Even though settlements reduce commissions overall, the more buyers understand what the policy means to them, the more cautious they become, according to the latest Inman-Dig Insights consumer survey.
This report was originally published on July 22, 2024 and is available to subscribers only IntelInman’s data and research arm. Subscribe to Inman Intel Get a deeper analysis of your real estate business.
Today’s renters remain largely unaware of the true impact of the National Association of Realtors’ settlement on their homebuying prospects.
But the more they learned about the deal, the less they liked it.
Meanwhile, when it’s their turn to list their current property for sale, homeowners are generally concerned about what the deal means for their position in negotiations, according to an Inman-Dig Insights consumer survey of 3,000 U.S. adults conducted in early July. What interests you.
The survey is conducted quarterly by Inman Intel to gauge potential real estate customers’ opinions on a variety of housing topics.
What’s the big takeaway? NAR’s settlement is widely seen as good for consumers and may actually improve the public’s perception of real estate professionals rather than harm it.
But when certain groups of consumers dig into the details, they are less likely to say they will benefit from the sweeping changes facing the industry.
Intel subscribers can read the full breakdown in the full report.
A rude awakening?
For several months, Three-quarters of consumers have said they had not heard of a settlement involving the National Association of Realtors.
This won’t surprise many real estate professionals.
In the Inman Intel Index, a separate monthly survey of real estate professionals, brokers consistently said the majority of their clients have yet to bring up the news or ask how they could benefit from the deal.
But one thing does stand out: Consumers who have heard about the deal but haven’t necessarily digested its full impact see it as a win for them.
- 64% Consumers who heard about the NAR deal in early July said they believed it would be good for consumers or a win-win for consumers and the real estate industry.
But the more tenants who knew the details, the less they liked the deal.
As part of its investigation, Intel provided some details to non-homeowners, including renters and potential first-time home buyers.
Tenant respondents were told that proponents believed the changes could reduce overall commissions paid by consumers. Respondents were also informed that in some cases, if the seller chooses not to bear the agency fees, the buyer may be required to pay the agency fees out of pocket.
- only 55% Tenants who understand the impacts say the NAR settlement is a benefit to consumers or a win-win for consumers and industry.
- twenty four% Tenants with knowledge of the details say the NAR settlement is bad for consumers and the real estate industry. This is better than three times Percentage of adults who had only heard of NAR transactions through the news or word of mouth before being surveyed and gave the same reaction.
U.S. adults who say they are likely to buy a home in the next 12 months say they are very reluctant to pay out of pocket for a buyer’s agent if the seller refuses to pay the fee.
But if it did happen, they wouldn’t give up on the home right away.
- only 10% of potential buyers said they were willing to pay agent fees out of pocket.
- 32% of potential buyers said they were willing to counteroffer for a higher price but insisted that the seller bear the buyer’s agency fees.
- The largest group of possible buyers—— 47% – Indicates they will fight back with the same price but will try to sweeten the deal by giving up concessions like waiving a contingency fee or more earnest money to ensure the seller covers their agent’s commission.
- only 11% of potential buyers said they would no longer consider purchasing the home if the seller was initially unwilling to pay the fees.
An opportunity—and a trap
American homeowners are widely interested No buyer’s premium thought. But if their agent suggests not paying the fee could make their listing less attractive to buyers — as most agents do tell intel They likely will – most consumers will either give in to buyer expectations or take a softer approach.
- 36% of homeowners said they would choose to offer the full 2%-3% buyer’s premium if told that refusing to do so could harm their listing.
- on the other hand, twenty four% of homeowners say they will refuse to pay buyer’s premium and list their home for full price — a strategy that takes advantage of the policy change but could create risks for the sale of the home.
- the remaining 40% of homeowners chose some middle-of-the-road option, such as lowering the asking price below the listing price while refusing to pay a buyer’s agent commission, or offering to pay only part of the fee.
Especially for seller customers, the road ahead is dark.
Real estate professionals clearly believe that insisting on a hard-line refusal to pay buyer fees will harm the listing. They told Intel they would advise customers Consider the impact The move could affect when the property sells and ultimately its price.
And here, Three-quarters of consumers said they would listen to the recommendation — at least in part.
at the same time, Nearly two-thirds of consumers Might be at least willing to push the boundaries and try to use this new option as a negotiating tool, or stick to a hard line.
unexpected improvement
When asked monthly by Intel Index, brokerage owners and executives unanimously said they believe the public has a negative perception of real estate agents.
Concerns echoed by many agents, who say the NAR is charged with maintaining a positive public image of real estate professionals — a task the trade group is tasked with. Mostly negative scores these days.
But so far, if anything, the NAR settlement appears to be improve Public perception of real estate agents, it doesn’t hurt it.
- 58% Consumers viewed real estate agents favorably in July; 7% Who has a negative opinion, according to Inman-Dig Insights consumer survey.
What’s more, this isn’t just a snapshot in time. Consumers were asked how their perceptions had changed over the past year, a period that saw a sluggish transaction market, poorer affordability and commission practices making headlines in the property world.
- 34% of employed adults say their opinion of agents has improved compared to the past 12 months 6% Who said things got worse.
- Consumers who had heard about the NAR settlement before participating in the survey were almost twice as likely say their opinion of real estate agents has improved over the past year 60% Select this option.
About Inman-Dig Insights Consumer Surveys
The Inman-Dig Insights consumer survey was conducted July 5-7 to understand Americans’ opinions and behaviors regarding home buying.
The survey sampled 3,000 U.S. adults, ranging in age from 24 to 65, who worked full or part-time. Participants were selected and broadly representative by age, gender, and region.
Statistical rigor was maintained throughout the study, and the results should be largely representative of the attitudes held by U.S. adults working full- or part-time jobs. Inman and Dig Insights are both majority-owned by Toronto-based Beringer Capital.
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