New real estate commission rules could push out "mediocre" Denver agents
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Real estate brokers may be singing for their suppers after new rules on commissions kicked in last month.
Why it matters: Changes from a National Association of Realtors settlement could prove especially tough for what Business Insider calls the country's "glut of mediocre Realtors," including amateurs and those whose services might not be worth the price to homebuyers.
What we're hearing: It's business as usual for most top agents, Denver-area agent Kelly Moye tells Axios, but now they have to do a little more education around market changes and why sellers can benefit from offering commission to the buyers' agent.
Yes, but: "Newer agents or those who aren't as polished in their value proposition are leaving the industry," Moye says.
- Local agent David Schlichter suspects agents who can't communicate their value will "exit the business in higher numbers." The changes will lead to a more qualified pool of agents for consumers to choose from, he says.
Catch up quick: The status quo is that home sellers typically pay a 5%-6% commission, which is split between the buying and selling agents.
- Buyers should now be compensating their own brokers, per the settlement reached in March — meaning buyer brokers can't count on a share of seller proceeds.
By the numbers: The average Denver-area buyer agent commission was 2.56% in July, down from 2.64% in January, before the settlement was announced, according to Redfin.
- Commissions are projected to continue falling nationally, Axios' Emily Peck reports.
What they're saying: "At the end of the day, the market is going to decide whether there are too many Realtors or not enough Realtors," says Nate Johnson, vice president of advocacy at the National Association of Realtors.
What we're watching: Sellers can continue offering to cover the buyer's agent commission.
- As some brokers look for workarounds to the rules, new websites are making it easy to learn if that's the case, HousingWire reports.