Are you currently looking to buy or sell a home? If the answer is yes, it’s essential to stay informed about recent developments in the real estate industry, especially regarding commissions. A significant lawsuit filed by the National Association of Realtors (NARS) has brought about impending changes in commission regulations, scheduled to come into effect in July. Let’s explore the implications of these changes for buyers, sellers, and agents alike.

Jessica Dunnam | Realtor | NARS Lawsuit | Commission Change | Real Estate Market

Common Misconceptions

Many people mistakenly believe that real estate commissions were always negotiable and remained static. Traditionally, industry standards maintained a commission rate around 6% for both the seller’s and buyer’s agents. These rates were typically subject to negotiation during the listing process, granting listing agents control over commissions for both parties. Negotiations often resulted in reductions in these percentages.

What’s Changing

Beginning in July, significant changes will disrupt this traditional commission structure. Buyers’ agents will now need to establish a contract with their clients upfront, disclosing the buyer’s fees before showing houses. Moreover, if a seller opts not to include a buyer’s agent commission in their listing, the buyer may need to cover these costs out of pocket.

Implications for Buyers

This shift means that buyers may now face additional expenses on top of their down payment and closing costs if the seller opts not to include a buyer’s agent commission. It’s crucial for buyers to be aware of these potential costs and factor them into their budget when considering purchasing a home.

Take Action

Given these impending changes, prospective buyers may want to buy before July to avoid potential out-of-pocket expenses associated with commissions. Working with a knowledgeable real estate agent can help navigate these new regulations and ensure a smooth transaction process.

In conclusion, while real estate commissions have always been a part of buying and selling homes, who pays for them is now shifting. Buyers may find themselves responsible for covering these costs if the seller chooses not to include a buyer’s agent commission in their listing. Understanding these changes and their implications is key for anyone involved in the real estate market.

Stay informed, stay proactive, and make the most of your real estate endeavors before the new regulations come into effect in July. Buy before July!