Big changes are underway in the real estate world, particularly concerning commissions and how they’re handled. If you haven’t already heard, there’s a significant legal battle against the National Association of Realtors that’s set to shake up the way commissions work.
The crux of the matter is this: Starting August 17th, there will be a shift in how commission compensation to buyer’s agents is handled. The crucial change is that this compensation won’t be posted on our Multiple Listing Service (MLS) anymore.
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What Now?
Commission eventually still come from the sales price. How it is paid will be different case by case. This new change give the seller more options as they are not obligated to offer a buyer agent compensation upfront. Lets take a look at some of sellers new options and how they will impact buying and selling.
Option 1: Sticking with the Usual
Some sellers may choose to continue offering upfront compensation to the buyer’s agent, maintaining the status quo. This ensures that buyers still benefit from the assistance of a buyer’s agent, paid for by the seller. While this keeps costs down for buyers and allows more flexibility in negotiating the purchase price, it also opens up the market for sellers.
Option 2: No Buyer’s Agent Compensation
Alternatively, sellers may opt not to offer any compensation to the buyer’s agent upfront. In this case, if the buyer’s agent expects to get paid, they’ll need to negotiate directly with the buyer. However, this could potentially increase costs for buyers, as they may have to factor in commission expenses into their down payment and overall purchase costs. While sellers save money, the market becomes more restricted, which may impact the sales price.
Option 3: Negotiating Compensation
Sellers can also choose not to commit upfront and leave compensation open for negotiation. In this scenario, the buyer’s agent will present the buyer’s offer along with a compensation request. Sellers may end up paying both commissions, but they risk missing out on some buyers. This presents a dilemma for buyers, as offers with additional compensation requests may be less appealing to sellers.
Each option comes with its own set of pros and cons, making it crucial for buyers and sellers to carefully evaluate their situation and preferences. It’s a complex topic, and if you have questions or need guidance, feel free to reach out at 909-610-5188.
Stay informed and make the best decision for your real estate needs!
