The impact of the New Realtor Settlement on home buying

WHILE A POTENTIAL REALTOR SETTLEMENT COULD IMPACT THE WAY YOU BUY YOUR NEXT HOME, AND JOINING US LIVE THIS MORNING WITH MORE IN THE MARKET AND WHAT IMPACT THIS SETTLEMENT COULD HAVE IS MORTGAGE LOAN EXPERT BRIAN SAX. HEY BRIAN, ALWAYS GREAT TO SEE YOU. THANK YOU. LIKEWISE, BRIAN. LET’S GO AHEAD AND START WITH THE MARKET. I’M HEARING EVERYTHING FROM THEIR STILL BIDDING WARS TO HOUSES ARE JUST SITTING THERE AND NOT MOVING. WELL IT’S REALLY BOTH IT REALLY THERE ARE VERY MUCH POCKETS UH, OF BOTH RIGHT NOW. BUT OVERALL ALL WHAT WE STILL HAVE IS A SHORTAGE OF INVENTORY. UH, A PRETTY SEVERE SHORTAGE OF INVENTORY. AND FOR THOSE WHO WERE WAITING, YOU KNOW, FROM LAST YEAR TO THIS YEAR, WAITING FOR RATES TO COME DOWN, GUESS WHAT? HOME PRICES WENT UP 5% WHILE YOU WERE WAITING. SO, YOU KNOW, WE’RE REALLY THINKING RATES MAY COME DOWN IN THE THIRD OR FOURTH QUARTER. CERTAINLY NOT IN THE FIRST OR SECOND QUARTER. IT’S A GUESS, BUT I WOULDN’T WAIT. YEAH. SO WHAT WHAT CONTINUES TO DRIVE UP THE HOUSING PRICES? WELL IT’S AGAIN SUPPLY AND DEMAND THERE. THERE’S JUST WAY MORE DEMAND FOR HOMES. MANY MORE BUYERS. AND THERE ARE ACTUAL HOMES FOR SALE. SO IT REALLY PAYS TO NOT WAIT. BUY A HOME NOW. AND IF RATES IF RATES DO COME DOWN, GREAT REFINANCE. AND MEANWHILE YOU’RE IN A GREAT HOUSE AT A GREAT PRICE BEFORE IT CONTINUES TO GO UP. OH, THE INTEREST RATES. WE’RE GOING TO TALK ABOUT THAT IN JUST A MINUTE. BUT FIRST LET’S TALK ABOUT THIS SETTLEMENT. AND HOW IT MIGHT IMPACT BUYERS. AND SELLERS. WE’RE REALLY TALKING ABOUT THE COMMISSION HERE. IS THAT RIGHT? YES. YES AND NO. FIRST, I THINK THAT THE, THE, UH, THE SETTLEMENT HASN’T BEEN FORMALLY APPROVED BY THE COURTS. SO REALLY, I THINK CONSUMERS ARE GOING TO DICTATE IN THE END WHAT HAPPENS. BUT TWO THINGS THAT ARE REALLY BIG CHANGES IS A SELLER WILL NOT PUT IN THE MULTIPLE LISTING SYSTEM. THE COMMISSION THAT THEY ARE OFFERING TO A BUYER’S AGENT. SO IT’S IMPORTANT TO UNDERSTAND THERE’S TWO AGENTS, TWO TYPES OF AGENTS. RIGHT. THERE’S A LISTING AGENT THAT REPRESENTS THE SELLER AND HAS A RESPONSIBILITY TO SELL THAT HOME QUICKLY. AND FOR THE MOST AMOUNT OF MONEY. AND THEN THERE’S A BUYER’S AGENT. AND THAT BUYER’S AGENT REPRESENTS THE BUYER. AND THERE NEEDS IN THE TRANSACTION. THAT’S A FAIR NEGOTIATING ACTION. SO BUT THE REAL BIG DIFFERENCE HERE IS THAT SELLERS WILL NOT BE LISTING THE COMMISSION IN MULTIPLE LISTING SERVICE, THEIR CO OP COMMISSION TO A BUYER AGENT AND A BUYER AGENT WILL NOT BE ABLE TO TAKE A BUYER OUT AND JUST SHOW THEM A HOUSE VERY QUICKLY UNLESS THEY ARE UNDER A VERY STRICT SET OF AGREEMENTS WITH A BUYER BROKER. AND THAT’S ACTUALLY NOT A BAD THING. UM, A BUYER SHOULD BE REPRESENTED THERE. INTEREST SHOULD BE REPRESENTED NOT BY THE LISTING AGENT, BUT BY THEIR OWN AGENT. SO WE DON’T KNOW HOW IT’S ALL GOING TO SHAKE OUT YET. THERE ARE MANY, MANY THEORIES. SOCIAL MEDIA IS FULL OF HYPOTHESIS OF WHAT’S GOING TO HAPPEN. BUT IN THE END, WHAT I THINK IS GOING TO HAPPEN IS THE MARKET WILL DICTATE COMMISSIONS AND BUYERS WILL BE REPRESENTED. UH, MUCH MORE APPROPRIATELY. OKAY, I HAD A RED FLAG GO UP AND YOU TELL ME WHETHER IT’S LEGITIMATE RED FLAG OR IT’S JUST MY WAY OF THINKING HERE. BUT IF A BUYER’S AGENT CAN’T VERY QUICKLY GET THE BUYER TO A HOUSE WITH A LISTING, UNLESS THERE’S SOME SORT OF AGREEMENT WITH THE BROKER, DOESN’T THAT LIMIT WHAT THE BUYER CAN GO TAKE A LOOK AT AND WHEN? WELL, YES. YES. AND BUYERS CANDIDLY SHOULDN’T BE LOOKING AT HOMES WITHOUT BEING REPRESENTED. AND MORE IMPORTANTLY, THEY SHOULDN’T BE LOOKING AT HOMES UNTIL THEY’RE PRE-APPROVED FOR A MORTGAGE SO THEY KNOW THEY CAN ACTUALLY BUY THAT HOME. UM, SO AGAIN, I DON’T THINK IT’S A BAD THING. OKAY. YOU KNOW, THE DAYS OF GOING ON ZILLOW OR REDFIN AND SAYING, OH, CAN YOU SHOW ME THIS HOUSE AND THE AGENT GOING THERE IN THREE MINUTES TO SOMEONE THEY HAVEN’T EVEN MET? I THINK THOSE DAYS ARE GONE. ALL RIGHT. AND THEN WHEN IT COMES TO INTEREST RATES, JUST REAL QUICKLY, DO WE SEE THOSE GOING DOWN ANYTIME SOON? THEY WILL GO DOWN I BELIEVE, BUT THEY’RE NOT TERRIBLE. I MEAN, THE RATES ARE IN THE IN THE SIX SEVEN RANGE AND THAT’S NOT TERRIBLE. UH, IT’S, YOU KNOW, IT COMES DOWN TO WHAT’S AFFORDABLE TO YOU, BUT AGAIN, IF THE RATE GOES DOWN AND IF THE HOME PRICE WENT UP, YOU’RE STILL BACK TO SQUARE ONE. SO WE THINK AGAIN IN THE THIRD OR FOURTH QUARTER, THERE IS THE POTENTIAL FOR INTEREST RATES TO DROP. RIGHT. AND BRIAN IT’S ALL ABOUT PERSPECTIVE RIGHT. BECAUSE YOU REMEMBER WHEN INTEREST RATES WERE AT 18%. SO. RIGHT. EXACTLY.