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‘Reshaping the industry’: WNY realtors brace for big changes in how you buy and sell your

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BUFFALO, N.Y. (WKBW) — Local realtors are bracing for some big changes in how you buy and sell your home.

On August 17, a recent settlement from the National Association of Realtors will go into effect, changing commission agreements across the country.

“It’s reshaping the industry,” said Vienna Laurendi, President of the Buffalo Niagara Association of Realtors.

For decades, people selling their homes have traditionally been responsible for a five to seven percent commission split between their agent and the buyer’s agent. But a Midwest jury ruled in part, that agreement can drive up home prices, and decided that commission should no longer automatically come from the seller.

Laurendi described to me how the ruling will change the real estate industry in three significant ways:

Any compensation offered by the home seller will no longer be published using a multiple listing service program.When a buyer wants to tour a home they now have to sign a contract with a buyers agent before they start touring the property.Communication between agents will increase “by 80 percent.”

The changes will give sellers more flexibility but could make things more costly for buyers.
For example, if the seller decides not to pay the commission to the buyer’s agent then the buyer would need to negotiate compensation with their agent.

So if you are looking to buy a $300,000 home, a traditional three percent commission could cost a buyer an additional $9,000.

“A buyer never really had to think about having that extra $9,000 available to cover their real estate agent. Now they will proactively talk about it with their realtor and come up with a game plan as to how they are going to pay the commission,” said Laurendi. “We are going to sit down. We are going to discuss the value that I offer. You are going to go over the contract and we are going to discuss what I would like to earn at the time of closing.”

Laurendi believes it will take some time for the real estate industry to adapt to the changes but believes realtors are dedicated to making it work.

“We are here for the consumer,” said Laurendi. “We are also here to pay our mortgages, but we truly are here for the consumer and we are going to help everyone get through this as quickly as possible. It’s going to be the new norm.”

If you have questions about the new changes you can call the Buffalo Niagara Association of Realtors at 716-636-9000 or email your questions to president@bnar.org





This article was originally published by a www.wkbw.com . Read the Original article here. .

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Want to buy or sell a home? This is important

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WEST PALM BEACH, Fla. — If you’re getting ready to buy or sell a home, there are some changes that go into effect Saturday, Aug. 17 that will impact you.

Up until now, sellers, on average, have paid 5% to 6% commission. But now, a buyer’s agent must talk about and negotiate their compensation expectations upfront.

“It establishes transparency and puts that negotiability at the forefront of the transaction,” said local realtor Abbey Adair. “What buyer’s agents are really going to have to do is they’re really going to have to show their value.”

This is part of the $418 million settlement announced back in March by the National Association of Realtors. The buyer’s agent will now have to have a written agreement with the home buyer before touring a property together.

Although this type of negotiating is nothing new, the NAR agreed to make these changes in order to resolve multiple class action lawsuits brought on behalf of sellers.

“The goal is to be able to have that buyer’s agent negotiate on your behalf to get it to come from the seller, so it doesn’t have to come out of the buyer’s pocket,” said Adair.

There are already 18 states that require a written compensation agreement, but Florida is not one of them.

“It will be new for people here and something we will have to get used to,” said local real estate agent Stephanie Grant. “There’s a lot of uncertainty, but we are going to get through it. It’s just going to take working through some kinks.”

Although these changes will have an impact, the negotiation part remains the same.

“It’s important to know that everything is negotiable, and it always has been negotiable,” said both Adair and Grant.

For the future of the real estate job industry, Adair added, “I think that it’s going to separate the weak from the strong. And I think that the agents who are able to present their value are going to be the ones that will succeed.”





This article was originally published by a www.wptv.com . Read the Original article here. .

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Is It a Good Time to Buy a House? – NerdWallet

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Editor’s Note: This article has been updated to reflect the outcome of a legal settlement involving commissions paid to real estate agents representing home buyers. Starting in August 2024, home buyers in most markets must sign agreements with their agents before touring homes, and buyers will set their agents’ commissions through negotiation. See how this will affect home sellers and home buyers.

If you’re wondering if now is a good time to buy a house, ask this instead: Is it a good time in my life to buy a house?

Housing market trends give important context, so we’ll look at those numbers here. But ultimately, whether this is a good time to buy a house depends on your financial situation, life goals and readiness to become a homeowner.

Let’s explore both aspects of the homebuying journey: the housing market and your own readiness to buy a home.

Looking to Buy or Sell a Home?

NerdWallet has partnered with HomeLight to help you find the best performing real estate agents

How’s the housing market right now?

These are some factors affecting buyers in today’s market.

Mortgage rates: At their lowest since February 2023

The interest rate on a 30-year fixed-rate mortgage averaged 6.28% annual percentage rate (APR) for the week ending Aug. 15, down one basis point from the previous week and down 90 basis points from a year ago, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of 1%.

Average weekly mortgage rates

Averages are for the week ending Aug. 15, 2024, according to rates provided to NerdWallet by Zillow.

Buyers got some welcome relief this month, when the 30-year fixed-rate mortgage dropped to its lowest average rate since February 2023. In general, mortgage rates have remained stubbornly high throughout the first half of 2024. If inflation gets under control later in 2024, as many experts predict, mortgage rates are likely to continue a modest decline.

Did you know…

Higher rates shrink buying power because they make home loans more expensive. For example: Let’s say you make a 20% down payment on a $350,000 house. With a 6.8% mortgage rate, your monthly payment would be $1,825 (not including home insurance and property taxes). With a 5% mortgage rate, the monthly payment would be $1,503 — $322 lower.

You can’t influence average rates, so focus on the things you can control:

Shop around for the best deal. Especially given today’s higher rates, buyers can save $600 to $1,200 per year by applying for loans from multiple mortgage lenders, according to a February 2023 study by Freddie Mac, the government-sponsored entity that buys conforming loans from mortgage lenders.

Lock in your rate. After getting approved for a home loan, consider locking in the mortgage rate until the loan closes to protect against further rate increases.

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Inflation and the economy: Waiting for the Fed to cut rates

The Federal Reserve, the nation’s central bank, guides the economy with two goals: encouraging job growth and keeping inflation under control. The Fed doesn’t directly set mortgage rates. However, it does set the federal funds rate, which influences interest rates for loans including mortgages.

After a series of 11 increases to the federal funds rate in 2022-2023, the Fed has kept things steady since last September. A rate cut of even a fraction of a percentage point would offer buyers more relief.

With inflation slowly easing, the Fed could consider cutting rates at its next meeting on Sept. 17-18, 2024.

Supply of homes for sale: Still limited (but getting better)

A shortage of homes for sale has made this a tough era for buyers. But inventory is finally improving: In June, the months’ supply of homes for sale reached its highest level in more than four years.

In June, there was a 4.1-month supply of homes on the market nationwide, according to the National Association of Realtors (NAR), meaning it would take a little more than four months at the current pace for all the properties to sell. That’s an improvement over last month (3.7 months) and last year (3.1 months). The market hasn’t seen inventory above a four-month supply since May 2020, when supply was 4.5 months.

Did you know…

In a balanced market, the supply of homes for sale would last six months. Supply less than that is considered a seller’s market. More than a six-month supply is considered a buyer’s market.

“We’re seeing a slow shift from a seller’s market to a buyer’s market,” NAR Chief Economist Lawrence Yun said in a news release. “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”

Home prices: Higher than ever after a 12-month climb

The national median price for existing homes sold in June was $426,900, up 4.1% from June 2023, according to the NAR. That’s the highest median price ever recorded by NAR, beating last month’s record high and following 12 straight months of year-over-year price increases.

Under the crunch of high prices, sales of existing homes — properties that were owned and occupied before going on the market — dropped 5.4% from May to June, according to the NAR. Sales are also down 5.4% compared to June 2023, when the median existing-home sales price was about $410,000.

All four U.S. regions — Midwest, Northeast, South and West — saw year-over-year price increases in June. Here’s a regional look at median prices and year-over-year price changes:

Midwest: $327,100, up 5.5%.

Northeast: $521,500, up 9.7%.

South: $373,000, up 1.7%.

No one can predict exactly what the market will do next. But in a news release, Yun paints an optimistic picture that high prices might be topping out now that inventory is improving.

“Even as the median home price reached a new record high, further large accelerations are unlikely,” Yun said. “Supply and demand dynamics are nearing a balanced market condition. The month’s supply of inventory reached its highest level in more than four years.”

Competition: Steady, but less intense than last year

Some good news: Compared to last summer, competition has cooled off. The June 2024 Realtors Confidence Index, a survey of the NAR’s members, highlights these key market indicators year over year:

Houses for sale are getting fewer offers. A home listed for sale received an average 2.9 offers in June, down from 3.5 offers per home last year.

Fewer homes are selling above list price. In June, 29% of homes sold above listing price, down from 33% a year ago. 

Homes are staying on the market longer. Houses stayed on the market for a median 22 days in June — four days longer than June 2023, when the median was 18 days. Last month, 65% of homes sold in less than a month. A year ago, that figure was 76%.

Overall, though, demand still outpaces supply. This is hardly a mellow market: Good homes sell quickly, and buyers should still expect competition out there. If you’re ready to buy, get a mortgage preapproval so you’re prepared to make a strong offer. Once mortgage rates drop, competition will only go up. There’s no time like the present to start shopping.

Homebuying readiness: Should I buy a house now or wait?

Ask yourself these questions to explore whether you’re ready to buy a home.

Are you prepared to put down roots?

Think about your life goals, relationships and interests. How long can you see yourself living in this location?

Ideally, you’d want to remain in the home long enough for rising property values and your equity to exceed the costs of buying and selling, including real estate commissions and mortgage closing costs. That will typically take several years.

You could also be subject to capital gains taxes if the home appreciates in value and you sell it after less than two years.

How’s your job security?

A mortgage is a big commitment and can become a stressful burden after a job loss, so it’s not a good time to buy a home if you think you’ll get laid off.

Wait until your employment is stable before thinking about buying a house.

Are you financially prepared?

Here are the three main ingredients to evaluate.

Savings

You’ll need money for a down payment and mortgage closing costs as well as for moving and other expenses after you buy the home. The down payment requirements vary by the type of mortgage and the lender. The more you put down, the lower your monthly mortgage payment.

The typical down payment for first-time buyers is 8% and for repeat buyers is 19%, according to an NAR survey of home buyers who purchased a primary residence from July 2022 through June 2023.

Credit

Lenders generally offer the best mortgage rates and terms to borrowers with credit scores of 740 and above, although you can qualify for a mortgage with a score in the 600s. The options are much slimmer, and loan costs can be higher for borrowers with a score in the 500s.

If your credit is marginal, it might make sense to postpone buying a house and use the time to work on building your credit.

The average FICO credit score for closed mortgage loans to purchase homes in the past 30 days was 735, according to mortgage data provider ICE Mortgage Technology.

Debt

Lenders look at your debt-to-income ratio (DTI) to help determine whether you qualify for a mortgage. Your DTI is the percentage of your monthly gross income that goes toward monthly debt payments, including housing costs, as well as car, student loan, credit card and other debt obligations. Lenders like to see a DTI under 36%, although it’s possible to qualify with a higher ratio. The lower your DTI, the better your chances of qualifying for a mortgage and getting offered the lowest available rate.

The average DTI for purchase mortgages in the past 30 days was 40%, according to ICE Mortgage Technology.

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This article was originally published by a www.nerdwallet.com . Read the Original article here. .

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The way you buy and sell real estate is about to change

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As a result of the March 2024 agreement by the National Association of Realtors to settle one of several class action lawsuits brought against them and a variety of large national real estate firms and Multiple Listing Services, things in real estate are about to change in a big way. August 17, 2024 is the deadline for certain practice changes to begin in the real estate industry across the country.

Some of those changes include a prohibition of any offers of compensation (by a selling firm to a buyer’s agent’s firm) from being displayed on any MLS listing as happens now, and more specific disclosures regarding agent representation and real estate commissions. Such as, clear reminders to consumers that commissions charged by brokers for selling your property or acting as a buyer’s agent are not set by law and are fully negotiable.

For several years, Maine Realtors have been required to present to everyone they have a substantive interaction with about buying or selling real estate, a written explanation of the types of agent representation available. This common disclosure details the difference between remaining an unrepresented “customer” and becoming a represented client. Still, there is much confusion about the process. 

In Maine, we have used written Buyers Representations Agreements for many years, but states elsewhere are only beginning to. And, while in Maine it has always been that an interested party could view a listed home with an agent without ever signing anything, after Aug. 17, 2024, that can no longer happen (in all but limited scenarios). All real estate agents will be prohibited from showing you a listed property without a signed written agreement between you and the agent detailing the terms of representation and potential compensation (you can limit that agreement to just one property, and for just that day, if you choose). To be sure, there are many great reasons to have a trusted Realtor by your side guiding you and representing your interests when buying or selling real estate. That will not change, and in fact, it will be more important than ever after Aug 17.  

There is an expectation that these practice changes will enhance transparency going forward, and maybe even lower the cost of selling real estate for consumers. At Newcastle Realty, our old model called for standard listing commission tiers of some percentage of the sold price; it might have been 5%, 6%, 7%, or 8%, depending on whether we were marketing land, a home, a business, or commercial property for the client. Of that, we used to offer a portion to agents representing buyers, as an additional incentive (that used to be 50% of what we were charging our seller client). Now, we offer a modified option where our listing and marketing services cost half what they used to, and the seller decides how much (if any) additional compensation they wish to offer to a buyer’s agent, and we add those together. The result is often lower than what we might have expected to see in the past. 

Yes, this can and will have the effect of transferring some or all the cost for the buyer’s agent services (that used to be paid by the seller), onto the buyer’s side of the settlement statement—and that is a potential disadvantage for first-time home buyers without extra funds beyond their downpayment. It will take time for us to see the full impact of this evolution.

To be sure, there is a lot of confusion among consumers, and frankly, there is a lot of concern among some Realtors. At my firm, we have accepted and embraced these changes. We are ready to guide buyers and sellers through this new, exciting landscape. This is the future of real estate, and it begins Aug. 17. There are some very good sources of additional information available online if you want to learn more, such as www.nar.realtor/the-facts/home-sellers-what-the-nar-settlement-means and www.nar.realtor/the-facts/homebuyers-what-the-nar-settlement-means. 



This article was originally published by a www.boothbayregister.com . Read the Original article here. .

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With Real Estate Commission Rules Changing, Should I Wait to Buy a House?

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“I want to buy a house soon, but I read that real estate commissions are going down. Should I wait until the new rules are in place?”

You’re right to step back and re-strategize your home purchase after the National Association of Realtors’ recent legal settlement. If it’s approved by the court, the real-estate industry is on the precipice of change that could impact the home buying process and what you pay for it. Whether it’s best to act now or to wait, though, will depend on your budget, how much work you want to put into the process and your need for certainty.

Here’s the gist of what’s happening: Lawsuits were filed against NAR, a trade group representing 1.5 million real-estate agents, questioning its cooperative-compensation rule. Under this rule, sellers cover the commissions for both their agent and the buyer’s, with the cut offered to buyer’s agents advertised in an agent-facing database known as a multiple listing service, or MLS. Critics say the practice reduces competition and inflates commissions and home prices.

In March, plaintiffs accepted a settlement proposed by NAR, which would remove offers of compensation from the MLS and require agents to sign contracts with buyers. The rules are expected to ultimately lower costs, however, buyers may need to pay agents out of pocket. If approved by the court, the changes are set to go into effect in August.

With this all in mind, there is no hard-and-fast answer as to whether you should buy now or wait until those changes roll around. There are, however, cases for both paths.

The case for buying now

If you want a full-service agent and assurance that the seller will foot the bill—then buying before July is probably best.

“The NAR settlement is creating lots of uncertainty, and if there’s anything people don’t like when making major life decisions and purchases, it’s that,” says Dana Bull, a real-estate agent and consultant in Massachusetts. “If you buy right now, you’ll have a greater sense of what to expect.”

By buying now, you’ll likely fall under the existing agent commission model where the seller pays. The total is usually 5% to 6% of the home price—with 2.5% to 3% going to each agent. In exchange for that cut, your agent will usually suggest listings, tour properties with you and negotiate on your behalf. Depending on what state you live in, they may also draw up contracts and attend your closing.

“The home buying journey will not be altered—at least for the next few months,” says Alyssa Brody, co-founder of Development Marketing Team, a real-estate brokerage with branches in New York City and Miami.

The case for waiting

If you’re comfortable negotiating and willing to handle some of the home-search process on your own, waiting to buy could pay off. “If you’re more focused on maximizing your investment and minimizing costs, waiting until the new rules come into play could be beneficial,” Brody says.

Starting in mid-August, buyers will sign a separate contract with their agent, opening the door for negotiation. Some agents may charge an hourly rate or offer a la carte services. This would allow buyers to choose which services they want to do themselves (browsing listings and touring homes, perhaps) and which they want to pay for (maybe negotiating and drawing up the contract).

Additional savings could come from lower home prices. With sellers no longer footing the bill for buyer agents, some experts believe they will sell their homes for less.

This all depends on market conditions, though, and agents broadly agree that prices are unlikely to drop much in the short-term. By summer, the Federal Reserve is expected to start cutting interest rates, which means lower mortgage rates and higher demand. “With our limited inventory, competition will be fierce,” says Bret Weinstein, founder of Guide Real Estate in Englewood, Colo.

If you choose to wait, be ready for a bumpy ride. “It will cause a shake-up, and no one knows exactly how the open market will react,” Bull says. “There will be lots of confusion, and as a buyer, you could be stuck in the crosshairs while the entire industry adjusts to the change.”

To sell or not to sell

The considerations are similar if you’re on the fence about selling. If you are comfortable with the existing model, sell now. For the lowest costs, you might want to wait until August.

Take note, though: Not everyone is convinced things will change once the new rules are in place. “I believe sellers will continue to pay buyer agents in big markets like Los Angeles, because it’s in their best interests,” says Michael Nourmand, president of real-estate firm Nourmand & Associates in Beverly Hills, Calif. “It’s best for buyer affordability, they don’t want to limit their buyer pool, and negotiating a commission is another variable that could derail the transaction.”

Talk to a few real-estate agents about the pros and cons of skipping the buyer-agent commission in your area. They can advise you on what it might mean for your sale, given current market conditions.



This article was originally published by a www.wsj.com . Read the Original article here. .

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Should I Buy A House Now Or Wait? Is It A Good Time? | Bankrate

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Key takeaways

The current housing market is causing many prospective buyers to wait for better conditions, but there’s no guarantee that it will improve considerably anytime soon.

If your credit score is strong, your employment is stable and you have enough savings to cover a down payment and closing costs, buying now might still be smart.

If your personal finances are not ideal at the moment, or if home values in your area are on the decline, it might be better to wait.

Buy now, or wait? That’s the question prospective homeowners have been struggling to answer in today’s housing market. Home prices have been skyrocketing recently, and the Federal Reserve’s work to tame inflation sent mortgage rates soaring, too.

The combination has led many would-be buyers to pick the “wait” side of the equation. The median sale price of an existing home in the U.S. hit its second all-time-high of the year in June 2024 — an astonishing $426,900 — according to the National Association of Realtors (NAR). And, according to the Fannie Mae Home Purchase Sentiment Index released in July 2024, 81 percent of consumers believe it’s a bad time to buy a house.

However, after being at a constant disadvantage for the past few years, things have actually started to look a bit better for buyers in some respects. For example, days-on-market figures are up, giving buyers more time to make an informed decision. NAR data shows that homes typically spent 22 days on the market before selling in June, up from 18 days a year ago. And available housing inventory, while still on the low side, is rising — up a healthy 23.4 percent year-over-year, per NAR.

June’s National Housing Report from RE/MAX, one of the biggest real estate brokerages in the country, also reported a sharp uptick in new listings, up 38.1 percent from June 2023. “It’s good to see inventory levels rising, as more listings represent more options for buyers,” said RE/MAX president Amy Lessinger in the report. However, she continued, “it’s evident that buyers are sensitive to interest rates, highlighting the need for lower rates to stimulate significant growth in market activity.”

So, is it a good time to buy a home? Or is it better to wait on the sidelines, in the hopes that either prices or rates see a significant drop soon? And are there still concerns about a possible recession? Here are some key considerations to help determine the way forward.

Is now a good time to buy a house?

Mortgage rates have backed off from the 8 percent highs hit in October, but they’re still close to 7 percent. And home prices are sky-high as well: June data showed the highest median price NAR has ever recorded, reflecting 12 consecutive months of year-over-year increases. Together, these factors might dissuade you from buying right now, and that’s understandable.

No matter which way the real estate market is leaning, though, buying now means you can start building equity immediately. It also means avoiding the potential for additional mortgage rate increases later: Rising rates can spell serious trouble for your monthly budget, and they also result in paying more in interest over the life of the loan.

“If a buyer finds a property they would like to call home, they should not delay,” says Stacey Froelich, a broker with Compass in New York City. “You cannot time the market, and a home should be a long-term investment.”

“Remember, you ‘marry the house and date the rate,’” Melissa Cohn, regional vice president of William Raveis Mortgage in Connecticut, recently told her newsletter subscribers.  To put it another way, if you find the right place, buy now — you can always refinance later.

In general, if you can answer yes to these three questions, now is a good time to buy.

Do you have excellent credit? Anytime you’re borrowing money, start by checking your credit score. The best deals on mortgages will be available to those with the best scores — in fact, the median credit score for mortgage borrowers in the first quarter of 2024 was a very high 770, according to the Federal Reserve Bank of New York. If you have demonstrated that you are a low-risk borrower with a history of on-time payments, you’ll be in line for the lowest mortgage rates a lender offers.

Have you saved enough for a down payment? In addition to paying your bills on time, you should be sitting on a sizable chunk of change for a down payment. The more you can pay upfront, the less you’ll have to borrow (and so the less interest you’ll have to pay). Make sure you’ll have plenty left over, too: Lenders like to see additional cash reserves that can provide a cushion if something unexpected happens.

Are you planning to stay in the home for a while? Beyond the purchase price, buying a home comes with closing costs that can run thousands more. So, to justify those one-time transaction costs, it’s wise to be reasonably certain that you won’t move again anytime soon — or that you’ll be financially stable enough to hold on to the property and rent it out. Selling a home very soon after buying can have serious tax implications.

Should I buy a house now or wait?

Ultimately, the decision of when to buy a home is up to you. Life goes on, whether the timing is perfect or not. If you’re anxious to become a homeowner, you’ve met the criteria above and you’re financially stable, go ahead and start house-hunting.

If you’re holding out for lower mortgage rates, a bit of patience might be in order. They have been volatile lately, topping 8 percent in October 2023 before falling back below 7 percent, then rising back above it, and lately just a hair under 7 percent again. That’s more than a full percentage point swing in just a few months.

While 1 percent might not sound like much, it can make a big difference in how much house you can afford over the long run. For example, Bankrate’s mortgage calculator shows that if you buy a $350,000 home with a 20 percent down payment, the monthly payment for principal and interest on a 30-year loan with a 7 percent interest rate is $1,862. The same loan at 8 percent brings those monthly payments up to $2,054 — $192 higher every month. That’s more than $2,300 each year, or $69,000 over the life of the loan.

Of course, it’s impossible to predict where rates will land eventually. But here are three instances in which it might make more sense to wait out the market for at least a while:

If home values in your area are dropping: The country’s overall median home price may have hit a record high in June, but some individual areas have still seen price declines. Take Austin, Texas, for example: Redfin data shows that the median price in Austin in June 2022 was $616,444. A year later, that figure was down to $600,000 even, and by June 2024, it had fallen to $564,000. Such declines may not be done yet, so it could pay to be patient for a bit longer.

If inventory in your area is increasing: When there are more properties on the market to choose from, buyers enjoy more bargaining power. Since many buyers have been sitting on the sidelines due to the interest rate environment, many areas have seen a jump in inventory. Even so, according to NAR, the country overall had 4.1 months worth of housing supply in June — an improvement over recent months, but still too low to meet demand.

If your personal finances could use some love: The biggest reason to wait is if your current financial situation is not ideal. For example, if you are expecting a sizable commission check or bonus, an inheritance or some other windfall that would make a big difference in your down payment, waiting until it arrives makes sense. And if your credit score is low, waiting is also smart. Take some time to improve your credit and pay down your debt so you can qualify for better loan terms.

Analyze your local market carefully

Deciding whether to buy a house now or wait depends a lot on where you want to call home. Regardless of national headlines, real estate is a local game and can vary greatly from one market to another, even within the same state.

Consider this June Redfin data from North Carolina’s Research Triangle cities of Raleigh and Chapel Hill, only about 30 miles away from each other: Raleigh homes cost a median of $450,000 and spend about 16 days on the market before selling. But in nearby Chapel Hill, the median home costs a much higher $667,500 and sells in less than half the time (just 6 days). That’s a notable difference.

In today’s homebuying market, it’s more important than ever to find a real estate agent who really knows your local area — down to your specific neighborhood — and can help you successfully navigate its unique quirks.

What if there’s a recession?

The odds of a recession within the next 12 months now stand at 32 percent, according to Bankrate’s most recent survey. And as you might imagine, recessions are a risky time to buy a home. If you lose your job, for example, a lender will be much less likely to approve your loan application.

Even if a recession doesn’t affect you directly, if your area is hard-hit, that could have a serious effect on the local real estate market. Fewer people with the means to buy means a lower chance of homes selling, which could keep homeowners from listing and decrease your options as a buyer.

There are some potential upsides to buying a home during a recession, though, if you’re financially able to do so. Notably, there will be less competition, which could help you find a great property that you otherwise couldn’t.

Next steps

Trying to buy a house right now might feel overwhelming, but waiting too long can present challenges as well. Review your finances in detail, and think about how much you’re able to pay upfront as a down payment. Be sure to take the pulse of the town in which you’re hoping to live. Then, talk with an experienced local real estate agent to figure out whether you should buy now or wait until the market is a bit more friendly to your bank account.

FAQs

Is now a good time to buy a house?

We’re in a volatile time for real estate. Prices are at record highs, mortgage rates reached 20-year highs last year, and some economic experts still believe we are heading for a recession. A high-interest-rate climate gives you less buying power, so buyers who opt to wait for lower rates may find themselves able to afford a higher-priced house, due to the lower mortgage payments. But there’s no guarantee that rates will actually go down. Ultimately, whether it’s a good time to buy depends on your personal circumstances. If you need to move now, then go for it: Shop around for the best deal possible, and remember, you can always refinance down the line if rates do decrease.

Can I buy and sell a house at the same time?

Yes — lots of people buy a new house while selling their old one at the same time. However, it does create some additional challenges, especially if you’re showing your home while still living in it. It’s important to work with an expert real estate agent who can help you find the right buyer and the right listings to look at. You’ll also want to stay close with your loan officer, to make sure the complexities of putting the proceeds from your sale toward your new down payment are as smooth as possible.

Is the housing market going to crash?

Housing experts do not think so. While there is certainly some economic uncertainty swirling right now, most experts believe that the housing market will not crash. Home prices may decline in some areas, but it won’t be catastrophic — think of it as more of a soft landing.



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The Realtors settlement is already changing the way some Americans buy and sell homes | CNN

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The seismic settlement announced by the National Association of Realtors earlier this month has not yet been approved, but it is already sending shockwaves through the real estate industry.

The mere prospect of a future settlement has already caused some Americans to change their behavior when buying and selling their homes. Some prospective homebuyers said they plan to restart their housing search after the new rules are in place in hopes of finding lower home prices, while some homesellers aren’t waiting for the new rules to take effect in July to lower — or even eliminate — the commission they offer to buyers’ agents.

Housing experts say the $418 million settlement will effectively demolish the current real estate business model, in which home sellers pay both their agent and their buyers’ agent, which critics say inflated housing prices.

If approved by a judge, the settlement comes with new rules for Realtors.

“This is unchartered territory,” said Debra Dobbs, a Realtor in Chicago, of the potential new rules.

The new rules could help lower home prices, experts say.

That’s what Jeremy Cannon, a 34-year-old teacher in Corona, California, hopes.

Last year, Cannon and his wife tried to buy their first home, putting in offers for multiple properties.

“All of our offers got denied because other people were bidding higher than us,” Cannon said. “We were already trying to bid above asking price for pretty much every place.”

At the time, Cannon decided to hit pause on his dream of owning a home. But, to Cannon, the new rules established by the NAR settlement could potentially clear what felt like an intractable hurdle for him: the high cost of housing.

Sales commissions, traditionally shared between a buyers’ agent and the agent who lists a home on the market, are usually between 5% and 6% of a home’s selling price. The median price of a home in the US is $417,000, according to census data, meaning the average seller could be paying more than $25,000 in brokerage fees.

Groups of sellers brought lawsuits against the NAR for this practice, alleging it was a violation of antitrust laws.

Under the proposed settlement terms, sellers’ agents will no longer be required to offer to share their commission with buyers’ agents, uncoupling commissions from home prices and opening the door to a more competitive housing market.

Many experts believe commission costs have been baked into home listings prices. Lower commissions could mean lower home prices.

“I think it could be helpful,” Cannon said. “I hope it might be cheaper and bring the prices of houses down more.”

He now plans to restart his home search this summer.

A price drop would be a much-needed reprieve for Cannon and others looking to buy a home: the median sales price of a new house has surged 21% since January 2020, according to census data.

The new rules also require agents to enter into written agreements with their buyers. Many agents plan to stipulate that if a home seller does not agree to pay their commission, their buyer is on the hook for that money.

But Cannon said if buying a home becomes more affordable, he would be willing to pay out-of-pocket for an agent, as long as it is “someone who has my interests in mind.”

Matt Hanley, a 49-year-old who works in insurance in Minnesota, has lived in his home since 2007. He was reacquainted with how real estate transactions work when he recently purchased a new home.

“We were confused,” he said. “I’m like ‘wow, I’m surprised the seller has to pay my agent’s commission.’ It seemed like a conflict of interest.”

Hanley now plans to list his home in April. After the NAR settlement was announced, though, he changed course: Instead of offering to pay a commission that would be split between his agent and his future buyers’ agent, he asked his agent to write “0%—negotiable” as the buyers’ agent commission on his home’s listing page.

“Why wait for the settlement? This is common knowledge now,” Hanley said. “I’m going to try to be at the start of this bell curve.”

Hanley’s experiment may be premature, though. The new rules will prohibit agents’ compensation from being included on centralized listing portals, which some critics say led agents to push more expensive properties on customers. But, for the time being, buyers’ agents will still be able to see that Hanley isn’t offering them compensation, potentially disincentivizing them from showing his home to clients.

But Hanley pointed to favorable conditions in his market as a reason that he believes buyers may still consider purchasing his home, even if they have to pay their realtor out-of-pocket.

“We’ve got everything going for us. We have no inventory in our area and we’re selling at peak time, so we said, ‘Let’s try it,’” he said. “If someone really wants it, they’re going to come up with their buyers’ fee.”

“They should be reporting to their agents, we should be reporting to ours,” he added.

Mariya Letdin, an associate professor of business at Florida State University, said this settlement has helped raise awareness that people have a right to negotiate. Even so, Letdin said it’s possible that the status quo is maintained.

“It’s up to the consumers on both the seller side and the buyer side to bring this to wide use,” she said. “I think it will take more than just a ruling. I think it will take consumers advocating for themselves and not being passive.”

“They now have a legally protected voice, and they should use it if we want to see change happen,” Letdin said.



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The way Americans buy and sell homes is about to get turned on its head | CNN Business

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The way Americans buy and sell homes is about to get turned on its head.

An earth-shattering, multibillion-dollar antitrust ruling against the National Association of Realtors late last year led to a settlement on Friday that will loosen the powerful trade group’s stranglehold on America’s housing market. The $418 million settlement with a group of homebuyers is expected to take effect sometime around July, pending a judge’s approval. It would transform a number of rules and guidelines set by the NAR that critics say have kept housing prices artificially inflated.

The TL;DR: 6% commissions, split between the buyer’s and seller’s brokers, will no longer be the norm. Agent commissions are expected to fall — in some cases, dramatically — because they will be competitive and negotiable, and sellers will be able to shop around for better rates. And other broker tactics that critics say are anticompetitive, such as a rule that made sellers’ agents set compensation for buyers’ agents, will be prohibited.

It’s not all good news: Buyers may have to pay their broker directly in the future, which could be tough for buyers accustomed to financing that commission as part of their mortgage. And some buyers could choose to forgo using a broker altogether. Also, a bunch of brokers are probably about to quit.

But the biggest takeaway for homebuyers is undoubtedly welcome: The overall cost to buy a home should fall by thousands of dollars on average.

For decades, Americans have paid a standard commission of around 6% when selling a home, split between the seller’s broker and the buyer’s broker. The National Association of Realtors and its 1.5 million agents say those fees are negotiable. But certain NAR rules have kept commissions significantly higher than in other countries, where they can average around 1% or 2%.

After the settlement, those commissions will be fully competitive, meaning brokers can advertise their rates to prospective sellers, and people can shop around for bargains.

Real estate commissions are expected to fall between 25% and 50% because of the new rules, according to TD Cowen Insights.

Without the guidelines that buyers’ and sellers’ brokers split commissions evenly, homebuyers may have to change they way they pay their own agents.

Typically, the 6% commission (typically 3% for the seller’s broker and 3% for their own agent) was passed on to the buyer in the overall cost of the home, which buyers can pay off over decades in their mortgages.

But after the settlement is finalized, buyers may end up paying their agents in new ways; including, perhaps, a flat fee. A separate new rule will require buyers’ brokers to enter into written agreements with their buyers.

Although that will add transparency to the homebuying process, it could become burdensome — particularly for first-time buyers, many of whom already have difficulty coming up with all the money they need for a down payment, closing costs, a lawyer and all the other fees associated with buying a home.

One rule that particularly irritated NAR critics is going away: The requirement that sellers’ brokers advertise the commission they will pay brokers’ agents. The NAR now prohibits brokers from advertising that compensation.

That rule had led to two bad outcomes for buyers, affordable housing advocates claim: The first is that it kept commissions artificially high. Second, it led buyers’ brokers to push more expensive homes on buyers, so their payout would be higher.

The ultimate question: Will buying a home get cheaper? Industry experts almost universally expect the answer to be yes. As brokers grow competitive on rates, commissions could fall significantly.

For the median-priced American home for sale — $387,000 — sellers are paying more than $23,000 in brokerage fees. Those costs are passed on to the buyer, boosting the price of homes in America. That fee could fall by around $6,000 to $12,000, according to analysis from TD Cowen Insights.

In aggregate, that will save people a ton of money: Americans pay around $100 billion in commission fees each year, and homebuyers could stand to save between a quarter to half of that once the settlement is finalized, according to Stephen Brobeck, a senior fellow at the Consumer Federation of America, an umbrella group of nonprofit consumer organizations.

The new reality could be tough on brokers, particularly people who don’t sell a lot of homes.

US home purchases dropped to nearly a 30-year low in 2023 as supply has dried up, mortgage rates have surged and home prices continue to rise in most areas of the country. Although falling commissions could persuade some buyers and sellers to get back into the market, Norm Miller, professor emeritus of real estate at the University of San Diego, said the settlement could lead to a mass exodus of brokers from the industry.

Potentially half of the 2 million or so agents in America could quit, Miller predicts, as the new rules become unworkable for many brokers.

In a sign of how nervous this ruling has already made the industry, stocks of real estate companies like Zillow (Z), Compass (COMP) and Redfin (RDFN) were down 13%, 14% and 5%, respectively, Friday, and Zillow and Redfin fell further Monday.

CNN’s Matt Egan contributed to this report.



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