Real Estate Settlement... what does in mean for Kitsap?

I hope your week is going well! I've been waiting to see what would shake down after the NAR settlement. I'm excited to say that many things have been corrected and, for me, it will be much 'business as usual'. There's been a ton of marketing, alluding to the idea that sellers can 'save money', since NOW, buyer's agent commissions are negotiable. 

 

So, here's the deal. Commissions, on both sides, listing and buying, have been negotiable, for years. It's been a law in Washington that commissions are negotiable for a long time. That negotiation happens between the listing agent and the seller, and the buyer agent and the buyer. Side note: I've been doing Buyer's Agency Agreements for almost three years. It's a good thing for both the buyer and the buyer agent. it puts all the expectations on the table, opens the conversation to how a real estate purchase works, and allows the buyer to truly see ho wI do business to get the answers they need to help me represent them in the the best way possible. This agreement literally saved a deal for one of my buyers, adn I'm proud to be a pioneer of using it!

 

So, what happened? A jury found that NAR (National Association of Realtors) had "conspired to keep commissions artificailly high", according to the Washington Post. Because of this, there has been a settlement on the part of NAR to put in place some protections. One is a buyer's agreement, one is removing commissions from the MLS (Multiple Listing Services), when listing a home, and some other things. What is important to understand here is that NAR owned several MLS boards, across the country. There was some confusion among members that the listing agent had to 'share' THEIR commission with the buyer's agents.

 

According to an article on their own website, NAR attempted to clear up the idea that commissions were ever NOT negotiable. However, there is a misconception, at least in Western Washington, that listing agents have the right to set compensations for buyer's agents. 

 

Excerpt from Correcting the Record Article

 

At least in my market, Western Washington, it is NOT the right of the listing broker to determine commissions for the buyer's agents. When I go to a listing appointment, we discuss my fee, what I do, what value I bring to the situation, and we discuss a buyer's commission, as a separate topic from my own commission negotiation. This has not been a right of the listing agent since I have been a real estate agent, and has, since I've been in the industry, ALWAYS been in the hands of the seller. Sellers do not, and have not, HAD to offer any commission, on either side. It is fully negotiable. In my opinion, the above wording, from the NAR, was part of what muddied the waters. End of the day, nothing has actually changed. Commissions CONTINUE to be fully negotiable, for BOTH listing agents and buyer's agents. 

 

Moving on to removing the buyer commission from the MLS, we are very blessed that NWMLS is not owned by NAR. Our NWMLS has been at the forefront of this issue, and have had buyer's agreements for years. I chose to use them, when I was shown how useful they could be, both for myself and for my buyers! Our listing agreements have always shown what the listing agent commission would be, separate from the buyer agent commission. Buyer's agreements are new to many agents here in Western Washington, but for me, again, nothing, has changed. I will continue to use buyer's agreements and consultations, and make sure we are all on the same page! Transparency is key!

 

NWMLS was given the opportunity to 'opt in' to the settlement. As of the date of this writing, they have stated they will NOT be opting in, and will not be conforming to what the NAR has agreed to.

 

Here's the deal. Kitsap County is full of budget homes. Homes that will be available for buyers who will utilize First Time Home Buyer's Assistance, FHA and other mortgage programs. While commissions continue to be negotiable, if your home falls in a certain market, the buyers who will be available to purchase your home may not have the extra money laying around to pay a buyer's commission. In our buyer's agreement contracts, it is specifically asked if the buyer wants to see homes where there is no buyer agent commission offered. If they don't have the funds, buyers will choose not to view your home, effectively removing your home from the very audience that would purchase. If they DO view your home, they will be asking for standard commission in the offer, anyways. Two and half to three percent is standard right now. No one works for free. While the buyer's agreement obligates the buyer to the commission, it also gives negotiating power to their buyers, to be represented in the highest and best way possible.  

 

Not all markets are the same. For example, the Kitsap Luxury market may not be so dpendent on having a percentage for buyer's commission, more on that in a later blog. 

 

Truly, the buyer's agreement forces the agent to a higher standard. It's in your best interest to choose an agent who will work to represent you well. if you are in the market for an agent, click here to download my free Buyer's Agent Interview Guide! The information vault is open!

 

As always, the best time to buy a home was five years ago. If you are renting, the next best time is NOW! 

 

Kari Green

360 552-8150

www.karigreen.evrealestate.com