By now I’m sure that you have seen all the scary headlines, read stories, or heard public figures (and maybe your real estate friends) talking about big changes in the real estate industry. But what do these changes really mean? How will this affect you? The answer is simple and boils down to one word. TRANSPARENCY.
As of August 17, 2024, sellers are no longer permitted to allow buyer’s broker compensation to be displayed in the Multiple Listing Service (MLS). This change gives sellers the option to not offer compensation for the buyer’s broker, but that does not mean the seller can’t or won’t contribute to the buyer’s broker. While the compensation can’t be displayed in the MLS, sellers are still permitted to pay the buyer’s broker compensation and the seller’s agent can market that in different ways.
Historically, sellers were required to offer a buyer’s broker commission, but now sellers have the option to decide whether or not to offer this compensation for the buyer’s broker. This creates more transparency for the parties because compensation can be negotiated by the parties at the beginning of the transaction. While sellers do have the choice, it makes sense for a homeowner to continue to offer compensation to a buyer’s agent to ensure attracting the largest pool of potential buyers.
Also changing, buyers are now required to sign a Buyer Representation Agreement with their broker prior to seeing a property. This agreement will clearly illustrate the details of the relationship, such as length of the agreement and process for termination of the agreement, between the buyer and their broker, each party’s roles and responsibilities, and the broker’s compensation. The agreement also states that the buyer will be responsible for their broker’s commission and expresses the amount for that compensation.
This is different from what we are used to. Now, there is an upfront expectation or understanding that the buyer will be responsible for the buyer’s agent’s commission; however, there are still circumstances that do allow for the seller to assume that responsibility. Although sellers and listing agents cannot publish information regarding broker compensation in the mls, it may still be an option that can be negotiated in the transaction.
But wait, why is this so scary? The short answer is that it isn’t. The entire purpose of this agreement is to distinctly lay out what the buyers and sellers can expect from their brokers. These agreements create transparency and allow the parties to work together with a concise understanding of each party’s expectations. By setting these expectations early in the relationship between a buyer and a broker, so much confusion and frustration can be removed from the equation.
As your realtor, my job is to provide you with the best service possible through knowledge, experience, negotiation, and expertise. Working with a skilled broker is more valuable than ever with these changes. I have spent months researching, learning, and even teaching what these changes will mean for my clients, the real estate industry overall, and what it will mean for The Zimmern Team locally.
I feel confident that our Team is extraordinarily capable of taking care of all of our clients’ needs in a professional and knowledgeable manner.
Real estate and real love,
The Zimmern Team
tonya@thezimmernteam.com
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