03/18/2024
If you haven’t heard, the National Association of Realtors agreed to a settlement on their commission structure. This agreement was brought about by several class action lawsuits being filed and one blockbuster win for the plaintiff in the $1.8B Missouri case. There is a lot of controversy over whether this is good or bad for homebuyers/sellers and also who is really behind these lawsuits in the first place and will reap the rewards. Are Realtors getting their comeuppance finally? Are the big R.E. Tech companies, like Zillow and Redfin, behind this and trying to push out the local Realtors? Are the big RE holding companies, like Blackrock, trying to change what homeownership looks like in this country by making it unaffordable for middleclass buyers? One thing is for sure, the real estate landscape is going to change. I could go on for a while as to whether it will be better or worse. One immediate impact on us is seller paying buyers commission. This will now be negotiated in the contracts as a seller paid concession to the buyer. Our underwriting guidelines limit the amount the sellers can pay – 3% -6% total depending on the loan program. So, are these commissions now part of that limit? Until we get further clarification from the agencies and FHA/VA/USDA, the answer is yes. There will be tons of other implications to be sorted and unintended consequences to be dealt with. This is a big deal… Anyway, today, bonds are flat to drifting worse ahead of the Fed meeting this week. Rates are doing the same with a split between same to slightly worse. -John
