Shifting Real Estate Commissions: What It Means for Homebuyers and Sellers
Anya’s Market Bites:
With recent changes in real estate commission rules, the landscape of buying and selling homes is undergoing a significant transformation. Traditionally, home sellers were responsible for paying a standard 5-6% commission, split between the seller’s and buyer’s agents. However, starting August 17, new regulations introduced by the National Association of Realtors (NAR) have changed the dynamics of how Realtors are compensated.
These changes come in response to antitrust lawsuits accusing NAR of keeping commissions artificially high by mandating that sellers cover commissions for both sides of the transaction. As part of a settlement, NAR has agreed to a $418 million payout and introduced new rules, which include prohibiting the display of commission offers to buyer’s agents on MLS listings. This move aims to prevent commission-based steering, where Realtors might favor homes offering higher commissions.
While these changes could encourage price competition and potentially save home sellers money, they also bring new challenges. Buyers may now be required to sign representation agreements with Realtors before viewing homes, and in some competitive markets, they might have to pay their agent’s commission out-of-pocket to make their offers more appealing to sellers.
For sellers like Dana McMahan, who recently chose to forgo a full-service Realtor to save on commission costs, these changes represent a shift in strategy. She handled much of the selling process herself, from hosting open houses to creating listings, and only paid a flat fee to list her home on the MLS. However, she still offered the standard 3% commission to the buyer’s agent to attract interest.
As the industry adapts to these new rules, both buyers and sellers need to be aware of the evolving landscape. While the potential for savings exists, understanding the implications and navigating these changes carefully will be crucial for success in the real estate market.
(Source: CNN)
All the best,
Anya Derebenskiy
(949) 942-5183
Oh, by the way…if you know of someone who would appreciate the level of service I provide, please call me with their name and contact information.
DRE# 02209693
