In Response to the San Diego Union-Tribune Article, Sunday 8/11/2024 on
A New Reality in Real Estate Charges (Spoiler Alert There’s No “New” Charges).

I've been conducting business according to these principles for more than 25 years. Working exclusively by referral, I see no changes—just business as usual. There’s no confusion here; in fact, I’m excited to see our industry “clean house”.

However, the so-called "new realities" in real estate procedures are less about groundbreaking changes and more about enforcing practices that should have been standard all along. The San Diego Union-Tribune has once again taken a familiar path—presenting information just accurate enough to attract clicks, while missing the broader context.

Yes, we’ve lost the ability to advertise compensation in the MLS, and yes, some documents have been slightly modified. But these aren’t seismic shifts; these practices have been in place for decades. The requirement for buyers in California to sign an agreement before working with a buyer's agent and to pay compensation shortages isn’t new—it’s just that many agents chose to skip this step because they couldn’t effectively communicate their value. Instead of setting a minimum standard, they took what was given.

And let’s be clear: no one in this business works for free. Listing agents will either get paid or won’t list a property. Selling agents will ensure they’re compensated, or they won’t represent buyers. If buyers go unrepresented, they may find themselves paying the listing agent in a dual agency arrangement—something that’s technically allowed in California, but not always advisable, given the listing agent's inherent loyalty to the seller.

As for the recent settlement, it’s worth noting that the affected homeowners received approximately a mere $21 each, while the attorneys walked away with millions. Pre-settlement, the system worked well for both buyers and sellers – it was the bottom 90% of agents that needed to step up their services. We are not all created equal folks, you can't commoditize real estate agents.

Now, buyers are the ones getting the short end of the stick, as sellers mistakenly believe they no longer need to compensate both agents—just their listing agent. This was always optional and negotiable, but apparently, it's only now being driven home with this new clarity.

The outcome of this settlement is that buyers may end up shouldering the difference between what their agent charges and what they can recover from the listing agent. Ironically, the very buyers this settlement was meant to protect could now find themselves facing higher fees.

On the bright side, this shake-up will force agents to either elevate their standards of practice and communication or start exploring career options in a different field.

As for me, I've been conducting business according to these principles for 25+years. I've never worked without a Buyer/Broker Agreement and yes many of my Buyers have paid me part of my compensation because they value my expertise. Heading into my 26th year, working exclusively by referral, I see no changes—just business as usual. There’s no confusion here; in fact, I’m excited to see our industry standards rise.

#thomasjnelsonrealtor