Realtors Grappling with Seismic Shift! Part 2

Tom Brezsny
- Tom Brezsny

Realtors Grappling with Seismic Shift! Part 2

Continuing the conversation…. talking about last week’s big court ruling that’s generating lots of headlines, lots of buzz, and lots of scrambling within the industry.  At this point, it’s just a ruling and it’s anyone’s guess how it will affect the day-to-day process going forward. We’re still in the the more we find out the less we know” stage.

Whatever else happens, fundamental changes are in the offing: Sellers will no longer be committed to paying compensation to buyers’ agents’ (they can if they want to).  And there’ll be a new emphasis on the buyer-broker relationship with a requirement for buyers and their buyers’ agents to have signed compensation agreements before they even start looking at properties. 

It’ll be interesting to see how it unfolds in the weeks and months ahead. It may even be a few years before the framework of a new normal coalesces to take the place of how it’s always worked before. 

Meanwhile, be prepared for some confusion. People venturing into the deep end of the real estate pool should proceed with caution. Big changes always open the door for bad actors wanting to take advantage of the complexity to leverage clever angles for their own gain. Future buyers should start interviewing experienced agents now, so they can settle into a trusted relationship before they dip their toes in the market. Call me if you need some friendly direction on all of this. 

And meanwhile… there are plenty of panicked agents out there who are looking up, convinced that the sky is falling and real estate as we know it is over. There are also buyers and sellers who think that manna from heaven is falling because the narrative around the commission lawsuit says that removing  buyers’ agents’ commission from the sellers plate will somehow make the price of homes more affordable for buyers, even as sellers get to keep more of their sales proceeds. 

Question: Is it really possible, in a market driven dynamic revolving around two principals (buyers & sellers), each negotiating for their own best interests,  for the price of homes to come down at the same time sellers pocket more money? There’s a profound disconnect in that, particularly in the kind of sellers market we’ve had for the last ten years.

As I read more of the articles behind the headlines, written by journalists who seem to know very little about how real estate works…. I keep hearing the voice of my favorite character Beatrice, from the old Esurance  commercials: “That’s  not how this works! That’s not how any of this works!” 

Next Week:  More from Beatrice about how a sellers market really works!

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