Realtors have a lot to learn, and so do real estate consumers. Always. New zoning rules in the City of Charlottesville affect the market, lawsuits and commissions’ decoupling affect the marketplace.
There’s the market, and then there’s the marketplace — one is shifting and one has been upended.
Have a question about any of this? Ask me. 434-242-7140
The Brave New World is Here.
This is a good thing. The new commission world is upon us. And it’s going to be fine.
Some CliffsNotes for those of you interested. (And if you’re reading my notes, you just might be.)
First, the mechanics
Buyers Agents *must* have buyer broker agreements before selling houses.
Sellers will no longer directly determine the buyers agents’ compensation.
Sellers might offer concessions to buyers so that the buyers may pay their representative.
No offers of compensation will be offered via the MLS.
The net — to the seller — is what matters
Cash to close — to the buyers — is what matters
Initial thoughts on ramifications
Some buyers — the ones without significant cash reserves in particular — may be significantly disadvantaged in competitive situations
Unrepresented buyers seeking to contact the listing agent directly hoping to “save the buyer agent commission” may absolutely still contact the listing agent directly — and there is no longer an offer of compensation to “discount.”
There will no longer be visibility into what concessions/compensations are offered.
Time is needed for those who touch the transaction to calibrate/adjust: buyers, buyer brokers, sellers, listing agents, lenders, appraisers, and brokerages.
The media (looking at you, Today Show) who by their nature of necessity will seek to simplify this significant information to soundbites and will unintentionally mislead consumers.
Fewer agents — those unable or unwilling to evolve, offer, and define and defend their value — will hopefully choose another profession, and we will all be better for it.
Objectively, Nest has done an incredible job educating our agents. I feel comfortable and confident saying that Nest agents will be better educated and better prepared than many of our peers. The agents who do not have such guidance will suffer, as may their clients, as well as our clients who have a less experienced agent on the other side.
What questions do you have about all of this?
What questions do you have about all of this?
Two of the bigger questions you might have:
If you’re a seller: “Do I have to offer concessions to buyers agents?”
If you’re a buyer: “How am I going to afford to pay the commission?”
If you’re either a buyer or seller or just curious, I’m happy to send you some questions to ask, questions that my clients have put together for interviewing agents (and they happily shared the questions with me after they hired me!)
Note From a Reader/Client
I was reading your note from this morning and loved seeing the part you included on travel. It reminded me of that Mark Twain quote which you might already know but I wanted to send it your way just in case. "Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime.”
1 - I've used buyer broker agreements for many years. (2006, 2010)
2 - The following is from a real estate industry podcast I listen to and is one of the most succinct explanations I’ve seen.
"... I only work with the written agreements, that's a requirement. So realize any real agent who is following the rules and code of ethics is also going to have you sign an agreement before we actually go tour any properties. And if they don't, then they're violating a number of very important rules that are designed for your protection and you may want to contemplate whether that's the kind of individual you'd like to work with. I'm going to talk about me, okay? I am going to present you with a non-exclusive agreement and I'm going to explain to you this is the fee that I charge. And by the way, I signed two buyer agreements last Friday. Okay? So I'm doing this stuff and this is the fee I charge and here's the services I'm going to provide for that fee.
Now under the current system, what we're going to do when it comes time to make the offer, we will request in our offer that the seller pay us that fee. And I'm going to show you every property you want to see and we're going to put an offer in with that request on any property you think you would like to have, period. It does not matter to me what the listing agent says as far as whether they're offering something, whether that be advertising a concession or not, or making some kind of offer of compensation.
We will put in the actual offer that we make that amount and then we'll be subject to negotiation. So either we have a good listing agent who has properly prepared their seller to understand this process that we will be including this request in our offer and that was factored into the list price or not, maybe they didn't. But I will use comparable properties and I'll use my negotiation skills on your behalf and my ability to properly evaluate property, to fight for you to make sure the seller ends up getting a price that's satisfactory to you that would then cover the fee."
A Nice Review.
Much as I despise self-promotion, sometimes I must:
““Jim was exactly what we were looking for in a realtor when were looking for a home: blatantly honest, down to earth, has a wealth of knowledge about the area, and provides tailored insights/guidance based on his client’s preferences. He helped us wade through the turbulent waters of the Charlottesville housing market where even strong bids are beat by cash offers that waive everything (seriously, how are there so many people who can afford to do that?!).
Despite our search taking far longer than anticipated Jim remained determined to help us find a home that met our needs, and did so with a great sense of humor that made each interaction an enjoyable experience. After over half a year of searching we finally landed an amazing home that we are thrilled about, and we would not be here now if it wasn’t for Jim and all his hard work.
There’s a reason Jim Duncan is the real estate king of Charlottesville Reddit and why he is kind of a local legend. So if you need someone to help guide you through anything real estate related, this guy is your agent. Thank you Jim for everything!"
I am grateful for the review and for the affirmation that I do what I do reasonably well — and I am always working to learn and improve.
The New Zoning in Charlottesville
Have there been any changes?
Much like the real estate commission lawsuits and ObamaCare, Charlottesville’s rezoning needed to be implemented so we can see what’s in the rezoning.
What effect has the new zoning had on the City of Charlottesville and its real estate market?
It is too soon to tell. I’ve seen several properties put on the market that are clearly trying to set a high floor for prices, speculating that speculators will want to take advantage of the new possible densities. And I have seen some of these either sit and sit and sit, have prices reduced, or have been pulled from the market.
I think the “Six townhouses planned for single-family house on Alderman Road” story from Sean Tubbs (seriously, give the man money to support his singular reporting!) best represents the immediate future. Looking through a longer lens, what might happen in the Meadows neighborhood, if a new roundabout comes in, and their zoning is taken to its highest use?
Will the new zoning add more housing units to the City of Charlottesville? Hopefully, and hopefully, the City will add more protected bike lanes and work with Albemarle and UVA to build cohesive and contiguous non-vehicular infrastructure networks.
The former is more likely than the latter; for now, the answer to, “What changes are happening?” is “We don’t know. Yet.”
MLS photos and enhancements
“We all know MLS photos get heavily edited whatever but this seems like going too far personally [link redacted] and at what point are we going to see straight AI-generated photos on MLS and are there any rules related to posting dishonest photos already?”
My response —
1. Whew. Glad it's not my listing.
2 . I sold that house about 15 years ago, and it just sold last year for $780K.
3. There was actually a trend years ago when photographers all over the country were using the same set of skies. I suspect the code of ethics is going to have to be updated, for what it's worth as it has no real teeth.
From the NAR Code of Ethics
"Article 12
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (Amended 1/08)"
Standard of Practice 12-8
The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on REALTORS®’ websites. REALTORS® shall use reasonable efforts to ensure that information on their websites is current. When it becomes apparent that information on a REALTOR®’s website is no longer current or accurate, REALTORS® shall promptly take corrective action. (Adopted 1/07)"
FWIW, very few ethics complaints are filed, but the code itself is a good baseline.
Leadership and Bicycles
You know how when one car goes wide when passing a bicycle, and everyone else follows? Be like that person: -Lead with goodness; others will follow.
Learning From Clients I Shouldn’t Have Taken
I truly appreciate those who choose to work with me and value the expertise and experience that I offer. And yet.
A friend advised me that working with these clients was not a great idea. I told him I agreed but that I thought I could learn something from them.
I learned:
When the first conversation is, “A friend told me you were great,” but they won’t tell the friend’s name.
Second, telling me without working with me that I was “worth” less than they thought. The very first interaction with this client was “What is the least you will charge to represent us?” This was before we had even had a conversation about what “representation” means.
Part of the lesson learned:
My fee is X, which includes counseling, guidance, often immediate responsiveness, scheduling on short notice when available, time and patience, and representation that includes far more than I can detail here this month.
My fee minus Y = a lower level of service that I am not prepared to offer.
What price can be put on an hour-long 8:47 pm Sunday phone call to quell clients’ nerves and fears? I am not sure, but I know that that hour was invaluable to that client, and fee minus Y won’t get that time.
Threads vs Twitter
I miss the community I had and built on Twitter, I miss the news lists I had on Twitter, and I miss the news and community I had on RealCrozetVA Twitter. Sadly, that place has become too toxic, hateful, and racist for me to comfortably participate.
Social media is short-lived. Blogs live longer.
What I’m Reading
For My Next Death-Defying Stunt, I Will Ride My Bike in This Bike Lane
Hi. Just spent the entire day sorting through my mom’s things. I’ve said it before and I’ll say it again DO NOT DO THIS to your children. Sort through your own stuff and give it away while you are able. Her house felt like a temple to consumerism. — and Part 2 of this Thread.
What I’m Listening To
Phish’s Tiny Desk Concert. All of the Tiny Desk concerts are amazing.
Albemarle Supervisors briefed on procurement mechanism for Eastern Avenue
Jazz Band Covers Nirvana On The Spot (ft. Ulysses Owens Jr.)
What I’m … maybe buying?
I’m really trying to not buy a Tom Bihn Bantam
This year, I’ve been taking more of a “when in doubt, go without” mentality, and bank that “savings” to be used for something else, like a walking tour in another city.
Made it this far? Let me know, and I’ll make a donation to the Blue Ridge Area Food Bank (which I do for every closed transaction anyway).
