The real estate landscape has undergone significant changes in August 2024, especially regarding how commissions are handled in transactions. These changes will have a profound impact on both buyers and sellers, reshaping how agent fees are negotiated and paid. In this blog, we'll break down the key elements of these changes and what they mean for you as a buyer or seller.

What’s Changing?

Starting August 17, 2024, the National Association of Realtors (NAR) will no longer allow sellers to offer commissions to buyer agents through the MLS. This marks a departure from the long-standing practice where sellers typically covered the commission for both their agent and the buyer's agent. Now, buyers will need to negotiate and pay their agent directly.

Why Are These Changes Happening?

These changes stem from a major settlement involving NAR, which aims to increase transparency in real estate transactions and reduce potential conflicts of interest. The settlement was prompted by lawsuits that claimed the traditional commission structure unfairly burdened buyers by embedding agent fees into the sale price of homes.

How Will This Affect Buyers?

For buyers, this change means taking on the responsibility of negotiating and paying for their agent’s services upfront. This could potentially increase the out-of-pocket costs at the time of purchase. However, it also allows for more flexibility in choosing an agent and negotiating fees.

How Will This Affect Sellers?

Sellers might find the process a bit more streamlined since they no longer need to worry about covering the buyer’s agent commission. However, this change could also impact how they price their homes, as they might adjust prices to reflect the reduced burden of paying both agents’ commissions.

These changes are significant, but with the right guidance, both buyers and sellers can navigate them successfully. In our next blog, we’ll explore how buyers can best prepare for these changes and the strategies they can use to ensure they get the best deal in this new environment.




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