DETROIT (WXYZ) — Since our initial story about a landmark settlement that has the potential to change the home-buying landscape, dozens of people across metro Detroit have been weighing in.
Some took issue, while others wanted to weigh in on the conversation.
An agreement announced last week from the National Association of Realtors changes the commission structure.
“I think that the reaction here is that the whole entire industry is going to get blown up and everything is going to change. And in all reality, I feel that very little is actually going to change,” realtor Andy Hargreaves from Preferred Realtors said.
Hargreaves thinks he knows who will really benefit.
“I mean, they're claiming this is for the consumer, right? And I believe the settlement is for in the vicinity of $418 million, which sounds like a lot. And then you begin to kind of peel the onion back a little bit and you see that attorney’s got over $80 million,” Hargreaves said.
He says the buying and selling agent will now negotiate separately for their terms of service instead of a straight listing on Multiple Listing Services, or MLS, the real estate database used by realtors.
“I think that’s where the price collusion discussions came in play that we were price fixing when it was never the case. Commissions have always been negotiable and then sellers had the opportunity to determine what they wanted to offer proactively to a buyer,” Hargreaves said.
One of the things that people said is that this should lower the cost of homes.
I asked Hargreaves, “Do you think that will happen?”
“Honestly, no I don’t,” he replied.
Gaston Munoz is the president of the Detroit Association of Realtors, a subsidiary of the National Association of Realtors, the entity settling the lawsuit brought by home sellers.
Watch our initial report about the commission changes in real estate below:
“If I’m asking a particular price and I’m a seller and a buying agent brings me a buyer for a price in terms that I’m happy to receive and accept, I would have no issue paying whatever compensation that they would be seeking,” Munoz said.
I asked him, "Where do you think the major points of confusion lie?"
“I saw some articles that say the housing price is going to drop because there’s no more commissions, something like that. And that’s not true. Commission is still there,” Munoz said.
“It sounds like there’s going to be more contract signing too?” I asked Munoz.
“There’s going to be more contracts. But not too much between the owner of the house or the seller of the house and the agent. It’s going to be between brokers. We’re going to have to put in writing who and how we’re going to charge the commission,” Munoz said.
“Before on the MLS, I was able to specify I’m selling this house for $100,000, the commission is 6% — 3% to the listing agent, 3% to the buyer's agent. That doesn’t go there anymore. We’re not allowed to put that on the MLS anymore,” Munoz said.
Amy Osterbeck is a realtor with Keller Williams in Birmingham. She considers herself an educator and an advocate of the consumer and the profession.
“As an agent, are you concerned?” I asked Osterbeck.
“Yeah, I would say I’m concerned. One, because of the misinformation that’s happening. And then two, we’re not saying sellers can’t compensate buyer's agents,” Osterbeck said. “And I think that’s another falsehood that’s been displayed in the media lately is that commissions are going away. And the truth is, commissions aren’t going away, and they’ve always been negotiable.”
“Who do you think this will be a bigger benefit for in the end?” I asked.
“The attorneys, and not the consumer. It doesn’t protect the consumer at all,” Osterbeck said.
