Changes to realtor commissions taking effect this weekend could give home sellers a lot more negotiating power \u2014 and for buyers, potentially some more paperwork.<\/p>\n
Starting Saturday, realtors will be barred from offering compensation on multiple listing services (MLS), making it harder for buyers\u2019 agents and sellers\u2019 agents to negotiate fees on their own, as they\u2019ve done for decades.<\/p>\n
Until now, home sellers traditionally had to pay commissions, commonly in the range of 5% to 6%, to their agents, who then split that fee with the buyer\u2019s agent upon making a sale. The new rules, which follow a historic $418 million settlement with the National Association of Realtors in March, leave more room for sellers to negotiate those fees down and make it more appealing for buyers to forgo agents entirely.<\/p>\n
\u201cIt\u2019s the biggest change probably in the history of real estate,\u201d said Mike McCann, a realtor in Philadelphia. \u201cIt has created a lot of fear, a lot of anxiety\u201d within the industry, he said.<\/p>\n With the MLS no longer serving as a forum for negotiation, it remains to be seen how agents, buyers and sellers will choose to cover commission costs. While sellers could pass on any savings on the commission to the buyer in the form of a lower home price, it\u2019s also possible that sellers could increasingly choose to ask the buyer to cover some or even all of the costs.<\/p>\n To ensure buyers know the compensation that they may be on the hook for, the NAR is implementing a change, also effective Saturday, requiring agents to enter into written agreements with buyers before showing a home.<\/p>\n Jan Jaeger is a client of McCann\u2019s and says the new rules add more work to the experience of homebuying, which she\u2019s going through now in Philadelphia after selling her house there earlier this month.<\/p>\n \u201cIt\u2019s just another step in already a very difficult process, and I only say that because I have bought and sold many homes in the past, and what\u2019s happening today is very different. It used to be fairly simple,\u201d Jaeger said.<\/p>\n The settlement that triggered the shake-up stemmed from a class-action antitrust lawsuit that alleged brokers were steering clients to listings on the MLS offering better commissions. The NAR denied wrongdoing and reaffirmed its \u201ccommitment to requiring that MLS Participants must not limit the listings their client sees because of broker compensation.\u201d<\/p>\n The NAR has also clarified that even though offers of compensation are prohibited on the MLS, offers \u201ccould continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.\u201d<\/p>\n The changes come in the midst of a cooling housing market, where high home prices and high mortgage rates have caused sales of existing homes to slide since the pandemic-era homebuying frenzy.<\/p>\n For first-time homebuyers already concerned about affordability, the possibility of being on the hook for commissions adds more potential costs.<\/p>\n \u201cPeople are saving, they\u2019re paying rent, they don\u2019t have the money,\u201d McCann said of younger buyers looking for their first homes. \u201cHow are they going to pay the commission? That\u2019s my biggest concern.\u201d<\/p>\n Still, experts say the big takeaway is that fees could decline further. Real estate listing site Redfin noted in a report earlier this month that commissions for buyers\u2019 agents have already been on a yearslong decline.<\/p>\n \u201cIt\u2019s also possible that news of the settlement made consumers more aware they can offer any commission to a buyer\u2019s agent or none at all, contributing to the decline since March,\u201d the report said.<\/p>\n In the end, the new changes should at least give homebuyers and sellers more transparency into how they compensate brokers.<\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Changes to realtor commissions taking effect this weekend could give home sellers a lot more…<\/p>\n","protected":false},"author":1,"featured_media":6857,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-6856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts\/6856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/comments?post=6856"}],"version-history":[{"count":0,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts\/6856\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/media\/6857"}],"wp:attachment":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/media?parent=6856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/categories?post=6856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/tags?post=6856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}