You may have heard in mainstream media about this recently…
Well, changes are taking place – all in hopes of gaining further transparency and discussion in the way parties are paid in a Real Estate transaction.
There will be further changes in the future but here’s what’s changing as of now:
What’s Changing for Sellers?
1. The new listing agreement only has an area for paying the listing agent/broker’s commission. Previously it was broken down into what you would pay the listing agent, and then what portion of that total % goes towards the buyer’s agent/broker.
**Now, your listing agreement with your listing agent only includes what you’re paying your listing agent/broker. Simple.**
2. So who pays the buyer’s agent? Well, the buyer can pay the buyer’s agent OR you as the seller still have the option of paying a buyer’s agent. However, the way that this will be negotiated will likely be when offers come in. I foresee many offers coming in with a request for the seller to pay some sort of commission towards the buyer agent. The amount will be negotiated between the buyer and the buyer’s agent (and will be documented) – and then this document will be presented with the offer. The seller will then have the choice to pay it or not.
There are a few nuances to these changes and multiple strategies we can employ to net the most amount of money.
What’s Changing for Buyers?
Buyers need to be more prepared…
1. Buyers must sign a written representation agreement with their agent before viewing any home. This agreement can be exclusive or non-exclusive and must contain a monetary amount they are WILLING to pay their agent, or the buyer can state they do not have the funds to pay their agent.
2. In most circumstances, I think sellers are still going to be willing to pay some sort of commission towards the buyer’s agent, so buyers don’t necessarily need to cover their agent’s fee.
3. Buyers can simply shop for homes where there is a seller willing to negotiate paying the buyer’s agent. OR the buyer simply puts together a strong offer and includes “this offer is contingent on seller paying for their agent’s commission of XYZ”.
These are significant changes and are important to understand. There are revised, as well as brand new documents that lay everything out so that everyone is protected. Like with all significant changes, all parties involved including buyers, sellers and agents will quickly learn to have these conversations up front. Nobody is FORCED into any one scenario.
The good thing is that both buyers and sellers have options.
Need help navigating these changes? I’m an open book and am happy to review and share my opinion on these new documents with you, before you commit to anything. I want you to be 100% clear before moving forward with anything.