Caveat Emptor – Buyer Beware: Consumer protection organizations are already sounding the alarm as Real Estate Brokerages and Agents are reportedly working together to bypass new regulations introduced after the Moehrl lawsuit. Instead of prioritizing their buyers’ best interests and showing all suitable properties, some Buyer Brokerages are now including a checkbox in their Buyer Representation Agreements, and advising clients to permit them to avoid homes based on whether the Seller or Listing Agent offers compensation. This exclusion is made without knowing if the seller will offer compensation, as no offer has been made, while fully knowing it is legal to request a Seller Credit toward Buyer pre-paids, closing costs, points and Buyer paid commissions in the offer.
Buyer Agents are who are aggressively pushing for percentage-based commissions are motivated to encourage buyers towards higher-priced offers to earn higher commissions, rather than agreeing to a flat fee or hourly rate, which would be more beneficial for the buyer.
Moreover, agents fail to disclose the financial benefits of buyers paying the brokerage directly, such as saving on interest and lower property taxes, rather than having the seller pay it and incorporating it into a higher price where the agent earns a higher commission, also resulting in an increase in property taxes and more.
The practice of encouraging Buyers to check a box in which compensation is only paid by the Seller or Listing Brokerage is a potential class action lawsuit waiting to happen, as the checkbox does not protect agents from accusations of steering. It also complicates matters for agents trying to determine their compensation but cannot get a clear answer from the listing agent. This might lead them to skip showing certain homes, even if compensation is available, or to submit an offer based on the listing agent’s indication of openness to compensation.
Next up:
Expectations are high for a significant drop in Buyer Brokerage compensation in the marketplace. Ohio Broker Direct has already noticed numerous Buyer Representation Agreements where Buyer Agents have significantly lowered their commission expectations to stay competitive. These agreements feature a variety of flat dollar amounts and commission rates ranging from one to three percent of the sales price. Additionally, some Brokers are preparing to introduce flat fee Buyer Representation Brokerages.
No Fees – Just Keys:
AI Real Estate Apps Offering Commission-Free Home Buying. ReAlpha offers a digital solution for home buyers and highlights features like AI-driven natural language home search and recommendations, commission-free home buying, and support from AI Real Estate Agent Claire.
Claire is designed to help with general application utilization, give market experiences, and answer inquiries concerning the home buying system, including offer entries and exchanges. According to the company, Claire is also able to review and provide analytical reviews of contracts, addenda, and other relevant paperwork associated therewith.
As we forge ahead, Ohio Broker Direct continues to champion the change with our Flat Fee MLS Listing Options, ready to guide you along. We’re not just participants in this industry revolution — we’re trailblazers, leaders, educators, and advocates for a future where real estate is fair and ethical. Join us at Ohio Broker Direct as we lead the charge towards a more transparent and equitable market. For personalized service that anticipates the needs of tomorrow’s market, reach out to us directly to begin your journey with a partner who’s defining the future of real estate today.
