New Changes to Realtor Commission Explained

On August 17, 2024, new real estate commission rules went into effect that changed how buyers' agents are paid and how listing agents communicate with buyers' agents. This change also affect how Buyers and Sellers interact with their respective agents and how each will proceed through the process of buying or selling a home. The key changes are as follows:

• Buyers' agents

  Buyers' agents must now have a written contract with their client before showing them a house (Buyers Agent Agreement). The contract must specify the agent's fee, and the services the agent will provide. Buyers are also required to have a written agreement before doing any in-person or virtual home tours. Sellers are no longer required to offer compensation to buyers' agents through the MLS, so buyers may need to pay their agent directly, or negotiate the buy side commission into the transaction. An experienced and dedicated agent along with the right tools can help you navigate these changes with ease.

• Listing agents

  Listing agents can no longer offer compensation to buyers' agents on the multiple listing service (MLS). Previously the seller of a home would be the one to agree up front to the total commission to be paid on a sale. That has changed, now the seller will only agree to the listing side commission up front. This ultimately reduces the implied financial burden on the seller, but they should keep in mind some buyers will still need to negotiate the buy side commission that they have agreed to when signing their "Buyer Agent Agreement" into the purchase agreement. A dedicated and experienced agent can help you sort through these and many other challenges in the process of selling your property.

  
  

Some say the new rules make the real estate market more transparent for consumers, and will lead to more options for buyers and sellers. Others say the rules could reduce transparency between agents and could lead to confusion. This much is true, the changes are here to stay, and it is now more important than ever who you select to help you buy and sell your properties. An experienced and dedicated agent that can provide unique service options can help save time, money, and headaches for both buyer and seller.