08/26/2024
I’d love to hear your thoughts on the recent changes to real estate commission rules by the National Association of Realtors. The new regulations require real estate agents to have a buyer’s agreement in place before showing any property—even if it's just for a single showing. This agreement will outline the buyer’s financial responsibility for their agent’s services, with a provision for a credit if the seller or another broker contributes to the agent's compensation.
Reflecting on the past, when I started in real estate over 40 years ago, it was standard practice for the seller to cover the listing agent’s commission—typically around 7% of the sales price, with some negotiation. The commission was then split with the selling broker, and transactions were straightforward. This system was based on the understanding that buyers often faced financial strain with down payments and closing costs, while sellers had the equity to cover the commission.
With these new rules, sellers are no longer required to offer compensation to the buyer’s agent. However, it’s likely that buyers will still prefer to view homes where the seller agrees to this, potentially leading sellers to offer compensation to remain competitive.
In essence, we might be returning to the traditional model of seller-paid commissions, but with a new process where commission details aren’t advertised in MLS listings, requiring agents to confirm compensation directly with listing brokers. Buyers must also now commit to agreements before viewing properties. How do you think these changes will impact the real estate market?
If you’re considering buying or selling a home, or if you know someone who is, I’d be happy to offer my expertise. With over 40 years of experience navigating market fluctuations and evolving industry changes, I can provide valuable insights and assistance with your real estate needs. Feel free to reach out!