ShareFox News
According to Kevin Sears, the president of the NAR, there will be a couple of rules and changes implemented that will impact real estate professionals, along with both buyers and sellers.
He said selling agents who list a home for sale on a Multiple Listing Service, known as MLS, will no longer be allowed to use the service to offer to pay a commission to agents that represent potential homebuyers.
"The selling consumer still is able to offer cooperating compensation or commission to the buyers represented by the buyer's broker as they have in the past, but it just cannot be communicated via the MLS," Sears explained. "So, now the seller and their agent are going to have to figure out how to effectively communicate what, and if any, the offers of compensation and commission are going to be."
Sears noted that any buying consumer who is interested in viewing homes with an intention of buying one, will need to have a meeting with a real estate professional in advance of touring any home and negotiate how much money the buyer's agent will earn.
At this point in the process, the buyer will be presented with a written agreement that will clearly spell out the services that will be provided to them by their real estate professional and the fee that the buyer's agent will be looking to get paid. Sears said the agent will need to clearly articulate their value and the expertise that they will bring to the transaction.
While commissions have always been negotiable, experts say this new ruling will ultimately lead to more transparency with the discussion about the fees upfront.
"On the buyer side, absolutely this is going to open up the door for negotiations between the buying consumer and the real estate professional because in the past there wasn't necessarily a negotiation on the commission because of what was being offered by the seller through the multiple listing service," Sears said. "It has to be a meeting of the minds and the consumer gets to decide what services that they want to have provided to them. And what they're willing to pay for it."
Sears said the buying consumer also needs to know that if the seller is not offering any compensation or commission for the buyer broker, the buyer may need to come out of pocket to pay for that fee. Otherwise, the buyer's broker can negotiate that as part of an offer to purchase the property and a commission would be a part of the purchase contract.