Have the new real estate rules been good or bad?
Who's winning -- buyers, sellers, or nobody?
As of Saturday, August 17th, real estate agents associated with the National Association of Realtors (NAR) will now require buyers to sign a Buyer Representation Agreement before showing them any properties. This applies to 18 states and provides protection and transparency for the agent and consumer.
Home buyers will have to sign a written contract with an agent before looking at a house for sale.
Traditionally, sellers have covered both the buyer and seller’s agent fees from the sale proceeds but with the new laws in place, buyers must now agree to their agent’s fee (if the seller does not cover it) in writing.
Buyers can still request that the seller cover their agent’s fee when making an offer.
For sellers, this change offers more flexibility when negotiating the commission for the buyer's agent.
With the new rules, buyers might also have to pay their agent’s commission which was previously covered by the seller. This added expense could push buyers towards alternative real estate models.
Buyers are encouraged to sign an agreement with one agent and work with that person to view multiple properties, rather than signing new paperwork each time they visit a house with a different agent.
There is no standard buyer representation agreement but you can consult an attorney to draft an agreement to ensure it complies with your state laws and MLS policies.
Additionally, the Multiple Listing Service (MLS) will no longer be able to display the buyer’s agent commission.
The new rules prevent listing agents from posting buy-side commissions on the MLS, as they used to, but allows agents to agree on an amount.
Different Buyer Types, Same Concerns
First-time buyers and those without additional funds to cover their own representation have been feeling the biggest impact. Veterans using VA loans have been a big concern because they are not permitted to pay for representation out of pocket. These buyers may be forced to offer higher prices than those who can afford to pay for an agent, or go without representation altogether—an option that would put them at a serious negotiating disadvantage.
For those opting out of working with an agent, the likelihood of saving money is slim.
Do you believe sellers will lower their asking price instead of keeping the money that used to cover the buyer's agent fees?
What has been your experience with the new rules that were put in place?
Share your experiences in the comment section below.