For Better or for Worse?

It's wedding season. Having written last week about our quick trip to Minneapolis, I suddenly received notifications, text messages, and video links from long lost friends sharing their own kids' nuptials. (Lovely.) Makes perfect sense; my peers and I are now at the age where our grown children are beginning to create their own families, and so they should . . . .

In fact, I'm babysitting my son's pit bull this week while he's off in the South of France attending a high school friend's wedding. It's a fabulous destination affair with folks flying in from all over the world - c'est magnifique! Ahhh, to be young and in love (for better or for worse).

The phrase "for better or for worse," has been turning over in my mind lately as my profession wrestles with new rules regarding the practice of real estate brought on by the DOJ's class action lawsuit alleging antitrust violations. (For the record, commissions have always been negotiable.)

While undoubtedly, the settlement creates an opportunity for growth and professional development (Better), there's also going to be the inevitable fallout that comes as a result of poor behavior by discounters, bottom feeders, and Sellers who don't fully understand the ramifications of these new rules. (Worse.)

"I found this house on my own," seems to be the line in the sand for many Sellers who are thrilled at the prospect of no longer paying the buy-side commission. "Our Agent did nothing but show up at the closing and get a BIG FAT check."

I beg to differ . . .

While it might seem to the uninitiated that Buyers' Agents aren't earning their keep, I begin every interview with potential Buyers by stating point blank: "It's unlikely that I will find your home . . . " and if I were being totally flippant, I'd explain that "given that the MLS (The Multiple Listing Service) is open and available to anyone and everyone at the touch of a key, a monkey could probably surf the Internet on your behalf."

Listen up: finding you a house is NOT what you are paying your Realtor® to do for you. (Really?)

Really.

So what are we paying them for? (I'm glad you asked.)

An experienced Realtor’s skills come in the form of knowing the nuances of each community, educating Buyers and Sellers, nurturing strong relationships with other Agents, dismantling the disclosures, identifying red flags, asking the right questions, understanding market context, preparing Buyers to be proactive, pairing Buyers with lenders, helping Buyers secure insurance, presenting competitive offers, getting the offer accepted, and seeing the transaction through to the close of escrow!

Once in contract, they will closely follow timelines as outlined in the California Residential Purchase Agreement, perform with good faith and goodwill, avoid drama at all costs, and remain flexible throughout the process. Your Agent is your council, advocate, advisor, problem solver, therapist, confidant, and cheerleader. Oh, and did I mention that the Buyers' Agent will probably have written on 5-6 other properties BEFORE they successfully get their client into contract?

But let's assume for the sake of argument, that you are lucky enough to get into contract on the first house on which you ever write; that's likely because your Agent has enough experience to secure your success. In other words, you're paying your Realtor for the years of training and experience they've accrued BEFORE they began working with you. (Not for nuthin' but there's a lot more going on behind the scenes than Buyers or Sellers realize.)

And while it's true that Sellers may no longer be obligated to pay buy-side commissions come mid-July, there's a host of good reasons why it's in their best interest to continue to do so, including the fact that Buyers will likely skip properties that require them to dig further into their pockets. Between higher interest rates, and home insurance that has skyrocketed in many cases, not to mention closing costs in the realm of 2-3%, many Buyers simply won't have an additional 2.5-3% necessary to obtain qualified representation. In other words, Sellers will lose market share by forcing the Buyers to pick up their Agent's fees. (Follow?)

Listen, professional fees elevate our industry and that's long overdue (Better), but failing to understand the true implications is only going to hurt those who aren't considering the whole picture (Worse).

So is the new ruling for better or for worse? You be the judge.

How can we help you?