Starting August 17th, new rules will affect how real estate agents get paid.
What’s Changing?
Starting August 17th, new rules will affect how real estate agents get paid. Traditionally, sellers would cover both their agent’s commission and the buyer’s agent’s commission, typically around 6% of the home’s sale price. But now, the National Association of Realtors (NAR) has agreed to remove the requirement to advertise compensation for buyer’s agents on listings. This change comes after a major lawsuit alleging that the old system was anti-competitive and artificially inflated commission prices.
For Buyers
If you’re buying a home, you’ll now need to sign a contract with an agent before they can show you any properties. This could be as simple as a one-day agreement, but it’s required before any home tours. You’ll also likely need to negotiate directly with your agent about their fee, which could mean paying out of pocket instead of relying on the seller to cover it.
This might lead some buyers to skip hiring an agent altogether, especially if they’re worried about costs. However, this could make the buying process more complex and challenging to navigate on your own.
For Sellers
Sellers now have the option not to pay the buyer’s agent’s commission. While this might sound like a way to save money, it could actually hurt your sale. If you don’t offer compensation to the buyer’s agent, fewer agents might show your home, and buyers could offer less, knowing they’ll need to cover their agent’s fee themselves.
This could lead to a smaller pool of interested buyers and lower offers, ultimately reducing the amount you walk away with from the sale.
Lenders helping out
Lenders are also adapting to these changes by exploring new ways to assist buyers and sellers. Some lenders are considering options to allow buyers to finance their agent’s commission, similar to other closing costs, to ease the upfront financial burden. Additionally, lenders working with VA loans are now permitted to include reasonable commissions in the financing, which could help VA buyers navigate these new commission structures more smoothly. This means both buyers and sellers can expect more creative financing solutions from lenders to help mitigate the impact of these industry shifts.
Overall Impact
These changes could lead to more upfront negotiations for both buyers and sellers. Buyers might face more out-of-pocket costs, and sellers will need to carefully consider how to attract buyers in this new landscape.
In short, the real estate market is entering a new era where transparency and negotiation play bigger roles. Whether you’re buying or selling, it’s important to be aware of these changes and prepared to navigate the new rules.
If you have questions, whether you are buying or selling please reach out to us at The Simpson Team.
Location
2020 Lomita Blvd,
Torrance, CA 90101
United States
Pages
Follow us
