Real Estate Commission Changes: What You Need to Know

Real Estate Commission Changes: What You Need to Know

Starting this Saturday, new rules are set to change how real estate agent commissions work, potentially impacting both buyers and sellers. These changes aim to create a more competitive market, but they come with a fair share of uncertainty.

How Do Commissions Currently Work?

Typically, sellers pay a 5% to 6% commission at closing, which is split between the seller’s and buyer’s agents. This system has been in place for decades, but critics argue that it hasn't evolved with the times.

What's Changing?

From now on, sellers will no longer be required to offer compensation to buyer brokers when listing their homes on MLS (Multiple Listing Services). This means buyers will need to negotiate and agree on their agent's commission directly before starting their home search.

What Does This Mean for Sellers?

Sellers can still choose to pay the buyer’s agent, but this won’t be advertised on the MLS. While some may opt out of paying, others might continue to offer a commission as a way to attract more buyers.

How Does This Affect Buyers?

Buyers will need to have an agreement in place with their agent regarding compensation before beginning their home search. Although sellers can still agree to cover this cost, buyers should be prepared for the possibility of paying out of pocket.

Will This Lower Commission Rates?

Experts are divided. While the changes could encourage more negotiation, which may lead to lower commission rates, any significant impact on overall home prices is expected to be minimal.

In short, these new rules may make the process more transparent, but both buyers and sellers will need to navigate the changes carefully. Stay informed and negotiate wisely!