In This Issue
A New Format
$2 Billion Judgment Against Real Estate Trade Association
One-stop Shopping for Golf Homes
Pawleys Plantation Reopens after Significant Renovation
A New Format
This month we are trying something new. We have dropped the sidebar on the left for the simpler, easier-to-read single column format. This approach is more in keeping with the popular Substack newsletter format; in the coming months I intend to relocate Home On The Course to Substack and alert subscribers with an email and a link. I intend to expand the content of Home On The Course to include issues of the day beyond golf real estate and lifestyle. I hope you will continue to join me for the ride. Thanks for being a subscriber and have a happy holiday season and New Year.
Buyer Beware: Court Judgment in Real Estate Case Could Lead to Fees for Buyers
I have not been a fan of the National Association of Realtors, the largest trade association in America, since before the 2008 housing recession. For years, the organization’s economists had bamboozled the media, homebuyers and its own 1.5 million members with the notion that the real estate market boom was not only sustainable but almost guaranteed. If you bought a home in the late 2000s, you likely were swayed by all the sunshine blown into the market by the NAR chief economists. In March 2008, to demonstrate just how bamboozled the mainstream media was, USA TODAY named NAR Chief Economist Lawrence Yun one of the top 10 economic forecasters in the country. Less than 10 months later, the esteemed Case–Shiller home price index reported the largest price drop for real estate in its history. Any home buyer in the prior few years felt betrayed; those preparing to sell their homes weren’t too happy either. Fifteen years later, Yun is still chief economist at NAR. No wonder many real estate brokers I have spoken with over the years find their trade organization unsupportive at best, ethically dodgy at worst. I sent my own broker some thoughts about the NAR just after the court decision. He responded:
“You had me at ‘is unaccountable to members, and whose pocketbook is never affected by failure.’”
$2 Billion Judgment Could Reach $5 Billion+
This past Halloween, of all days, the NAR’s business practices were unmasked in a $2 billion class action judgment brought against it and a few other national real estate agencies. (Additional agencies had settled prior to the court case, indicating a wisdom beyond the NAR’s.) The court held that the way the agencies and NAR forced commission rates on home sellers and provided no transparency on the commission rates they charged home buyers was an unfair trade practice. The damages could be tripled to more than $5 billion in coming weeks by the sitting judge in the case.
The biggest winners, besides the 500 Missouri plaintiffs who brought the case, are future home sellers who no longer will be required to pay both the seller’s agent AND buyer’s agent commissions. If you have sold a house in your lifetime, you know that the commission set by the brokerage who handles the sale of your home covers all parties to the transaction. What you may not know, because the NAR has not exactly been transparent about it, is that sellers are essentially forced into paying the commission rates in order to have their homes posted on the local multiple listing service, or MLS. That is the resource virtually all buyers’ agents use in most areas of the U.S. to find homes for their clients. You cannot effectively look for a home in America without access to the MLS. The NAR and its agents, the court decided, had established the equivalent of a monopoly on the listings of homes for sale.
Sellers Won’t Be Forced to Pay Buyers’ Commissions
If industry practice evolves from the court judgment in the way many industry watchers believe it will, sellers will no longer pay a 5% or 6% commission rate to their real estate agency because the fee will no longer cover the buyer side of the transaction. Buyers’ agents will have to cut their own deal with their clients. And that could take different forms.
One of those could be a straight-fee arrangement in which the buyer pays the buyer’s agent a set dollar amount or a percentage pegged to the purchase price of the home. The amount will be negotiable and, therefore, competitive. I represent buyers looking for a golf home; I do not charge them a fee for my services but here’s how I expect to handle the fee issue in their behalf when I look to identify a local agent to work with them. Let’s say my client is focused on the Sarasota area in Florida; we would agree on a maximum fee they would pay a local agent, and I would make that – and the agent’s experience and track record -- a requirement before engaging the agent to represent my client in the Sarasota market.
Today, the buyer agent’s brokerage commands half of the commission the seller pays to his/her broker (100% of it if they are a “dual agent” with real estate agents inside the firm representing both sides of the transaction). In cases in which the fee is set at, say, 6%, today the buyer agent’s brokerage receives half of that, or 3% of the selling price. (The buyer’s agent personal commission is paid from a percentage negotiated with his agency.) On a $1 million sale, for example, the total commission is $60,000 (or 6%), with half going to the seller’s agency and half to the buyer’s.
Buyers Agents Role Could Undergo Big Transformation
Realistically, buyers are not going to pay $30,000 to an agent just to find them a $1 million house and to fill out paperwork when the sale is consummated. More likely will be either a set fee for a list of basic duties – research homes for sale, make offers, file paperwork – and an additional set of fees for “extras” such as identifying a lawyer to handle the closing, a mortgage broker, or an engineering inspector. Slowly over time, as the process becomes more transparent than it has been, buyers will ask ever tougher questions of their prospective agents. Agents are going to have to become a bit more persuasive about the services they offer beyond simply identifying homes that match their client’s requirements. (Note: The Multiple Listing Service will undergo its own set of changes, one of them the likelihood of a subscription service to buyers and real estate agencies.)
Of course, sellers’ agents will still be able to “negotiate” a buyer side commission with another agency. The MLS will likely list the commission rate the seller is willing to pay a buyer’s agency. In order to speed up the sale, the seller could very well offer a commission equal to or close to the current 3%. But the point is that the seller will be free to set the buyer commission rate if they and their agent believe it will help sell the home faster and at a better price.
One of the most interesting questions from the court case is if and how larger housing developments will adapt to the new freedom buyers are likely to enjoy. Virtually all golf communities initially sold home sites and home packages through an on-site agency. But once a community neared the sold-out phase, its developer typically turned the community over to its residents and closed the on-site sales office. Some resident-led communities – like the 45-year-old Landings in Savannah and the 15-year-old Carolina Colours in New Bern, NC – maintain their on-site sales offices to this day and are already holding internal discussions about how to react to the changes likely in the wake of the court decision.
Sellers May Still Incentivize Buyer Agents
Ken Kirkman, who developed Carolina Colours, stresses the importance of outside real estate agencies in bringing buyers to his community.
“Continuing to attract 3rd party buyer agents will be important to maintain values in [Carolina Colours and other communities],” Kirkman told me. He also predicts that some practices of the past will endure beyond the court case.
“The reality is that a seller willing to pay, say, 2% to the buyer’s agency will probably get more showings, and quicker, than a seller asking the buyer to bear all of the buyer agency compensation,” he said. But, he added, “in the end, there will be less compensation to buyer agents and much less uniformity in pricing."
In more than 15 years of assisting folks searching for golf homes in the Southeast U.S., I have never had a buyer’s agent try to charge my client a fee. Depending on how agencies handle the fallout from the court case, that could change soon.
Homes of the Week at GolfHomes.com
A few months ago, I negotiated a straightforward arrangement with the owner of GolfHomes.com, Kirk Tidwell: I supply Golf Homes with summaries of my favorite golf communities in the Southeast, and Golf Homes provides me with complimentary ads featuring my most trusted real estate agents. Those ads, with the agents’ contact info, are positioned alongside current listings of golf homes for sale in their local golf communities. To date, we have posted summaries and agent info for golf communities in the following areas: Bluffton, Beaufort and Daufuskie Island, SC; Pawleys Island and Murrells Inlet, SC; Aiken, SC; Greenville, SC; Lake Lure, NC; New Bern, NC; Wallace, NC; Richmond, VA; Charlottesville, VA; Harrisonburg, VA. I am adding more every week.
Although I stress with my clients that they should first identify the area(s) where they would like to relocate – based on climate, topography, proximity (or not) to an urban area – once they have a targeted area in mind, GolfHomes.com is a great place to gauge the price ranges of homes in specific communities and get a look at architectural styles.
If you would like assistance with your search for a golf home, please do not hesitate to contact me at This email address is being protected from spambots. You need JavaScript enabled to view it..
Pawleys Plantation Re-Opens
My wife and I are headed to our second home just before Christmas and I cannot wait to play a golf course I first played almost 35 years ago and have played more than 50 times since. Under the guidance of Jack Nicklaus, Pawleys Plantation Golf Club’s original designer, and Troy Vincent of Nicklaus Design, the Pawleys Plantation course has been restored to its former glory circa 1989 – and then some. My son Tim, who writes for Golf Pass, part of the Golf Channel, played the course shortly after it reopened after seven months of work and published a comprehensive overview. You can read it here. https://www.golfpass.com/travel-advisor/articles/pawleys-plantation-golf-course-renovation-myrtle-beach
Happy Holidays and New Year to All
Larry Gavrich
Founder & Editor
Home On The Course, LLC
In This Issue
A New Format
$2 Billion Judgment Against Real Estate Trade Association
One-stop Shopping for Golf Homes
Pawleys Plantation Reopens after Significant Renovation
A New Format
This month we are trying something new. We have dropped the sidebar on the left for the simpler, easier-to-read single column format. This approach is more in keeping with the popular Substack newsletter format; in the coming months I intend to relocate Home On The Course to Substack and alert subscribers with an email and a link. I intend to expand the content of Home On The Course to include issues of the day beyond golf real estate and lifestyle. I hope you will continue to join me for the ride. Thanks for being a subscriber and have a happy holiday season and New Year.
Buyer Beware: Court Judgment in Real Estate Case Could Lead to Fees for Buyers
I have not been a fan of the National Association of Realtors, the largest trade association in America, since before the 2008 housing recession. For years, the organization’s economists had bamboozled the media, homebuyers and its own 1.5 million members with the notion that the real estate market boom was not only sustainable but almost guaranteed. If you bought a home in the late 2000s, you likely were swayed by all the sunshine blown into the market by the NAR chief economists. In March 2008, to demonstrate just how bamboozled the mainstream media was, USA TODAY named NAR Chief Economist Lawrence Yun one of the top 10 economic forecasters in the country. Less than 10 months later, the esteemed Case–Shiller home price index reported the largest price drop for real estate in its history. Any home buyer in the prior few years felt betrayed; those preparing to sell their homes weren’t too happy either. Fifteen years later, Yun is still chief economist at NAR. No wonder many real estate brokers I have spoken with over the years find their trade organization unsupportive at best, ethically dodgy at worst. I sent my own broker some thoughts about the NAR just after the court decision. He responded:
“You had me at ‘is unaccountable to members, and whose pocketbook is never affected by failure.’”
$2 Billion Judgment Could Reach $5 Billion+
This past Halloween, of all days, the NAR’s business practices were unmasked in a $2 billion class action judgment brought against it and a few other national real estate agencies. (Additional agencies had settled prior to the court case, indicating a wisdom beyond the NAR’s.) The court held that the way the agencies and NAR forced commission rates on home sellers and provided no transparency on the commission rates they charged home buyers was an unfair trade practice. The damages could be tripled to more than $5 billion in coming weeks by the sitting judge in the case.
The biggest winners, besides the 500 Missouri plaintiffs who brought the case, are future home sellers who no longer will be required to pay both the seller’s agent AND buyer’s agent commissions. If you have sold a house in your lifetime, you know that the commission set by the brokerage who handles the sale of your home covers all parties to the transaction. What you may not know, because the NAR has not exactly been transparent about it, is that sellers are essentially forced into paying the commission rates in order to have their homes posted on the local multiple listing service, or MLS. That is the resource virtually all buyers’ agents use in most areas of the U.S. to find homes for their clients. You cannot effectively look for a home in America without access to the MLS. The NAR and its agents, the court decided, had established the equivalent of a monopoly on the listings of homes for sale.
Sellers Won’t Be Forced to Pay Buyers’ Commissions
If industry practice evolves from the court judgment in the way many industry watchers believe it will, sellers will no longer pay a 5% or 6% commission rate to their real estate agency because the fee will no longer cover the buyer side of the transaction. Buyers’ agents will have to cut their own deal with their clients. And that could take different forms.
One of those could be a straight-fee arrangement in which the buyer pays the buyer’s agent a set dollar amount or a percentage pegged to the purchase price of the home. The amount will be negotiable and, therefore, competitive. I represent buyers looking for a golf home; I do not charge them a fee for my services but here’s how I expect to handle the fee issue in their behalf when I look to identify a local agent to work with them. Let’s say my client is focused on the Sarasota area in Florida; we would agree on a maximum fee they would pay a local agent, and I would make that – and the agent’s experience and track record -- a requirement before engaging the agent to represent my client in the Sarasota market.
Today, the buyer agent’s brokerage commands half of the commission the seller pays to his/her broker (100% of it if they are a “dual agent” with real estate agents inside the firm representing both sides of the transaction). In cases in which the fee is set at, say, 6%, today the buyer agent’s brokerage receives half of that, or 3% of the selling price. (The buyer’s agent personal commission is paid from a percentage negotiated with his agency.) On a $1 million sale, for example, the total commission is $60,000 (or 6%), with half going to the seller’s agency and half to the buyer’s.
Buyers Agents Role Could Undergo Big Transformation
Realistically, buyers are not going to pay $30,000 to an agent just to find them a $1 million house and to fill out paperwork when the sale is consummated. More likely will be either a set fee for a list of basic duties – research homes for sale, make offers, file paperwork – and an additional set of fees for “extras” such as identifying a lawyer to handle the closing, a mortgage broker, or an engineering inspector. Slowly over time, as the process becomes more transparent than it has been, buyers will ask ever tougher questions of their prospective agents. Agents are going to have to become a bit more persuasive about the services they offer beyond simply identifying homes that match their client’s requirements. (Note: The Multiple Listing Service will undergo its own set of changes, one of them the likelihood of a subscription service to buyers and real estate agencies.)
Of course, sellers’ agents will still be able to “negotiate” a buyer side commission with another agency. The MLS will likely list the commission rate the seller is willing to pay a buyer’s agency. In order to speed up the sale, the seller could very well offer a commission equal to or close to the current 3%. But the point is that the seller will be free to set the buyer commission rate if they and their agent believe it will help sell the home faster and at a better price.
One of the most interesting questions from the court case is if and how larger housing developments will adapt to the new freedom buyers are likely to enjoy. Virtually all golf communities initially sold home sites and home packages through an on-site agency. But once a community neared the sold-out phase, its developer typically turned the community over to its residents and closed the on-site sales office. Some resident-led communities – like the 45-year-old Landings in Savannah and the 15-year-old Carolina Colours in New Bern, NC – maintain their on-site sales offices to this day and are already holding internal discussions about how to react to the changes likely in the wake of the court decision.
Sellers May Still Incentivize Buyer Agents
Ken Kirkman, who developed Carolina Colours, stresses the importance of outside real estate agencies in bringing buyers to his community.
“Continuing to attract 3rd party buyer agents will be important to maintain values in [Carolina Colours and other communities],” Kirkman told me. He also predicts that some practices of the past will endure beyond the court case.
“The reality is that a seller willing to pay, say, 2% to the buyer’s agency will probably get more showings, and quicker, than a seller asking the buyer to bear all of the buyer agency compensation,” he said. But, he added, “in the end, there will be less compensation to buyer agents and much less uniformity in pricing."
In more than 15 years of assisting folks searching for golf homes in the Southeast U.S., I have never had a buyer’s agent try to charge my client a fee. Depending on how agencies handle the fallout from the court case, that could change soon.
Homes of the Week at GolfHomes.com
A few months ago, I negotiated a straightforward arrangement with the owner of GolfHomes.com, Kirk Tidwell: I supply Golf Homes with summaries of my favorite golf communities in the Southeast, and Golf Homes provides me with complimentary ads featuring my most trusted real estate agents. Those ads, with the agents’ contact info, are positioned alongside current listings of golf homes for sale in their local golf communities. To date, we have posted summaries and agent info for golf communities in the following areas: Bluffton, Beaufort and Daufuskie Island, SC; Pawleys Island and Murrells Inlet, SC; Aiken, SC; Greenville, SC; Lake Lure, NC; New Bern, NC; Wallace, NC; Richmond, VA; Charlottesville, VA; Harrisonburg, VA. I am adding more every week.
Although I stress with my clients that they should first identify the area(s) where they would like to relocate – based on climate, topography, proximity (or not) to an urban area – once they have a targeted area in mind, GolfHomes.com is a great place to gauge the price ranges of homes in specific communities and get a look at architectural styles.
If you would like assistance with your search for a golf home, please do not hesitate to contact me at This email address is being protected from spambots. You need JavaScript enabled to view it..
Pawleys Plantation Re-Opens
My wife and I are headed to our second home just before Christmas and I cannot wait to play a golf course I first played almost 35 years ago and have played more than 50 times since. Under the guidance of Jack Nicklaus, Pawleys Plantation Golf Club’s original designer, and Troy Vincent of Nicklaus Design, the Pawleys Plantation course has been restored to its former glory circa 1989 – and then some. My son Tim, who writes for Golf Pass, part of the Golf Channel, played the course shortly after it reopened after seven months of work and published a comprehensive overview. You can read it here. https://www.golfpass.com/travel-advisor/articles/pawleys-plantation-golf-course-renovation-myrtle-beach
Happy Holidays and New Year to All
Larry Gavrich
Founder & Editor
Home On The Course, LLC
