With predictions about the impact of the National Association of REALTORS®’ (NAR) Burnett settlement all over the map, ranging from higher costs for first-time buyers and job losses among REALTORS® to more transparency in transactions and lower overall commission costs and home prices in the long run, Clever Real Estate surveyed homeowners, those who plan to soon buy a property, and the real estate agents who serve both groups.
Clever asked 1,000 Americans about their thoughts on the NAR settlement and how it might impact their behavior. Responses were split between 79% who currently own homes and 21% who plan to buy one in the next year. In addition, Clever asked 516 active real estate agents about their views on the changes to the real estate market in the wake of the settlement.
The numbers broke down as follows:
- Nearly two-thirds of real estate agents (64%) oppose the recent changes to commission structure, down from 70% from a similar Clever survey conducted earlier this year.
- The percentage of agents who believe the settlement will hurt first-time homebuyers has decreased by 12 points since April but remains at more than three-quarters (76%).
- More than two-thirds of homeowners (67%) support the changes brought about by the NAR settlement, although only 53% of upcoming buyers do.
- Barely a quarter of homeowners or potential buyers (26%) have a strong understanding of the lawsuit and resulting settlement compared to 40% who either don’t understand the implications of the changes at all or haven’t even heard of the lawsuit.
- Agents used the words “confused,” “confusing” or “confusion” to describe their feelings on the settlement more than any other term.
- Nearly three-quarters of agents (72%) believe the NAR settlement will have a negative impact on the real estate industry overall, while only 20% expect a positive one.
- Almost half of the agents surveyed (48%) indicate that their overall outlook on their real estate career has become more pessimistic since the NAR lawsuit settlement was approved. Only 16% feel more optimistic.
- Two-thirds of agents (66%) believe buyers will become more hesitant to use a REALTOR® due to the NAR settlement, but just 22% of homeowners and potential buyers say they’ll be less likely to do so.
- Post-settlement, 71% of potential buyers still plan to use an agent. However, about half of potential buyers (49%) say figuring out their REALTOR’S® compensation, even if they don’t have to pay it themselves, makes it less likely they’ll end up actually buying.
- Almost two-thirds (63%) of homeowners who intend to sell in the next year are more likely to sell now that they’re not obligated to pay the buyer’s agent commission.
- More than a third of agents (35%) say they won’t work with sellers who don’t offer a concession that buyers can use to pay their agents.
- About eight in 10 (79%) homeowners and 71% of potential buyers believe real estate agents should be required to disclose their commission rates upfront.
Although the commission changes impact buyer agents overall more than those who work only with sellers, 90% of agents say they’ll remain open to working as a buyer agent going forward. Still, more than a third say they’re less likely to work with buyers, a trend that could lead to a shortage of buyer agents down the road.
Agents who spoke to Clever had varying views of the impact the settlement is having or will have on their careers.
Erick Dunn, who serves clients in the Columbia, South Carolina, market, sees only downsides.
“It’s frustrating for agents to do more work for the same money,” Dunn said. “It’s confusing to sellers the way that the fees are broken down on the contract. It’s scary for buyers to have to sign something before they can even see a house.”
Cheyenne, Wyoming, agent Barbara Kuzma said, “Buyers don’t like not getting to know me as an agent before I ask them to sign the new forms required.”
With two-thirds of agents believing buyers will become more hesitant to use a REALTOR® due to the NAR settlement, Alison Baity, who works in the Costilla County, Colorado, area, said, “My homebuyers want to go directly to the listing agent.”
When confronted with the typical buyer’s agent commission on a median-priced home, which costs roughly $12,000, nearly two-thirds of would-be buyers say it would make it less likely that they buy a home.
“Most buyers that I have come across barely have enough for the down payment and closing cost and can’t afford to pay their agent and don’t want the extra expense wrapped up into their mortgage,” said Tracy Trammel, an agent working in Washington, D.C., and Prince George’s County, Maryland.
Another takeaway from the survey is that homeowners who are considering selling their properties in the next 12 months are far more tuned into the settlement and its consequences than those with no plans to move.
One-third of homeowners without plans to sell their properties say they’re not even aware of the settlement compared to just 14% of potential sellers.
Although they might grumble a bit, most agents aren’t taking the changes lying down. About 83% of agents are planning to experiment with new business strategies in the wake of the NAR settlement.
The most common change in strategy is the use of short-term showing agreements (43%), which provide a single showing or a handful over a short period for no cost.
Many agents also plan on providing more detailed cost breakdowns for customers (42%) and adjusting commission structures (40%).
“This is a change in our industry,” said Marisa Bilkiss, an agent who works in the Las Vegas market. “It’s now a teachable moment to our consumers.”
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