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‘Heli realtor’ sets a high bar in real estate market with unique sales stunts

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Michigan real estate agent flies helicopter to sell houses

Dylan Tent calls himself the heli-realtor – a helicopter pilot who also sells houses. Tent uses his passion to literally and figuratively elevate his sales game.

NORTHVILLE, Mich. (FOX 2) – In Michigan alone there are an estimated 66,000 licensed real estate agents, making it an extremely competitive industry.

But there are ways to set yourself apart from the crowd – one agent from Metro Detroit who has really taken his profession to new heights.

Dylan Tent calls himself the heli-realtor – a helicopter pilot who also sells houses. Tent uses his passion to literally and figuratively elevate his sales game.

While his situation is unique, his story provides lessons for anyone looking to set themselves apart.

His videos are outrageous combining daring stunts with unique stories – all to get eyeballs on the properties he represents.

“I did jump a motorcycle pretty far over someone’s house and that’s when people saw, (and said) ‘Wow this video got 30,000 views. I want to hire that guy.'”

And so far, so good.

“An average real estate video might get 500 to 1,000 views, and we have stuff that goes into the hundreds of thousands and millions,” Tent said.

But his path to get there, wasn’t exactly a straight line.

“I quit college after watching a snowboarding movie called ‘The Art of Flight.’ I wanted to be a heli-ski pilot.”

That career choice was short-lived after he says it was more dangerous and less profitable than he thought.

“I started taking pictures of people’s houses from the air and selling them door to door,” he said. “One of the customers said if I got my real estate licenseI could sell his house.

“It was a beautiful lake house. I started adding up in my head, it was a little more profitable to sell real estate and then I could actually purchase and own a helicopter myself.”

Dylan turned 2,000 pictures from above into three real estate sales – and was off from there.

Having a helicopter offers certain advantages including travel for one, which broadens your sales area.

“Lapeer, Metamora, Detroit, Howell,” he said. “I have gone to all of those locations in two hours rather than six or seven hours of driving.”

And it potentially separates you from the competition.

“It really is a resource for video content,” he said. “If I post a video of a house we might get so many thousands of views. If I take off, or land in their front yard or back yard, or lake lot, we’ll get it to go viral almost every time.”

He wouldn’t do it if it didn’t work. but that’s not to say this sales tactic is for everyone.

FOX 2: “You have taken a lot of risks that have seemingly paid off?”

“For example, I had a property that had a gun range and we did some exploding targets that were blowing up stuffed animals on the gun range,” he said. “We were in an area where everyone has guns in that area. Other real estate agents were like, ‘I don’t think we should do that, that is unprofessional.’ I said I’m going to sell that property to a gun owner, I’m probably not going to sell it to someone who doesn’t have that.

“I don’t care if that makes someone angry.”

Tent says the real reason behind his success incorporates passion into his craft, something anyone can do.

“If I was a scratch golfer, I would probably focus on selling houses on golf courses,” he said. “If I was a yoga instructor, I would offer free yoga classes in the park. I have built more relationships through my hobbies than I have, anything else.”

In addition to selling houses, Dylan also offers helicopter tours of the Detroit areas. You can find him and contact him with social media by searching for Dylan Tent, Heli Realitor.

You can find Dylan Tent on social media below:



This article was originally published by a www.fox2detroit.com . Read the Original article here. .

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Real Estate Agent Fees And Realtor Commissions | Bankrate

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In this do-it-yourself digital age, home sellers and buyers alike might wonder if they need Realtors — or, more precisely, to pay Realtor fees. Just how crucial are these agents to a successful real estate transaction?

Well, a good agent is really pretty useful. Especially if you’re buying a home: Agents have access to information you don’t, and it takes time and expertise to research properties, find the best ones for you and put together a strong offer. But sellers see many benefits, too, especially when figuring out the best asking price. Your home will still need to be staged, listed on the market and shown, too. Here, we’ll take an in-depth look at how real estate agent fees work and what you get for the money.

One important note first: Changes to the way commissions work went into effect on August 17, as a result of a long legal battle settled by the National Association of Realtors and several major brokerages. The commission system, and how it has changed, is outlined below.

The NAR lawsuit

In October 2023, a federal jury found that the National Association of Realtors (NAR), along with several large brokerages, conspired to inflate Realtors’ commissions. All of the brokerages settled out of court, and as of March 15, 2024, NAR did the same.

As a result, the longstanding traditional real estate commission model — that is, sellers footing the bill for both their own agent and their buyer’s, typically totaling 5 to 6 percent of the home’s sale price — is upended. Now, sellers’ agents may no longer make offers of compensation to buyers’ agents on the MLS (multiple listing service, a vast database of for-sale homes accessible only to industry pros). Home sellers might no longer need to pay the agent who represents their buyer, which could open the door to much more competition among buyer-side agents, and even more potential for fee negotiation.

How much are Realtor commissions?

Let’s recap the traditional commission model, before the rule changes took effect.

Only a very small portion of Realtors work on salary — working on commission is much more common. For years, the typical going rate was 6 percent, split down the middle between the buyer’s agent and seller’s agent. But it began to fluctuate with the advent of discount brokers and the rise of online, publicly accessible listings.

Of course, real estate commissions can be negotiated, and nowadays they typically run somewhere closer to 5 percent of a home’s sale price. That means the means the more expensive the home, the more money the agents make. The exact terms of an agent’s commission vary from sale to sale, and can depend on the region and which firm they work for.

Let’s look at an example. A 5 percent commission on a $250,000 home sale would come to $12,500. But on a $1M sale, a commission at the same rate would come to $50,000.

Assuming a 5 percent total commission under that model, here’s roughly what sellers could expect to pay based on the price their home sells for:

Home’s sale price
Seller’s agent commission (2.5%)
Buyer’s agent commission (2.5%)
Total commission (5%)

$250,000
$6,250
$6,250
$12,500

$500,000
$12,500
$12,500
$25,000

$750,000
$18,750
$18,750
$37,500

$1,000,000
$25,000
$25,000
$50,000

Seller vs. buyer commission

Sellers sign a listing agreement with a Realtor in which they agree to pay a commission fee after the transaction closes. If it’s an “exclusive right to sell” arrangement, they pay the fee even if they found the buyer on their own.

Commissions for both Realtors in the transaction have traditionally been paid by the home seller: Both the buying and selling agents are paid with proceeds from the sale of the home. These two agents typically split the total commission — so for a 6 percent commission, the selling agent would receive 3 percent and the buying agent would receive the other 3 percent. Now that the new rules have kicked in, that is changing.

It also changes in the case of dual agency, when one agent represents both the buyer and seller in a transaction. Laws about this vary by state; in some states, dual agency is not permitted. In this type of scenario, pay particular attention to the home appraisal to ensure you’re getting a fair price. While agents have a fiduciary duty to their clients, with dual agency, the lines can get blurred.

As Samantha Fish, an agent with Wesely & Associates in Grass Valley, California, points out, agents are still required to act in their clients’ best interest. “It’s in our ethics; it’s in our contract,” she says. “If someone comes into my open house and they like it, but they don’t have an agent, at that point I can say, ‘let me get you an agent from my office’ so they feel like they’re being represented 100 percent as well.” Still, buyers working directly with a listing agent may have more room for negotiation because the seller may agree to a lower selling price if the agent agrees to lower their fee.

The brokerage’s cut

Real estate brokerages may get a cut of the commission as well. The brokerage RE/MAX, for example, has a split commission setup by which its agents receive 95 percent of the full commission from the sale, and 5 percent goes back to the company.

“The broker has to set the policy and oversee, monitor and supervise everything the agent does,” says Patrick Duffy, broker/owner of Duffy Realty in Miami. “And if the agent does something fraudulent or unprofessional, the broker gets sued.”

What do real estate agent fees cover?

You might wonder, what services does this commission fee buy me? One of the biggest ways buyers benefit from working with a Realtor is gaining access to the MLS, the database Realtors use to see and list properties for sale.

The fee compensates the agent for time spent answering questions and helping you through the process. An agent is also able to utilize their skills and contacts to negotiate, find properties and take you on tours of multiple homes.

A Realtor’s fee covers a wide range of costs for sellers as well, including marketing materials, staging and showing the property, coordinating open houses and contacting agents of potential buyers. When an offer comes in, the listing agent negotiates on behalf of the seller, often presenting one or more counteroffers. A lot goes into listing a home, such as:

Creating a comparative market analysis to establish a competitive price
Arranging for photo shoots, sometimes including aerial shots via drone
Writing descriptive listing copy to attract interest from other Realtors and potential buyers
Providing staging guidance
Showing the property multiple times to prospective buyers
Hosting open houses, often on weekends
Providing yard signage
Making sure listings are populated on all major property search websites
Helping the seller review and negotiate buyer offers

As with most of the other expenses related to real estate transactions, a Realtor’s fee isn’t paid until the sale closes.

Average real estate commissions by state

Overall, the national average Realtor commission in 2023 was 5.49 percent, according to data from Clever. In all but a few states, the average commission ranged between 5 and 6 percent.

Keep in mind, though, ​​that Realtors may accept a lower commission for high-priced homes to earn a higher amount overall: Their piece of the pie may be smaller, but it’s a richer slice. “For example, if I’m listing a $4 million home at 6 percent, that’s a lot of money,” Duffy says. “In a situation like that there is greater flexibility to negotiate the commission — if you get $100,000 or $80,000 instead of $120,000, it’s still a good payday.”

Here are the average real estate commissions by state, according to Clever:

State
Average commission rate

SOURCE: Clever

Alabama
5.45%

Alaska
6.00%

Arizona
5.44%

Arkansas
5.99%

California
5.11%

Colorado
5.62%

Connecticut
5.47%

Delaware
4.88%

District of Columbia
5.49%

Florida
5.37%

Georgia
5.81%

Hawaii
4.78%

Idaho
5.50%

Illinois
5.35%

Indiana
5.56%

Iowa
5.67%

Kansas
5.58%

Kentucky
6.00%

Louisiana
5.56%

Maine
5.17%

Maryland
5.34%

Massachusetts
5.45%

Michigan
5.92%

Minnesota
5.82%

Mississippi
6.07%

Missouri
5.58%

Montana
5.50%

Nebraska
5.25%

Nevada
5.80%

New Hampshire
5.25%

New Jersey
5.21%

New Mexico
5.90%

New York
5.39%

North Carolina
5.52%

North Dakota
5.00%

Ohio
5.99%

Oklahoma
5.95%

Oregon
5.03%

Pennsylvania
5.48%

Rhode Island
5.50%

South Carolina
5.62%

South Dakota
5.49%

Tennessee
5.58%

Texas
5.73%

Utah
4.90%

Vermont
5.49%

Virginia
5.45%

Washington
5.25%

West Virginia
6.67%

Wisconsin
5.15%

Wyoming
6.00%

How to avoid paying Realtor fees

Selling your home without the help of a real estate agent — called “for sale by owner” or FSBO for short — is certainly possible. Between July 2022 and June 2023, 7 percent of home sales were sold by owners without the help of an agent, according to NAR data. But selling without an agent’s help is a lot of work to do on your own, much of it complicated.

If you don’t want to go it alone, ask agents from the outset what their commission is and compare the terms of each person you talk to. If you think the fee is too high, talk to them about lowering it. If the transaction is being handled on both sides by agents from the same brokerage, you might have more leverage to negotiate as well.

Alternatively, you could consider working with a low-commission real estate agent, who will likely charge much less than a traditional agent would (usually 1 to 1.5 percent of your home’s sale price). However, since they’re receiving a smaller commission on each property, these agents are typically focused on volume. As a result, you might not receive as much personal attention as you would with a traditional Realtor.

There are also brokerages and agents who work on a flat-fee basis. In other words, no matter how much your home sells for, they’ll receive a set amount rather than a percentage of the sale price.

If you want to avoid Realtor fees and sell your house quickly, another option could be selling to an iBuyer or a company that buys houses for cash. Both options will allow you to finalize your home sale fast, without paying any agent commissions. But the offers from these buyers will be less than you’d likely fetch in a traditional sale, and some charge service fees that are equivalent to what you’d pay in commission anyway.

Finally, remember that even if you’re not paying Realtor fees, there are still plenty of other closing costs associated with selling your home. For instance, you may be on the hook for things like title transfer fees, attorney fees, property taxes and more. And even if you sell without an agent of your own, you may still be on the hook to pay your buyer’s agent.

FAQs

What percent commission do most real estate agents charge?

Typically, each agent involved in the transaction (one for the buyer, one for the seller) earns somewhere between 2.5 and 3 percent of the home’s sale price as their commission fee. However, the amount is negotiable — and new rules as of August 17, 2024, mean the seller may no longer be obligated to pay their buyer’s agent’s fee.

Do sellers or buyers pay fees to the real estate agent?

Traditionally, sellers have been the ones who covered real estate agent commissions — both for their own agent and for the buyer’s. That changed on August 17, 2024, as a result of the NAR lawsuit settlement. Now, buyers may (or may not) be responsible for paying their own agent directly. The details of each transaction will be different.

How much commission do you pay on a $500,000 home?

It depends on the specific terms of each agent’s commission. Commissions usually total somewhere between 5 and 6 percent of the home’s purchase price — on a $500,000 transaction, 5 percent comes out to $25,000 and 6 percent comes to $30,000.



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

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What Is Dual Agency, And Is It Risky? | Bankrate

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Key takeaways

In a dual agency situation, the same real estate agent represents both the buyer and the seller of a home.

This arrangement can be risky for buyers, since agents are paid based on how much the home sells for.

However, dual agency can also be beneficial in helping to simplify a complex transaction and ensuring a smooth and efficient close.

In most real estate transactions, the buyer and seller are each represented by their own separate agents: one buyer’s agent and one listing agent. Each agent protects their individual client’s interests. It’s also possible, however, for both the buyer and seller to work with the same real estate agent in an arrangement called dual agency.

Having only one agent involved in a transaction can simplify the process. But it also presents the risk that the agent may favor one party over the other — specifically the seller, as their commission fee hinges on the final sale price of the house. In fact, in several states, acting as a dual agent is actually illegal. Still, if it’s permitted in your state, it can be worth considering. Here’s what you should know about dual agency, whether you’re a buyer or seller.

What is dual agency, and how does it work?

Typically, when a buyer searches for and purchases a home, they do so with the help of a buyer’s agent — an agent who works specifically for them, helping them find and buy the right property. The seller of a home, meanwhile, works with their own dedicated agent, whose job is specifically to market and sell their home (usually referred to as the listing agent, as they manage the listing). Each agent in the transaction works on behalf of their respective party under a principle known as fiduciary duty, which means each must act in their own client’s best interests. But in a dual agency situation, the same real estate agent represents both the buyer and the seller of the home.

Dual agency often occurs when the buyer and seller of a home use the same brokerage. It can also happen when a buyer approaches the listing agent directly, such as through a for-sale sign or online listing, without being represented by their own buyer’s agent.

Here’s an example: Say you’re a buyer who’s just starting to look at homes, and you are not yet working with an agent. You attend an open house, love it, and chat with the agent hosting it, who is representing the seller. You hit it off with that agent and decide to work directly with them to submit an offer and purchase the home. If that agent agrees, they are now a dual agent, representing both parties in the transaction.

Whether you’re the buyer or the home’s seller, it’s important to understand how you’re being represented. Both parties must formally agree to a dual agency arrangement, notes Than Merrill, a real estate investor and founder of FortuneBuilders. “For an agent to represent both sides in a real estate transaction, they must receive informed consent from the buyer and the seller,” he says. “If either the buyer or seller isn’t comfortable with the idea, they reserve the right to opt out of the deal.”

Risks of dual agency

By its nature, dual agency can present very real conflicts of interest.

A real estate agent’s commission is based on a percentage of how much the home sells for — in other words, the higher the sale price, the more money they earn. So they “are incentivized to bid up the sale price,” Merrill says. “That’s not to say that all dual agents don’t have their customers’ best interests in mind, but rather that the incentives inherently work in favor of sellers.”

It also raises potential ethical questions. “Dual agency in and of itself is not unethical, but there are actions and tactics that could be sneaky,” says Farid Yaghoubtil, an attorney with Downtown LA Law Group in Los Angeles. He notes that “both the buyer and seller may be under the impression that the agent is biased toward or favoring the other party, which can result in suspicion, mistrust and anger.”

Overall though, buyers and sellers can usually count on getting fair, if not full, representation in a dual agency transaction, says Deb Tomaro of Bloomington, Indiana’s Deb Tomaro Real Estate. “For example, if I am the agent in a dual agency arrangement, I cannot make suggestions to a buyer about how much to offer, because that’s not fairly representing the seller,” she says. “If a buyer tells me he wants to see a list of all homes with 2,000 square feet that sold in the past year in the same neighborhood, I can run that report. But I can’t help him interpret it or point out differences. I can only provide the facts.”

Is dual agency illegal?

For these and other reasons, some U.S. states actually prohibit the practice of dual agency. “The fact that it is illegal in several states should be enough to give some parties pause and elicit further consideration,” says Yaghoubtil. Real estate dual agency is illegal in these eight states:

Alaska
Colorado
Florida
Kansas
Maryland
Texas
Vermont
Wyoming

Advantages of dual agency

While dual agency can be inherently problematic, it can also offer advantages — namely, a smoother transaction.

“Since both the seller and buyer are working with the same agent, documents can be prepared and signed more quickly,” says Raj Dosanjh, founder of Rentround, a rental agent-matching platform. “There will be one person who knows everything about the property. This can eliminate excessive back-and-forth questions.”

Another plus? The seller has more leverage to request a reduced commission fee, since there’s only one agent. “You can use the single point of payment to your advantage,” Merrill says. “You may be able to negotiate lower commission fees when the dual agent doesn’t have to split profits with anyone else.” (Read more on this below.)

Who pays commission in dual agency?

In a traditional two-agent transaction, each agent earns a portion of the overall commission. In contrast, a dual agent will receive the entire commission on the transaction, since there’s no second agent to split it with. Thus, the amount can often be open to negotiation. For example, a dual agent may agree to a 5 percent commission instead of 5.5 or 6 percent, or maybe even less, since they do not have to split the fee with anyone else.

As for who pays that commission, buyer or seller, it used to be that the seller paid the commission for both agents out of their sale proceeds. But that is changing thanks to new commission rules going into effect after a federal lawsuit, which are due to kick in this August. Be sure to hammer out the details of who is paying what percentage of a dual agent’s commission beforehand, and have it clearly spelled out in the purchase and sale agreement.

Bottom line

Dual agency is legal in most states and can make for a more convenient transaction, provided you understand the risks. But it isn’t often recommended. “I believe buyers should have their own representation and enlist their own agent before they start looking for homes,” Tomaro says. “Having representation with a Realtor you trust and develop a relationship with will always end better than just calling a random name on a sign and having them represent you.”



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

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Realtor Fees And Real Estate Commissions in California | Bankrate

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Traditionally, when a homeowner hired a real estate agent to handle the sale of their property, they agreed to pay that agent, as well as their eventual buyer’s agent, a commission. This fee typically amounted to between 5 and 6 percent of the home’s selling price, split more or less evenly between each agent.

Due to a recent lawsuit settlement, sellers may no longer be on the hook for buyer’s agent fees. But if you use a real estate agent, he or she will have to be paid somehow. How does that look for California home sellers? Let’s take a look at Realtor fees in the Golden State.

How much are real estate commissions in California?

In California, the current total real estate commission averages 5.11 percent, according to the latest data from Clever Real Estate. This clocks in lower than the national average of 5.49 percent.

That might be because the California housing market is so expensive: The median price of an existing single-family home in the state was about $908,000, in May 2024, per the California Association of Realtors (CAR). For a home sale of this amount, 5.11 percent equates to $46,400 total, or $23,200 per agent.

Chalk it up to the high cost of living in the Golden State. Here’s what the Realtor fees would be in a few major cities across the state, assuming a home’s median sale price per May CAR data and an even split of a 5.11 percent commission:

City
Median price
Total agent commission
Individual agent commission

SOURCES: California Association of Realtors May 2024; *San Jose median price from Redfin May 2024 

Los Angeles
$811,610
$41,473
$20,736

San Francisco
$1,690,000
$86,359
$43,179

San Jose*
$1,500,000
$76,650
$38,325

Fresno
$425,000
$21,717
$10,858

Sacramento
$555,000
$28,360
$14,180

What’s included in a real estate agent’s commission?

Whether they’re representing the buyer or the seller, most agents do a lot to earn their fee.

“For the seller’s agent, the commission generally includes services like listing and marketing the property, hosting open houses, negotiating with buyers and assisting the seller through the closing process,” says Scott Beloian, broker/owner of Westcoe Realtors in Riverside, California. Listing agents also often prepare a comparative market analysis to determine a competitive price and help the seller review and compare offers.

“For the buyer’s agent,” Beloian says, “the commission covers tasks such as finding suitable properties, setting up property viewings, advising on the [bidding] strategy and guiding the buyer through negotiations and closing.”

Who pays agent commissions in California?

Across the country, including in California, it used to be that commissions for both agents in the transaction were paid by the seller. “This arrangement [meant] that, while buyers [did] not directly pay the commission, the cost [was] typically factored into the home’s final sale price, affecting both parties indirectly,” says Beloian.

Again, however, changes to the way Realtor fees are paid are coming this summer. Under the new rules, sellers may — or may not, depending on the details of their deal — be responsible for paying their own agent directly.

Are California real estate agents worth it?

Although no one is required to use a real estate agent to either buy or sell a home, there can be considerable advantages to doing so. Agents are licensed professionals who are experts in their local markets. Their job is literally to help you meet your real estate goal, whether that’s earning top dollar on your sale or finding you the right new home at the right price.

Selling a home without a listing agent — known as a for sale by owner transaction, or FSBO for short — means you take on all the responsibilities typically managed by an agent yourself. With California’s high home prices, a mistake in negotiations or missed detail on the contract can really cost you.

That said, $23,200 apiece in commissions is a lot to tack onto an already pricey transaction. And there can be disadvantages to using an agent, aside from that cost, as well. For example, if the two of you don’t mesh well in your schedule or communication styles, working together can be a rough road. And most agents juggle multiple clients at once, which means you might not always be their top priority.  But generally speaking, the pros of having an agent on your side should outweigh the cons.

Saving on commission fees

There are ways to save money on fees if the commission is a hurdle you just can’t get past:

Negotiate the rate: Real estate commissions are often negotiable, and many agents might be willing to lower their rate if you ask. On a high-priced home, even a small rate reduction can make a big difference.

Choose a discount agent: Think about hiring a low-commission real estate agent — companies like Redfin and Clever often charge closer to 1 or 1.5 percent of your home’s sale price, rather than the traditional 2.5 or 3 percent. You might also explore agents who operate on a flat-fee basis, earning a predetermined amount rather than a percentage of the sale price.

Sell by owner: When you sell without a listing agent, you don’t have to pay a listing agent’s commission. But you do have to do all the work yourself, and you still might have to pay your buyer’s agent.

Sell to a cash homebuyer: There are many companies in California that buy houses for cash, closing quickly with no hassle and no Realtors or fees. However, this method will yield a lower sale price compared to a traditional market sale.

Find a trusted California real estate agent

If you’re ready to sell and eager to maximize your profits in the pricey California market, your next step is to find a local real estate agent to team up with. Do your homework first: Start by asking for referrals from family and friends. Look for agents with a thorough knowledge of your specific area and expertise in selling properties similar to yours.

Interview multiple agents and ask targeted questions to help you make an informed choice. The better you click with someone, the smoother your journey is likely to be.



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

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Should you sell your home now or wait for the Realtor settlement this summer? | CNN Business

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New York
CNN
 — 

Listing your home in the spring used to be a no-brainer. But a major real estate shakeup is complicating the equation.

That shakeup is coming from a $418 million settlement the National Association of Realtors announced last week with groups of homesellers that could go into effect as early as July. The settlement will eliminate the long-standing standard 6% commission paid by the seller, which could ultimately make it cheaper to sell your home post-settlement.

But is it worth waiting to list your home and potentially risking a sale?

Would you rather be unloading boxes from a moving truck in a potential snowstorm or heatwave as opposed to when it’s a pleasant 60-degree day?

That’s one of the main reasons spring has been the most popular season to buy a home.

For families with children, it’s also an ideal time to close on home because it would allow them to stay in the same school.

By springtime, people are also more likely to have paid off any debt they took on over the holidays, said Phil Crescenzo Jr., the southeast division vice president at Nation One Mortgage Corporation.

The settlement could present a major downside to homebuyers.

Under the current system, the buyer’s agent’s commission is baked into the total they pay for a home. That meant buyers could pay that added cost over the entire length of their mortgage.

But after the settlement is finalized, many may have to pay flat fees upfront to agents. That would add to the financial burden for homebuyers – especially first-timers. And that’s on top of coming up with all the money they need for a home downpayment, closing costs, a lawyer and all the other fees associated with buying a home.

Buyers, therefore, may have more of an incentive to close on a home sooner rather than later.

There’s also no guarantee a federal court will sign off on the settlement as is. The unknowns associated with that are enough of a reason not to wait to list your home, said Crescenzo. From conversations he’s had with real estate agents, he said he’s not seeing any signs that the NAR settlement is delaying listing activity.

“There is no reason to wait,” Mike Downer, a broker associate with Coldwell Banker Realty in Naples, Florida. “The seller does not currently need to provide any compensation to the buyer’s agent.”

The biggest advantage of waiting to list your home until the settlement is finalized is being able to negotiate an agent’s commission down more than they otherwise would’ve been able to. On top of that, they may be able to avoid having to pay the buyer’s agent’s commission.

That could allow them to pocket thousands of dollars more on the sale of their home.

If selling your home boiled down to a business decision, Mike Downer, a broker associate with Coldwell Banker Realty in Naples, Florida, said he’d try to list it as soon as possible.

“If I am trying to test the market, there would be no need to list it 1723291007,” he added.

But in his view, the NAR settlement shouldn’t be a major consideration when it comes to timing.

“An agent who provides value will always be worth more than an agent who does not provide value,” because they can help you net more money for the sale of your home, he said.



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If you recently sold your home, you might get part of your realtor fee back

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A ‘For Sale’ sign is posted on the lawn in front of a home on March 15, 2024, in Miami, Fla. The National Association of Realtors announced that it had reached a nationwide $418 settlement of claims that the industry had conspired to keep agent commissions high.

Joe Raedle/Getty Images

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Joe Raedle/Getty Images

A ‘For Sale’ sign is posted on the lawn in front of a home on March 15, 2024, in Miami, Fla. The National Association of Realtors announced that it had reached a nationwide $418 settlement of claims that the industry had conspired to keep agent commissions high.

Joe Raedle/Getty Images

Big changes are coming to the way people buy and sell houses in the United States. The National Association of Realtors settled a lawsuit last week that could up-end the way real estate agents are paid, doing away with the traditional agent’s commission of 5-6%. That’s prompting a reckoning for buyers, sellers and real estate agents. Here are six things to know.

What if you already sold a house?

As part of the settlement, the National Association of Realtors agreed to pay $418 million over the next four years. That’s in addition to $210 million that various brokerage firms had already agreed to pay. Lawyers will get a chunk of that money, but the rest will go to people who sold their homes in recent years and paid what critics argue were inflated real estate commissions. Eligibility depends on where you live, but in some parts of the country, the settlement covers people who sold homes as much as a decade ago.

“We don’t know the exact number, but we estimate it to be in the neighborhood of 40 or 50 million” people, says Benjamin Brown, co-chair of the anti-trust practice at Cohen Milstein, one of the law firms involved in the class-action case.

To find out if they’re entitled to compensation, sellers can check the lawyers’ website: www.realestatecommissionlitigation.com.

How will this change real estate commissions ?

For decades, the norm in this country has been for the person selling a home to pay both her own agent and the buyer’s agent. What’s more, the buyer’s share of that commission had to be spelled out in order to advertise the home on the big regional listing sites. Realtors insist they never fixed those commissions, but as a practical matter, the public notice worked to set a standard — often in the neighborhood of 5 or 6%, split between the seller’s agent and the buyer’s agent.

For a home priced at $400,000 — which is close to the national average — that works out to $20,000 to $24,000 in commissions — much higher than people in other countries typically pay. In Germany, commissions average 4.5%. In the UK, they’re under 2%.

Starting in July, sellers will no longer have to spell out a commission for the buyer’s agent. Advocates say that should lead to more negotiation, more competition and ultimately lower costs.

What increased negotiations mean for buyers and sellers?

There’s going to be more opportunity to shop around, and likely a wider array of services, from deluxe agents who charge a premium price to discount agents with more limited services — similar to what exists in other markets like stock brokers and travel agents.

Sellers may be able to negotiate a flat fee to market their house, not connected to the selling price. Buyers may be able to purchase a la carte services — paying less if they do their own house-hunting on the Internet and more if they want to be chauffeured around to open houses.

Many sellers may decide not to pay the buyer’s agent, leaving buyers to shoulder that cost on their own, or go without an agent altogether.

Overall expenses are expected to be significantly lower, however. Economists at the Federal Reserve Bank of Richmond estimate the changes could save homebuyers $30 billion a year, with most of those savings coming out of the pockets of real estate agents.

Prospective home buyers leave a property for sale during an Open House in a neighborhood in Clarksburg, Md. on September 3, 2023. The new real estate commission structure could mean buyers have to pay more out-of-pocket fees starting in July.

Roberto Schmidt/AFP via Getty Images

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Roberto Schmidt/AFP via Getty Images

Prospective home buyers leave a property for sale during an Open House in a neighborhood in Clarksburg, Md. on September 3, 2023. The new real estate commission structure could mean buyers have to pay more out-of-pocket fees starting in July.

Roberto Schmidt/AFP via Getty Images

What does this mean for agents?

Agents are still sorting out what this might mean for their business. When fees are more negotiable, agents will have to make the case for what they’re worth. But the best agents feel like they do that already.

“Do I think that Realtors have to learn to do business in a different way? Absolutely,” says Kevin Wilson, president of the Greater Nashville Realtors. “But I also think this is a wrinkle in the landscape. Not a landmine.”

A drop in commissions might drive some agents into other lines of work, but that’s not necessarily a bad thing. The U.S. has 2.5 to 3 million real estate agents — which is far more than any other country, relative to the size of its housing market. For example, the U.S. has about six times more home sales each year than the U.K. does, but 26 times more agents.

“Do we see agents that work with buyers start to phase out of the business because they’re just not getting as many clients?” asks Jovani Ortiz, an agent on Long Island. “These are sort of the unknowns that most agents are looking at right now.”

While the commission pie is likely to shrink, it may be cut into fewer slices, so the remaining agents might end up making the same amount of money.

With home prices and mortgage rates already high, how will homebuyers pay for their own agents?

While sellers have traditionally paid buyers’ agents in the U.S. (and built that expense into the sales price of their home), many sellers may opt not to pay buyers’ agents in the future. In that case, buyers will have to pay their own agent out of pocket, on top of a down payment and other closing costs. Finding thousands of dollars to pay an agent could be a challenge, especially for first-time buyers, who typically have limited funds and also the greatest need for an agent’s guidance. First-time buyers accounted for just 26% of existing home sales in February — tying a record low.

“Many first time buyers are already at the absolute max of what they’re able to borrow,” says Vanessa Perry, a professor at George Washington University School of Business and a fellow at the Urban Institute’s Housing Policy Finance Center. “They’re not going to be able to come up with any additional cash to pay their own agent.”

Home sellers could still agree through negotiation to pay the buyer’s agent. But in a hot housing market, sellers may have little incentive to do so. Eventually, buyers may be able to fold the cost of their agent’s commission into their mortgage, stretching the payments out over the life of the loan. But that will require a change in mortgage underwriting rules. Over time, lower real estate commissions should lead to somewhat lower housing prices.

What should people who are thinking of buying or selling in the next six months do?

The settlement’s changes in commission rules take effect in July, just as many people will be shopping for homes ahead of a new school year. But it’s not clear how quickly the landscape will change. Buyers and sellers may want to talk with their agent about the costs and benefits of moving before the deadline or waiting until the new rules are in place. Remember, commissions account for $20,000 to $24,000 on a typical home. Still, that’s just one factor to consider when deciding when to buy or sell — along with interest rates, the supply of homes on the market and life circumstances like a new job or family member.



This article was originally published by a www.npr.org . Read the Original article here. .

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