Let’s Unpack This: What is Going on in the Real Estate Industry?
Over the last few weeks, you have likely heard that the National Association of Realtors (NAR) has settled a federal lawsuit about commission payments. Business analysts and media pundits have been sharing their real estate predictions – and for the most part, there is a lot of misinformation out there. Let’s talk about the top 3 misinformed news and what it all really means…
Myth #1: Standard commissions are going away. Sellers are no longer required to pay the buyer’s agent commission for their home sale.
Facts: Sellers NEVER had to pay a specific commission percentage to their listing agent or the buyer’s agent. Commissions have ALWAYS been negotiable for both sellers and buyers. The Tennessee real estate listing agreement has specific, open spots for the negotiated commission rate for the listing agent and the buyer’s agent. You and your Realtor will discuss commissions, and the pros and cons of offering or not offering a commission to a buyer’s agent.
Myth #2: Now that the sellers aren’t paying buyer’s agents’ commissions, the price of homes will go down.
Facts: This is not proven or true. The belief behind this myth is that home prices were inflated to cover the cost of the buyer’s agent commissions. Again, commissions are negotiable, and many times it will be in in the seller’s best interest to offer a compensation to the buyer’s agent. Home values will not see a decrease.
Myth #3: Realtors will become obsolete.
Facts: Realtors do more than open doors. From marketing to negotiation, advising to cleaning, there are many functions that a Realtor performs on your behalf. Buyers and sellers may find more options available to them, from discount services that offer minimal, basic assistance to full-service, concierge-like experts. Each type of service provides value at a corresponding price.
Do you have questions about commissions and the real estate market? Let’s chat! We are here to unpack the headlines and get down to the information you need.