KEY REAL ESTATE CHANGES
Starting August 17, key real estate changes affect how agents are compensated for helping buyers and sellers.
One of the most significant shifts is that buyers must now sign a contract with their agent before touring any homes.
Additionally, the way agent commissions are handled is set to change. Historically, sellers would pay about 5% of the home’s sale price in commissions, with half going to the buyer’s agent. However, shared commission offers through Multiple Listing Services (MLS) will no longer be allowed. This means sellers may not automatically cover the buyer’s agent's fees, shifting that financial responsibility to the buyer.
As Jen Routon, president of the Denver Metro Association of Realtors, notes, “The biggest change is that buyers and their agents will need to negotiate compensation directly before viewing homes.”
Real Estate Changes: What Buyers and Sellers Can Expect
For buyers, these real estate changes mean more upfront negotiations and a mandatory contract before home tours. These contracts can vary in duration and terms, allowing flexibility between buyers and agents. However, buyers may face additional costs, as they may now need to pay their agent's fee directly if the seller chooses not to contribute.
On the other hand, sellers will experience more negotiation over whether to offer compensation to the buyer’s agent. While this could reduce out-of-pocket expenses, it may also result in lower offers from buyers who need to cover their agent's fees. Additionally, homes with no buyer’s agent compensation might see less interest from potential buyers, as their agents may be less inclined to show these properties.
Other Potential Industry Impacts
The shift in commission structures could also lead to the more common adoption of new pricing models, such as flat fees or a la carte services. Additionally, changes in lending practices, like allowing buyers to finance agent commissions, may occur. The VA has already adjusted its policies to permit reasonable commission payments by borrowers, which were previously prohibited.
If you have questions about the changes and how they may affect your real estate goals, reach out today! Together, we can navigate the changes and provide the support and information you need for success.
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