On Aug. 17, 2024, significant changes to real estate practices will be implemented by the National Association of Realtors® following a settlement from recent legal challenges.
These changes will impact how real estate commissions are managed and introduce new requirements for buyer’s agents, according to Kevin Sears, president of the National Association of Realtors®. "These changes help to further empower consumers with clarity and choice when buying and selling a home," Sears said.
Key changes include:
Commission Transparency: Broker commissions will no longer be displayed on Multiple Listing Services (MLS) associated with the National Association of Realtors®. This change aims to enhance transparency and encourage direct negotiation over commission rates between clients and agents.
Buyer Representation Agreements: Buyer’s agents are now required to have a signed agreement with their clients before showing homes, including virtual tours. This agreement will outline the compensation the buyer agrees to pay the agent, either as a percentage of the transaction or a flat fee. The new rules clarify that the buyer, not the seller, is responsible for compensating their agent, though there remains room for negotiation for the seller to cover these fees.
Negotiation Flexibility: Sellers and buyers can continue to negotiate commission structures, whether through flat fees or traditional percentage-based arrangements. All terms must be documented in the buyer representation agreement, offering greater control over transaction costs.
The new rules represent a major shift toward transparency and fairness in real estate. By removing broker commissions from MLS platforms, the changes encourage open discussions and negotiations between clients and agents, where buyers and sellers can make informed decisions about their financial commitments.
The upcoming changes could reshape the dynamics between buyers and sellers, impacting everything from negotiations to the overall experience of buying a home. How do you feel about the new practices? Do you think they will benefit buyers, sellers, or both? Let us know in the comments!
These changes are discussed in detail in the YouTube video above. For more insights on real estate investment, tune in to my podcast, Black Real Estate Dialogue, available on YouTube, Apple Podcasts, and Spotify.
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