Hello everyone and Welcome to another

episode of Selling Greenville your

favorite real estate podcast here in

lovely Greenville, South Carolina, I'm

your host as always Stan Mccune realtor

right here in Greenville, South Carolina

and you can find all of my contact

information in the show notes if you

need to reach out to me for any of your

real estate needs and just a reminder as

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episodes okay it is time again for us

to revisit the topic

of changes that are coming into the

industry actually the changes are upon

us I'm recording this on August 12th

today is the official day of major

changes for the state of South Carolina

now

these changes did not have to be done

until August 17th but in South Carolina

we're a little bit ahead of the curve we

got these changes done earlier what

changes am I talking about the changes

I'm talking about are that the National

Association of Realtors had to settle a

bunch of lawsuits there were all sorts

of lawsuits

over a range of issues all kind of

related to realtor commissions and the

lawsuits essentially claimed that the

entire real estate

industry under the oversight of

the National Association of Realtors was

committing antitrust violations by

price fixing when it came to commissions

that commissions were always the same

amount across the board that somehow

there was this big conspiracy none of

that is true nonetheless a jury

that was very hand selected by the

prosecution and that I could I

could get into a lot of details about

the jury selection it was basically

done in such a way that the National

Association of realtor simply was not

going to win the the juries concluded

that yes there were antitrust violations

and as a result of that the National

Association of Realtors could either

appeal the the case and they felt like

maybe they would win the appeal but the

problem is that there were other

lawsuits coming down and it would have

bankrupted the organization it would

have bankrupted the industry if they had

kept having to appeal every single

lawsuit because once they lost one they

were going to win they were going to

lose the others excuse me and so the

only tenable solution for them and for

local mls's local realtor associations

was essentially to settle now there were

a lot of things that happened part of

the settlement a lot of money is

going out as a result of it it's not

money that's going to really see the

consumer Pockets even though that's

allegedly what the whole lwuit was about

but it is primarily money that's

going in the attorney's Pockets which is

what it is that's just the way it works

but the primary things that we are

talking about today is not money that

was spent or anything like that it is

the changes that were agreed to as part

of this settlement that the national

National Association of Realtors did

and the primary changes involved again

compensation how agents are compensated

and how we have to communicate that

compensation now I don't know because

this topic is going to be a very hot

topic this week and in future weeks I

might get some listeners and or viewers

from outside of the state of South

Carolina that are tuned tuning into

this content I'm just going to warn you

this is a Greenville South Carolina

podcast and I am only going to be

talking about my perspective as a South

Carolina realtor the things that I say

on here may not may not apply excuse me

had a frog in my throat there for a

second the things I talk about

on here may not apply to someone in New

York or Missouri or Texas or Arkansas I

I don't know I don't know those States

not involved in those States I am only

involved and I'm only knowledgeable

about real real estate here in the state

of South

Carolina so just keep that in mind also

nothing I'm saying on here constitutes

advice or price fixing I'm not going

to mention any specific percentages when

it comes to commissions because we've

been told not to do that for antitrust

reasons so so keep all of that in

mind as we're talking about about

this topic okay with that groundwork

laid here is kind of the the big picture

of what we need to think about and then

I'll get into what this means for buyers

and sellers of real estate I I'm not you

know we've talked about this a lot from

realtor perspective but I want to talk

about it from your perspective you the

consumer the most common compensation

model in residential real estate for the

past 30 years in South Carolina has been

a very simple model which was that a

seller lists their home with a listing

agent not a requirement right sellers

could always do for sale by owners

but they would typically list with a

listing agent and there would be a

negotiation between the seller and the

listing agent on what the total

commission would be for selling the

home now as probably a lot of people

know about 30 years ago buyer agency

became introduced in the state of South

Carolina and and buyer agency was

essentially a way to fulfill a need

in the marketplace which was that buyers

felt like they needed representation

they they didn't like that only sellers

had the listing agents representing them

and then buyers had to go to the listing

agent who already had a fiduciary duty

to the to the seller not to them and

so buyers were getting the short end of

the stick and in terms of representation

so about 30 years ago they created a

buyer agency in the state of South

Carolina and in many other states and

the natural conclusion when you have

something like this you have the

listing

agent and they're mostly doing marketing

trying to get a buyer to come through

the house and then but then the Buyer

Agents was typically the ones actually

bringing the buyers so then the Buyer

Agents need to be compensated well The

Logical way to do that that was to

Simply split the compensation in half

and even though the listing agent got

all the

compensation slide over here a little

bit even though the listing agent got

all the compensation in theory they

would end up creating a compensation

agreement with Buyer Agents whereby they

would split their commission with the

buyer's agent which only made sense

right because the buyer agent was the

one that actually brought the buyer the

listing agent helped the buyer to find

the house so it's kind of a match made

in heaven right the listing agent's not

going to take all the commission the

buyer agent doesn't need to pay an

additional commission because all of

this has already kind of been handled in

in a variety of ways the commission has

already been set and so it can just

be split between the two parties and and

so here's let's just simplify this right

let's say and again I'm not going to

talk percentages I probably shouldn't

even talk dollar figures but I I

don't know I don't I don't see a harm in

that

excuse me and just to be clear there's a

lot of compensation models out there for

listing agents or some listing agents

that only charge a flat fee some that

charge a percentage combination of the

two so there just know that there's

not one size fits-all when it comes to

realtor compensation there's a lot of

models out there but most people

think about the percent model but we

can't talk about that so I'm just going

to talk about the the flat fee idea

right let's say that you had a listing

where the seller was paying a $20,000

commission to the listing agent at

closing once the house sells but the

listing agent didn't find the buyer a

buyer's agent brought the buyer usually

what would happen then is that half that

commission half that 20,000 would be

split 10,000 to the listing agent 10,000

to the buyers's

agent now a lot of people think about it

as like well the seller is paying for

the buyer agent well that's that's not

really accurate what's actually

happening is the seller is paying that

amount to the listing agent and the

listing agent is simply sharing part of

their commission with the buyer's agent

which is again is fair because the

buyer's agent actually brought a buyer

so I think that's an important an

important distinction now there's an

additional layer to this though and that

is that the

compensation that is offered by the

listing brokerage okay and by the way

let there's a lot of complexity let me

try to simplify something here you've

got listing brokerages you've got

listing agents okay I'm going to be

using both terms buyer broker brokerages

and Buyer Agents I'm going to be using

all of these terms at different times

what does it mean The Brokerage is the

company a real estate agent me as a real

estate agent in South Carolina I have to

be with a brokerage okay now can I own

my own brokerage yes in theory but there

are a lot of reasons why I don't want to

do that and so I work for a brokerage

specifically it's a long name Brookshire

hathway Home Services C Dan Joiner

Realtors Midtown and so there's The

Brokerage and then I am an agent of that

brokerage so if you're a buyer or a

seller and you want to become my client

you're a seller you want me to help you

list and sell your home you're a buyer

you want me to help you find and

purchase a home you have to become a

client of my company with me as an agent

of that company that's a common

misconception my clients they are my

clients but they're a client of my

company and actually if I were to leave

CED and jiner Realtors the the shorthand

we don't always just say the Berkshire

haway version of it if I were to

leave cedan Joiner Realtors and I had a

bunch of buyer and seller clients at the

time that I left I would actually have

to get permission from the company to

release those clients to to basically

the new company that I'm working for

and they're not not necessarily

obligated to do that now good companies

do that and there are a lot of bad

companies in Greenville that don't do

that if you're an agent listening to

this I recommend that that is something

that you very much vet out if you're

looking around at at different

brokerages find out what their policy is

in terms of how they handle it when

someone leaves do they get to bring

their clients with them or will The

Brokerage fight them tooth the nail over

keeping those clients if you do need a

company if you're an agent listening in

on this and you need some help with all

of this my team the Morgan group we are

looking for new agents I will personally

Mentor you and train you you can light

me up all hours of the day or night

and so let me know again my contact

information is in the show notes

but man that was a that was a crazy

asside I don't know I don't know where

all that came from long story short

we have Buyer Agents who are working for

their their brokerage and Buyer

Agents have to have an agreement in the

state of South Carolina with their buyer

clients and and now after this week this

is one thing that's being rolled out

Nationwide is that all over the country

Buyer Agents are going to have to have

written agreements with their buyer

clients that hasn't been the case in

Most states in the in the US until this

year South Carolina we've been ahead of

the curve we've had this in place for

roughly 30 years now and so we have a

buyer agency agreement that essentially

clarifies what my fiduciary

responsibilities are to the buyer client

and then what the buyer client's

responsibilities are to me as their

agent and to see the enjo Realtors as

the The Brokerage that I work work

under and part of all of that is the

compensation side of things so the buyer

agency agreement actually states that

the buyer is responsible to compensate

their agent how much well that's the

part that's negotiable right now the

thing is that Buyer Agents like myself I

have plenty of clients I can set my fee

and if people don't want to pay it they

can go to someone cheaper that's not

going to offer them the kind of service

that I offer them and that is totally

fine I don't lose any sleep over any

time that I lose someone over

over that if someone just wants to get

less service maybe they bought a bunch

of houses they don't need full service I

don't know I don't judge people on any

of that I don't lose sleep over

that the times that I lose sleep are

when people say they don't want to be my

client over something else because they

feel like they might get better service

from another agent that's when I lose

sleep doesn't happen often but maybe

I have a bad day when I'm giving a

presentation I don't give my best

presentation and that happens who

knows but the buyer Agent form has a

variety of fields in it that can be

filled in again negotiable that

outline what sort of compensation that

the buyer's agent is going to receive as

part of the transaction be a percent it

could be a flat fee there could be

retainer fees there could be service

fees there's all sorts of different

things things that can be in there but

the point of me saying this is that

buyers have been used to in their mind

the sellers paying for Buyer Agents

right even though I've already said the

seller is only indirectly doing that

it's really the listing agent that is

compensating the buyer's agent but

the listing agent is doing it with the

seller's money so it does make sense why

people just kind of jump to the

conclusion that the sellers are doing it

but for a while right until probably

2018 it was pretty common place that

Buyer Agents almost never yeah Buyer

Agents almost never received money

directly from their buyer clients

well that started to to shift as home

prices got more expensive and as you

know the market became more and more of

a sellers Market became easier to sell

homes listing agents started to

started to you know essentially have to

reduce commissions that they were making

because again it's all negotiable and

when it's a sellers Market sellers have

the power right and so sellers are able

they have more negotiating ability and

so they were able to drive down

commissions gradually over the course

of the years and so what happened was is

that the past few years there's been a

lot more buyers that have had to

actually pay their buyer agent because

let's say that they agreed to pay their

buyer agent

$5,000 but the listing agent the

listing broker is only offering

$3,000 as part of you know if you

close with them then the buyer at that

point has to make up the difference the

extra

$2,000 and so that is something that

that that's not something new okay

that's been in place for a long time but

that's something to keep that's really

important here because there's a very

good possibility even though this has

been going on now with regularity for

for you know five or six years there's a

good chance that this becomes a much

bigger part of this whole process moving

forward and certainly something I'm G to

have to explain in a lot more detail to

all of my clients moving moving

forward now I've always been very

upfront with all of my buyer clients if

they're making an offer on a

home that will in some way shape or form

require for them to pay some or all of

my commission why I hate

any sort of surprises I I don't even

like good surprises in a real estate

transaction all surprises are bad I want

the entire real estate transaction to be

predictable to go exactly how we

expected to and for there to be no

surprises not even a good surprise I

come I am of the opinion that all

surprises are bad surprises in a real

estate transaction and if there's a

good surprise and I I'm still not

super happy about it but better than

a bad one but i' just like to eliminate

all of them right let's make let's all

know what's going to happen over the

course of these next few weeks while

you're under contract and there's no

worse surprise than getting to the end

of your contract and finding out that

you owe more money than you thought you

did oh and not only that but you owe

more money than you thought you did to

me that is not a surprise that I want to

spring on anyone so if ever there was a

transaction that or a potential

transaction where my client would have

to compensate me without knowing it I'd

always make sure before we ever submit

an offer and some cases before we even

look at a home let my client know just

FYI here is what you agreed to

compensate me here is what I'm what

you're getting what you're paying for

for my service and here is what the

listing agent is offering it doesn't

make the full amount so if we make an

offer on this home

home a I will try to get the seller to

make up the difference okay what we can

ask for them to pay for to to pay for

concessions which some people call

you know seller paying for buyer closing

costs there are other forms of

concessions than that but we can try

to get them to pay for concessions to

make up the difference but if they if

they won't do that then you're going to

end up paying this extra amount at

closing here's the exact amount so I

always make sure that people know that

right off the bat and for the most

part outside of like that really crazy

sellers Market from 2021 through

2022 very few of my buyer clients except

for my investor clients for a variety

of reasons I we'll talk about that

another day investor clients tend to

look at unique properties sometimes off

Market things and and sometimes they

have to pay for my entire Commission

because we might not be looking at

things on MLS

but the the vast majority of the time

for just my standard retail home buyers

and home sellers if we're looking at

a home where the seller and the listing

agent they're not paying enough to cover

my entire commission almost all the time

I was able to negotiate once we made the

offer right because that's when you have

all the Leverage is when you're making

the offer able to negotiate for the

seller to go ahead and pay up that

little bit extra difference so that my

client did have to do that and again

there was a short period of time from 21

through 22 where where we couldn't do

that it was just too crazy sellers had

all the leverage but it's come back

and now you know it's it's becoming more

common again for sellers to have to do

that so everything I've said so far is

what's been true in the past and all of

that remains true moving forward at

least within the framework that we're

currently familiar with from the

National Association of Realtors from

the South Carolina Association and from

the Greenville assoc the greater

Greenville

Association so what is changing all

right now we get to the good stuff first

off Buyer Agents can no longer show

homes to customers or clients a customer

is an unrepresented buyer a client is a

represented buyer represented by a

realtor Buyer Agents can no longer show

homes to any parties without a written

agreement between the buyer and the

buyer agent in place now currently in

Greenville where I'm located the only

paperwork that I have to cover this is

the exclusive right to buy buyer agency

agreement which in South Carolina is the

contract that specifies that I am only

that I am working with you and that I

have a fiduciary duty to you as my buyer

client and you are only working with me

you are not contacting other agents

other Realtors you are only working with

me and you will compensate me if you if

we have a closing or if you have a

closing on any house for sale by

owner on MLS not on MLS whatever the

case may be if you have any closing

During the period period of time of that

buyer agency agreement you will

compensate me unless I'm able to get

compensation out of the transaction

through the seller through the listing

brokerage etc

etc I can no longer show you any house

unless we have that agreement in place

now it's possible that there will be

some kind of a new sort of agreement a

showing agreement or something like that

it you know and and it's possible

even so that perhaps my brokerage

will produce paperwork like that my

brokerage I I work for a a pretty large

brokerage so sometimes they produce

their own paperwork if they don't

feel like the South Carolina Association

real

is is doing a a good job on their

front with the paperwork so there's a

lot of possibilities here but

currently there's only one possibility

as I'm speaking right now and that is

you if you want me to show you a house

you must sign the buyer agency agreement

now it could be a very short agreement

let's say that you're you know you want

to kind of see what I'm like right

which is a completely reasonable thing

if you're wanting to work with a buyer's

agent some people like to interview

multiple agents well you can't really

get a sense of what they're like unless

you look at houses with them so maybe

you want to sign a one day or a one week

agreement and just kind of see how that

goes look at some houses and then I can

actually show you what I can do as an

agent that is a kind of a workaround

that could be done and the National

Association Realtors even said so much

but that's the F that's the first

thing I want I I want to lead with that

rather than all this commission and

compensation stuff because I feel like

that is going to be a big change to a

lot of people and I think it's very

important that we get out in front of

that right on the front end no more

people calling me up and just being like

hey Stan I saw this house can you show

it to me and me being like well we don't

have an agreement in place that's okay

I'll just do this one as a freebie nope

can't do that anymore there's no more

freebies we've got to get the paperwork

in place on the front end and I think

some consumers are going to be really

put off by that but it is what it is

this is the rule this is the law it is a

settlement that was agreed to and this

is what we as Realtors have to do to

protect ourselves and I'm sure that

there will be some realtors that don't

do it and good luck to them those are

the realter that aren't going to last in

this industry very long what's

another thing that that is changing well

this is another big one this is the one

that that really it most people are

talking about

whether directly or indirectly a

listing agent can no longer advertise on

the multiple listing service how much

compensation they are sharing with a

buyer agent or

brokerage they still can share a portion

of their commission with a buyer's agent

or brokerage and they can still tell

people that on platforms that are not

the multiple listing service but they

can't do it on the multiple listing

service so so I will be doing this on my

website for any listings that I have my

personal website non MLS I'll be putting

on there what commission is being

offered to a buyer's agent obviously

people can text call do things of that

do things like that but when you're

searching on MLS it's not going to be on

there and this is a little bit

frustrating for me because this would

was a very quick and easy way to be able

to you know for my clients that were

cash strapped and I work with a lot of

first-time home buyers so a lot of my

clients aren't super duper wealthy and

it sometimes it was really important to

be able to see very quickly okay will my

entire buyer agency fee be covered by

the listing agent or not well now there

are some additional steps that we have

to take in order to clarify that because

I can no longer just quickly look on MLS

and see it it's not there anymore they

deleted the field it's gone and

and and so that is just the reality

it's frustrating but it's it's

something that had to be done in order

to get the Department of Justice off the

backs of the National Association of

Realtors now further to this a seller

and by extension the listing brokerage

can declined to offer any compensation

to a buyer agent they can say we're not

giving them anything we don't want Buyer

Agents 0% Z commission and if that's the

case then the entire compensation for

the buyer agent becomes negotiable when

an offer is made right just because they

say we're not going to do it doesn't

mean they're not going to do it

right I trust me I have this all the

time listing agents will be like yeah my

client's not going to pay for closing

costs well let me make you an offer and

see what they say and then you make an

offer and turns out they are willing to

to pay for cl costs in order to get

their house under contract same thing

with these realtor compensation

things if if a listing says or

doesn't say that they're offering any

sort of compensation obviously they're

not going to say we're not offering it

because also that would be an

antitrust violation too but if

they're if they're if they're thinking

we're not going to offer it we're not

going to advertise anywhere that we're

offering a commission and if if an agent

calls and asks are we offering a

commission we're just going to say no

you can still make an offer and ask for

them to pay for it right there's nothing

preventing you from doing that and a

listing agent is required by law to

present every single offer that they get

so they have to present the offer

now a little

tip and and this is this is going to be

a whole another thing okay

really Buyer Agents should not be even

showing houses unless there is already

that compensation agreement in place

that is that is a whole thing and and

this is I don't know if compensation

agreements you know I this is a part of

it that I'm not sure how it's all going

to shake out but generally speaking

if I have a buyer client that can't

afford me without getting some help from

the seller or listing agent I am going

to recommend to them we should not show

any houses unless we already have a comp

unless I'm able to get a compensation

agreement in place for this home because

otherwise you're going to look at it

and then realize that you can't afford

it and that's a terrible situation for

everyone listen I can't work for free

obviously I think every reasonable

person gets that but I also hate for my

compensation to get in the way of

someone else getting a house but again

unfortunately this is the world that we

live in now and some people are I I've

already heard some people say well we

don't have to pay Buyer Agents anymore

yeah we'll come back to that in a

second but technically you are true

technically technically it's true that

sellers listing brokerages do not have

to offer any sort of compensation to a

buyer's agent and if a compensation

agreement was not done in advance of

going under contract then there is a

very good possibility that the buyer's

agent and the buyer are going to have a

major problem mid transaction when they

realize that the buyer agent is going to

have to pay the full sorry the buyer

is going to have to pay the full buyer

agent commission that they agreed to

in the exclusive right to buy agreement

that they had that they had each

signed

earlier

however let me say this as well because

I just said that some listing agents

and some sellers might be not offering

compensation to Buyer Agents anymore

individual brokerages can still require

their listing agents and seller clients

to offer certain compensation

amounts just

because the National Association of

Realtors wants us to tell sellers that

they don't have to compensate a buyer

agent that doesn't mean that they can

can force my company to not do that does

that make sense my company still has

policies and every single whether you go

to a Keller Williams or Coldwell Banker

or an exp real estate or a Remax or an

Allan Tate or real broker or whoever

then there's all sorts of Boutique

companies as well you go with any of

these and they all have policies of

procedures and they all have the good

ones at least have policies when it

comes to commissions and they can still

specify for listings or for buyer

clients this is what our agents are

expected to to be compensated in

terms of their commissions and so

that's something very important

important to keep in mind I cannot give

a

0% buyer agent or a0 buyer agent

amount on a listing why because my

company doesn't allow it it's a bad idea

and again I'm going to get get to

that in a second but we want to actually

sell the listings that we get and we

want to sell them for top dollar and we

believe that the only way to do that is

to actually pay a buyer agent and to

make sure that the that the full

Market is accessible and able to see the

property that is for

sale I'm going to get into more

specifics on that and how it affects you

but before I do that we need to talk

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before all right how does all this

commissions and whatnot stuff the

settlement stuff affect you okay let's

go through this real quick here first

off if you're an active buyer client

with me or with any other realtor in

South Carolina you're going to need to

redo your buyer agency paper work

because now we have all new paperwork

for all of these

changes it's the reality of the

situation the old paperwork has gone the

new has come and now we have to redo

paperwork so that's something that I

will be sending to probably by the

time this goes out I will already have

sent it to all of my buyer clients

and so that's just something to

keep in

mind the I'm not changing the terms of

of these agreements I'm not sliding

anything shy into there it's just

that we need the updated forms to be

used for all of our clients so that's

going to

happen secondly buyers can still assume

that most of the time I think at least

part of their commission for their buyer

agent will be covered by the listing

brokerage but I do think that there will

still be a major adjustment period in

terms of figuring out how much listing

brokerages are offering to Buyer Agents

and what paperwork is needed or what

process is needed to confirm that

commission amount so there's going to be

a lot of learning curves ahead here I

mean it is yeah it's going to be crazy I

I'm not looking forward to this

transition it's not going to be easy I

think it'll be good in the long run

but it's going to be a difficult

transition we're not exactly sure when

the dust settles what it will all mean

but it's something that buyers are

going to have to be patient as they deal

with this because it's going to be a new

system and there are going to be some

sellers that are going to be like well

heck I'm going to I'm not going to offer

anything or I'm going to offer bar you

know I'm going to offer 500 bucks the

buyer agent doesn't do more than 500

hours worth of work yeah a buyer's

agent that that doesn't do it

full-time right how many people want a

buyer's agent that's not a full-time

agent and has never been a full-time

agent in their life they don't know what

they're doing like let's just be honest

let's be honest they don't know what

they're doing only the full-time agents

know what they're doing I talked to both

of them you can tell right away it's

very easy to tell if someone's a

parttime agent because they because I

have to end up educating them on things

so I'm I'm sorry for that little

rant there but these people that want to

cut out buyer agent commissions what

they're really saying is they don't want

there to be any full-time Buyer Agents

and that doesn't help anyone it if Buyer

Agents are going to be here they need to

be full-time in my opinion that's a

whole aside but but thinking big

picture on it I I just wanted to mention

that let me also say this with regard to

lenders we have an interesting thing

that is going to happen here again a

learning curve a period of filling

things out where I don't know exactly

how lenders are going to handle this but

let's say that I don't want or let's say

that my buyer client doesn't want to or

can't pay me for my entire buyer agent

commission they want the seller or

listing brokerage to cover all or some

of that there are in the state of South

Carolina essentially two simple ways

that I can do that one is we have an

actual compensation agreement that

specifies who's paying to whom and how

much and under what conditions great

form very simple we're going to be using

it a lot in the upcoming months the

other way to do it is is to just

basically have the buyer pay the

commission but have the seller reimburse

the buyer in the form of concessions

again okay this is what we talked about

before when the seller is paying for

a part of the buyer's closing costs that

is a form of a seller concession okay

now here's where things get

tricky loans lenders that are in hold

on let me back up for a second lenders

that are providing loans got my tongue

tied there for a second it's been a long

day I'm recording this at 740 p.m.

I'm ready to go to bed lenders that

are providing various loan products have

limits on how much seller concessions

can be typically it's between 3 to 9% of

the purchase price and and it it depends

on a lot of factors whether it's 3% or

whether it's 4 or 6% or 9% or whatever

the case may be but you cannot give more

concessions if you're selling a house to

a buyer you can't get more concessions

than what that buyer is allowed to get

within the framework of that loan so

what happens if the buyer is allowed to

get say 6% of seller concessions let's

say the buyer they can't pay their

closing costs they need to do a rate buy

down and all sorts of other things so

they need to get an entire 6% of their

purchase price back from the seller in

the form of a concession what happens if

I also as a buyer's agent need to be

compensated without that money because

you can do it that the buyer pays for

the commission and then is is paid for

it back in the form of that concession

but what if the buyer can't even do that

what if they need the concession and

also need for the for their buyer

agent to be fully compensated as well

well that compens agreement is different

than the concession but will every

lender see it that way and will Fanny

May and Freddy Mack at the end of the

day see it that way as well well my

understanding so far as fanny has not

made a determination on this and they're

kind of waiting and seeing and my

understanding from lenders I've spoken

to is that some lenders have already

decided Fanny hasn't done anything and

so we are going to accept both

concessions and compensation agreements

as separate things and so you could

completely max out the concession Max

for your loan and also have you know

your buyer agent being compensated by

who knows how much whatever you've

negotiated that to

be on the flip side I think that there

are going to be other lenders with

stricter standards that are concerned

that Fanny May change some things and

that they are going to say you know what

if whatever your you know if you have a

compensation agreement that is a part of

this

transaction that counts as a seller

concession in other words if I as an

agent am being compensated $10,000 then

that $10,000 will go against the the

concession amounts so let's say the

concession amount was you know up to

$20,000 depending on on the you know the

purchase price and and the concession

Max and all of that now if if you can't

pay for your buyer agent and the buyer

agent commission is half of that now

you've just reduced the amount that you

can ask for in terms of closing costs

and concessions from the

seller so this is going to be a new

layer that we need to verify with

lenders listings listing agents sellers

are going to have to call up those

lenders if they get an offer that is

asking for both concessions and

compensation they're going to have to

call up lenders to make sure that that

the lender is willing to do that that

the lender guidelines allow them to do

that buyers who can't pay for all of

their closing costs and also can't pay

for their buyer agent commissions need

to make sure that they're with a lender

that's okay with a seller paying for all

the closing costs and all of the

commissions as well and so these are

things that are really really important

details that we need to start thinking

about now because again super duper

important now I've already kind of

referenced this in passing but my

company cedan Jordan Realtors will

continue to require compensation to

Buyer Agents that that we do as by means

of of sharing our listing

Commission because that's the only way

to really ensure that you're not harming

the marketability of your listings now

you might be cynically saying well how

would it Market the how would it harm

the marketability if Realtors aren't

allowed to steer their clients well I've

got news for you clients steer

themselves and the reality is that again

if you are a buyer and you can't afford

to pay your buyer's agent but you need a

buyer's agent you can't afford to not

have one then you're only looking at

homes that can and will pay for your

buyer agent for you so you are just

going to not look at all the homes that

are are neglecting to compensate a buyer

agent well guess what the vast majority

of buyers in this historically

unaffordable Market cannot pay for their

buyer agent that is the reality of the

situ ation you know who's sitting on all

the money it's the sellers all these

people that bought their homes in 21 and

20 and 2020 getting you know have a nice

2% mortgage rate they've got so much

Equity they got 50 or 60% Equity over

over what they bought the house for they

have tons of money the reality is guys I

hate to say it but if there's going to

be Buyer Agents it's going to be

subsidized in some way by Sellers and if

you're a seller and you're in denial

about that I'm sorry you can

absolutely choose to say I am not going

to compensate a buyer agent but what

you're going to do is you're going to

eliminate 60% of the buyers in the

market from being able to make an offer

on your home do you want to do that do

you want to only look at 40% of the

market that is a terrible strategy that

is a terrible way to approach economics

and I don't think it's a good way to

sell a house because at the end of the

day yeah maybe you saved a few

thousand doll on a commission but how

much should you lose by not having the

full Market looking at your house I

would argue there's no data for this

because again we we don't exactly

know how this is all going to play out

but I would argue that probably in

most instances those homes will end up

selling for Less net than what they

would have net even including

commissions if the entire buyer agent

commission had been paid by the seller

and most intelligent Real Estate

Investors and people like that that

that don't have skin in the game from

a realtor standpoint but understand how

basic Economics work most of them agree

fully with me there's a reason why I

when I flip houses I am willing to to

compensate Buyer Agents handsomely

because I see their value and I don't

want to you know eliminate potential

buyer clients that or or potential

buyers for for my houses and for my

listings because they can't afford

their agent and they're just not going

to look at I don't want to do that

that's a really bad strategy and I

highly highly don't recommend

it that said if you are a seller or a

potential seller you absolutely have the

option to list your home or your

property whatever with a firm that does

not require buyer agent compensation

like I said my firm does already but

there are going to be plenty of firms

that don't there are already firms that

don't and so you will absolutely end

up paying a lower commission amount but

remember what I've already said and

remember this as well when looking at

comps to determine the home value I

highly recommend that you note

whether or not a listing has paid an

entire buyer agency agreement or not now

you might not have a way to check that

but you need to even if you can't check

it you need to keep in the back of your

mind that most likely listings for the

past year paid for at least part if not

all of the buyer agent commission and

you cannot compare it's not Apples to

Apples comparing a listing that was

marketable to the entire Market versus a

listing that you're proposing not

offering any buyer agent commission

that's only going to go out to a small

portion of the market or that's only

going to be affordable to a small

portion of the market that is not a true

comp so you're going to have to start

making some adjustments in terms of of

how you analyze proper properties and

how you analyze comps and you're you're

not going to like the end result of that

is just the reality of the situation

because you think your neighbor that

offered you know a huge buyer agent

commission and sold their

home for top of the market you think

that you can do that without

compensating a buyer agent that's

ridiculous that's just not how it works

but I know I know that people are

going to think that and so I just want

to nip that in the bud right away

and as I've already said

before obviously at the end of the

day I do truly believe I am not just

saying this I am not just saying this

because this is none of this is going to

be a problem for me I've been ready for

this for months I'm prepared for all of

this but I'm telling you right now you

limiting the number of people that can

buy your home is a bad thing and you

will I believe be better off offering

some sort of compensation to a buyer

agent but that's something for you to

to to look at and crunch numbers and

discuss different marketing strategies

with different agents if you're

selling a home and then you can make

that judgment call because it is up to

you all of this is negotiable and and

and you can figure out what you feel

best about at the end of the

day so it's going to be it's going to be

a crazy next few months we got a

presidential election coming up we've

got the possible rate cuts from the FED

coming up we've got all of these changes

that are that are here upon us right now

but I'm ready for it I'm excited and

I want to work with you guys so if you

need a buyer agent or a listing agent in

Greenville let me know my contact

information is in the show notes happy

to talk to you guys if you're just

trying to feel out about Greenville

happy to just have a conversation with

you guys let me know shoot me a text

shoot me an email however you want to

reach out Piper Insurance Group if you

need home Auto Umbrella Insurance reach

out to them their contact information

it's also in the show notes and if you

enjoy this content please like rate

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good things sorry I got a little excited

there any way that you can support

the show I'd appreciate you guys and

so thank you guys for watching or

listening and we will talk again next time