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Why Buyers Still Need Real Estate Agents, Why Buyer’s Agents Will Not Go Extinct

by Anna G. Kudla


The recent headlines related to buyer’s agents’ commissions caused a frenzy among those involved in the real estate industry. However, when today’s news cycle shifts to the next big headline, there is little reason to believe anything will change. Buyers will still require the assistance of an agent. Moreover, while the MLS will no longer identify commissions, agents are free to discuss payment and percentages on other platforms as well as with one another. Anti-trust litigation over real estate agents’ commissions will not eliminate the need to have a buyer’s agent, it only requires the agent to identify their fees upfront and make them negotiable.

When presenting legal seminars to various brokerages across Southern California, I was told that sellers have been paying buyer’s commissions for 75 years because many buyers cannot afford the additional cost added on top of the sale price. The concern over anti-trust litigation was dramatically felt when the news of NAR’s settlement hit the stock market with shares for some online selling platforms falling. However, what the public needs to understand is that the NAR settlement marks the end of litigation, not real estate professionals’ services. Buyer’s agents are fiduciaries. As such, they have the highest level of care owed to their clients, often referred to as the “principal.” The duty is not to be taken lightly, nor should all the remedial and time-consuming tasks be taken for granted. Starting in 2019, home prices skyrocketed due to the COVID epidemic vastly changing the landscape of work, “Zoom” becoming a common term identifying the platform for interacting across cities, states, and even countries, without leaving the comfort of your own home, coupled with a housing shortage, government subsidies, and low-interest rates (at the time).

From 2019 to 2022, buyers were fighting over square footage while being squeezed out in bidding wars by offering too little over asking. The soldiers in this fight were buyer’s agents. They were the ones who located properties, filled out complicated forms, and presented purchase offers. Buyer’s agents scheduled showings, called in favors from listing agents, and consoled their clients when multiple offers were repeatedly denied. They are still the ones who interact with escrow, order inspections, take their clients to various listings, and advise their clients about earnest money deposits. Most successful buyers do not even know that escrow and title are not affiliated with their realtor, because the buyer’s agents make the transaction so smooth. With a decrease of independent buyer’s agents, we will see dual agency rise. With that rise, we will see lawsuits related to breach of fiduciary duty resulting from disgruntled buyers and sellers suing overworked realtors.

As the author of this commentary, I have represented and defended real estate professionals, buyers, sellers, and investors for 20 years. One constant denominator in each of the cases I handled is that buying property involves a complicated transaction and if left in the wrong hands, will most likely result in litigation.

Disclaimer: The information provided is commentary and is intended for general informational purposes only. It should not be considered professional advice or a substitute for seeking professional guidance. Readers should consult with an attorney for specific advice related to their situation.

Headshot of Anna G. Kudla

Anna G. Kudla
Senior Counsel

Anna G. Kudla is Senior Counsel at Hart Kienle Pentecost, where she provides comprehensive guidance in civil litigation. She represents brokers, sellers and buyers, appraisers, contractors, business owners, and professional athletes in contract negotiations, commission disputes, administrative hearings, mediation, litigation, and arbitration. To schedule a consultation with Ms. Kudla, contact Hart Kienle Pentecost at 714-432-8700 or email [email protected]. To learn more about Hart Kienle Pentecost, visit our website at www.hkplawfirm.com.