Opinion on Class Action Sitzner | Burnett Case

In light of the recent news regarding the verdict of the Class Action Sitzner & Burnett Case, I want to address a few things. Let's keep in mind, the case is more complicated than the news sums up in a quick article.

It seemed to devalue the role of a Real Estate Agent and being that it is my profession, I am here to play devil's advocate. 😈

Real estate transactions tend to be the most expensive transaction any of us will make in our lives. When navigating the complex and high risk process of buying or selling, the value of an experienced agent is paramount.

Did you know you can negotiate vacation packages, attorney fees, fitness memberships, bulk ordering of product, consulting services? Just like anything, Buyers Agent and Seller Agent compensation rates are negotiable. They vary depending on the service you receive and like the age-old saying, “you get what you pay for.” There are discount brokerages in the industry. They often have newer agents, with less experience; or are overworked and have less time to dedicate to each client.

So what is the value of an Agent? What do we do? Operating on the seller side or the buyer side, I broke down the list of responsibilities and duties of a Buyer Agent or Seller Agent.

When the stakes are high, personally, it is a time I invest in expertise. I recently had the pleasure of utilizing an attorney's services. Don’t be jealous, haha! 😉 I interviewed many and did not select the cheapest one. My decision was made based on professionalism, knowledge, and experience. I would recommend the same to anyone buying or selling their biggest asset.

It actually is beneficial for a seller to have a strong Buyers Agent on the other side. If things start to go sideways, you want two professionals to keep the deal together or get you out of the deal with the minimum amount of damage.

There have been more times than I can count where deals almost fell apart if it wasn't for the collaboration of myself and the agent on the other side of the deal.

One could insinuate that these sellers are expecting buyers to either not be represented or pay the Buyer Agent compensation on top of the downpayment and closing costs, making the buying process (of these sellers’ homes I might add), even more difficult and challenging. In King County, the median home price $800k in Oct 2023. This is up from $555k in 2018, $245k increase in appreciation. Median Home Prices in King, Pierce, and Snohomish.

To provide more transparency about the compensation, the Buyer Agent compensation is paid to the Brokerage and they pay the Buyer Agent a percentage of that fee, ranging from 50%- 98% or sometimes less than 50%. The Buyer Agent operates as a 1099 and covers most, if not all, of their business costs - taxes, health insurance, all of the things an employer would cover plus more, i.e. photographers and marketing expenses. Operating as a 1099 there is no paid time off, no matching of a 401k, no overtime, no sick paid leave.

A Buyer's Agent is only paid if and when a home is sold. That means there are many instances where people start the search, tour homes, go through buying consultations, even write up and submit offers, move through negotiations, and do not proceed or have a changes of plans, resulting in zero pay for the Buyer's Agent. Invoices aren't sent to the client for the time that was invested. It balances out for the times when clients do find homes and the Buyers Agents are able to play a vital role in assisting.

Over the last 4 years, WA has been a leader in improving communication around agent compensation, displaying it in MLS and since early 2023, on the offer page.

Starting Jan 1, 2024, Buyer Agency Agreements will be legally required under RCW 18.86. The Buyer’s Agent should be explaining this to the buyer so they understand what they are agreeing to and answer questions as well as explain what happens when a seller offers 0% to the Buyer's Agent, a red flag indicating the type of negotiator on the other side of the deal. I can only imagine their response when trying to get necessary repairs covered or extending a closing date and wouldn't risk depositing earnest money without solid representation.

For the seller's that want to offer 0% to Buyers' Agents, the sales price should reflect that to enable the buyers to cover compensation for their protection in the deal.

Have questions or curious about potential outcomes to the industry? Reach out, I would love to chat about it.

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