July 26th, 2024 1:06 PM by Linda Holley
Hear all about it! The real estate practice is undergoing major changes next month. Offers of brokerage compensation will not be included in the Multiple Listing Service (MLS). Additionally, buyers and their brokers will negotiate how much the broker will earn and how they'll be paid. It's simple yet complex.
What brought about this change? Some brokerages have required sellers to pay a 6% commission, which was generally split 50/50 between the listing and selling brokerages. Critics say that this has driven up the price of housing.
Today, offers of buyers’ brokerage compensation do appear in MLS listings for everyone in this business to see. It's fair to say that some agents/Realtors (not Linda Holley) overlooked listings unless they would be paid a 3% commission if they sold the home.
Six home sellers in Missouri filed a lawsuit claiming that the real estate industry forced them to pay inflated fees. The National Association of Realtors (NAR) settled out of court and Department of Justice has been heavily involved.
Here's what you need to know:
1. Provisions in real estate contracts have been recently revised.
2. Offers of compensation must NOT appear in MLS after August 6.
3. Buyers and brokers will negotiate how much the broker will be paid.
4. Buyers MUST sign a Buyers Brokerage Agreement before seeing a home.
Commissions have always been negotiable; however, these changes won't be easy for Realtors. My broker has given us 17 Frequently Asked Questions and Answers (FAQs) to understand how we are to communicate compensation.
On August 7, there will be $500 fines levied if any mention of compensation appears on any of our systems.
Who can compensate the buyer's broker? The listing broker, the seller, or the buyer.
This does not affect commercial transactions or leases.
NAR policy will not dictate the compensation agreed between buyers and their brokers (e.g., $0, X flat fee, X percent, X hourly rate).
There are many issues in this new practice, and naturally, the Department of Justice could very well be involved in the future as this evolves.
VA Home Buyers: The Department of Veterans Affairs (VA) recently announced that it has temporarily lifted its ban on buyers paying for real estate agent representation. Veteran buyers now have more options, ensuring they can have professional access to representation in their home-buying process. The VA’s policy takes effect on August 10. The VA is evaluating the need for a formal rulemaking process on this issue.
Reach out to your own real estate brokerage if you have any questions or concerns about these new practices. Call Linda Holley, Realtor, GRI, SRES, CIPS, Fine Properties, 941-914-4914 for more information about home buying and selling in Sarasota County, Florida.
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