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  • Writer's pictureBeth Campbell

The Elephant in the Room, Part 2!

Last month, I wrote about the changes in the real estate industry COMING SOON nationwide of how REALTORS® and their brokerages will conduct business in the future. I wanted to continue this discussion to help all of us understand just what will take place. NAR® practice changes are to be implemented by late July and final approval is scheduled for 11-26-24. So, how does that impact sellers, buyers, and our local market?

If you are a buyer looking for a home, your REALTOR® agent will no longer be able to set you up on a search, counsel you or tour homes without first asking you to enter into a written Buyer’s Agency Agreement. This agreement is a legal contract and will spell out how much your representing company will be paid. For many years now, the buyer’s representing company was paid by the listing company “sharing” a portion of the total commission. The NEW procedures agreed to by NAR® will allow the buyer’s representing company to be paid either by the buyer (out-of-pocket), the listing company “sharing” a portion of what they are charging the seller, the seller to pay all or a portion via “concessions” or a blend thereof. That amount or percentage will no longer appear to agents/brokers on the MLS and must be communicated outside of that platform. IF the buyer does not want to be represented, they will have to schedule appointments for each home they want to see with numerous listing agents. They will also need to make other arrangements to submit a purchase offer and schedule inspections, appraisal, repairs, etc. In other words, that buyer would be a “customer” only.

BUT DON’T PANIC! Sellers understand that in most cases, they are asked to pay “closing cost concessions” from their proceeds on the buyer’s behalf. Moving forward, buyer’s will also be able to ask for “concessions” to pay their representing company for all or a potion of what they’ve contracted to pay in the Buyer’s Agency Agreement. The seller is simply looking at the terms, conditions and “net proceeds” figure, regardless of what the concessions are for.

How does this impact Sellers? Some listing companies will continue to simply “share” a portion of their commission with the buyer’s representing company. Other listing companies will charge the seller’s side of the commission only and simply see what the buyer’s side wants or needs in concessions. And to reiterate, commission rates are never pre-determined or dictated by any entity.

The real estate transaction today is complicated, time consuming, nerve wracking and contentious to say the least. These changes will be “old hat” in time, but your local REALTORS® will continue to provide valuable and professional services to buyers and sellers alike. Real estate procedures have changed many times in the past and I presume will again in the future. Change is acceptable, unless my cell phone needs upgraded! Now THAT I have a problem with! Feel free to email with any questions about these important changes!

Published in Louisville Neighbors 06/2024

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