Savvy Way Realty aims to be the most reliable source for you on what is going on with this monumental change in the Brokerage real estate industry. While I happen to be a Realtor, which means I am a member of the National Association of Realtors (NAR), I have always been opposed on any protectionism that disrupts the free market of homes. As a Broker, I have no choice but to participate in the Realtor system, in order to be able to provide you a Compliant based Flat Fee MLS listing service across our coverage markets (Texas, Georgia, Florida, and California).

 

Let’s Discuss what has always been there:

 

First, what is the National Association of Realtors (NAR)? The best word that describes NAR is the UNION of licensees in real estate.

 

You can be an Agent, which means you are licensed to represent a principal/client in your state.

 

You can also be a Broker, which means you have the right to supervise or self-supervise your own Real Estate operation.

 

Sometimes you are both, or just an Agent that works under the supervision of a Broker.

 

Both Brokers and Agents usually join this UNION to have benefits, and set the rules for all other Realtors to follow. Another great example is the HOA of Agents. Each Agent agrees to follow these set of rules (Rules of Ethics), which gives you access to the Multiple Listing Service (MLS).

 

MLS is a tool of the subdivision of NAR by state (i.e. Texas Realtors, California Realtors, Georgia Realtors, Florida Realtors, etc). The MLS data gets syndicated, or pulled, by the major Real Estate websites such as Zillow, Trulia and Realtor.com. This is why most sellers need the MLS, because it is the way to be promoted throughout the market and virtually on most buyer’s phones through these real estate apps.

 

MLS has rules for all Realtors to follow, and they could be fined for

non-compliance.

 

Now, let’s discuss the facts on what could be changing:

 

I will be referencing the letter from the NAR President about clearing up these changes.

 

First of all, NAR never set a 6% commission requirement.

 

“NAR does not set commissions, and commissions were negotiable long before this settlement. They are and will remain entirely negotiable between brokers and their clients. And housing prices are dictated by market forces beyond members’ control.”

 

What was a requirement on MLS was that some commission needed to be offered to the buyer’s agent. Then, that the commission was negotiated ahead of time between the Seller and the Listing Agent.

 

What is the change that matters to you as a seller?

 

The commission will not be promoted on MLS. It will mean that the commission will now not be set ahead of time, but more than likely through a separate form between Listing Agent and Buyer’s Agent.

 

But there is a catch!

 

Now, the Buyer’s Agents will be required to have a Buyer’s Agent Commission Agreement with the Buyer. More than likely it will be for a 3% payout to the Buyer’s Agent. Which means that if the Listing Agent offers zero or less than the historic norm, the buyer will pay the rest.

 

Think about how this hurts your chances to sell your home.

 

It means that if your Listing Agent offers zero commission, the buyer will have to cover the rest among the other high costs of this market. These costs include lender origination, buying down of points, lender insurance, escrow insurance, etc.

 

Well then how do you use this for your advantage as a seller?

 

Reduce what you pay the Listing Agent!!

 

But be sure to hire a Listing Agent that will still be compliant with all of the MLS rules. These rules did not change or go away. A Listing Agent that is compliant with MLS rules means that they have a good responsive rate and are working the listing.

 

More than likely this will be a Listing Agent that works remotely, and concentrates on volume. This way they pay out the Buyer’s Agent more than the competition.

 

A compliant and reduced Flat Fee MLS Company.

 

If you sell this way, you will more than likely save around 3%, which is a world of difference from 6%. Some piece of the commission would be withheld with the Flat Fee company, around ½ of a percent. The rest, 2.5% goes to the buyer’s agent. The buyer may not have to pay any commission at all, therefore, having the incentive to buy your home.

 

Work this new change to work for you. You can do it this way now, even before the approval of the settlement by the Federal courts.