Commission Changes 2024

In response to the settlement The National Association of REALTORS entered into earlier this year, there are a number of new policies in place that may affect you as a buyer or seller that went into effect on August 17th, 2024.  Here’s our effort to let you know what you need to know, in broad strokes.

First and foremost, it’s important to understand that all commission and fees for real estate services are negotiable for both sellers and buyers, and always have been.  The primary changes going forward include additional contract disclosures for all parties in an effort to make sure there’s no misunderstanding about who represents who in a transaction, what the fees will be, in advance of any transaction, and who’s responsible for paying those fees.

There is going to be a bit of an acclimation period as various brokers, associations, and agents determine exactly what their policies will be.  A series of guidelines and requirements did come out of this settlement, but the exact approach and documentation may vary from one agent, broker, or association to the next.  Having said that, our approach at HomeWaters is to fully separate the idea of a listing commission and a buyer’s agent commission and transition away from the long held practice of the listing agent and buyer agent “sharing” one negotiated fee with the seller.  Our listing contracts break out each separately and the seller has the right to negotiate a commission for the services we provide as a listing agent and to separately negotiate any commission they’d like to offer in compensation toward the buyer’s broker fees.  When working with buyer clients, our clients will be able to negotiate what fees they’ll pay in exchange for our services as a buyer’s agent and those fees will be their responsibility whether they pay directly or ask for seller concessions as part of their purchase offer process on a specific property. 

As a buyer, you and the showing agent are now required to sign an agreement prior to touring a home offered for sale, either in person or via video.  This agreement needs to outline exactly what the fees will be, what the agent’s role will be, and who is responsible for paying those fees.  Prior to the changes being instituted, an agreement only needed to be signed if the buyer wanted to enlist the showing agent as their buyer representative.  Now an agreement must be signed regardless of the agency relationship.  I’d like to make a point of saying that no buyer is required to enlist an agent as their buyer broker.  They must simply sign an agreement about the terms of that showing which outlines the role the involved agent will play and what their fees will be, if any.  While we believe buyers are best served when they enlist a buyer’s agent to represent their best interest, it’s perfectly acceptable for a buyer to complete an agreement with an agent that says, they do not agree to pay a fee at all, or to have that agent as their representative in the transaction.  The agreement just needs to outline those terms.  It would then be up to the agent to decide if they wanted to show the property to that buyer or not, as they may not wish to go through the effort with no guarantee of payment for their efforts.  This seems to be a disputed aspect of all of this and deserves a more thorough conversation, so please contact us if you have questions.

As a seller, you’re still welcome to offer to pay compensation toward a buyer’s agents fees and there are a lot of possible reasons you may or may not want to do so.  Those fees are 100% negotiable, and your agent can discuss how it might impact your property based on your unique goals and needs.  If you do choose to offer compensation toward a buyer’s agent fees, they are no longer allowed to be advertised within the MLS system, but your agent is able to advertise your offer in just about any other format they wish.

To this point, it seems as though a large majority of sellers are seeing value in offering to pay compensation toward buyer broker fees and are considering that when setting their list price.  An overwhelming majority of offers being written in our service areas are asking for the seller to pay for some, or all the fees for the buyer’s agent.  This may change going forward, or practices may vary depending on price points and other factors, so just be sure to have a detailed conversation with your agent until you fully understand how this might affect you. 

Wow…  I’m sure that’s a lot to take in, especially considering we’ve been weighing all the aspects of this for a year or more now and work within the industry every day.  In the end, it really is not a large scale change, but one more of semantics and process.  We’ve found we’ve been able to help both our seller and buyer clients through the process smoothly and to great benefit at every step of the way.  As always, we’re here to help.  Contact the HomeWaters agent or broker in your service area with a call, to schedule an in home visit, or a property tour all at no charge or obligation.  We’re certain you’ll find confidence in our approach to all of this and choose to work with HomeWaters when it’s time to buy or sell.