Due to the aftermath of a giant legal settlement, a new realtor law is changing the real estate landscape for good.
Now the process of buying and selling a home is getting more complicated for everyone involved.
Here’s how the new realtor law is going to affect the entire industry…
New Realtor Law Changes Commission Rates For Real Estate Agents
Buying a home is always an ordeal, but before August, you could take things slow with your buying agent. You could take your time getting to view homes before making any concrete decisions…
But thanks to this new realtor law, those days are over.
NOW THE HOME BUYING PROCESS IS BECOMING MUCH MORE OF A… PROCESS.
This lawsuit and subsequent legal settlement have had many experts worrying about its wider effects on the industry. The lawsuit centered on the National Realtor’s Association…
And its commission information available on their Multiple Listing Services.
The NAR controls 97% of the nation’s multiple listing services. An MLS is a database where agents can list and find information on homes in their area. What this realtor law changes, however, is how buying and selling agents split commission payments.
When someone wants to sell their home, a selling agent will market the home for between 5-6% of the sale price. Once that home gets sold, the selling agent will split the commission with the buying agent.
The lawsuit was filed against the NAR by home sellers…
Who thought it was unfair that the split commission meant that they were paying the buying agent.
After all, the buying agent and the home seller never even meet.
Now, following the settlement, the new realtor law means selling agents can no longer list home commission rates on the MLS…
AND THIS SPELLS TROUBLE FOR PEOPLE LOOKING TO BUY HOMES AND THEIR REALTORS.
New Landscape For Buying Agents
The MLS is not the only thing affected by the realtor law…
Now, whenever you meet with a real estate agent to buy a home, you must enter a contract with them before seeing any homes in person.
This new contract is called a buyer-representation agreement…
And it details what services the client will receive and how the agent expects to be paid.
THE BUYING AGENT’S PAYMENT, WHICH IS SOMETHING HOME BUYERS NEVER HAD TO THINK ABOUT, IS NOW A TOP PRIORITY FOR THE BUYER.
Along with everything else in the home buying process…
This becomes yet another negotiation between the buyer, the buying agent, and the selling agent.
Now thanks to the realtor law, instead of one clear avenue…
There are a million different ways to pay the buying agent.
The buying and selling agent can still split a commission (they just can’t advertise it on an MLS), the buyer can fork over and cover the cost of the agent or negotiate a way to get the seller to pay for their services…
WHATEVER IT MIGHT BE, THE PLAYING FIELD JUST GOT A LOT MORE COMPLICATED.
The Future Of Home Buying
Ultimately, this realtor law just presents more hurdles for everyone to jump through…
And it costs homebuyers to shell out more cash in an already extremely competitive and expensive market.
The question remains…
This new law is benefitting home sellers…
But what about everyone else?
Be Great,
GCTV Staff
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