing is they are asking you to sign a contract. That is something that was done by some agents and not by others. But by signing the contract they are forcing the buyer to acknowledge any compensation terms as F12517 noted.

quote:

Originally posted by mrvmax:
I'm curious how all of this will pan out. I never did think realtors earned what they get paid. I know, there are some here who won't like that but its my limited experience with it. If I had to pay out of my pocket I'd skip a buyers agent and look myself. I'm sure many will do that.

You could certainly go without an agent representing you. That doesn't necessarily save you any money. The seller agent won't always lower the commission simply because the seller doesn't want to pay the buyer's agent. If they do lower their commission then the seller is expecting to make more money on the sale. They aren't expecting to give you a discount.

Regarding if realtors earn what they make, like any profession, it depends on the person doing the work. My wife earns every penny. It's a 24/7 job. Not a day off and the amount of work and money she saves her clients more than makes up for her earnings.

We will be meeting with him starting tomorrow. He's been one of the best realtors we have worked with in several transactions. He was really good in the messed up market in Vegas back in 2009. We understand it's his job and he should be compensated for doing it. We are just having a little heartburn with the way Berkshire (and maybe the Vegas market) is driving the situation. May end up being an interesting conversation tomorrow morning. The whole situation has me a bit out of my comfort zone.
Ironically, we are also looking in Southern Utah. The dream state is to have places in both locations eventually. Our agent in Utah is still operating under the "old" system and hasn't asked us to sign anything at all.

quote:

The whole situation has me a bit out of my comfort zone.

Always remember that you are the customer and can decline/walk away from anything/anyone.
Billy

The truth is, that court decision that led to this story last year was rejected by the court and is still ongoing.
In other works, nothing has officially changed.
I've done a bit of buying and selling of real estate myself but my wife's also a Realtor so I get to see the other side and hear the war stories.
Almost all the stories you read in the MSM about this issue are short on facts or totally misrepresent the facts/issues around the subject. That has led to many of the rumors swirling around the subject that are a little wrong up to completely false.
Again, the problem the suit was based on was only a real issue in a couple of states. I'd say that frayedends version is correct as far as he goes.
The settlement story still has an uncertain resolution and date.

[QUOTE]Originally posted by mrvmax:
I never did think realtors earned what they get paid. (QUOTE)
I'd be willing to bet that you never worked as a Realtor. Are there Realtors who don't earn their pay? Absolutely. Are there people in any/every profession that don't earn their pay? Absolutely.
Rod

quote:

Originally posted by mrvmax:
I never did think realtors earned what they get paid. I know, there are some here who won't like that but its my limited experience with it.

Definitely not my experience.

Our realtor worked patiently with us for months, showing us about 40 houses, until we found the right house.

Then, the sellers turned out to be a couple of a**holes. She and the listing agent had to deal with them for weeks as they made demands, threw tantrums, and tried to renege on the deal on a couple of times because they decided they could have gotten more.

And, behind the scenes, she was coordinating all the different parts (inspections, appraisals, etc.) to ensure they all came together in time for the closing.

IMO, our realtor earned every penny of her commission.

Indiana has this rule and when buying my first home from a builder, the agent acted like it was simply a formality and didn't matter.

Signing a document stating your agent is a buyer's agent means they are legally obligated to work in your best interest - meaning getting you the best price and ensuring you are fully informed.

Letting your agent be a seller's agent means they are legally obligated to act in the best interest of the seller.

Funny how many never actually told you who they were representing in the past? How many people assumed the agent was acting in their best interest when they were not?

This message has been edited. Last edited by: Lefty Sig,

This!

quote:

Originally posted by frayedends:

Regarding if realtors earn what they make, like any profession, it depends on the person doing the work. My wife earns every penny. It's a 24/7 job. Not a day off and the amount of work and money she saves her clients more than makes up for her earnings.

Money doesn't just come rolling in. I've seen realtors literally walking the pavement and handing out their flyers to people in the neighborhood. I have a classmate from my Masters in Information Systems quit IT and started out as a realtor after graduating. That was in 2013. She's got her own brokerage office now and selling multi-million dollar homes in Colorado. She's making the big bucks but she put in the hard work to take advantage of the opportunities.

quote:

Originally posted by Lefty Sig:

Funny how many never actually told you who they were representing in the past? How many people assumed the agent was acting in their best interest when they were not?

But even under the old rules, a buyer could figure out both agents' goals were to close a deal. It's a matter of matching the attributes of the right house at the highest price both the buyer and seller would find acceptable. If there's no deal, both agents don't get paid.

In days gone buy, a realtor actually earned their commission. They listen to your needs, drove you around showing you properties of interest.

Today, it's all about getting the listing, putting it on the internet, sitting on their ass feet propped up on their desk if they have one, and wait for some dumb son of a bitch to ask about the property. Then tell them to drive by and take a look it it to see if it is worth their time pursuing it with you. If it is, they show it you only if you can produce a letter from a lender showing you are prequalified. For this they want 6% of the selling price. They tell you that the seller pays. Bullshit, the one with the money in the transaction pays and that's you.

quote:

Originally posted by nosticks:
In days gone buy, a realtor actually earned their commission. They listen to your needs, drove you around showing you properties of interest.

Today, it's all about getting the listing, putting it on the internet, sitting on their ass feet propped up on their desk if they have one, and wait for some dumb son of a bitch to ask about the property. Then tell them to drive by and take a look it it to see if it is worth their time pursuing it with you. If it is, they show it you only if you can produce a letter from a lender showing you are prequalified. For this they want 6% of the selling price. They tell you that the seller pays. Bullshit, the one with the money in the transaction pays and that's you.

This ^^^^ is a load of horseshit and any realtor that does it this way will not be in the business for long.

1: Once they get the listing they pay $800 out of pocket (or thereabouts) for professional photos. They market the property, send out mailers and take phone calls from agents with buyers. They stage the property. They deal with inspections, and mortgage brokers. They work on the purchase and sale agreements. They show the property if there is no buyer's agent. Otherwise the buyer's agent shows the property. They do a lot more work than people realize.

2: What kind of buyer hasn't taken a drive by? Okay, in crazy competetive market they may set up a showing first.

3: If you are selling your home, how many tire kicker scumbags do you want roaming through your shit? You want to show the house to serious buyers and not squatters, thieves and miscreants. To do this you make sure they are qualified buyers.

4: Listing commission is negotiable, and differs in many areas. Around here it's 5%. The agent pays half or about half to the buyer's agent. Both agents lose some of that money to the brokerage.

5: You are partly right because the money ultimately comes from the buyer. But the seller pays the commission to their agent. Their agent pays the buyer's agent. Commission is in the sale price of the house. When they tell you the seller pays, it means there are no additional costs to the buyer apart from the cost to purchase. No one is being deceived. Although, the lawsuit noted in this thread was based on the semantics of this and how it was commission being paid was presented to buyers.

quote:

This ^^^^ is a load of horseshit and any realtor that does it this way will not be in the business for long.

All of those things plus more.^^^^
Also, the agents on both sides get zero and spend a lot of money and time up front and don't get a nickel until they're at the closing table.

If the seller offers less than 3% to the buyer's agent, then the contract says the buyer makes up the difference. Some sellers choose to offer less than 3%, which then disincentivizes buyer agents to show that property. But it does allow them to list a bit lower, to attract interest.

In the end it is all math. Know exactly what any particular deal will be at the bottom line.

When we sold, our buyer was self-representing. So he offered us 3% less which netted the same bottom line to us. Our agent had to do a lot of extra work that a buyer's agent would normally do, so it was not a good deal for her as seller's agent.

quote:

Originally posted by Fly-Sig:
If the seller offers less than 3% to the buyer's agent, then the contract says the buyer makes up the difference. Some sellers choose to offer less than 3%, which then disincentivizes buyer agents to show that property. But it does allow them to list a bit lower, to attract interest.

In the end it is all math. Know exactly what any particular deal will be at the bottom line.

When we sold, our buyer was self-representing. So he offered us 3% less which netted the same bottom line to us. Our agent had to do a lot of extra work that a buyer's agent would normally do, so it was not a good deal for her as seller's agent.

These numbers depend on the market you are in. Around me the total is generally 5% with 3 to seller and 2 to buyer agent.