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Notes -
On Friday, the USA's National Association of Realtors agreed to settle a big lawsuit (in which it lost a jury trial late last year). Starting in mid-July, sellers' agents will be permitted to list houses on NAR-controlled multiple-listing services (the databases from which Zillow and Redfin copy their information) without being forced to make a blanket offer to split their commissions with buyers' agents. This will make it much easier for buyers to hire their agents separately (rather than the current practice of having the buyer's agent hired by the seller), leading to lower buyer's-agent commissions. Alternatively, it will be much easier for buyers to imitate the standard practice in Britain and Australia, and hire real-estate attorneys for a flat fee rather than real-estate agents for a percentage commission. See these articles (1 2 3 4) for descriptions of how house buying works in Britain and Australia.
Bonus: Starting on page 106 of this PDF is the testimony of the plaintiffs' star witness, economist Craig Schulman. The meat is on pages 196–211. (Unfortunately, it seems that RECAP isn't set up to process trial transcripts.)
This means many realtors may leave the industry. Good riddance.
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I don't think this is typical in America. Usually buyers work with an agent before they've even found a house.
Very excited for the
backbreakingunbundling of realtors though. No reason this should be a commission business, especially on the buyer side.It's effectively mandatory under the NAR's current rules that the buyer's agent be compensated out of the 6-percent commission that nominally is paid to the seller's agent by the seller. But the NAR has encouraged buyers' agents to misleadingly state to buyers that their services are free.
I guess it's a question of semantics. Their commission comes out of the six percent, but the buyer's agent is selected by the buyer. Clearly the buyer's agent wants to steer the buyer to a more expensive property, but it's arguable who "hires" the agent.
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