Realty experts weigh in on latest settlement and its potential impact in Louisville
Change could be coming to the real estate industry. The National Association of Realtors (NAR) has reached a $418 million settlement to end litigation of claims brought on behalf of home sellers related to broker commissions. The settlement could impact the real estate industry in Louisville, where two experts suggest it could significantly impact how AGENT COMMISSIONS are paid. Home sellers typically cover the commission with proceeds from the sale of their home. If approved, the buyer will be responsible for their own separate agreement regarding compensating their agent. This could result in a total cost of buying a home on top of the top of closing costs. However, both experts believe that the settlement is still pending a court approval.
Published : 4 weeks ago by Madison Elliott, https://www.facebook.com/ in
AND SELLERS IN. LOUISVILLE. IF YOU’RE IN THE MARKET TO BUY OR SELL A HOME, WE SAT DOWN WITH TWO EXPERTS WHO BREAK DOWN THE POTENTIAL CHANGES THAT COULD COME FROM THIS SETTLEMENT. AND WHAT THEY MEAN FOR YOU, CEO OF THE GREATER LOUISVILLE REALTOR ASSOCIATION, JACKIE LEE, SAYS ONE IMPACT COULD BE HOW AGENT COMMISSIONS GET PAID. TYPICALLY, HOME SELLERS COVER THE COMMISSION FROM THEIR SALES PROCEEDS, WHICH IS SPLIT BETWEEN THE LISTING AND BUYER’S AGENT. AND NOW, IF THE SETTLEMENT IS APPROVED, THE BUYER WILL HAVE TO BE RESPONSIBLE FOR THE COMMISSIONS WITHIN THEIR OWN SEPARATE AGREEMENT. REALTOR JONATHAN KLUNK SAYS THAT COULD MEAN CHANGES FOR HOME BUYERS. THEY’RE GOING TO BE RESPONSIBLE FOR COMPENSATION, SAYING THEIR AGENT OUT OF POCKET, WHICH IS A POTENTIAL RESULT OF THIS. THEN THAT COULD LEAD TO THE TOTAL COST OF BUYING A HOME ON TOP OF THE DOWN PAYMENT, ON TOP OF THE ALREADY ESTABLISHED CLOSING COSTS. ONE THING LEE SAYS WON’T CHANGE BEING ABLE TO NEGOTIATE AN AGENT’S COMMISSION. BOTH EXPERTS SAY A MISCONCEPTION IS THAT THERE’S A SET STANDARD COMMISSION FEE OF 6% ALWAYS HAD THE ABILITY TO NEGOTIATE ANY SORT OF RATE THAT THEY WERE PAYING. AND AT LEAST IN THE STATE OF KENTUCKY, THE WAY THAT OUR CONTRACTS ARE WRITTEN IS THAT THE SELLER WAS PAYING TO THEIR AGENT. 6%, 5%. WHATEVER WAS NEGOTIATED. AND THEN THAT WAS THEN SHARED WITH THE BUYER’S AGENT. THERE’S AGENTS OUT THERE WHO HAVE WORKED FOR LESS THAN 1% OF A DEAL. ANOTHER CHANGE WOULD PREVENT AGENTS COMPENSATION FROM. BEING INCLUDED ON LISTINGS PLACED ON CENTRAL LISTING PORTALS, KNOWN AS MULTIPLE. LISTING SERVICES. WHAT THE COURTS ARE. SAYING AND WHAT THE SETTLEMENT AGREEMENT IS, IS THAT THAT CANNOT BE ISSUED WITHIN THE MLS ITSELF. IT CAN STILL BE STATED OFF THE MLS, SO YOU CAN STILL NEGOTIATE ONE ON ONE. HOWEVER, THE NAR SAYS THIS AGREEMENT IS STILL SUBJECT TO COURT APPROVAL UNTIL THEN, KLUNK SAYS NOTHING IS SET IN STONE AT THIS POINT. EVERYTHING IS STILL SPECULATIVE. HOWEVER, I THINK THAT THERE ARE PEOPLE WHO HAVE VERY STRONG SONG OPINIONS THAT TH
Realty experts weigh in on latest settlement and its potential impact in Louisville Change could be coming to the real estate industry.The National Association of Realtors reached a $418 million settlement they say would end litigation of claims brought on behalf of home sellers related to broker commissions. CEO of the Greater Louisville Realtors Association, Jakeeva Lee, says one impact could be how agents get paid. Typically, home sellers cover the commission with proceeds from the sale of their home. "Once someone entered into a listing agreement with a seller, that listing agreement will say, okay, I'll get 4%, 5%, whatever the percentage of the sale of the home after that time, once that listing agreement is signed, the listing agent will cooperate with a buyer's agent to say, okay, I'm going to split this particular commission that I have or whatever the arrangement would be," she said. "And now if the settlement is approved, the buyer will have to be responsible for the commissions within their own separate agreement."Jonathan Klunk, who is a realtor with EXP Realty, says this could mean changes for home buyers. "They're going to be responsible for compensating their agent out of pocket, which is a potential result of this, then that could lead to the total cost of buying a home on top of the down payment, on top of the already established closing costs," he said. He and Lee both say one misconception is that there is a set standard commission of six percent. However, both say that commission has always been negotiable. "Sellers always have the ability to negotiate any sort of rate that they were paying," he said. "And at least in the state of Kentucky, the way that our contracts are written is that the seller was paying to their agent 6%, 5%, whatever was negotiated and then that was then shared with the buyer's agent.""There are agents out there who have worked for less than 1% of a deal," said Lee. The NAR says this agreement is still subject to court approval. Change could be coming to the real estate industry. The National Association of Realtors reached a $418 million settlement they say would end litigation of claims brought on behalf of home sellers related to broker commissions. CEO of the Greater Louisville Realtors Association, Jakeeva Lee, says one impact could be how agents get paid. Typically, home sellers cover the commission with proceeds from the sale of their home. "Once someone entered into a listing agreement with a seller, that listing agreement will say, okay, I'll get 4%, 5%, whatever the percentage of the sale of the home after that time, once that listing agreement is signed, the listing agent will cooperate with a buyer's agent to say, okay, I'm going to split this particular commission that I have or whatever the arrangement would be," she said. "And now if the settlement is approved, the buyer will have to be responsible for the commissions within their own separate agreement." Jonathan Klunk, who is a realtor with EXP Realty, says this could mean changes for home buyers. "They're going to be responsible for compensating their agent out of pocket, which is a potential result of this, then that could lead to the total cost of buying a home on top of the down payment, on top of the already established closing costs," he said. He and Lee both say one misconception is that there is a set standard commission of six percent. However, both say that commission has always been negotiable. "Sellers always have the ability to negotiate any sort of rate that they were paying," he said. "And at least in the state of Kentucky, the way that our contracts are written is that the seller was paying to their agent 6%, 5%, whatever was negotiated and then that was then shared with the buyer's agent." "There are agents out there who have worked for less than 1% of a deal," said Lee. The NAR says this agreement is still subject to court approval.