Thanks to the 4 Realtors on my team, our 5 person Client Care Team, and all our past clients, I am on the cover of the July 2022 Real Producers.
I am also happy we saved 320 sellers $4,532,220 in Real Estate commissions using our $3,500 Flat Fee Selling option.
Thanks to Chris Wirsing and the Real Producers Team too.
https://www.oahure.com/pdf/Jul_2022_Honolulu_Real_Producers.pdf#page=28
This chart shows two things well.
One is prices do not go up every year. After the sharp increase that peaked around 1991, you can see we went to 2003 before prices hit that 1991 price again, so over 10 years of prices not increasing.
Two is the current up trend is a lot steeper than it was back in 1991.
It will be interesting to see what happens next.
Ordinance 22-6, effective March 28, 2022.
A seller of residential real property must provide the buyer a Short-term rental (STR) disclosure form stating whether or not the property may be legally used as an STR. If the seller discloses that the property being sold may not be legally used as an STR, the form need only be given to the buyer.
More details are at https://www.honolulu.gov/dppstr.
Wow, the price drops started fast.
The highest share of sellers on record dropped their list price during the four weeks ending June 12 as mortgage rates shot up to levels not seen since 2008 according to Redfin.
For the first time ever we closed today on a $2,400,000 Kailua home that was offering only $1, yes ONE DOLLAR commission.
The MLS does not allow a seller to negotiate the commission down, but they do allow the seller to pay Realtors more commission (isn’t that nice of them LOL), so putting in $1 essentially made the commission negotiable, and a deal was reached that everyone was happy with.
So now if your Realtor tells you commission is not negotiable you can let them know it can be negotiated up, just not down, and it is possible to sell a home offering $1 commission, which essentially sends a message that commission is negotiable.
We just put a home in escrow today that was only offering $1 in Realtor’s commission.
It got a lot of Realtors upset as you can imagine, but I explained to them they can put a commission amount on their offer, so they can make more than $1.
The winning offer did just that. The normal commission would have been over $60,000.
The buyer’s agent in this case is not getting that amount, but they are getting a very nice commission.
It is not something I can recommend at this time because of some of the feedback I got from other Realtors, but in this case, the home still went into escrow with a very strong offer.
OahuRE.com is now one of the first sites on Oahu to show the buyer’s agent commission for all listings as we just got permission today to do so. Unfortunately, it is non-negotiable still, but at least buyers can see how much their agent is getting paid.
The buyer’s agent commission is paid for by the seller, but the price of the property is raised so the seller can pay the buyer’s agent. It is a cost to the buyer because they pay a higher price for the property to cover their agent’s commission.
For the property in the image, the buyer’s agent commission is $134,700.
OahuRE.com rebates 20% of our commission back to the buyer to help them cover their closing costs.
This survey was conducted by mortgage giant Fannie Mae.
They started this survey back in 2010, after the big 2008 housing crash.
We have been on a long-time upward slope of home prices as shown by the above graph of the Case-Shiller U.S. National Home Price Index.
I read these thought-provoking statements in Inman news, the leading news source for Realtors. It is good to see Realtors themselves asking these hard questions.
“Why are typical commissions in Australia, Denmark and Finland 2 percent, and 1.5 percent in the U.K., yet 5.5 percent in the U.S.?”
“How do you explain, to a consumer, why it costs them three times as much to sell a $900,000 home versus a $300,000 home? How do you justify that $54,000 bill for selling said $900,000 home?”
Have you ever heard of a Flat Fee Buyer’s Agent Commission? Maybe soon you will.
There are at least 3 big class-action lawsuits against Realtors claiming the fixed 2.5% buyer’s agent commission should not be paid for by the seller but instead the buyer should pay their own agent.
Their argument is this would allow buyers to negotiate the commission, the same way sellers have options, such as our $3,500 Flat Fee.
It would be a huge change for Real Estate buying and selling if sellers are no longer forced to pay a 2.5% commission to a buyer’s agent.
We will see how this turns out.