My wife Heejin and I are both licensed real estate brokers.
And between the two of us, we have bought and sold at least 25 properties over the years.
And … we’ve used agents to represent us on both sides of every transaction – despite our licenses, our industry knowledge, and general education.
We well-knew how much work agents do, and we were too busy to do it ourselves – and we needed assistance from agents who obviously had far more local knowledge, connections and insights than we could ever have.
We found properties and got offers accepted solely because our agents were so well-connected, and we often needed advice from agents when dealing with properties with severe condition issues.
As an aside, a borrower of mine once asked me to write an offer for her back in the 90s, and it turned out that the house was sliding down a hill (I hate it when that happens). Anyway – I had no clue what to do, and the listing agent ended up advising me (to protect me), so I gave her my commission. But – more importantly, I learned not to write offers…
I share all this because I attended a lender webinar yesterday with about 175 loan officers, and they were in panic mode over the changes coming to the real estate world, as most of them get all of their business from buyers’ agents. One of the takeaways from the webinar was to learn how to help sell the value of their referral partners/buyers’ agents. And – that is something we have done for years – very sincerely I might add, based on the information I share above.
Mortgage Companies Getting Sued Too!
Before I get to the gist of my blog, I wanted to share that the class action sharks are now coming after the mortgage industry too: UWM was recently sued over a “corrupt scheme with brokers to steer loans.” United Wholesale Mortgage ostensibly tried to force mortgage brokers to use them exclusively if those brokers were using UWMs systems and tech stack. The lawyers are claiming that this resulted in borrowers getting higher rates and fees. The sentiment against agents and NAR in general will probably not help UWM’s case, and I suspect they are fairly worried about getting hit with a huge award for the plaintiffs. And worse, many of the large broker shops who sent loans to UWM could get sued too.
Ok – What Did the Attorney Say?
I recently wrote this blog about the NAR settlement: NAR’s Settlement – May Be Great News For Agents! (Except for the Civil War Part). In that blog, I quoted an attorney named Rob Hahn, who said that not much is going to change when it comes to commissions and how they’re paid. While there will be no references to buyers’ agents’ commissions on MLS, there will still be references to commissions on the websites of the brokers – so buyers’ agents will know what to expect on the commission front before they show a home (just like always).
But I sat on a webinar today with another attorney, Ed Zorn, who disagrees with Rob Hahn (even though they’re good friends). Ed is the VP and General Counsel for the California Regional MLS – so, he comes from good authority. Ed says that if things transition the way that Rob thinks they will, it will just invite an entirely new slate of class action lawsuits. So, it is likely that many attorneys will advise brokerages not to post commissions on their websites.
Ed thinks we will see new purchase contracts with one line that says something like “seller will pay buyer’s agent’s commission with X% of concessions at closing.” Ed further believes that MLS will reference the amount of concessions sellers are willing to pay.
So, I suspect we will see a lot more seller concessions coming soon.
Hot or Not? (Jobs Report)
There used to be a website called “hot or not” where people would rate other people – and … I, of course, did not approve!
But – if today’s jobs report was on that website, there would be some serious fights amongst the bulls (market optimists) and the bears (market pessimists).
The jobs report came out hotter than expected with a lower unemployment rate and a lot more job creations than anticipated – so rates went through the roof, right?
Nope.
Most of the new jobs were part-time; there was still a loss of full-time jobs; and many of the jobs were government (much of the private sector is still losing jobs).
So rates only edged marginally higher, as the bears seem to be winning again.
