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  • Writer's pictureGlenna Pendleton

New 2024 Realtor Fee Policies Shake Up the Real Estate Landscape - What YOU Need to Know!



Modern home picture with information on realtor fee policies
New 2024 Realtor Fee Policies Shake Up the Real Estate Market

New 2024 Realtor Fee Policies

The new 2024 Realtor fee policies regarding the sales fee a Realtor charges for their services is shaking up the home buying and selling process and are set to go into effect Aug. 17, 2024 as a result of the NAR lawsuit settlement. These policies give home sellers a stronger ability to negotiate the payment of the buyer’s agent fee — whether they want to use it to induce competitive bids or keep it to themselves entirely.

The choices complicate the upcoming fall real estate season more than usual, for both buyers and sellers. Here’s what to know to help you and your agent come up with the best strategy for you.

 

What, exactly, is changing?

  • Starting Aug. 17, home listings in the MLS will no longer include information regarding how much the seller is willing to pay the buyer agent (co-broker in the transaction).

  • Buyer agents are required to have an agreement in writing, including the amount of their buyer agent fee, with their buyer client prior to showing any property on the MLS.

For decades, and up to Aug. 17, 2024, MLS listings have been required to advertise how much commission the seller is offering to buyer's agents. The information wasn’t visible to home buyers but could be viewed in agent-only fields of the MLS.

 

Can sellers start offering 0% to buyer’s agents today?

Technically, sellers have always had the right to offer the buyer agent any fee but most sellers were not aware. The fee offered to the buyer agent is incentive for the agent to show the home to their clients. Keep in mind, in 2023, 89% of buyers purchased their home through a real estate agent or broker.1  What impact would a cut in your pay have on your desire to work every day?

 

Even though buyers set their agents' fees, buyers haven’t and won’t necessarily pay out of pocket. Buyers and sellers will simply negotiate who will pay, which highly impacts the ultimate price paid for the home. The process hasn’t changed, it simply was not clearly communicated to sellers, as was the basis for the lawsuit.

 

Note: Keep in mind that sellers tend to have more access to cash at closing than first-time home buyers, who, according to a Zilllow report, comprised 50% of buyers in 2023.2 

 

A seller who’s willing to pay all or some of the buyer's commission may end up with more offers, and a higher final price, than one who flatly takes that commission off the table.

 

How much money could sellers keep, though?

  • If the buyer pays their agent fee directly or indirectly a home seller could stand to save thousands of dollars at closing but what is the net savings if the price offered for the home is less?

    • Buyers might request bigger closing cost credits, subtracting from the seller's bottom line because they will bear the expense of paying their own agents.

    • It is expected that many sellers might keep offering fees to buyer's agents as motivation. Offering flat fees or % of sale commissions to buyer’s agents will still be permissible under the new policies, but those offers will no longer appear on the MLS. Listing agents can communicate the information on brokerage websites, or in phone calls, emails and texts.

What would be the cost of waiting?

  • You might be tempted to keep your home off the market until the new policy goes into effect. But waiting might not be a wise move, because it would mean sitting out homebuying season.

  • Home prices are the highest from May through July, then drop off. In 2023, the median existing home price in the Dallas/Fort Worth area was $385,000 in July, $375,000 in August — and $370,000 in September, according to the North Texas Real Estate Information System. If you list your house after mid-August, you probably won't close until October or later, when prices are even lower.

Can I negotiate the listing agent’s commission too?

  • You might save money if you don't pay the buyer's agent's fee. But what about the fee you pay the listing agent for selling your home? You have always been able to negotiate your listing agent fee but again, what incentive does your agent have to do their utmost to sell your home? And, if they have multiple listings, do you want your home to be “second priority” in their busy schedule?

What if I list before Aug. 17 but sell after?

It all depends on when you sign/execute the purchase offer and what terms are included in your listing agreement. Here are some scenarios:

  • Your home's MLS listing offers to pay the buyer's agent's fee, and you sign the contract accepting the purchase offer before Aug. 17. You'll pay the fee, even if the closing occurs on Aug. 17 or after.

  • Your home's MLS listing offers to pay the buyer's agent's fee. But, in accordance with the new policy, the offer to pay the fee is removed from the MLS on Aug. 17. Sometime after that date, you accept the purchase offer. In this case you and the buyer will negotiate how to take care of the buyer's agent's fee.

When you put up your home for sale, you'll sign a listing agreement with your agent. That agreement includes an agreed upon price for broker compensation which includes buyer agent fees. Your listing agreement is a binding contract between you and your listing broker and any changes must be agreed to by both parties.

 

Time will tell how all of this will play out but one thing is certain. The home buying and selling process is going to be a bit more complicated this fall.  Be sure you discuss with your Realtor how these changes will affect your plans to buy or sell a home in 2024.


The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.


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