For those who think the new MLS Realtor rule changes are bad for buyers

[Albert Hepp]

Let's go over some examples and show me where you think the buyer is harmed:

My opinion/perspective: The buyer has really been paying for the buyer agent commission all along. Because Sellers care about their net proceeds, the amount they are going to walk away with after all the transaction costs have been paid. Proof of what the seller cares about exists in every transaction where the seller provides a concession to assist their buyers with their closing costs.

Example 1, the Old way:

Buyer offers $100k, seller pays 6%, seller nets $94k. Buyer starting mortgage balance is $90k (assuming 10% down)

Example 2, the New rules way:

Buyer offers $97k, pays their agent $3k, seller pays their agent 3%, seller nets $94k. Buyer starting mortgage balance is $90k (assuming 10% down) because mortgage rules changed to enable commission to be added to mortgage balance. If a mortgage program doesn't change their rules, the difference is negligible, starting mortgage balance would be $87.3. Buyer's agent could/should also negotiate a seller credit that makes the offer $100k, with $3k credit for buyer agent compensation, again resulting in a seller net of $94k.

But now buyer has the opportunity to agree with their agent that the rate should be 2%, or a flat fee of $2k, and the buyer then pockets that savings. Before the buyer really never had a chance to determine their agent's compensation.