Hypothetical

I think Streeteasy/Zillow will be afraid of lawsuit and eliminate the buying broker commission field. But there is nothing in the judgment to prevent the seller to offer buyiside commissions (buying brokers just would have to call/email) or pay for closing costs which can become a code for buy side commission but with buyer having an option of what to pay their broker.

Maybe the commission could be written into the property description by the listing agent? So it sounds like exclusive agreements will not be able to list buyer compensation?

I think they can put in the description but nothing in the proposed settlement prevents sellers from offering buyer's agent compensation in their exclusive agreement with their broker. What is a real change is the requirement for the buyer's agent to have an agreement with the buyer - essentially giving some control to the buyer to negotiate services and commission?
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And buy side commission will not be listed in the MLS.

Removing buyside commission from MLS is kind of silly as they can be communicated via other means or can replaced by "closing costs" offered by the seller. From what I see, buyer having some control over the commission with their agent is the main change in the proposed settlement.

I think the adjustment that rebny made to the co-brokerage agreement makes sense. Instead of a commission going to the the listing agent, who then agrees to distribute half to the by-site agent according to the terms of our universal co-workers agreement. Now the seller initials a box stating what they're willing to pay the buyside agent and what they're paying the listing agent.

Oops... cobrokerage agreement= exclusive listing agreement

------> "... there's nothing stopping a buyer asking a seller to pay his agent's commission as part of an offer. "

In The Economist's jaded view:

https://econ.st/43JTK5b

I wonder how an hourly rate would work out for all concerned - buyer and buyer's agent. That's how lawyers work. I really don't know.

While I was actively searching I did feel some not-so-subtle pressure to look at places above my modest ceiling of ~40% of my current net worth. 'C'mon, it's NYC' or 'Hey, it's your home you want something nicer than what that can buy' - and maybe he was right but I felt funny about it.

>I wonder how an hourly rate would work

It's not the broker's responsibility to put in hours.

MTH, I just don't understand the Economist's article.

Buyers are smart enough to buy houses but too dumb to ask agents what they're making?

The fix is in at 6%, a wall that needs to be cleaved through, but buyers don't know that their agents are getting 2% (yes, buyer's agents get a smaller share in certain markets) or 3%?

Agents are going to "steer" their clients towards higher-commission properties (that seems like human nature) but how does that work in a low-inventory submarket, which is the problem in much of the country ... if you only have five things to show, you're not going to only show three of them because two of them don't pay well -- trust me, the client will fire you!

And this still doesn't solve the larger problem -- in between corporate buying of housing, and the use of housing as short-term rentals , and rising income inequality -- the three factors that have really been driving housing prices --- housing is unaffordable to most people.

Housing is so unaffordable that even taking a transaction cost that is currently around 5.3% .... according to RealTrends, although I as a homebuyer am supposedly too stupid to look that up ... to zero isn't going to make homes affordable anyway.

ali r.
{upstairs realty}

I agree that it's not the commissions that are the main problem - it's the scarcity of housing. And if you build more housing, that risks stalling home value appreciation for current owners who, by and large, vote and contribute and sit on city council meetings - they value scarcity. It's a logjam.

Housing is only scarce where people want to live now.

Plenty of run down housing in less desirable parts of Bronx, Harlem and Brooklyn where the buildings trade far less than the replacement cost.

Cities/towns upstate with declining population have a lot of cheap housing. Even places like Binghamton with a large population of students.

This is true - I guess it's important to qualify that.There's huge moat surrounding highly desireable areas with good quality jobs and amenities called rent. High crime areas with lousy schools are more accessible.

Let's add more people to midtown.

I never paid more than $1400 a month in rent in NYC, I left 12 years ago. I lived in working class neighborhoods throughout Brooklyn/Manhattan when cheap,small apartments stopped existing downtown. Affordable rents exist, but not in the most convenient, trendiest hoods. That said, I experienced many areas of New York City, I may never have expected to live in. And found many very cool neighborhoods, that were affordable with good housing.

The commission lawsuit is not about making homes more affordable, it's about the structure of commission payments. Sellers paying the commission for the buyer and their agent, whom don't work for the seller, with little option to negotiate. I think a big part of this decision has to be made based on the type of home you're selling, along with the current market conditions. Whereas previously it's really been a one size fits all, basically 5 or 6% split between the buyer and seller agent.

Keith Burkhardt
TBG

You might find this article interesting, MCR. Also, some very interesting commentary in the comments section by the subject of the article, Doug Miller. This guy has been on a mission!

https://www.wsj.com/us-news/the-minnesota-attorney-behind-the-new-rules-roiling-real-estate-5e84e18b

I lived in Inwood for a while and loved it but would not feel great about sending my kids to schools in that area. It had a lot of charm but many of the things I lived in NY for - exhibits, performing arts, assorted cultural events - were tough to get to. Yes, there are great trains but did I want to spend an hour and much longer at night to go a concert? After a day at work it was hard to get on that train. I would, from time to time, but in some ways I might've been living in the burbs. I imagine the outer boroughs are similar although Brooklyn has more going on than it did back then.

“exhibits, performing arts, assorted cultural events”

I’m more here for the high taxes and the bodega bacon, egg, and cheese. They got that in Inwood, no?

Keith, I am impressed by $1400 rent in 2012! Thanks for linking the WSJ article. Nice read, and funner comments still.

Yes, the last apartment was at 555 edgecombe avenue, otherwise known as the triple nickel! And that was 2011!! I forgot I transitioned for one year and lived in Rutherford, New Jersey where we rented half of a two-family house for $1,400 a month!!

555 edgecomb has a great history, and Miss Marjorie put on free jazz concerts in her apartment every Sunday as a way to celebrate her son and deal with the grief from her loss.

https://www.harlemonestop.com/organization/84/parlor-jazz-at-marjorie-eliots

@Inonada - I love a good greasy kabob truck lunch. The taxes...that's what makes it all run, kinda

Forgot to mention: Cloisters and beautiful parks. So not a bad area, per se. Just feels like Siberia when coming back from Carnegie Hall at 11

Yes. Somebody I know moved up there and he said it was next to impossible to do anything spur of the moment because of transit time.

Understood, MTH. I’m not really into Carnegie Hall fare, but for me, I’d be at Miss Marjorie’s regularly if nearby.

Keith, did you get a river view for that $1400 at the Tiple Nickel?

So a funny story. The original apartment we were meant to get had a water view. The owner and his family, live in the building, they are very old school. I showed up to apply for the apartment and got there about an hour early. I decided to walk around the neighborhood a little bit, when I got back there was someone else sitting in the little office waiting area. That lovely couple wound up getting the apartment! Owner simply went on who was sitting there first when he walked in! We did wind up getting an apartment a few weeks later, it was even larger, but didn't have the spectacular view !! and wound up becoming pretty friendly with the people that got 'our' apartment!

Old school indeed — you snooze, you lose.

Yeah I thought I was good, I had an appointment. But I guess I wasn't the only one with an appointment...

Terrific story! Very old New York. I think that the younger generation does not fully understand the conceptual difference between "The landlord's job is to rent an apartment." and "The landlord's job is to rent an apartment to you."