If you watched any media outlet this week, you may have seen that home sellers have won a landmark lawsuit with a $1.8 billion judgment in their
favor. A jury said the National Association of Realtors and numerous real estate brokerages colluded with one another illegally. The ruling requires these entities to compensate home sellers who claimed they were forced to pay exorbitant fees to real estate agents.
But we will get to that in a minute.
First, let’s talk about the October real estate numbers in Niceville and Valparaiso:
Whether you are looking to buy or sell a house in our area, here is some helpful data from Flex/MLS as provided by the Emerald Coast Association of Realtors: The average sales price in October of this year was $481,000, up 6% compared to October sales of 2022.
According to local lender Steve Schutt, a local mortgage broker with Movement Mortgage, borrowing rates will fluctuate and then find a resting place for some time before they fluctuate again. You can learn more in the latest episode of The Interview on Mid Bay News Update.
Steve goes on to say that the current rates that we are seeing are that resting place for a 20-year high. The news Steve dropped in the podcast could mean good news: Likely, we will not see rates go up again, at least not in November and again in December.
At the risk of sounding like a broken record, this could indicate that should you be in the market to buy or sell, now is a good time to do it. Seeing that home prices are steadily increasing, but rates are stabilized implies that buying now locks you into a home that is growing in value. Should rates go down in the future, you could always refinance at the lower rate. There are, of course, variables to this being the best decision for you, and if you are planning on buying and being in your new home for five years,
then now would be a good time to consider it.
The sales price and days on the market align with what they were last year. Homes are selling in our area on average 99% of the list price and are on the market a little less than three months at 83 days. The amount of time on the market we see implies that, depending on your initial list
price and particular neighborhood; if you listed your home this week – you might be closing on your home in January of 2024.
Okay, back to the lawsuit. Simply put, consumers accused Realtors of conspiring with other Realtors to set commissions (the money they make off real estate transactions). In North America, members of the National Association of Realtors have cooperating agreements to “split” the commission from the sale of the listing.
Example: Seller lists with real estate agent A and agrees to pay
5% of the sales price. With the cooperating broker, real estate agent B brings the buyer, and real estate agent A splits the 5% commission with agent B. As a result, each agent earns 2.5% of the sales price paid by the seller.
The conspiracy comes from the consumers being unsure of how the buyer’s agent is paid. The argument is that – because the commission is split between the Realtors on the buyer’s and sellers’ part, the argument is that realtors would not do their duty to protect the best interests of the client – and instead work to get themselves the biggest commission possible.
Members of the National Association of Realtors take an oath to protect the consumer and to carry themselves with a high degree of ethics.
The NAR will be appealing the ruling and could end up taking years to come to a conclusion.
But what could happen if it is finally determined to be collusion? Essentially, it could mean that the seller only pays the listing agent, and buyers would pay the agent they are working with directly. Ultimately, what it comes down to is Realtors need to explain very clearly to anyone that they are working with, buyer or seller, how they are compensated.
In a listing agreement, Realtors should clearly explain their relationship with you in the selling process.
For buyers, you may start seeing your real estate agent asking you to sign a buyer agreement. Some of you have seen this or heard about its use, but it is not common. A buyer agreement clearly explains to the buyer how the agent is compensated and detail the services that they are providing.
This agreement lets you see what your realtor will do for you and what they will expect, compensation-wise, as a result of their work.
All 2023 data is provided by Flex/MLS as provided by the Emerald Coast Association of Realtors and is deemed reliable as of November 3, 2023, but is not guaranteed and should be independently verified.
John Sallman is the Broker/Owner of Salt and Light Realty and a regular contributor to Midbaynews.com. In addition to serving others as a realtor in the Niceville and Valparaiso areas, Sallman is a world-class chef with more than a decade of experience in the finest restaurants along the Emerald Coast.
Sallman, a Niceville resident since childhood, has experience in all types of real estate transactions. His brokerage specializes in sales and property management. Reach out to him today at John@saltandlightrealty.com.