Lowcountry realtors react to proposed national real estate settlement
CHARLESTON, SC (WCSC) – A proposed multi-million-dollar settlement with the National Association of Realtors is getting Lowcountry real estate agents talking about how this will impact their businesses and the home-buying process.
Some agents say it is not going to change so much for the average real estate agent and how they do business. But what will change is how the average home buyer might go about getting representation for when they want to buy a home.
This is because it might cost a buyer more in commission fees than before.
Lee Allen, managing broker at Corcoran HM Properties, says the buyer’s agent typically gets most, if not all, of their commission percentage from the seller. If this settlement goes through, it might end that. The buyer might need to pay more in those commission fees because the Multiple Listing Service – the main database agents use to look for and list properties on – will no longer be allowed to show how much an agent will get paid for the sale.
Drew Grossklaus, broker-in-charge for William Means Real Estate says there are positives.
“This is going to give them a positive outcome for them to be able to get more information about the fees they pay for real estate services and understand those fees clearly,” Grossklaus said.
But he also has fears for those who don’t have the means to pay for these added costs.
“It’s a big concern,” Grossklaus said. “First-time home buyers and possibly home buyers who do not have money up front to pay for buyer’s representation. It’s a big concern that this makes it so that they don’t use representation, which is never a good thing when you’re purchasing the largest purchase of your life – a home. You want someone there helping you. Making sure and giving you the knowledge to do that correctly.”
Dirk Zeller, CEO of real estate training and coaching company, Real Estate Champions, says those who get federally backed mortgages affect certain demographics disproportionately.
“Minority buyers, which they’re going to be affected,” Zeller said. “Specifically, VA buyers. Those who have served our country that get VA benefits.”
Zeller says with these loans are prevented from having to pay a representation fee. So, he says unless the Veterans Affairs, the Department of Housing and Urban Development and financers can figure out a way to find a solution, there will be more buyers who can’t buy homes with representation.
“Causing a roadblock and a major impediment for these individuals to access the American dream,” Zeller said.
Although it’s not mandatory to get an agent, Allen says it’s highly recommended.
“In my opinion, buyers need representation,” Allen said. “First-time home buyers are even more so… to make sure, did they get in the right school district? Did they make sure they didn’t get in a floodplain?”
Grossklaus says there are other things people should be warned about.
“Inspection issues,” Grossklaus said. “They may not be aware of what the market is and may be paying maybe more than they should for a home.”
Allen says home sales are up 11% year after year with prices up 6%. He adds the future of real estate agents’ jobs might not look that different, but it depends on what the judge decides.
“I do think you will see part-time agents step back from the career, but the professionals will always be in demand,” Allen said.
As for home buyers, Grossklaus says communication is key to making sure buyers and sellers know what they’re paying and how much the real estate agent is expecting to make.
“Get with a real estate agent and understand what they do,” Grossklaus said.
The National Association of Realtors has already settled with $418 million to compensate a group of sellers in a lawsuit. This all still has to go in front of a judge, and the answer to whether or not all of these impacts will become reality will be at least July.
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