CHANGES THAT IMPACT YOU AS A FUTURE HOMEBUYER OR SELLER
As of August 17 in MA and already implemented in NH - there are some major changes in the real estate industry!
Here’s what you need to know:
NAR (National Association of Realtors) settled on a lawsuit that comes down on real estate agents offering “cooperating compensation” on the sale of home.
THE HISTORY + WHAT WAS:
In mid to late 1900’s, there was 1 real estate agent that sold a home. They represented the seller, charged the seller a fee, and brought the buyers(representation was a pretty loose term- there was little regulation around this industry).
Around 1990s ish, the “buyers agent” concept was born in order to protect homebuyers with their own fiduciary agent who works solely in the best interest of their buyer while the listing agent worked in the best interest of the seller. The listing agent still charges the seller a fee (percentage of sale price) for their services and then shared their fee with the buyers agent.
This model worked for years. It works because the buyers agent is ~helping~ the listing agent by bringing a ready, qualified, educated buyer to the table to successfully purchase the home listed for sale.
Buyers were rarely responsible for paying their buyer agent because of this model and business structure.
HOW IT WILL WORK NOW:
— BUYERS
It is more important now than ever to thoroughly interview and connect with your agent to ensure they will be the best fit for you in your home buying journey.
It is equally important to have a clear understanding of what they do for you and see the value in what they charge.
NOW (as it is with almost every service you may need) you as the buyer will be responsible for paying your buyer agent for the services rendered on a successful sale as part of your closing costs.
✨ I will be able to work with my buyers on cost depending on what services they may need or want✨
NOTE: there may be some circumstances where a seller is willing to cover the cost of your agent but this will be a negotiation point as with most terms in an offer to purchase contract. That’s where I come in to negotiate the best terms for you 💪🏻
— SELLERS
Although it was never “mandatory” for you to offer buyer agent compensation, it was typically wrapped into the listing fee you agreed to because it was part of the marketing strategy.
This was the best way to bring the most amount of QUALIFIED, READY + ABLE buyers to your home. And this will still be the case if you chose to offer compensation to a buyers agent proactively (in my opinion).
If you do not, you may still see these terms in an offer to purchase which you then can negotiate.
ALL IN ALL:
As a Realtor, I genuinely do not want or like this change and feel it’s brings more stress + negotiation into a transaction. As a buyer, there are already enough points to negotiate and protections removed from contracts in highly competitive situations. As a seller, could you save some money? Sure, maybe. But it could open you up to liability by selling your home to an unprepared, uneducated and unrepresented buyer. These are just my options. We will see how things go as time goes on.
Real estate is MUCH DIFFERENT than it has been in the past and this change could possibly improve the industry and make things easier for buyers. Only time will tell.
Please reach out with your questions, comments and concerns about this change to talk more I depth about this may affect you and how to better prepare for home ownership.
For more information regarding the lawsuit and settlement CLICK THE LINK BELOW
https://crushitinre.com/real-estate-cases/
