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If you’re in the process of buying a home, you might have heard about some recent changes in the real estate world. These changes come from a significant settlement involving the National Association of Realtors (NAR) and have a direct impact on how the home-buying process works. But don’t worry—it’s going to be OK! You’ve got this, and I’m here to help. Let’s break down what these changes mean for you as a buyer, in a way that’s easy to understand.
1. Written Agreements Are Now Required
In the past, you could start touring homes with an agent without needing to sign any formal agreement. However, with the new rules, before an agent can show you any properties, there must be a written agreement in place. This agreement outlines the relationship between you and your agent, ensuring that everyone is on the same page from the start. It’s important to note that this requirement doesn’t apply if you’re just chatting with an agent at an open house or inquiring about their services—it only kicks in when you’re ready to start seeing homes.
2. Transparency in Commission Disclosure
Previously, there was no mandatory requirement for agents to inform you about commission arrangements. Now, transparency is key. Agents must disclose their commission details to both buyers and sellers. This means you’ll be fully aware of how much your agent will be paid and who’s responsible for that payment.
3. Buyers Now Pay Their Agent Directly
This is one of the biggest shifts. Traditionally, the seller would set the commission amount for both their own agent and the buyer’s agent. But under the new rules, buyers will negotiate and pay their agent directly. This change gives buyers more control over their representation but also means you’ll need to budget for this cost, which was previously covered by the seller. Keep in mind, most times the seller is still paying a buyer agent commission.
4. Filtering Based on Commission Is No Longer Allowed
In the past, listings could be filtered based on the commission offered to buyer’s agents, potentially affecting which homes were shown to buyers. With the new regulations, listings can no longer be filtered by commission, ensuring that all homes are shown based on your preferences, not the commission offered to the agent.
5. Seller Concessions and Commission Offers
Sellers used to make standard commission offers to all buyer’s agents, and these details were visible in the Multiple Listing Service (MLS). Now, sellers are not required to offer commissions via the MLS, and those commission details won’t be shown. However, sellers can still offer concessions, such as covering some of the buyer’s closing costs, which might include contributing toward the buyer agent’s commission. This can be negotiated as part of the overall deal.
6. What This Means for You
So, what does all this mean for you as a buyer? First, it’s important to understand that you now have more control over your relationship with your agent. You’ll be more involved in negotiating the commission, which could lead to a more tailored service. However, it also means that you need to be prepared to cover the cost of your agent’s commission directly, something that was often taken care of by the seller in the past.
This shift may require some adjustments in how you budget for your home purchase, but it also brings a new level of transparency and fairness to the process. You’ll know exactly what your agent is earning and can negotiate accordingly, ensuring that you’re getting the best value for the services provided.
As the real estate landscape continues to evolve, it’s crucial to stay informed and work with an agent who understands these changes and can guide you through them. If you have any questions or need further clarification on how these new rules might impact your home-buying journey, feel free to reach out—I’m here to help!
For more information, check out NAR’s website at https://www.nar.realtor/the-facts
Contact me if you want more info. I’m here to help! https://sawickisells.com/contact-me
