New Real Estate Rules Shake Up Industry: What You Need to Know
A recent settlement in a class-action lawsuit has brought significant changes to the way homes are bought and sold in the United States. The National Association of Realtors (NAR) agreed to a $418 million settlement in March, putting an end to a federal jury’s findings of antitrust violations. As of August 17, the NAR’s multiple listing service (MLS) no longer facilitates compensation rates for buyer’s and seller’s agents.
Prior to the settlement, home sellers would negotiate with listing agents to set the compensation rate for buyer’s agents, which was then listed on the MLS. However, this often led to sellers being locked into paying the listed brokerage fee without realizing they could negotiate. Now, commission rates are removed from the MLS, and sellers are no longer obligated to offer commission for both agents.
“This is a new competitive ballgame,” said Glenn Kelman, CEO of Redfin. “Now, the buyer chooses how much the buyer’s agent makes, and the sellers choose how much the seller’s agents make.”
While some confusion may arise among agents and consumers as they adapt to the new rules, experts believe it will be temporary. “Real estate agents are good at moving the market,” said Kerry Melcher, head of real estate at Opendoor. “That’s their job. So, I don’t believe that this is going to slow down the market.”
Here are some key takeaways for potential homebuyers:
* Be prepared for inconsistencies in the market as agents adjust to the new rules.
* Understand the buyer-broker agreement, a contract between the agent and buyer that specifies the terms of their working relationship.
* If the seller doesn’t offer commission, the buyer may be responsible for the commission listed on the buyer-broker agreement.
* Don’t be afraid to ask questions about the language and terms of the agreement.
As the industry adapts to these changes, it’s essential for buyers and sellers to stay informed and understand their rights and responsibilities in the homebuying process.
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