Hear Ye, Hear Ye” yelled out the Town Crier in the 1800s. Today’s Crier is the Internet and TV and they are certainly yelling out ‘Woe is the Real Estate Industry’. As a real estate firm located across the street from Stonecrest, we thought we would help clear up a few of the headlines and give a behind-the-scenes story.
The actual suit was filed against a few large companies and then the National Association of Realtor stating that they were participating in ant-trust activities. They said that sellers were feeling taken advantage of by not only paying a commission for the selling agent but for the buying agent too. Any of you who have sold know that that has always been an option when sellers sign the listing agreement. There is a space for total commission to be paid at the closing table. There is a separate paragraph which states the part of that commission which is paid to the selling agent.
Let’s talk about who is actually paying for the commission. It is truly a cost that is on the seller’s side of a closing statement BUT, it is calculated into what the buyer is writing a check for. So, in fact, the buyer is paying both sides.
When you have a good agent, they will do a seller’s net sheet when they take a listing. In this net sheet, there will be an estimate of the known expenses, including the commission, so that they can calculate what price they need to sell the house for to cover all of the expenses, including commission. That is the price that the buyer is making their offer based on. That is the listing price posted in the Multiple Listing Service, which is an agreement of compensation between the Listing agency and Selling agency.
So the buyer’s offer includes the total commission and the other seller’s expenses, so the seller walks away with what they wanted outside of the expenses. That is the way things happen now.
Starting July 1st, there will be changes. If approved by the courts, the offer of compensation due the buyer’s agency will not be in the MLS. Buyer’s will be signing a Broker’s Buyer agreement on which their side of the commission will be stated. It is not that the buyers will be paying any more since they have been paying the entire commission as part of their offer. Some buyers may insist that the seller pay for their commission. That would be done on a one time showing for commission basis that the seller can either sign or not. It cannot be put into an offer sheet! This is a contract between the buyer and the seller, and the Realtors are not part of that contract.
In the past, Florida was considered a Transaction Brokerage state. Which means that in most cases, there is no fiduciary relationship between the listing agent and the sellers nor between the selling agent and the buyers. This will most likely change to an agency state such as the case in many of the northern states where real estate attorneys do much of the paperwork instead of the Realtor doing it. That may, in fact, become the case in Florida. Preparing for this possibility, many firms, including Broker Associates Realty, has a business relationship with an Attorney to work with those who desire it.
We are also opening a separate division of Marketing Specialist for those who wish to select from a menu of services.
We are prepared for whatever comes down the pike to make sure that all of our customers get the service they need and want. If you have any questions, please stop by our website http://www.brokerassociatesrealty.com.