By Patrick McCarran, Real Estate Broker
There is a major change coming in the real estate world that will completely reshape how buyers purchase their home. What will the settlement mean for homebuyers and homesellers?
Traditionally Owners have hired an agent to sell their property and negotiated a commission. By making it a percentage it gives the agent incentive to maximize the sales price, this is a very common practice with money management, talent agents, etc. The listing agent would then offer an offer of compensation from their commission to act as a finder’s fee and to broaden the scope and market of the property, this was the function of the MLS.
Starting in August 2024 this will no longer be allowed, due to a class action settlement with a private party and supported by the DOJ the selling agent will no longer be able to offer a finder’s fee on the MLS. The new system will shift agent compensation and place the Buyers on their own. This will give the Buyer the options of hiring a real estate agent, or a lawyer, or representing themselves. A written agreement will be required for Realtor representation for both in-person and live virtual home tours. This currently only applies to Realtors but there is a state law in the legislature to apply to ALL real estate licensees. The Buyer will now be responsible for paying for their representation. There is, as always, no set price for representation and this will be up to the individual to negotiate.
Sellers will be allowed to pay for the Buyer’s agent if they choose by offering concessions on the MLS. The buyer can then choose to distribute the money according to their needs towards closing costs or Realtor fees. While listing commission fees have always been negotiable with the changing dynamic the fee structure will most likely change. As a Seller it will be up to you to negotiate what you wish to pay to sell your home and what will be the most advantageous. The Seller will decide if they wish to pay and how much to the Buyer’s agent. The Seller and their agent will need to work out if they are comfortable with their agent representing an unrepresented buyer and what the additional fee for the listing agent to represent the Buyer in that scenario.
While doing it yourself may sound like a great idea and instant savings, bypassing an agent’s services may not lead to direct savings, especially for first time buyers, the home buying process can get very complicated and having a great local agent to negotiate and guide you can give you a competitive advantage.
Consumers will still be able to view Open Houses without a written agreement and may tour with the listing agent if the listing agent business practices allow. Buyer will have option to sign exclusive agreements or open agreement which will be up to the consumer and their Realtor. The Multiple Listing Service (MLS) will continue to be supported through Realtor dues and thereby imparting vital information to the consumer.
As we move forward into this brave new world of real estate, it will be different but ultimately I am confident that Consumers and Realtors will work together so that all parties may benefit.
Patrick McCarran is a local Realtor and Broker He can be contact by phone or text at (925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office. Equal Housing Opportunity.
