The Aug 17th Realtor commission changes have now gone into affect. How does this impact you?

First off, what changed? Primarily 2 things:

1. No more promise of buyers agent commissions posted on the MLS. This includes removing of all commission data from the MLS both past and present. This also applies to any outside websites that are directly linked to a listing on the MLS.

2. Buyers agents can't show a home without already having a buyer broker agency and commission agreement in place.

Buyers:

1. You now have to sign a binding agreement with your agent stating how much they will be compensated for their services prior to doing a showing. No this is not them strong arming you. We all have to do it to be in compliance.

2. You will be agreeing to pay your agent a commission just like you have in the past (albeit probably unknowingly). If you do not wish to pay this out of pocket, you will want to include an addendum in your offer requesting the sellers pay your agents fee for you.

The whole purpose is to put the buyers agent commission back in play as a piece that needs to be negotiated. Before buyers agent commissions were guaranteed by the MLS. Could they be negotiated before? yes. Were they? no.

Sellers:

1. Instead of paying your listing agent a commission that they would typically split with the buyers agent, you are now paying each of them directly (if you so choose). The agency docs have made the separation a bit more clear. If you get two nearly identical offers where one is asking for you to pay their agent 2.5% and the other is asking you to pay 3%, you get to decide if that .5% is worth it.

Many people believe that these changes have made it so sellers no longer pay buyers agent commissions. That is not true. They have just forced it to be more negotiable than it has in the past.

I still believe sellers will need to pay the buy side commission if they want to sell in a reasonable time frame and for top dollar. Good buyers agents still bring a lot of value to the seller by orchestrating a smooth process for both sides of the transaction. Those unwilling to pay a buyers agent commission will see drastically less traction and offers.

What questions do you have about these changes? Drop them below 👇