Great commentary, read every post. / As they say; be careful what you wish for. / The first skill many agents learn is how to back pat. Most enlightening comments here came from early on, related to the aspect of agents being tied to the deal, not the customer they supposedly represent. ABC always be closing. / Some of the more interesting things buyers agents have told me personally; 'I'm not your low price gopher!', 'I have a professional reputation to uphold.' (aka; buyers are expected to negotiate up, not down.), 'Those are not the types of properties that this firm shows buyers.' (shorts, REO, discount price, stated lower agency commission.) And so on and so forth. You know what, I may very well volunteer to pay a buyers agent a flat rate of $5k to $10k or some other sort of similar approach, break this current mold and form a legitimate new type of agency agreement; Buyers agent agrees to help buyer get the best possible price, and is willing to put forth as many purchase offers at significantly less than purchase price if buyer requests, etc, etc. Perhaps one or two month agency agreement or something like a fixed amount of offer events. Buyers agent service fee paid only upon successful completion of a home closing. That sort of thing. Who says the buyer is required to sign what the agents put in front of them, with their terms, and their time frames? What stops buyers from signing agency agreements, or agents offering agreements, with limitations such as only one month at a time representation or other special terms? One reason we see a failure in best representation is the presence of the agency agreement, because they last too long. Everyone may be better served by working with different agents in short order, if the first failed to make the goals materialize. That was also a wise piece of information from a poster here; They have always been allowed to negotiate, if they knew how, nothing has changed in that regard. What has been missing is how to incentivize buyers agents to more honestly represent in the best interests of buyers, somehow over ride the inevitable preference for a higher comission. Flat rate realty tried to fill that gap but used an explotative model on the other end, as one single licensed agent would 'represent' ten dozen people at a time, with a staff of replacable non skilled labor workers to hanlde the details, calamaty ensued. For the most part, sellers were the primary beneficiaries of any cost savings under that model. A fixed cost buyer agency not tied to points structures with a traditional agent model could provide solutions. I certainly prefer individual small scale brokerages whom don't have fee splits, or if so, they are fair and not quota based. Better more attentive service is more likely. Skip the desk fees.
That's what's wrong with realty representation today; The vast majority of agents steer buyers into as high as possible of deals, or they slam dunk the listing for the fastest possible sale and leave sellers money on the table. Instant equity! Reads well on a listing, seller beware if the agent dares say that. Someone mentioned the agents limit buyers exposure to what they can afford. Watch ten seconds of any popular housing show on tv, that is not the case. Agents get aggressive and explore how much more the buyers may be willing to actually pay, walk them right up to their dream home they only thought they could not afford. The smartest play a typical financed buyer can make is to base purchasing decisions based on monthly affordability with a strict maximum payment cap monthly bill. Get the best possible home, without paying more than $X per month. That is an easy way for novice buyers to navigate realty as well, either the buyers agent can calculate a decisive monthly payment on the spot, or they can not. Shopping by price in real property, needing a mortgage loan, risky. As I like to tell people when providing appraisals; Only the seller cares about the price, because they walk with the stack of cash. The buyer only needs to care about monthly affordability and is better served by not being concerned with price, as price is relative to the rate, taxes, insurance, fees, hoa dues, and the need for maintenance reserves planning. The monthly payment is all that matters, just assume you could be tied to that for the entire length of the loan. On that note, this new trend of temporary point buy downs is a disaster in the making, they may just as well be pushing arms. For every hundred thousand dollar borrowed, minor rate rises can and do result in hundreds and hundreds of dollars more every month. Think twice before presuming you'll find sales data on zillow or any of those if agents stop using MLS, they all scrape the data from assessors feeds and MLS systems. Avm's to this day can not distinguish between probate, discount, special deals, and market rates. The most inspiring post for me personally of this thread was an appraiser speculating this could derail the AMC and modernization models. Dare to dream.
The disclosure of agency fees did not come out of thin air. People will be regretting these industry shake downs and disruptions when sellers agents do start jacking up commissions and plays both sides, padding in case the buyer agent is savvy, pocketing the difference if they are not. It's doubtful that unless the entire lending industry in unison forces buyer agency fees out of pocket up front from buyers, that this will not do anything to quell the affordability issues. Because one thing is true; Agency fees rolled into 30 year amortized loans not only cost buyers much more long term then they are aware, but also have verifiably caused incremental increases in total housing pricing, accellerated in times of higher volume turnover. The truth is there is entirely too many loans, too much turnover, and too much movement. Trace it all back to the Fed anyways, we have reached critical mass where they can no longer bury QE in real estate, inflation and spiraling home pricing proves it. As they say in sumo wrestling; 'They are running out of real estate.' Perhaps if the red tape beaurocrats did not put first time buyers in front of trial attornies just to buy a starter condo, whom restrict housing development with their never ending litigation, and big hedge firms and global investors were not scooping up real estate ahead of citizens, being given first purchase opportunities on defaults as special GSE favors, we'd have better balance and more affordability.
Political proclamations of caring about buyer affordability are there to justify further expansion of a beaurocratic state. Nothing stops them from rezoning failing commercial to residential, releasing government lands to developers, or doing something as radical as re initiating homesteading approaches alongside tax relief programs. Nope, we get enterprise zones, special favors, special interests, imbalanced affirmative action preference, further consolidation, and restrictions against truly independent players whom would press out manufactured homes or custom one off builds like dome homes on land. Never ending expansion of hoa's which serve as a convenient way for city planning persons to provide special favors to developers, while simultaneously offloading what used to be city borne costs onto residents instead. Because; saving the environment and such. As one of my favorite authors in CO states, Caldera; We could all have affordable housing, instead the beaurocrats stack em like rats in high density housing. Surely the government will be more proficient at saving open spaces once everyone is stacked into a condo or adu, than an entire community of independent small scale land owners... The NAR lawsuit is a symptom of a larger problem, too many played for themselves and not the greater good for too long, the bill came due. For all the great intelligent positions here many are missing an important consideration factor; Most market participators, namely those whom need maximumally leveraged mortgage loans, are not as intelligent or sophisticated as you guys. They're just fish in the bowl waiting to get picked and served, left wondering where the money went, future foreclosures in the making. The entire lending and housing industry, and everyone associated with them, has for far too long played advocate for vested interests. The markets are artificially propped high, some speculate 15% or more nationally, so investors can flip and hold properties as reits, for tax write offs, avoid the volatility of other markets which are vested in their own corporations. There is no such thing as residential anymore, it's all commercial now. The question nobody dares to answer; What exactly is wrong with lower prices? They'll miss the agency fee disclosure when it's gone. Not to worry, corporate consolidation of MLS systems will be there to save the day as the small scale groups go under.
Thanks for reading. I learned a lot from reading the forums today, great different perspectives.
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