A Change is Coming

The National Association of Realtors agreed to a $418,000,000 settlement to bring an end to series of class action lawsuits concerning the unfair method used to pay commissions. The is no doubt that the change will reshape the industry. The talk of the destruction that will because by this action is a slippery slope:

• Agents are going to leave the industry
• Agents are going to lose money
• Buyers are going to pay more for their homes
• Sellers are going to earn less

I am told that there are two times in a person’s life when they’’ except change. Each involves dippers.

For years the buyers commission has been determined by the seller’s agent. When the seller sets the commission because they choose to be a volume seller and not a local real estate professional, they are able to price some agents out of their market. As it is the selling agent could get a listing for 6% and pay the buyer’s nothing. The tend to not do so because other agents may not show their properties.

            If the buyer agent negotiates their price with their clients and the selling agents have nothing to do with these negotiations, why would it have to change the cost of the property.

Some agents will lose money, those agents who take unfair advantage of the faulty system should lose money. This change may make it more difficult for the volume agents to price other agents out of their market place. Do people really believe that the seller didn’t consider the agents commission when pricing their homes. They will have to adjust for 6-5 % commission to the new normal 2.5- 3 % commission they pay.

            There are things in the industry that should be changed because of the unfair advantage it gives some over others. Say another agent violates a standard. They complaint is heard by group of industry profession out of the violator MLS. This would be a conflict of interest for them to reduce their profits by removing a source of income. The board will not hear these cases and the is no agency to regulates these unfair bias rulings by the local MLS’s.

It is true change is coming. Perhaps it is because change is needed.

Relax, there is still a rule which will apply. Let the industry find its balance.

Note: Images on this blog site are from a free source or taken by the author. No image or group of photos is intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity, color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status.) He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662. He’s a member of the CRMLS and The East Valley Association of Realtors located in the Inland Empire region of Southern California.