Barbara Corcoran: NAR settlement causing 'total confusion' in real estate

disruption in real estate well the landmark legal settlement between the n and several major real estate brokers having Ripple effects across the industry now real estate stocks sold off in the wake of the announcement we have Zillow off more than 10% since the settlement was announced red fit Encompass shares they have also declined on that news Well Wall Street is now trying to gauge and Americans are really trying to gauge what the settlement will mean for home buyers what it means for some of the major players within the sector who better to talk to about this than Barbara corkran she's joining us now at the desk founder of the corkran group Barbara it's great to see you thank you very much so let's talk about this settlement just your initial reaction to it the disruption will it cause disruption throughout the industry I think a lot less than people expected to but what it is causing is total confusion Brokers are confused buyers and sellers are confused I even think the people who made the amendments are confused but they're really only basically two changes that do make a difference not a not a tremendous difference but a clear difference one is if you're a buyer in the market and you want to hire a broker to represent you to find you a house it now has to be in writing exactly what they're going to do for you and exactly what each service is going to charge okay what they will charge you for each service so there's Clarity and I think that's very good for the buyers that they have Clarity but it's not so good for the buyers because if the seller doesn't want to pay like days of old sandwich it into the commission they have to take it out of their pocket and buyers I know don't like to pay for things out of their own pocket I wonder too if sellers are going to find other ways to increase fees so that it doesn't necessarily lead to or Brokers rather are going to find a way to increase fees and commissions so there's not that big of an impact I think that's going to happen I think particular the sellers will step up to the plate because you have to remember sellers want buyers coming in the more buyers that come in the house the better the price they get basically so they're going to find a way to make good with the buyers whether it be paying for closing cost or any Myriad of things that they can do but it will even the score out so I don't think the the ruling is a big deal honestly but the confusion it's causing is amazing so bar you mentioned confusion and I think a lot of people are confused me included about what this is going to do to the price of homes right because you have the argument out there that if you're not paying for a fee here an agent fee then it makes more sense for the home seller maybe they could list their housing their home a little bit more maybe they'll list it less because they're not having to deal with those fees then you also have the other side of the argument where this could actually attract more people into potentially buying a home and get them off the sidelines here if we do see a drop in fees what's the ultimate impact on home B I don't really believe either of those things are going to happen it's a neutral think of yourself if you selling your home and if you let's say you save 3% with the new ruling and say I don't want to buy pay the buyer broker and the extra 3% do you think you're going to pass that along to the buyer which a lot of people are saying is the case no sellers are greedy it's a one time chance to get the most for your house and you're not going to give that money away so if you think prices are going to come down definitely not the case there is such a shortage of houses right now that prices have gone up despite everybody singing the blues 9% this year how pardon me 6% this year how did that happen it happened simply because of supply and demand there's a lot of buyers and not enough houses to to be available and that's what rules the market do you see prices continuing that move to the upside I think the prices are going to go through the roof especially if interest rates come down another Point by year end I think everybody and their mother and their in-laws going to come out looking for a new house and the competition is going to be so Fierce that house prices will have to go up so when should people be buying right now but that's always my Mantra always the best time to buy not because I'm an ex real estate broker by any means but I'm sure I'm biased in my attitude to it but it always is true that the minute you go out in the marketplace when everybody else is out you always pay more why would you wait for that a real driver here when we talk about the pricing of homes why they have risen so dramatically has been because of inventory that lack of inventory there has been lots of questions about what it's going to take in order to unlock more inventory what the ultimate impact is going to be on the housing market do you see the inventory picture getting fundamentally better anytime soon it's gotten a little bit better maybe did the tunea 4% more inventory a month in the last three months but no this such a shortage of houses I don't see how that's going to change you know the biggest problem again is interest rates people who own homes have 3 4% some of them even 2% mortgages they don't want to give those up that's why you have the bottleneck right now that's why people aren't leaving their homes is it still true that you can buy the house and then date the rate and you can refinance is that true in kind of a higher for longer environment uh it can but it makes people feel good more than it makes a difference okay barbert your advice to maybe people who are sitting on the sidelines they haven't listed their home they're a little bit nervous given the fact that we've seen that dramatic run up in rates what do you think is going to be the key factor to prompt them is it mortgage rates below 6% or do you think even some improvement from where we've plateaued just below 7% is enough to move some of that inventory if it goes to 6% people are going to get so much more for their houses why would they even think of selling if it hovers somewhere in the 7% the market is going to be so active and they're going to get more for their houses too so it's a hard argument to convince a seller Now's the Time to sell life changes make it necessary for people to sell but when it's optional nobody's putting the house on the market I'm curious about your advice for firsttime home buyers obviously impacted by this settlement but also a lot of people have just said I'm going to give up I'm just going to rent forever should people still have the goal of owning a home someday well first I'll say that rents are cheaper anywhere in the United States than buying so logic would dictate sure why not not rent it's cheaper but everybody almost everybody has this idea that the American dream is still owning your own home but for the firsttime buyer they're the hardest hit they have to compete the hardest have the least amount of cash to compete so they're not making cash offers and they're losing four to five houses that they're interested in I would not want to be a firsttime buyer I don't know what's really going to give there but it's not going to be easy any advice then for the first time buyer Barbara help me I must sound depressing today don't I yes here's good advice do what I did for the last four houses now my people might say well I don't have her money that's true but I've done this my whole life run into a community see which houses you like and leave love notes on every door and that's worked yeah you're allowed to leave no I love your house it reminds me of my grandmother's house where I grew up in the wallpaper I noce SP or the Garden or whatever whatever trim it up leave him a note the last four houses I buil were not on the mar that I bought were not on the market I just picked out the house I like best and eventually the people called that's some great advice I love that advice take it yeah I think sellers are going to kill us they're going to get a lot of notes hey they love notes you can't be too too unhappy Barber thank you so much really appreciate you joining us hope I wasn't too negative today hey you got the pink you're realist exactly thank you so so much we appreciate it

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Id: ZgrsHoZ77Cg

Length: 7min 25sec (445 seconds)

Published: Wed Mar 27 2024