Navigating Changes in Real Estate Commissions: What Buyers and Sellers Need to Know

The real estate market is undergoing some significant changes that could impact both buyers and sellers. A recent study has found that homes offering below-market commissions tend to attract fewer views and take longer to sell. This has led to concerns about commission-based steering, where agents may be less inclined to show properties with lower commissions to potential buyers.

To address these concerns, the National Association of Realtors has agreed to make changes to its policies. Starting August 17, listing agents will no longer be allowed to offer a buyer’s agent fee on the multiple listing service (MLS). This means that buyers and their agents will no longer know if or how much a seller is willing to contribute towards the cost of the buyer’s agent representation.

Buyers who work with an agent will now need to have a written agreement spelling out their agent’s commission before touring any properties. Sellers can still agree to cover the buyer’s agent’s commission, but they cannot advertise it on the MLS. This change aims to eliminate any incentive for agents to steer buyers towards certain listings based on commission rates.

While some worry that these changes could lead to additional upfront costs for buyers, others see it as an opportunity for more transparency and negotiation in the real estate market. The hope is that these changes will ultimately benefit consumers by giving them more control over their real estate transactions.