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Do you need an agent to sell a home? Of course not. However, you don't know what you don't know - and real estate is easy until it's not. Then, it becomes stressful and potentially very expensive. The internet and "advice" sites can be helpful, but expecting them and AI to handle things as effectively as a full time, professional agent is not realistic.
The NAR Lawsuit Settlement
The lawsuit settlement by the National Association of Realtors institutes and reinforces certain compensation guidelines. As a practical matter, nothing in Texas changes as far as agent compensation. It has always been, and continues to be, entirely up to the seller what, if anything, they want to pay agents involved in their transaction. Compensations are not set by law and are fully negotiable. The settlement reinforces this and adds additional transparency into the listing agreement.
As a reminder, what home sellers in TX need to know:
* Compensations are not set by law and are fully negotiable
* Home sellers are not required to offer compensation for a buyer’s agent
* Multiple listing services (MLSs) will no longer include offers of buyer agent compensation
* Buyers can request the seller pay compensation to their buyer's agent when an offer is written
* Buyers may be obligated to cover the difference if offered compensation is less than that agreed to in their buyer brokerage agreement
The fundamentals of buying and selling a home remain the same, the issue of compensation has simply become more transparent. The settlement reinforces what has always been in effect in TX, all offers of agent compensation are completely negotiable. For sellers, it's a question of deciding if offering buyer agent compensation will ultimately result in the best possible outcome. Every situation is different and that is a discussion best had with the listing agent.
What is a Listing Agreement?
An exclusive right to sell listing agreement establishes a client relationship between seller and real estate broker. The seller gives permission for the broker to exclusively represent them in listing and selling the identified property following the terms and conditions set forth in the agreement. The real estate broker is required to represent and look out for the client’s interests at all times – as long as those interests are not illegal.
Why is This Valuable to Sellers?
Agents are not required to sell or buy a home. However, a professional agent is a major asset to a seller at every level from prep, pricing, marketing, negotiation, contract writing, and contract management.
What is Required for This Level of Representation?
A written and signed “buyer agency” agreement is required by Texas law and after 8/17/24 as part of the NAR settlement.
What Does a Listing Agent Do?
A professional listing agent should handle every aspect of the transaction. From the moment the agreement is signed, they should take control. This includes but is not limited to analyzing information such as comparable market data, assist with required disclosures, advise during negotiations and market your property for maximum exposure. In general, they act as the client’s advocate during the purchase process. See what a listing agent does by clicking here.
What if There is No Buyer Agent?
If the buyer is unrepresented, the listing agent is required by law to represent the interests of the seller. If there is no buyer's agent, the listing agent then effectively manages the entire transaction. They will not advise or counsel the buyer, they can advise for procedural or ministerial matters only. Transactions without buyer agents tend to be more difficult as there is no guidance and filter to walk the buyer through the process. It is reasonable to expect this to become more common post lawsuit settlement.
How Much Does a Listing Agent Charge?
Recent (2023/2024) lawsuits and projected settlements surrounded transparency of listing and buyer broker compensation. In TX, compensation has always been fully negotiable, there are no set fees. Listing agent compensation is negotiated between the agent and the seller. That is spelled out in the listing agreement. The seller IS NOT required to offer buyer agent compensation. Every situation is unique, and agent compensation, including any for the buyer broker, is discussed and agreed upon prior to signing a listing agreement.
What are Seller Responsibilities?
In this agreement, sellers agree to handle all real estate concerns through the agent. Sellers agree neither to seek real estate information from nor work with any other agent. Sellers agree to make their home available for showing, to have it promoted as detailed by the agent, to have any self generated marketing directed toward the agent and to cooperate with the agent during the listing period. In short, when sellers sign the exclusive listing agreement, everything concerning the home needs to be directed to the listing agent. The agent will work with the seller on all aspects of the transaction.
What About Other Options?
Some sellers feel competent to act unrepresented. They may feel money will be saved or that an agent isn't "worth" it. The internet will offer options; sites will discuss things from ala carte brokerages, pay as you go brokerages or iBuyers and investor options. Sellers should very carefully review and research options as these recent changes have opened up many untested but heavily marketed schemes. In most cases, a seller makes more money when they list with a real estate broker than when they try to sell on their own.