One of the big news items of the last few weeks was that the National Association of Realtors had settled their lawsuit for price fixing and collusion. A key result will be a drop in real estate commissions, which was traditionally set at 6%, as homeowners and buyers can now separately negotiate commission rates with realtors.
Sam at Financial Samurai spoke with Mike Ketchmark, the lead trial attorney on the case, and then broke down what he thought would be in the future for commissions and home prices. While Sam isn’t an industry veteran, he is a smart guy and I think his thoughts on this particular subject are well-reasoned.
The NAR Settlement’s Impact On Commissions And Home Prices [Financial Samurai] – “My conjecture is that homebuyers will be reluctant to pay more than 1% of the home’s value in commissions. For instance, a buyer may be willing to allocate up to $10,000 to their agent for closing on a $1 million property. It’s either up to 1% or a flat fee. Of course, a buyer’s agent and a buyer can agree to incentive commissions if the agent is able to negotiate a lower price.”
Fluke [Morgan Housel] – “I did a talk with a high school class last week and someone asked how I decided to become a writer. I said I didn’t, it was never planned. The path that led me here is an absurd story, and one that most of us have a version of – the pure fluke.” You have to read the story, it’s a little crazy, and I can attest to his believe that everyone has a story like this. I have a story like this (maybe not nearly as sketchy though).
Turning Pro: The Difference Between Amateurs and Professionals [Farnam Street Blog] – “Why is it that some people seem to be hugely successful and do so much, while the vast majority of us struggle to tread water? There is one thing that stands out more than others: mindset. If you want results, you need to approach things like a professional, not an amateur. It all comes down to your approach.”
In a real life Brewster’s Millions (sort of), how Anil Ambani lost $42 billion: