The traditional model of home purchasing has been upended by a recent court settlement involving the National Association of Realtors. Effective August 17, homebuyers will now need to negotiate and pay their agent's fees separately, rather than having the seller cover the commission as part of the sale proceeds.
This rule change offers buyers more flexibility in negotiating how much they pay for an agent. However, it also introduces some confusion for those who may not be sure how to navigate the new options. While some buyers may attempt to save money by avoiding a buyer's agent altogether, it is generally recommended to work with an agent due to their expertise in the local market, assistance in finding listings, handling paperwork, and negotiating on the buyer's behalf.
Buyers who choose to hire a buyer's agent will need to sign a written agreement outlining the terms of the contract, compensation, scope of services, exclusivity, cancellation policy, legal compliance, confidentiality, dual agency disclosure, amendments, and signatures of both parties. The new rules may lead to a shift in the market for buyer's agents, potentially resulting in lower fees and a tiered system of service.
When deciding on a payment structure for a buyer's agent, buyers should consider their own needs and preferences. Options include a percentage of the purchase price, a flat fee, or an hourly rate. It is important for buyers to carefully evaluate their options, compare services, and negotiate effectively to ensure they are getting the best value from their agent.
Overall, the new rules surrounding buyer's agent compensation provide buyers with more control and flexibility in the home purchasing process. By understanding the changes and exploring their options, buyers can make informed decisions when selecting and working with a buyer's agent.