Cochran told Yahoo! She doesn’t think the impact of the settlement will be as earth-shattering as many imagine, but “the disruption it creates is staggering.”
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Barbara Corcoran can always be trusted to tell it like it is.
Founder of Corcoran Group and star of ABC Shark Tank Tell Yahoo!finance On Wednesday, while she believed the National Association of Realtors’ recent $418 million settlement of a commission lawsuit will cause less disruption to the industry than expected, it has caused “complete chaos” for industry professionals and consumers. .
Barbara Cochran | Taylor Hill/Getty Images
“Agents are confused, buyers and sellers are confused, and I even think the people who made the changes are confused,” Cochran said.
The former agent went on to explain that the settlement means buyers who want representation in a transaction will now have to sign a Buyer Broker Agreement with their agent, which sets out how much the agent will charge for their services. By default, changes in commissions are added to seller fees, which could irritate experienced buyers, she added.
“I know buyers don’t like paying out of pocket for things,” Cochran said.
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But Cochrane added that because sellers have an incentive to attract buyers, she believes sellers will “ingratiate themselves” with buyers by paying fees such as closing costs to “even the score.”
“Honestly, I don’t think this ruling is a big deal,” Cochran said. “But the chaos it caused was staggering.”
Yahoo!finance One wonders whether the ruling will help lower home prices because home sellers will no longer have to pay the 3% buyer’s agent commission, but Corcoran was quick to say that doesn’t seem like a likely outcome.
“Sellers are greedy. This is an opportunity to get the most for your home, and you’re not giving that money away,” Cochran said.
She added that the shortage of inventory is causing home prices to rise, and if interest rates drop another percentage point at the end of the year, home prices could “skyrocket” as buyers flood the market.
“I think everyone and their mums and in-laws are going to be out looking for a new home and there’s going to be so much competition that house prices are going to have to go up.”
Cochran suggested buyers should enter the market now if they want to avoid paying more.
As for the low inventory issue, Corcoran said she doesn’t think the problem will be significantly alleviated anytime soon because homeowners don’t want to give up 2%, 3% or 4% mortgage rates.
Cochran said it’s also impossible to know what rates will spur homebuyers and sellers back into the market because interest rate fluctuations aren’t necessarily a turning point for consumers, but life changes that force people to move are the only factor. Can be trusted.
Although renting is now more affordable than buying a home in major cities across the U.S., Cochran said she doesn’t believe the American dream of homeownership is dead. But in this environment, it’s especially difficult for first-time homebuyers to realize that dream.
“They’re the hardest hit,” Cochran said. “They have to compete the hardest, have the least cash to compete, so they’re not making cash offers, and they’re losing four of the five houses they were interested in. I don’t want to be a first-time home buyer.”
Luckily, Cochrane does have some advice for first-time homebuyers struggling in this market.
“I’ve been doing this my whole life,” Cochran revealed. “Run into a neighborhood, see which houses you like, and write love letters on every door.”
Corcoran said that on the last four houses she purchased, she used this tactic when the house she was interested in wasn’t on the market yet—and it worked.
Buyer love letters are considered a controversial tactic because they can put agents at risk of violating fair housing laws. However, Oregon’s 2022 ban on buyer love letters was later overturned as the ban was deemed unconstitutional, suggesting love letters are not as taboo in the industry as once thought.
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