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    • More “for sale by owner” after real estate agent commission lawsuits?
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    More “for sale by owner” after real estate agent commission lawsuits?

    Sakege Posted on

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    Mary Anne Bryan is about to sell the 3-bedroom brick Colonial where she raised her daughter in Chicago’s Beverly neighborhood. Bryan spent a decade working as a real estate agent and is keenly aware of recent changes in an industry he always thought could use some innovation, thanks to demands for buyer’s agent commissions.

    Bryan hopes to handle some of the work of selling his own home. Saving a real estate agent what would likely be a commission of about 2.5% would save you thousands of dollars in your pocket. But there are still some big unknowns.

    Most importantly, how will you know if a potential buyer is actually willing to make an offer? On the other hand, if that buyer is working with a real estate agent, how much will they expect to be paid?

    “How do you know if unrepresented buyers are pre-approved?” she said. “What is the process for that and how do you make sure you do it without discriminating against people? Even with all the knowledge I have, I am afraid of saying or doing the wrong thing.”

    Is the FSBO market booming?

    In 2023, a Missouri jury ruled that the National Association of Realtors and some large real estate brokerages had conspired to keep commissions artificially high. As a result of that case, the new rules came into effect in August that changed the way commissions are established and communicated.

    Most media and industry attention has focused on What did the changes in practices mean for buyers?But any homeowner thinking about selling also faces a whole new world. Coupled with Americans’ growing comfort in making online transactions, even large purchases, and the knowledge that sellers have an advantage in One of the tightest real estate markets in history.A For Sale By Owner (FSBO) has never seemed more tempting.

    “The FSBO market has changed significantly since the MLS (Multiple Listing Service) offset offer requirement was removed,” said Victor Lund, managing partner of WAV Group, a real estate industry consulting firm. “The game has begun.”

    The compensation offer requirement that changed starting in August was the commission paid to the real estate agent representing a buyer. In the American real estate market, that amount has been paid by the seller for a long time. Plaintiffs in the lawsuits settled in 2023 argued that it made no sense for people on one side of the agreement to pay for representation of the other side.

    What’s more, the old system often meant that the buyer’s agent could be paid more than the person representing the seller, since any seller who wanted to save money could ask his or her agent to accept less. In contrast, buyers rarely thought about the transaction.

    In fact, while buyer’s agents often argue that their commission was “always negotiable,” industry observers respond that many buyers had no idea how their agent would be paid, much less how much. Additionally, if any seller tried to offer a buyer’s agent less money than is typical in a particular market, many buyer’s brokers would steer their clients away from those properties.

    As new rules went into effect, delisting that compensation offer for the buyer’s broker, industry participants expected the buying process to become more complicated. But as Bryan’s situation suggests, sellers may face just as many unknowns.

    How should you sell your house?

    Ena Koellish sees the new terrain as an opportunity.

    With her husband, Koellish founded The K Group Real Estate, in Radcliff, Kentucky, two years ago. Koellish says she was motivated by the opportunity to educate consumers about their options in what will likely be one of the most important steps of their lives. But the more he read about the commission’s demands, the more surprised he became.

    “It blew me away how much unethical behavior there has been in this industry,” Koellish said. While not all agents behave unethically, he emphasized, there is an inertia in the way things have traditionally been done in real estate that makes transactions opaque and difficult to understand for many consumers.

    Now, Koellish makes videos that he posts online, explaining the selling process to anyone considering it. She believes homeowners should still be able to request a “package” of all services offered by a listing agent, but should also have the option to pay individually for select services, an “a la carte menu,” for a fee, if they want it that way. take on some of the selling tasks themselves.

    “My husband says we’re entering (the industry) at a good time,” Koellish told USA TODAY. “We are learning the good habits and the right processes. And we are going to work ethically.”

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    A real estate “coach” instead of an agent?

    There have always been a handful of agents who offer limited seller services for a small fee, Lund noted, and for many savvy homeowners, particularly those with professional real estate experience or those who have already been through the process several times, working with such an agent. service can make sense.

    But he cautions potential sellers to be careful about assuming they can do it completely alone. “If you’ve ever done something as simple as selling an item on Facebook, you know the process is difficult. It’s painful. “And that’s for a couch,” he said. “Real estate agents offer a legitimate service.”

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    In most cases, it’s what Lund calls “the background stuff” (knowing where to list a house for sale, for example) that’s easy for professionals but difficult, or even inaccessible, for amateurs. Most salespeople need at least one “coach,” he said.

    Some industry veterans see the same possibility as Koellish, but on a larger scale. Brad Rice, who has founded several mortgage and real estate companies, recently started Homepie, an online marketplace that aims to connect buyers and sellers, with services to make the transaction easier on both sides. Homepie is currently available in California and Florida, with ambitions to expand.

    Mary Anne Bryan can’t help but worry that many people try to do FSBO without really understanding the implications.

    “The biggest concern I have is that most people only do this a few times in their life,” he said. “I think the real estate agent profession is important and they deserve to earn what they deserve to earn.”

    Still, he concluded, there are opportunities to make the system more efficient. “Maybe a la carte services are the way to go,” he says.

    Sakege
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