Revisiting 2025’s biggest headline in Real Estate: our Storii host, Mike Sokolowski, hops on Storii Time solo (in May 2025) to chat about the National Association of Realtors‘s (NAR’s) nationwide commission changes and the New York Times article that put it back into the headlines. Listen in to talks about the latest news and if they matter to our buyers and sellers.
Mike: What’s happening? All right, we are live. As always, I am joined by my esteemed business partner and colleague, Saad Manir. Saad?
Mike: Saad, how you been?
Mike: Right on, right on. Excellent. Now, of course, so I’m doing this solo today because Saad is sick. He sounds like when he’s talking that he’s gargling, which isn’t good for anybody’s ears. So he’s gonna sit this one out and probably comment in.
Mike: Oh wait, maybe I can, maybe he can at least join in for a little.
Mike: We’ll see what’s up. Anyway, so I don’t know how these podcasters do it, talking by yourself for an extended period of time, but I’m gonna give it a go here. I’ve got my Boston Glitter shirt on, go C’s, and also the Glitter Boys are some of the best DJs in town. And pardon my French, but it’s always Disco Fox. It really does.
Mike: Okay, so today’s topic is the national headlines, particularly the daily podcast from the New York Times this week that I was sent by several people, friends, my girlfriend, the whole…everybody send it over and be like, what are your thoughts on this? So, I will try to articulate them as best as possible.
Mike: So the headline is basically that NAR passed a bunch of rules, National Association of Realtors, back in August. And it says that Realtors have been evading the rules, right there. So what are the rules, and what’s being evaded, I guess, is what we’re going to cover.
Mike: In the podcast, the main setup is that the law that passed in August saying that, and this is I tell all clients too, beforehand, before that August ruling, in the MLS, the multiple listing service, where properties are listed, there was a buyer’s agent commission percentage listed in there. So you, as representing the buyers, you saw a percentage commission in there. You knew that’s what that was going to be as part of the sale. And so it often wasn’t discussed with the buyers because it’s kind of built into the price already. What that ruling did was take that information out of it. And now it’s basically as a buyer’s agent, beforehand, you need to talk to the buyers about what percentage you’re making agree upon that. And that’s a contract between you and the buyers. And then when you submit an offer to the sellers, the percentage of buyer’s agent commission is written into the offer. If the buyers choose to roll that commission into their purchases of the sale and essentially the purchase or sorry, the loan amount.
Mike: The buyers do have the ability to pay the buyer’s agent directly in cash…that route is not usually explored. It’s usually built into the price of the home in a way you go and then it’s part of your loan.
Mike: So, The New York Times was claiming or in the daily in this podcast was claiming that was going to be a huge windfall for everybody in terms of prices were going to go down tremendously and there’s going to be this huge amount of savings and whatnot. That was never really the case. All historical data is if you’re looking at prior previously sold homes, the commissions for the agents are in that somewhere. And also you’re still using a buyer’s agent, and sellers are still using a seller’s agent. So the windfall that they were describing I think, was like, you know, with the…idealistic version of something that was never going to happen.
Mike: What did happen, and which is great is the transparency of all parties involved, knowing what line items are what and what commission percentages are going to each agent.
Mike: So the transparency of that ruling was the best thing that happened out of that. Further in the podcast, they’re talking about that…It’s a 6% commission with agents on each side splitting 3% each. I’ve been doing this for nine years. I’ve never experienced a 3% commission in my life. Sometimes there are special projects where they’re trying to get rid of the last few products in a development. And so they might advertise something like that, like, buyers, your clients, they’re gonna up your commission percentage.
Mike: All that…that is all a disservice to the actual buyers themselves. Like no agent should be steering one way or another just because they’re incentivized a little bit more to make a different commission. And in fact, the ruling out of August kills that where you’ve agreed to a percentage ahead of time, the buyers know what you’re making and that’s submitted with every offer. So that’s actually a good thing too.
Mike: But yeah, I’ve never seen 3% in my life. Good luck to the people outside of New England that are potentially making that. I have no idea, but never seen it before in the Massachusetts and New Hampshire area.
Mike: What else can we get into? Saad, you would have anything to say? How are things going? Good? Great. So with the 6%, the…reporter then goes on to say that agents are rejecting listings and saying that they won’t work with people for anything less than that amount. That’s kind of collusion. I think that that should be banned everywhere. I don’t think that that has anything to do with recent laws being passed. That was always kind of a thing of saying like, this is the price we set and there’s no negotiation on it. There’s always a negotiation on it. I understand that when you start a journey, especially if you’re buying for the first time, that things can be a bit overwhelming and you might not kind of catch on to that. But at any point during the process or transaction, you as a client should not be feeling pressured into everything, anything, and you should not… be doing things without a thorough explanation so that you understand it.
Mike: So if you do feel like the pace is a bit too much, that things aren’t being explained properly, that’s a reason to raise your hand and be like, I don’t get this, please explain it to me further. Don’t be afraid to push back or fight back on things that you don’t fully internalize and know what you’re getting yourself into.
Mike: And with that, there is a buyer’s agency agreement that is being signed now that needs to be signed. That’s with me as a buyer’s agent, working with buyers, you agree upon the percentage and the way you go. We didn’t like doing that.
Mike: And in fact, our version of that contract gives people an out after a few weeks. It’s like an amicable split. And that’s because our philosophy… during the entire time at Torii was that if this isn’t working for either party, both should be free to go away, or like to leave the agreement, unless you’re trying to screw somebody else over. And did that happen maybe from time to time? Yes, but very rarely. And it was worth people knowing that they weren’t forced to be locked in with somebody that they kind of just met and are just getting to know and getting used to working with. You know, that could feel like handcuffs on something. It can make the entire transaction miserable for everybody involved. And you know, that’s just not the right tone to have during a transaction. So, although buyer’s agency agreements are needed now, make sure that you have a potential out if after a few weeks, just be like, listen, we’re not vibing. I’m not getting what I expected out of this. And therefore you’re not locked in for the remaining time after that. So we’re going back to the podcast. The 3% each side, the people not willing to work for anything less than that, kind of insane, right?
Mike: Are you gonna pass up a multi-million dollar listing because they found somebody that would do it for two and a half percent versus three, then you’re still getting zero out of that. So, there’s always been negotiations in that, but for an agent worth their salt, it is good to have some standard, but there’s always wiggle room, especially if you’re doing a buy and a sell, and two transactions, things like that. There’s always sort of discussions to be had on that.
Mike: Another thing was that because the MLS no longer had the buyer agency commission offered, like in the database, agents were being rather creative with their conveying that there is an agency commission in this sale.
Mike: And so they were claiming that agents were doing things like leaving three muffins out on the kitchen island in the listing photos to subtly say there’s 3% commission offered on this sale. Other things were leaving a movie on during open houses with three in the title, such as Three Amigos or Three Ninjas, a personal favorite of my childhood…and all of that, one, if people are doing that, almost like kudos to you for the creativity there. Can’t imagine somebody doing that. Have I experienced that since August? Never. I think they’re giving the…idea of being creative, like for some of these agents, a little too much clout. I don’t think people are that creative to try to skirt the rules that way.
Mike: And that’s all beside the point. When you’re putting in an offer and you’re writing in, like “this offer price includes my buyer’s agent commission of acts”, that’s one of the things in the offer itself, which means it’s one of the things that’s up for negotiation.
Mike: In the end, all the sellers are worried about is their net proceeds that they’re actually able to take and move on and either save or invest or buy a different property with. It’s the money that the seller is actually getting. So when a seller’s agent is saying, we’re offering X amount of commission, it almost doesn’t matter because the offer with the proper net to the seller is what’s most appealing. If you’re the only offer at ask price and you’re asking for 2.5% buyer’s agent commission, they’ve probably planned to pay a buyer’s agent, but if you’re the only offer and you’re trying to negotiate things down, you’re the only offer. If you’re the highest offer in terms of net, it doesn’t matter what the buyer’s agent commission is at that point. That’s the net to the sellers.
Mike: It’s almost, get for journalism and for listeners and things like that, I get the appeal of trying to make a mountain out of a molehill or trying to, hear anecdotally about one situation and then you take it and run with it. But on the end, doesn’t like, when I’m selling something, I might have a buyer’s agent ask, are they offering out commission? And all you gotta say is like, yeah, they’re prepared to pay your buyer’s agent. Like I’ve prepped them for that. And that’s really it. It doesn’t need to be a certain percentage or amount because if you’re like, yeah, they’re ready to play 3% and you were gonna write in 2%, then I’ve already cost my sellers an extra 1% of proceeds that were going to that. So it’s part of the negotiation. And I don’t get why that is a big deal or why people would go out of their way to say that there’s an X% buyer’s agency offered to people. Doesn’t compete with me.
Mike: Yeah, what else about that pod? So, beyond that, there was an anecdotal story. Hello, Saad. Finally, you’re here.
Mike: Hey Mike. Wow, it’s been a hell of a week. Thanks, Saad.
Mike: Yeah, so let’s see, another, the anecdotal story.
Mike: Do you agree with that, Saad?
Mike: All right. So an anecdotal story to the the daily podcast was a guy in Colorado who had like a $2.7 million house. And when he was speaking to agents, some of the agents that he interviewed goes, no, we’re not working for less than 6% of the commission, 3% per side. I just find it odd that you couldn’t find anybody that wouldn’t do that or there’s not like an exchange of like, know, that becomes a good chunk of change. And so what this guy decides to do is to go it alone in terms of selling his house, which like, you know, I think the agents always need to demonstrate their value to the client and if the seller’s agent wasn’t able to demonstrate enough value for that, then people are free to kind of do what they want. An agent who is worth their salt is plugged into, with other agents, plugged into a big database, knows how to market the property, and knows other extra things to get eyeballs on the property and to put it in the best light. And that’s kind of like the value add that’s there. But if you do not see that, free to go it alone. And what this guy… would later say is that he came across like a bunch of it’s almost like going up against the mafia that he was pushed at every corner that agents that had buyers colluded not to show the property because he wouldn’t go with the seller’s agent. That’s insane too. If you are representing the buyer, it doesn’t matter what or who’s selling the property. Like if it’s a good deal for that buyer, you’re obligated to show them that property. So that’s collusion too.
Mike: So what they’re talking about are just like oldest time anti-business practices that should be taken to court if that was the case. But it has nothing to do with the agents at large and NAR in that ruling and how that just hasn’t stuck. That’s just shitty behavior in a very broad, general sense. So if people aren’t showing your property, like, yeah, I don’t know. You can’t find one buyer’s agent that is, like, I don’t care what the fuck other people are saying. This is great for my buyer, I’m gonna show them that. Like there had to be some people like that. And so what you later learn, and I think that this is like a broader scope, I’m like, just journalism in general, is you find the person who can create a story that has shock like that, but then you later find out that this person is a pro marketer and I respect the hell out of him for this because he got the hash or the IG handle realtors hate me. So, it says realtors hate me. It’s basically an account of going through the process of trying to list his home allegedly and the hoops and other obstacles that he’s encountered along the way. And then it turns out that he’s starting his own real estate company. So, which I can’t hate on that. If people are skilled in that way and can gain that much attention, like that’s the climate that we’re living in. But you gotta call a spade a spade when you see it. If you’re doing all this and then starting a real estate company. Can’t you see that like this was all in an effort to get to that point versus like, oh, this person ran up against big real estate and we need to tell his story as if he’s a sympathetic character. Those are very different things.
Mike: Call it for what it is, I’m still not hating on it. That’s like, if you’re a pro marketer, you can get a hundred thousand followers in a few months from like a specific shtick that you’re doing by all means. No exactly like what the end goal was on this stuff….so one of the things that he did talk about was that as a for sale by owner, you don’t get as much attention or ranking in Zillow. And I’ve found that to be true. So that definitely is one thing that we could like agree upon that that isn’t right, right? Like if a property is listed for sale, like it should show up in that way. But the unfortunate reality is most of these search engines and other things like that are doing their own things for monetization and you can, like on Zillow, as an agent you can pay for your face and information to be listed next to properties. And then you’re the person that calls and it’s paid advertising essentially for that agent. That’s part of the shtick for Zillow. What we’ve been seeing lately…
Mike: Matt, what’s up, Matt? What’s up?
Mike: It’s my buddy Saad, he is not on the call today. Once again, I’m doing this solo and just riffing on the daily podcast that came out this week. And this is the first solo StoriiTime I was able to do, but Saad, appreciate you in the comments.
Mike: So one of the other tangential battles that are going on right now is Compass’s promotion of their exclusive listing process. So what they’re trying to tell sellers is that there are added benefits to you not putting your house on the MLS and instead doing this as an exclusive listing within Compass, and it gets marketed that way.
Mike: Not a definite no from me in terms of like my argument against that, but there are certain situations for sellers, and I admit that there are, where you know, putting your house in the market doesn’t make sense. Do you have a ton of tenants and it’s so difficult to show? Are there health concerns from the family, and you don’t want like kind of the general public popping around and whatnot, those things. I even had recently, I was prepping a listing for sale and the neighbor, my clients called me and they’re like, our neighbor has expressed interest in buying this property. So, we kind of reworked the agreement. I didn’t have to take, you know, do any marketing—do the pictures and video the things that you do typically to prep it for listing, you know I just made sure that they were getting a fair price and if they agreed upon that that’s the sellers’ discretion to sell to their neighbor instead of putting it on the market.
Mike: That was their decision to promote that something is better for you by limiting the amount of people that are exposed to it in…You know Business 101, that doesn’t seem like a very good thing to have, right? You want the most eyeballs you want the most exposure of your property because you never know who’s gonna see it and be like that’s the one for me and outbid other people right there are some occasions where you can kind of guess where it’s gonna be and then there’s other other occasions where somebody’s either like so into that property or pent up from losing other offers that they’re willing to go even like above and beyond what the market is dictating at this moment oh and for a seller to limit their ability or an exposure to that, I don’t think is a great thing and definitely is a disservice to the sellers at that point. If you want to spread it amongst your office and spread it amongst the people that you know ahead of time to try to build up momentum, that’s totally one thing. But to be like, hey, like in a way, this is better for you to not put it on the market even though you wanna sell it. I don’t know, somebody argued against me on that, but that sure doesn’t seem like the greatest service for the sellers themselves.
Mike: So with that, Zillow is now saying that any, let me backtrack for a second. The agency modeled to do that, I understand the incentive because it keeps the sale potentially in-house so that both sides, both agents, are working for the same company. That’s added revenue for that company, but in a very, very murky sort of way.
Mike: So, Zillow’s response to that was that they will not put homes that have been prior, like previously marketed as exclusives, but not on the MLS. Zillow won’t show those homes on their search site. So right now we have like kind of a battle of two behemoths, Compass and Zillow. That was Zillow’s response to that. And we’ll see where things go. But my opinion on most of this is outside of extenuating circumstances and there inevitably is some small percentage where it doesn’t make sense to put your house on the market, even though you’re trying to sell it, you kind of try to find back channels. The overwhelming 98, 99 % of the sellers would benefit themselves from marketing it to the widest audience that you possibly can get. And that’s it. And then there’s room at that point, if you’re only showing it to select people, for some fair housing type laws that probably would run the risk of being violated at that point. You can inevitably see, I’m not accusing anybody of anything, but you can see how that might occur down the line. So with that, are you still on? Do you have anything I should talk about? Any questions? I think I’m just talking to myself right now, unless Matt’s still on.
Mike: Simple as that, what’s best for the client.
Mike: And that all goes back, that’s something we harp on all the time. There’s a shit ton of agents. There are a lot of people with a license, because guess what? It’s really not that hard to get your license, right? Take a 40-hour class, pass a test, now you have your license. And what is there to, sometimes, like from a naive person who isn’t in this consistently, you know, if you’re an agent, you’re licensed. Sometimes that’s all people look at and then they don’t know any better. But I’ve always thought that there should be a higher barrier to entry in this field because I think what sparked the original lawsuit that was settled back in August where sellers didn’t know that they had to pay fees for the buyer’s agent. People didn’t know that the buyer’s agent was getting paid all that stuff.That just boils down to poor communication.
Mike: Right? If that person knew ahead of time, that would have been discussed and not been a problem until the, you know, when they’re at the closing table and people are surprised by numbers, which also goes back to the buyer’s agency agreement that I discussed earlier.
Mike: If you are, if you got to know if you’re feeling unsure, uncertain, confused or pressured, and if you are feeling any of those during the process, you need to pause and take a step back. People can’t force you into doing anything, but you can make it easy for them to allow them to sort of do that. So, be cognizant and make sure that you’re getting full explanations of commissions, of process, of what the responsibilities are from somebody, and be like, listen, like if… A riff out of middle.
Mike: I’m in a contemplative state, Saad. I’m in a contemplative state. And once again, that’s why the Torii buyer agency agreement has an out for people after the first two weeks. Because if we don’t show that we’re working for you in any sort of facet, then you shouldn’t be handcuffed to this agreement. And I’ve had plenty of people call me, and then they realized that they signed that agreement, and they couldn’t leave an agent who really wasn’t doing anything for them. So your agent, once again, and I’ll finish on this, should continuously prove to you that they are doing work for you to have the conversations and that’s that. But that’s it for the story time today. It’s been nice talking into the void, I suppose.
Mike: I tried to limit my ums and my ahs and my stalling on thoughts getting out, but we’re gonna end it with, as we always do, I’m Mike. That’s Saad. This was StoriiTime. And when Saad’s better, which is very soon, I suspect we will see you next Wednesday. Anytime, my man. And by the way, again, Glitter Boys in Boston, great DJs, disco f**ks. That’s what I’m gonna end it with. Bye everybody, bye bye.
This Instagram live is transcribed for your easy reading. If you want to catch Storii Time live, every week, follow @saadmun1r and @photolowski on Instagram.