After a previous court settlement, major changes are beginning this week involving homebuyers and their real estate agents. The changes follow a federal court settlement with the National Association of Realtors.
The Aug. 17 changes could break the standard of the listing agent and buying agent splitting a 5%-6% commission on the purchase price of a home.
The Justice Department said the National Association of Realtors rules have prohibited multiple listing services from disclosing to prospective buyers the commission that agents will earn if the buyer purchases a home listed on the MLS. The Justice Department argued that this process potentially led agents to recommend their clients to purchase homes with higher commissions.
The NAR contended that agent commissions are negotiable and competitive, a claim the Justice Department has disputed in legal filings.
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But new changes now prohibit offers of compensation on multiple listing services. Secondly, agents working with a buyer now must enter into a written buyer agreement before touring a home.
Together, these changes are intended to inform a homebuyer of how much compensation is being provided to the agent for their services. While the seller often pays for the commission, many consider these fees baked into the cost of a home.
Although there are fears the new changes could lead some agents to leave the industry, the National…
