You may have heard the news of real estate compensation changes coming. The changes go into effect this month. These shifts are due to an NAR settlement from March 2024. If you are in the market to buy or sell, we want to keep you informed about what this means for you.
How Compensation Worked and What’s Changing
Traditional Compensation Structure:
- Commissions have always been negotiable and will continue to be negotiable.
- Sellers agreed to pay a portion of the listing commission to compensate the buyer’s agent broker at closing.
- This commission was included in the sale price, so the buyer effectively covered it through their mortgage.
New Compensation Structure:
- Sellers and their agents won’t be able to promote how much they’re compensating the buyers’ agents in MLS listings. There are other ways they can promote the compensation amount; just not through the MLS. Sellers are still encouraged to offer a buyer’s agent compensation, but it won’t be shown in the listing.
- Buyers will need to sign an agreement with their agent before looking at homes. This agreement will explain how much the agent’s compensation amount is and how their broker can receive payment. It doesn’t mean buyers have to pay directly; they can negotiate with the seller to cover this.
Looking to Buy or Sell?
These changes can make the real estate market seem more complex, especially for first-time buyers or sellers. But here’s the good news—understanding these changes and working with a knowledgeable REALTOR® can help make the process smoother.
For Sellers: With these changes, you can still offer compensation to the buyer’s agent broker. In fact, doing so will help you attract the best offers.
For Buyers: Working with a buyers’ agents will ensure your interests are protected and you have someone advocating for your best interests. They will help you understand the market, find the right property, negotiate, and handle contracts. They will also be able to recommend trusted providers to help you with your real estate needs.
So, whether you’re buying or selling, remember that having a knowledgeable real estate agent by your side is key. They’re not just there to support you—they’re there to teach you and guide you every step of the way! Find an expert agent here.
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