Local real estate agents are scrambling to figure out the effect on them of the National Association of Realtors’ anti-trust settlement last week to pay $418 million in damages and eliminate some rules dealing with commissions.
The association agreed on several new rules:
- Sellers no longer will have to pay the commission of the buyer’s representative.
- The amount of the agent’s commission will no longer be required on the multiple service listings.
- The buyer’s representative will have to write a written agreement with the buyer.
- Agents no longer will have to join a multiple service listing.
A judge still has to approve the settlement. The new rules will take effect in July, if approved.
Realtor Allan Hasse said Realtors and non-Realtors have been asking him what the changes mean. Even his doctor, on Tuesday, was asking him about it.
Hasse doesn’t have many answers yet. He said he is in information-gathering mode.
“I think once the middle of July gets here, I think it’ll be somewhat chaotic until it’s figured out, and what that chaos looks like I don’t know.”
“I think once the middle of July gets here, I think it’ll be somewhat chaotic until it’s figured out, and what that chaos looks like I don’t know.”Realtor Allan Hasse
Aprile Osborne, a Realtor and co-owner of Call It Closed in Naples, said there’s a lot of fake hype about this.
“It’s kind of exaggerated. It’s making a lot of drama out of this and it’s not really dramatic.”
Denny Grimes, Realtor and president of Denny Grimes and Team in Fort Myers, used an analogy to describe the agreement.
“It’s like people boarding up for a hurricane that’s not going to hit,” he said. “In the end it’s not going to be a big deal.
“Will it change the way we have conversations, yes. So, any kind of change creates uncertainty. Things are generally a bigger deal as you anticipate them, as you look at them after they’ve passed.”
Will it make homes more affordable? It’s unlikely.
“I believe that home prices will remain stable or potentially even increase due to the change,” Marlissa Gervasoni, president of the Royal Palm Coast Realtors Association, said in a written statement. “The housing market will continue to follow supply and demand.”
Osborne thinks lowering interest rates will do more to energize the real estate market than the change in rules.
Analysts for the investment banking firm TD Cowan said the settlement could lower commissions by 25 to 50 percent. Using the median price of $417,700 for a home in the last quarter of 2023, the savings on commissions could be $12,500 less.
That doesn’t guarantee the seller would lower the price by $12,500, only that the owner would save an additional $12,500.
Grimes warned that buyers might offer less for a home if they are paying a commission to their representative.
Now, sellers pay the listing broker a brokerage fee and then pays a percentage to the buyer’s representative. Marcie Roggow, a director at the Naples Area Board of Realtors, cautioned about using a 5-6 percent as the norm charged by the listing agent.
“I’ve been a Realtor for 50 years, and a long time ago you would see those numbers most often. Things have changed.”
PJ Smith, a broker and president of the Naples board, said he’s always been able to negotiate commissions.
The only thing that will change for most of the country is brokers will no longer be allowed to post their commission fees on the MLS listing. The lawsuit claimed that agents led buyers to listings where the commissions were the highest.
Sellers will have more leeway in negotiating a commission. They will decide if they don’t want to pay the buyer’s agent’s commission.
The change could be a boon for Realtors like Hasse, who is a listing agent.
“This is to my advantage,” said Hasse. “Buyers are going to be more prone to call the listing agent and to think they can work out a better deal with the listing agent than they can to sign an exclusive contract with the buyer’s agent.”
The change could hurt first-time buyers, if they have to pay a fee to their representative, Smith said.
Smith and Roggow believe agents will still strive.
“It’s just a little bit different way of doing business,” Smith said.
Florida agents could have a larger learning curve than the rest of the country. Florida is the only state in the country that doesn’t require a buyer-brokers agreement or an agency disclosure, Roggow said.
“The problem in Florida is they’ve never been exposed to this so the fear is out there,” she said.
“ A lot of education is the key,” Smith said.
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