Start your 7 day free trial and get 25% off Seeking Alpha Premium with my exclusive affiliate link at https://seekingalpha.me/Graham | Thanks to SeekingAlpha for sponsoring today’s video. Let’s discuss the NAR Lawsuit Settlement and what this means for real estate, home buyers, and sellers – Add me on Instagram: GPStephan
Check out http://acorns.com/graham/ to sign up and receive a $20 bonus when you start saving & investing with Acorns!*
Paid ad. Compensation provides an incentive to positively promote Acorns. The information and opinions presented are for informational purposes only and represent the views of the promoter as of the date created and are subject to change. Investment advisory services offered by Acorns Advisers, LLC, an SEC-registered investment adviser. View important disclosures at Acorns.com.
GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER: http://grahamstephan.com/newsletter
The NAR Realtor Settlement:
What Is The NAR?
This is a trade organization that real estate agents can pay into if they want to receive the designation of becoming a Realtor®. This means they’ve pledged to a higher code of ethics, adopt additional industry standards, and they get access to a wide range of services and forms.
The Current Payment Structure:
The commission is – and always has been – completely negotiable. However, the MLS previously required that the listing agent offer some form of compensation to the buyer’s agent – even if it was just $1. Despite this, most buyer’s agent commissions were listed at 2.5% in the MLS.
The NAR Lawsuit:
The lawsuit alleges the “existence of an anticompetitive agreement that resulted in home sellers paying inflated commissions to real estate brokers or agents in violation of antitrust law. Their entire argument relies on the belief that – if commission rates were negotiated directly by the home buyer, for their own services, commissions might begin to fall as agents compete for the buyer’s business.
The NAR Outcome For Housing Prices:
FOR SELLERS: The only confirmed change is that the MLS is no longer required to display buyer’s agent commissions. This doesn’t mean that sellers can’t (or won’t) pay commissions – but it’ll no longer be a required section to list.
For buyers, it’ll soon be required that they sign a buyer’s representation agreement before touring any MLS-listed property, that specifically states the amount or rate of the agent’s compensation.
The Realistic Changes:
I believe that buyers probably wouldn’t want to pay a cost like this out of pocket, especially when so many of them are already cash-strapped to begin with. This means, any commission would have to be written into the offer and “baked in” to the selling price of the home.
Second, I wouldn’t be surprised if some buyers simply chose to forgo any representation, entirely, as a way to either save money or make their offer more competitive – which, can be incredibly risky.
Sources:
List of NAR Dues and Benefits:
The Basis of the NAR Lawsuit
https://www.prnewswire.com/news-releases/if-you-sold-a-home-and-paid-a-commission-to-a-real-estate-broker-or-agent-a-class-action-lawsuit-may-affect-your-rights-302070013.html
The NAR Settlement for Buyers, Sellers, and Agents
https://apnews.com/article/national-association-of-realtors-agent-commissions-lawsuits-d62a66cb80639be3c4c3b429053a22c5
The NAR Presidents Resign:
https://www.nar.realtor/magazine/real-estate-news/kenny-parcell-president-of-nar-resigns
https://www.washingtonpost.com/business/2024/01/08/national-association-of-realtors-president-tracy-kasper-resigning-blackmail-allegation/
The $418 Million Settlement Terms
https://projects.propublica.org/nonprofits/organizations/361520690
Sellers May Receive Only $13
Sold a home recently? Here’s what you’ll get from the $418 million Realtor settlement
Additional Settlement Terms:
https://www.veteransunited.com/education/nar-commission-settlement/
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://the-real-estate-agent-academy.teachable.com/p/the-youtube-creator-academy/?product_id=1010756&coupon_code=100OFF – $100 OFF WITH CODE 100OFF
For business inquiries, you can reach me at grahamstephanbusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice.
-Here is a link containing the source material for each piece of research cited. I do my best to make my videos as accurate as I can, and the additional resources should help anyone who wants to look into them further – enjoy! https://docs.google.com/spreadsheets/d/1lcf98InSWCgBionMor1ZCFmX6-brB6EtAiH-nZ18XBc/edit?usp=sharing
-Start your 7 day free trial and get 25% off Seeking Alpha Premium with my exclusive affiliate link https://seekingalpha.me/Graham
The text in your videos is very low resolution, it bothers me! (example 14:24) It’s been like this for a while.
😊😊😊😊😊😊😊❤
Thanks for share your time. I appreciate you
Graham, I just want you to say “hey Cade, you’re the coolest!” That’s all I need.
What do you think about the stock, matterport?
The problem i had was mofos wouldnt update the status of the property on the MLS do you would waste time calling them just to tell you its been sold,pending, or under contract 🤡
Finally somebody with some knowledge making a reasonable report on the situation that wasn’t this ridiculous Clickbait stuff that I’m seeing on all these online news sources. Great job Graham. Well put.
Sold my grandparents old house a couple years ago..we had our agent they had a buyers agent from a different company..the buyers agent was hands down better than ours and I credit her for making the deal happen..
If the is happened before you became an agent this would have been the reason you became an agent, to save money on buying your rental properties. Haha
Is that new watch on wrist? havent noticed you wearing one with jubilee bracelet=)
Home inspectors and local contractors know more about real estate than the average realtor.
Nah this is nothing big. This will just remove the part time agents. The top Realtors will be fine.
How can a buyer forgo an agent when you are required to have a signed agreement to tour a home?
Good question. That’s probably something this dumb lawsuit didn’t even think about.
I really hate how much I have notice gram just straight up lying. He has stated many times he don’t reads the comments. But in each video says he will read them just so he gets more interaction…. Also, the ads he runs are so scripted. It’s not even funny. No one believes you’ve been using that service for 10 years before they started paying you. 🤦♂️🤦♂️🤦♂️
The price of the home is whatever someone is willing to pay. The reshuffling of the agent compensation will hopefully shake out the bad agents. It’s what happened in software engineering and other professions.
Zzzzzzzzzz
Love how your click bait videos are getting less and less views. Maybe you should try bullying more lesser known youtubers to make your Napoleon complex self feel better. >UNSUSCRIBED<
I recommend diversifying your investments by considering stocks alongside real estate. During a recession, there are potential buying opportunities in the stock market if approached cautiously. Additionally, market volatility can offer short-term buying and selling opportunities. However, please note that this is not financial advice. It’s important to be proactive in investing as cash may not be the most advantageous option during these times.
In these uncertain times, it’s more important than ever to have a solid understanding of how to manage your finances, invest wisely and navigate economic downturns.
Safe to say not everybody has the skill to pursue investing. But it’s always easy to follow the advice of someone who knows how to i.e a financial advisor. You could anywhere between 10–40k with the right ones. Online businesses are a good bet too if you are savvy.
Please who is the consultant that assist you with your investment and if you don’t mind, how do I get in touch if you don’t mind
“JENNIFER LEIGH HICKMAN” is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Great video Graham, we’ve covered this extensively since the proposed settlement came out and you’ve covered this topic quite well, kudos! The only ones making out are the attorneys; sellers are going to make $13 and open themselves up to lawsuits from unrepresented buyers. Ultimately, I think there is going to be a culling of the herd, with the punters being weeded out and the professionals thriving.
FTX so you are a fail
Nobody cares
I love having these videos along side my dose of ice coffee hour 🙂
I wonder if companies like Redfin were behind this lawsuit-here in Missouri and several other states it is against the law to offer commission refunds. How exactly did this class action materialize-a bunch of KC sellers didn’t just get together and say hey – we’re being screwed. Agency laws have been in effect for many years in Missouri. I practiced here for over 30 years. Our offices commission was the same before the courts required buyers agency. I have a sneaky suspicion some investment firms overall don’t like how well priced a home is when it hits the market as agents have access to the sold listings and if you are good you price it correctly-commissions don’t affect the price like they are trying to say.
Honestly I hope the courts dont approve. And if they only got paid 22m. Looks like they cant afford to pay this settlement anyway.
They will jack up the agent fees and divert and distract the agents from being angry by stuffing more DEI CEs and more classes threatening agents against hate speech….and handing out their various surveys prying into the details of what color you are. That’s about the only interaction I have had with NAR….
Y’all use the report button, these bots have like 2K likes each, they’re all at the top before any real comments. Don’t reply Bot, you’re engaging.
I delete those spam bot comments and they immediately reappear in the hundreds
The same people crying that they can’t afford a house are going to be the same people hit hardest by this. You’re not going to save anything, your realtor isn’t getting screwed over like you think they deserve. All it is will be more money out of the lower end home buyers and first time homeowners. Congratulations, you played yourself.
I am bullish on AMS2007193 blah blah blah…
All those comments are probably scams. Don’t listen to them.
Thank you talking about this!!
You got it!
The max amount is have to be paid for buyers agent to show the property, send an offer, win the offer and make couple phone calls is 500$. No other percentage have to be charged to the buyers. That five hundred dollars enough for this type of service!
Another fact to mention is that a lot of homebuyers will want to simply just work with the listing agent directly because they will be under the impression it’s just a cheaper route to take and not want to sign buyer brokers agreements. I predict we will see a lot dual agency transaction, and in 3-5 years, we will see another class action suite switching things back to MLS offers of comp given the conflict of interest. :lol
My theory I’d they Can create the midichlorians so they need omega to bond with the weaker force users first. Then in the future maybe they have omegas blood and they need gorgus high m count so they can create a sidious esque clone
As someone trying to get my RE license currently while working a full-time job and expecting to continue that full-time job until I can make as much or more than I am currently making. With you mentioning that you think that most RE agents that have other jobs are not good. Is it just due to lack of time, or lack of effort. What would you recommend to me to be successful in RE while holding my full-time job. My job provides a lot of autonomy and flexibility so to increase my income I thought doing RE on the side would be a good idea.
With u being a leader in the real estate space I thought u would respond sooner
Didn’t think there was much interest!
The Buyer is a Big Winner here, the current model was PRICE FIXING. The price was fixed and the buyer never had any power to affect their agents compensation, now they do.
Buyers already pay for their own inspectors, the lenders appraiser, origination fees, etc but SOMEHOW paying for their own Agent is going to bankrupt them? GET REAL
This is a great change and if Buyers Agents don’t like it, GET BETTER or GET OUT
Being “required” to participate is why there was a lawsuit.
C’mon man I didn’t watch you channel for several months . You still use the same overdramatic titles and depressing thumbnails. The content is the same over and over again.
Never spoke about this topic before! Not sure what’s the same?
This will also wipe out a bunch of fly by night agents who have no business in the industry
Having to sing an agreement with a buyer’s agent before being allowed to see a house doesn’t seem like it should be allowed. Would the sellers agent show the house if the buyer didn’t want to use an agent?
Graham, the topic is interesting, but you talk too fast for someone who is new to Real Estate.
My bad! Noted.
Ethic.. come to Miami all crooked no license contractors are the Realtors
Who flipped houses here
Real estate is a perfect job for former sex workers or prostitutes. You you have to see as many clients as quickly as possible. You have to get them in and out as quickly as possible. You have to get the most money as quickly as possible… Some real estate agents will do ANYTHING to sell that house.
Testing to see if Graham responds…
Done
the NAR is class violence plain and simple and should be treated as a terrorist organization tbh
Graham, your presentation was commendable, offering a clear overview of the situation. However, I would like to suggest enhancing it by discussing the significant value a buyer’s broker or agent brings to the seller. By having professional representation for the buyer, there’s an added layer of legal protection, significantly reducing the probability of legal disputes. This is particularly crucial for first-time homebuyers who might inadvertently make mistakes and attribute them to the seller, whereas having a knowledgeable agent mitigates such risks.
Great points!
Just became a realtor here in Texas this January thanks for the video very informative!
I HATE working with a specific realtor! Every time I look at a house, I talk to a realtor and they ask me “are you already working with a realtor?”. I also say “no”. I will work with whomever gets me the house, IDC who it is. I also never call a realtor back. I just go through Zillow, Trulia, or Realtor.
We ask because it is specifically against our code of ethics to work with someone who is already being represented. That is part of the Realtor code of ethics and could get us in trouble if we are found to be doing this.
Also, you are probably going straight to the listing agent who does not represent your interests and is not legally obligated to protect you or your money.
🔥 Where Is The Fire ? 🔥
Do you need a restroom break ?
You are rattling this off like a 90 WPM typist.
Just cut out the buyers agent all together and negotiate directly with the sellers agent in states where that is allowed.
I’ll say it for you:
Most real estate agents are useless.
As for the “good” ones, there us nothing an agent can do that is worth tens of thousands if dollars of your money.
Nothing.
Typical Realtor, Standard canned corporate response to try and justify a high commission.
Graham you’ve been saying housing crash, housing crash, don’t buy, housing crash, since like 2021… . It’s all on YouTube! Imagine if ppl listened to you…it’s the difference between having or not having tens of thousands of dollars , or the difference between owning and still renting. Please be more responsible with your messages.
Watch those videos 🙂 I have never once said the market would crash – in fact, there were several videos where I said it was good. Even the “home buying regrets” video was about negotiating mortgage rates and getting inspections, give them a watch and decide for yourself 🙂
Your description of how payments technically happen is wrong.. The listing agency negotiated a listing fee and if the listing company brings a buyer there is only one listing fee that gets distributed to the listing company. In this scenario there is no buyer agency coop fee .. In a listing agreement most contracts also has a place where the listing agency can offer a cooperative offer of compensation… This is the amount the listing agency offers other agencies if they bring a buyer to sell the home for listing company…. The seller doesn’t pay the buyers agency fee.. The listing agency does… Now the buyer and the buyers agency has its own contract between the buyer and the buyers agency… This is where buyers negotiate the fee they pay… In these contracts the buyer agrees to allow the buyers agency to receive compensation from the listing cooperative agency. This is how the agency compensation works in the two states i live in.
Just sellers fail to negotiate the LA commission… the irony is the sellers didn’t pay a buyers agent to purchase the home they have now…
I agree with you, I don’t think it will bring prices down and I think it will make it harder for buyers.
Thank you I was wondering about your opinion. I read what financial samurai had to say about it, he posted right away. You should keep posting in your area of expertise, we value this. This was very helpful. Unlike your suggestions for job hunting. We’re not going to let you live that one down lol.
As a realtor, you are the first big content creator I have seen to accurately share what is going on rather than chasing headlines and clicks. You communicating in this way is going to save a lot of buyers/sellers from all of the misinformation out there!
Been waiting for this video!!
Thank you for finally explaining it like it actually is rather than the clickbait headlines full of incorrect information everywhere!
Nah, real estate agents aren’t worth the money most of the time. If you are smart enough, you can do it yourself.
a Realtor is just a Google Search lol
In a sellers market, buyers are going to pay, in a buyers market, sellers are going to pay (assuming we ever have a buyers market again)
If the property is hot, and likely to attract multiple offers – I won’t bother using a buyers agent. If the seller/listing agent can be utilized as a transaction agent, they don’t have to pay a portion of the commission to an independent buyers agent at closing. Consequently, a transaction agent will be more motivated to present and accept my offer over the contracts submitted by other parties (buyer’s agents). The caveat, of course, is that a seller/transaction agent may not represent the buyer’s best interest in negotiations. But according to my experiences, this isn’t any different than working with a buyer’s agent that doesn’t save you anything and is just going along for the ride, so why bother? From my standpoint, the NAR lawsuit doesn’t really change anything.
Does this settlement now allow buyer agents to double dip? Charge the buyer they are represent as well as include a commission fee with an offer?
No. We can’t write anything in an offer that the buyer doesn’t explicitly agree to.
Thanks Graham love your videos!
Glad you like them!
You crushed it Graham! Thank you!❤
You’re so welcome!
Buyer agents do none of those things you mentioned. They are focused on pushing you into a home. I’ve seen it everytime I bought a house. They never called out the most obvious things and I had to do it.
It’s like paying for the best lawyer in town – better believe buyers gonna be paying 2%- 5 % to those buyers agents
The Lawyers get rich. Everyone else pays the price. Agents leave the market, fewer agents mean higher prices. Oh and VA Buyers, Thank you for your service now F-off. Thanks for rolling over NAR.
Do you still invest in cryptocurrency? 😂😂
As a real estate agent that this does not apply to, i will say, in my experience noone wants to work with buyers. Sure, it can lead to future business, but more often than not, they will run you ragged and forget yoy exist when they go to sell their house 10 years later. So now agents will have even less incentive to even bother representing buyers
Which is as it should be. When you advertise your services as free and spend your time driving people around without a buyer broker agreement in place, and not even a pre-approval….you are teaching buyers that you are worthless….and that is what has been happening for years. People don’t care one iota about wasting others time and money when they have no skin in the game. It’s time buyers had skin in the game right out of the gate, it will get rid of all the lookie Lou time wasters, which is a vast majority of buyers. Let agents spend more time on people serious about buying a house, who will actually sign a buyer agreement and figure out whether a lender will even loan them money to buy a house.
Will anyone consider A O C s proposal new housing be constructed of gingerbread so people have a choice between hunger and homelessness?
She’s really going out on a limb if she pushes for this, as she may have critics grim assessment she is pro witch.
This will not reduce prices. Prices are not based on commission they are based on what the people are “willing” to pay. They drive the prices up with multiple offers.
as usual great job explaining what is actually going on. as an agent I think this is good. it will help get rid of all those agents that do bare minimum
One of the best videos I’ve seen on the subject. You definitely did your homework. I sell real estate in the Florida Panhandle, primarily in the resort realm (condos, vacation homes). With condo associations and STR consideration it’s a bit of a specialization. Real Estate is a big subject with a lot of different arenas. I don’t see much changing in these specialized arenas as the markets have tightened and agents have to demonstrate expertise to exist.
In the vanilla primary home transaction, I could see this being more of a factor, especially at lower price points. As you touched on in your video, this new overlay could be adverse on cash strapped homebuyers in competitive markets, including the subset of VA, FHA, and first time homebuyers. From my experience, this class buyer typically benefits greatly, if not the most from representation. Many will opt out of representation. Many problems will come from this.
Inflation caused by govt spending is the root cause of the steep housing market. It seems like an opportunistic move during an election year with marginal benefit to the end user.
It seems like you missed an opportunity to talk about the big gorilla in the room MORTGAGE… for example your suggestion about an offer that includes the commissions would only work if mortgage guidelines allow for those amounts to be loaned above the appraised value of the property. Otherwise everyone is taking a reduction.
Lets ask the question that nobody is asking..what was this lawsuit trully about..it def wasnt about the people
most laws are honestly an insult. No one forces people to accept them terms. We could look at canada for a better example of how to sell homes.
This just means that the real estate agent will also cherry pick their client’s. Only picking who is gonna pay a higher interest
As a commercial realtor, I confirm that this is true and it works.
Let’s see the new watch!
is that a ford gt behind you!?
Is this the short guy with the super small hands ? Creepy
Bro love your content BUT all your hand gestures are making me dizzy. Slow them down a bit. ❤
Can we reform lawyers commissions first
It’s bad for everyone ☹️
Are you a Realtor?
14:08 what about the Freakonomics book talking about the lack of incentive to negotiate the price down. They won’t get much more money to go the extra mile. Not necessarily something you could “catch” them on. Also, if you’re not buying an above average home, you’re not worth the hassle the a buyer agent in comparison to other buyers.
I wish people would stop saying it’s “always” been negotiable. While that might be true, most agents never mentioned that. We need to be intellectually honest here. This typical non disclosure is why the lawsuit was brought and won.
I’ve been a real estate appraiser for the last couple of years and I decided to become a realtor recently to learn more about the process. To me, the biggest issue isn’t buyer agency compensation, by far. It’s the fact that NAR is the only game in town. You HAVE to join NAR. They have stifled all competition in a way that isn’t healthy for the industry.
I’m a huge fan of Seeking Alpha, I’ve been a subscriber for years – it’s not cheap, but one good decision pays for itself.
I love this! As someone who has worked in real estate and seen how common it is to pay out thousands for an agent to do the bare minimum this will help push them to do a better job or find another job. We live in a time where the average person can do their own research easily and just pay someone to inspect the property and do paperwork. The fact that agents would often withhold properties that fit the exact criteria of their client solely based on a low commission payout is disgusting.
Hey Graham, this is totally unrelated to NAR lawsuit, but this morning I made public a video I filmed the other day of a 2024 C8 Corvette. That’s essentially my review style and an example of what I’d love to do with your Ford GT someday. Anyways, thanks for continuing to post such insightful information and staying relevant in your videos! 😊
I remember in 2007 when I was working in real estate seeing people buy homes new from builders with the intention of selling before close of escrow to a new buyer for profit. The crash was so brutal and fast that I remember seeing a lot of these units foreclosed on with the builder plastic still on the carpet.
Most people find it difficult to handle a fall since they are used to bull markets, but if you know where to look and how to maneuver, you can make a size-able profit. Depending on how you intend to enter and exit, yes.
Given that we are not used to such volatile markets, the fact that the US stock market has been on its longest bull run in history helps to explain the widespread fear and enthusiasm. There are chances if you know where to look, as you noted when I earned more than $780k in the prior ten months. I hired a portfolio advisor because I knew I would need a solid plan to get through these difficult times.
Please who is the advisor that assist you with your investment and if you don’t mind, how do I get in touch if you don’t mind
It was run by “JENNIFER LEIGH HICKMAN” , who I learned about and got in touch with thanks to a CNBC interview. Since then, it has served as the point of entry and departure for the games we have emphasized. A search on the internet can be done if tracking is necessary.
After buying a couple homes there is no way I would purchase property that isn’t a trivial expense, without the help of a realtor.
you changed your name from Guys to Graham?
Good summary of the issues. VA buyers will get screwed (until a fix is put in place). New buyer’s agents may have a challenge demonstrating their “value proposition.” And worthless scum lawyers involved in this litigation, who claimed real estate buyers’ agents making $70K a year (1099, not W-2) were overpaid and driving up the market value of real estate, will collect contingency fees of $30,000 per hour of “work” on this nothingburger of a lawsuit.
Your Husbands response please?
Graham Im an investor and I make my offers through the listing agent letting them represent me also allowing them to keep both sides of the commission. This gives me a competitive edge when buying. Will I still be able to utilize this strategy in the future or will I need to get my own buyer’s agent and pay their commission myself ultimately defeating the purpose of having a competitive edge?
Great video
You changed my whole life I was homeless couch surfing late early 30’s whenever I subbed. Now I have my own home some debt and multiple sources of income plus investments. you thought me money I would hide a body for you ….. Thank you for everything you do and keep doing it you do have a good effect on the world
I don’t feel like real estate agents should be allowed to do commission anyway that’s why the price is going up on homes not the sole reason obviously but when you have incentive to make sure the cost of the home as high as possible or you make less money for you, it’s obviously a conflict of interest
You definitely have my sub. This content is next level. For me Eledator was the turning point. Please keep doing what you do and keep being you, love it.