How Will Changes to the Real Estate Industry Impact You?
The real estate industry has been the subject of significant attention recently due to a major settlement involving the National Association of Realtors (NAR), which will take effect nationally on August 17. There has been a lot of speculation and misinformation regarding how these changes will shape the industry moving forward. In this article, I will clearly outline the key changes and what they mean for the future of real estate.
Decoupling of Commissions
Before the new national policy, commissions were typically structured as a single percentage in the listing agreement. This percentage was paid to the listing agent’s brokerage at closing and then split according to the commission offer made via the MLS. Listing agents would specify a cooperating commission in the MLS to inform buyer agents that the seller was willing to cover their commission. At Brown & Co (my team), we have always made it a priority to explicitly explain how commissions are split when listing a home.
Buyer Service Agreements Required Before Showings
Moving forward, buyers must have a Buyer Service Agreement signed with their agent before viewing any properties. While the specifics of this agreement may vary between brokerages, the primary goal is to enhance transparency regarding how agents will be compensated. Agents and their clients will agree on a compensation structure and outline the terms in this document, which, like any business agreement, will have an expiration date. At Brown & Co, we have always used a Buyer Service Agreement when submitting offers, but now we ensure it is signed before any property viewings. This shift, while significant, is a positive one—it ensures that buyers have a clear understanding of what to expect from their agent from the outset.
Myth Busting: “Now I Don’t Have to Pay a Buyer’s Agent”
There’s a common misconception that buyers no longer need to pay a buyer’s agent under the new rules. In reality, commissions have always been negotiable. There has never been a set fee, and it’s up to sellers and their listing agents to determine the best approach for selling their home with minimal friction and maximum return. Buying a home is a significant investment, and nearly all buyers (99.9%) factor in the cost of reimbursing their buyer’s agent as part of their financing when purchasing a home.
If you’d like to learn more about these changes and discuss it in more detail, please reach out to me.
Stephen Brocks
Brown & Co. at McGraw Realtors
Cell: 918-984-8029