- calendar_month August 16, 2024
- folder RE News
Significant changes in real estate agent commissions are scheduled to take effect on August 17, 2024, implemented by the National Association of Realtors (NAR). These adjustments reflect an evolving market landscape and the ongoing discussions about transparency, fairness, and value in real estate transactions.
The most notable change is the shift towards a more transparent commission structure. Traditionally, the seller’s and buyer’s agent commissions were often bundled into the overall transaction cost, typically paid by the seller. This model sometimes obscured the actual cost of services provided by each agent. Under the new guidelines, there is a greater emphasis on clarity, ensuring that clients fully know how much each agent is being compensated and for what specific services.
Agents working with buyers must enter into a written agreement with their buyer before touring a home, either in person or virtually. That agreement must specifically disclose the amount or rate of compensation an agent or broker will receive or how this amount will be determined. An agent's compensation will no longer be shown on the MLS.
One of the critical updates is the increased flexibility in commission negotiations. Previously, commission rates were often seen as standardized within certain markets, leaving little room for negotiation. The new rules explicitly state that commissions are not legally set and are fully negotiable. This change empowers both buyers and sellers to have more control over the financial aspects of their transactions, potentially leading to more competitive pricing.
Additionally, NAR has introduced measures to enhance consumer protection. Real estate professionals are now required to provide clear disclosures about their commission structures and any potential conflicts of interest. This increased transparency aims to build greater trust between agents and their clients, ensuring that all parties have a clear understanding of the financial dynamics involved in their transactions.
These changes represent a significant step forward in promoting fairness and transparency in the real estate industry. As these new rules take effect, both agents and consumers should prepare for a more open and flexible approach to real estate commissions. Overall, it's important to remember that all forms of compensation remain fully negotiable as they were before the settlement. Now consumers have a choice and options.
Keeping you in the know!
