Almost No Buyers Are Having to Compensate Their Agents as Result of NAR Settlement
Leading up to the changes on August 17th which prohibited MLSs from displaying compensation for buyer brokers, I said that I would be surprised if any buyers ended up compensating their own agents. So, last week I did some research of my own and solicited input from others to see if my prediction had come true. It has. I sent emails to listing agents who had closings in September, and every one who replied said that their seller had compensated the broker representing the buyer of their listing.
My friends at First Integrity Title did a few “spot checks” on transactions which closed post-NAR settlement to verify what they were hearing based on actual data. The challenge was that they would have to open every file individually, but the consensus was that, as I expected, the seller has continued to compensate the buyer’s agent.
“It really has not changed from the past,” I was told by Pam Giarratano, our sales rep at First Integrity Title.
Here is the response Pam got from her VP of Operations:
“I can tell you that I’ve asked the same question multiple times; I’m just trying to understand how much has changed since the NAR settlement. I can tell you that I am repeatedly told that people have not seen any buyers paying their own agents.”
From Pam’s VP of Sales: “I looked at settlement statements for a dozen closed files, and the seller paid the buyer’s agent’s commission on all of them.”
Pam asked closers and lenders, and the
consensus was that the seller still pays. A lender who conducted a CE class in Westminster told Pam that they are still seeing the seller pay, but that sometimes if the seller is offering a buy-side compensation of 2.5% and the buyer’s agent has an agreement of 2.8%, the buyer is making up the .3% difference, or it is included in the contract as a seller credit.
That was exactly the case with one of my own listings in September. I told the buyer’s broker that the seller was offering 2.5%, and he submitted a contract with the seller paying 2.5% and the buyer paying an additional 0.3%.
Pam told me, “It looks like nothing has changed as far as the seller paying commissions. I think homeowners still want their houses looked at.”
Here’s the bottom line: Real estate is a free market. Just like builders who feel they must offer commissions to buyers’ agents because other builders are doing so, individual sellers are being counseled to offer the buyer broker commission because they realize that most buyers are represented by agents and they’re not going to buy a home if the seller requires them to compensate their own broker.
I chatted with my broker associates about this, and they are comfortable with the new rules which essentially bring more transparency to the process.
At the closing table, it has always been that the commissions paid to listing agent and buyer’s agent were listed separately on the settlement statement as being paid by the buyer. Naturally, some sellers objected to paying the buyer’s agent’s com-
Understanding Different 55+ Communities
Last week I was in a Zoom conversation with 14 of my high school classmates. We have been meeting like this every week since our 2020 reunion was canceled due to Covid. Three of us had moved into senior communities and we were answering questions about the options which we Baby Boomers face.
We are all healthy 77-year-olds (or thereabouts), but we all realize that the clock is ticking and that it’s not a matter of if but when we will need some sort of assisted living. Should we “age in place,” enter an “independent living” facility now, or wait until we need “assisted living”?
If you have 90 minutes of free time, I could share with you the URL of the recorded Zoom meeting, but for now, let me share some of the insights.
Laird lives at Windcrest, where he paid a 6-figure “entrance fee” and pays about $4,000 per month rent for a 1bedroom plus den apartment. He gets 30 meals per month in a dining room, but also has a kitchen for other meals. 90%
of his entrance fee is returnable if he leaves or dies. One thing I learned was that if by chance he runs out of money and can’t afford the rent, it is taken out of his entrance fee instead of having to leave. If assisted living is needed later, he stays in the same apartment, but the services and rent increase dramatically.
“They promise this can be my home for life,” Laird said.
Rita and I had moved into a pure rental 55+ community with no entrance fee. In fact, we paid no security deposit, and we got the first month free. We since moved to a regular apartment building.
I shared what I had learned about Vi at Highlands Ranch, where you must be healthy with no degenerative disorders, but you are promised no increase in rent when/if you need to enter assisted living, nursing care or even memory care.
The entrance fees at both facilities are reduced if you agree to only 50% or none of it being returnable when you leave.
Call me if you’d like to get more info or chat, or if you’d like that Zoom URL.
mission, forgetting that they had listed their home for x% and agreed that part of their listing agent’s commission would be offered to any agent who produced the buyer.
In other words, the commission to the buyer’s agent was coming out of the listing agent’s pocket, but it sure looked like the seller, not his agent, was compensating the buyer’s broker.
As I predicted, nothing has changed except the wording. The revised “Exclusive Right to Sell” contract still states the total commission to be paid at closing, but it lists a smaller amount that the seller will pay to the buyer’s agent, and states that the listing commission will be reduced by that amount.
Of course, in a real estate transaction, what rules are the provisions in the “Contract to Buy & Sell” between the buyer and seller. Section 29 of that document has lines to enter the compensation paid to the buyer’s broker by (1) the seller, (2) the buyer, and (3) the listing agent.
In some cases, the buyer’s agent will find out what the seller is offering, since it is no longer specified on the MLS listing. (Our listings specify that amount on the listing’s website and on a sign rider.) Regardless, the buyer’s agent will submit a contract which specifies how much the seller will pay the buyer’s agent, and the seller can counter that provision. It’s simply another element of the offer to be negotiated between buyer and seller through their agents.
Just last month, to win a bidding war, one of our broker associates submitted a contract asking the seller to pay only 1.5%, which tells you not only that buyer broker compensation is negotiable but that the amount of buyer broker compensation is going down. That was predicted, and is coming true. Listing agent was paid 3%.
In the past that listing probably would have displayed at least 2.5% buyer agent compensation in the MLS, and that amount would have been paid without negotiation or discussion.
So what did the plaintiffs in the NAR settlement expect to achieve, and what did they get?
At least in Colorado, they did not relieve sellers from compensating buyer agents. Listing agents are probably get-
ting the same compensation as before, but some sellers (like in the transaction mentioned above) are saving on the compensation paid to buyers’ brokers.
In some cases, listing agents may actually be earning more. I know of one multimillion-dollar listing which had a 4% commission specified in the listing agreement. The listing agent negotiated a 1% commission paid to the buyer’s agent, leaving 3% for the listing agent. Under pre -settlement rules, that listing would likely have offered 2% co-op commission on the MLS, netting the listing agent only 2%. Thus, the listing broker earned 50% more, thanks to the new rules.
As Realtors, my broker associates and I are okay with this new arrangement. It clarifies that the seller is paying both agents, but makes the amount more transparent and thus more negotiable. With sign riders and listing brochures, it’s not hard to inform buyer brokers of the compensation which the seller (not the listing agent) is offering, and the buyer can submit whatever compensation amount he or she wants in the contract to buy and sell.
Given the minimal end result of the NAR settlement, it will be interesting to see if there is further litigation on this matter. I don’t see any legal basis for denying a seller the right to offer compensation to the broker who produces the buyer for his home.
The Habitat for Humanity Pumpkin Patches Are Open
Every October, Jeffco Interfaith Partners sells pumpkins to raise money to sponsor a Habitat for Humanity home. In the past 20 years, they have funded over a dozen metro area Habitat homes.
The pumpkin patches are on the corner of Garrison & Alameda in Lakewood, and at 78th & Wadsworth in Arvada. The pumpkins are more expensive than elsewhere, but 40% of the purchase price is tax deductible, and it’s an easy way to donate to a worthy charity.
And the selection of pumpkins is great! They also sell carving kits and other Halloween paraphernalia.
Jim Smith
Broker/Owner, 303
YOUR GO TO, GAME TIME DESTINATION FOR PRO FOOTBALL
James Grant “Jim” Terry
July 6, 1935 - June 16, 2024
James Grant “Jim” Terry, aged 88, of Fort Lupton, Colorado, passed away on June 16, 2024. Born on July 6, 1935, in Fort Lupton, Colorado, Jim lived a life marked by dedication to his family, his community, and his country.
Raised on a dairy farm, Jim was deeply in uenced by his parents, Earnest and Viva Ackerson Terry, as well as his grandparents, Walter and Ellanora Carlstedt Ackerson. is early exposure to farm life instilled in him a profound love for animals, a trait that de ned much of his personal and professional pursuits.
Jim’s strong moral compass and sense of duty guided him to serve in the Colorado National Guard and the United States Army from 1953 to 1962. After his military service, he continued to serve the public as a member of the Colorado Highway Patrol and later as the Chief of Police in Johnstown. His commitment to law and order was paralleled by his dedication to the family farm, which he took over after retiring from public service. In late retirement Jim participated in the dog breeding business with his daughter.
A devoted husband to his late wife, Maryann Nichols Terry, and a loving father, Jim was survived by his children, Sharol Ann Terry Pestotnik, James Scott Terry, and Duane Lee Terry. His legacy continues through his grandchildren, Katie, Ashley, Nathan, Jason, Amanda, and Zach, and his six greatgrandchildren, Ciella, Leo, Trenton, Colton, Joaquin, Julieta, Dexter, and Dempsey.
Jim was raised in the United Methodist Church. His hobbies included a yearly cruise vacation, leather crafting as a young man and woodworking in later years.
Jim’s life will be celebrated on November 2, 2024, at the 1st Street Church in Fort Lupton, Colorado. e day will begin with an interment at Hillside Cemetery at 10:00 AM followed by a service at 1st Street Church at 11:00 AM. A reception at the church will follow the service, where family and friends can share memories and honor Jim’s remarkable life.
Jim’s unwavering commitment to his family, his tireless service to his community, and his enduring kindness and integrity will be deeply missed by all who knew him.
Lucy Jean Koontz (Salazar) October 2, 2024
Lucy Jean Koontz (Salazar), 77, of Greeley, CO, passed away on October 2, 2024, in Greeley, Colorado.
Lucy was born an identical twin at home in North Denver, delivered by her grandmother (Jesusita), who was also a midwife, to parents Anita and Macario (Max) Salazar. She attended North High School and married Fred Velarde. Together, they had three children: Gregory, Rebecca, and Christopher. Lucy loved being a homemaker, often showcasing her baking skills by creating beautiful cakes for her children, grandchildren, nieces, and nephews on their birthdays. She was also a talented seamstress, crafting stunning dresses and out ts for her loved ones, including prom gowns for her daughter and elegant dresses for various events. Lucy also enjoyed making dolls with intricate out ts. She loved reading her Bible and was a master decorator.
allieventcenter.com
Later in life, Lucy married Gary Koontz, with whom she shared a deep love for the Lord. ey were married for 21 years.
Lucy’s greatest passion in life was her relationship with God and her unwavering love and dedication to her family. We rejoice in knowing she is now in heaven, living a joyful eternal life, even though we deeply feel her loss.
Lucy is survived by her children, Greg (Peggy), Becky (Dan), Deron (Christina), and Chris; her siblings, Linda, her identical twin (Felix), Virginia (Jerry), Marylou, and Gloria; her grandchildren: Sharai, Maleah, Joseph, Michael, DJ, Natalie, Destani, Rachel, and Alesia; her great-granddaughter Harlowe; and many nieces and nephews. She was preceded in death by her beloved husband Gary, her cherished grandson Gregory (Little Greg), and her siblings Jenny, Perfecto, Rita, Frank, and Anthony (Tony).
A celebration of life will be held at Victory Christian Fellowship, 6101 W. 10th St., Greeley, CO 80634, on Saturday, November 2nd at 1 pm.
TERRY
KOONTZ
MARKETPLACE REAL ESTATE
Careers
Help Wanted
WELDER / FABRICATOR / MECHANICAL, Hudson, CO. Call Jeff 303-857-0380
Now Hiring Route & OTR Drivers at Bayer Built in Belgrade, MN. $10,000 sign on bonus! Email resume to hiring@bayerbuilt.com
Office position, flexible schedule, 3-4 days per week. General bookkeeping, organizational and computer skills a must! Contact Jim or Matt, 303-857-2750. Send resume to office@ houseofsmokeinc.com
Merchandise
Arts & Crafts
Family in Christ Church
70+ Vendors, Little Bear Café, Cookie Walk & FREE Raffle! Friday, October 18th 10:00am-4:00pm & Saturday, October 19th 9:00am-3:00pm 11355 N. Sheridan Blvd. Westminster (303-466-7770) Admission: FREE Suggested Donation: Non-perishable food items (not expired) for local food banks
Lawn & Garden
Professional lawn service: Fertilization, weed control, seeding, aeration & mosquito control. Call now for a free quote. Ask about our first application special! 1-833606-6777
Miscellaneous
We buy houses for cash as is! No repairs. No fuss. Any condition.
Easy three step process: Call, get cash offer & get paid. Get your fair cash offer today by calling Liz Buys Houses: 1-844-877-5833
DIRECTV Stream - Carries the most local MLB Games! Choice Package $89.99/ mo for 12 mos Stream on 20 devices at once. HBO Max included for 3 mos (w/ Choice Package or higher.) No contract or hidden fees! Some restrictions apply. Call IVS 1-866-859-0405
Aging Roof? New Homeowner? Got Storm Damage? You need a local expert provider that proudly stands behind their work. Fast, free estimate. Financing available. Call 1-888-878-9091
Wanted to Buy
