USA, — If a federal judge approves a settlement between sellers and the National Association of Realtors, the real estate industry could experience a major shake-up.
As of right now, nothing is changing in the way traditional listings happen across the country, but that could all change over the summer.
Under the settlement, NAR would adopt a new rule that prohibits the advertisement of broker compensation on Multiple Listing Services (MLS) and requires MLS participants working with buyers to enter into written agreements.
"Here in Georgia, fortunately, we're lucky to have rock solid contracts to protect both our buyers and sellers, and those investors," Matt LaMarsh, a real estate advisor for Engel & Völkers, said,
He said this settlement will ultimately decouple the two sides of the commission. LaMarsh pointed out, though, that there has never been a standard when it comes to their commission, which is how a real estate agent is paid.
"I think the perception is that somehow there was just this major agreement that we all said 6%," he said.
On average, a seller's agent would make around 3% as well as the buyer's agent.
"There have been norms, if you will, but there has never been a standard that says you have to charge 6%," LaMarsh said.
He pointed out, "Everything in real estate is negotiable, from the price, to the terms, to the closing date to the closing costs."
LaMarsh said across the board, he feels the industry could have been doing a better job in educating consumers.
As of right now, if you search through the MLS, the listing shows the 'buyer agency compensation.' This is included in the MLS price and paid by the seller.
If this settlement is approved, moving forward, the buyer will be responsible for paying their own commission to their agent. Now, there could be ways around that, but LaMarsh points out this is where it will weed out the strong realtors from those who are subpar in the industry.
"Yeah, we do think there's going to be a mass exodus, and not just here in Atlanta, but of course nationwide," LaMarsh said, adding. "This business is hard. And I think a lot of people will only see the 'Selling Sunset' and the other Netflix series and stuff that make it look so easy to make a six-figure income in a very short amount of time, or maybe for minimal work. And that's just not the case. We all understand that it takes a long time to build a very successful business in real estate."
There are rumblings that this settlement could save buyers and sellers money, but LaMarsh said that while that may be true in a sense, it doesn't mean people should walk into any deal without someone looking out for their best interest.
"This is a much more complex scenario and transaction, the largest of most people's lives," he said.
He warned that if you're looking for a home, you also have to remember it's more than just a place you're going to live. It's also a big investment. There are things many people don't think to ask or look for when shopping around.
"If you don't know what you're looking at and if you don't have an inspection done as an example, those things could cost you tens if not hundreds of thousands of dollars in repairs," LaMarsh said.
He also said you shop around agents to make sure you're getting the best representation.
"You know, we're all running our own business, and it's up to us to determine what our value is, but also the results that we're able to deliver," LaMarsh said.