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How homes are purchased set to change

 RidgecrestCaHomes Clint Freeman is broker/owner–

If you haven’t heard or read that there are major changes in how homes and properties will be sold and purchased in the U.S. come July 2024, now is the time to tune in and read up.

The National Association of Realtors (NAR) recently settled a massive lawsuit by paying $418 million. The suit was brought by sellers who argued that their realtors were not transparent enough about commission payments.

In the future, the proposed settlement will alter the way realtors discuss commissions and payments with their clients, particularly how a buyer’s realtor is to be paid.  In the past, a seller would state in the Multiple Listing Service (MLS) what percentage of compensation they are offering to a buyer broker. It may have appeared to buyers that their agent was working for free, but that has never been the case.

In the future, payment to a buyer’s broker and agent could come in multiple forms.

For instance, a buyer could ask the seller for concessions that could include payment for their realtor. This request must, in the future, be included in the purchase contract and will be a very important piece of the purchase negotiations.

In some instances, a buyer’s realtor might set up a percentage tier and offer their professional services at a percentage based on the home’s sales price. If that fee cannot be fully negotiated with the seller, the buyer may be liable to their realtor for the remaining balance.

Some realtors may opt to work with a fixed fee. That is, no matter the price or how much work it will take to complete the escrow and sale, the buyer’s realtor will complete the sales process for a set, agreed-upon flat price.

Buyers, expect to read and sign a Buyer Representation And Broker Compensation Agreement with your realtor. This form spells  out the conditions for hiring and working with your realtor to purchase that prized home or property.  Payment to your realtor could be made through escrow, or your realtor may require those fees if and when the broker agreement expires.

NAR has always believed that it is in the best interests of sellers, buyers, and their realtors to make offers of compensation. An experienced professional realtor is an invaluable asset to a real estate transaction. The vast majority of buyers and sellers agree that they will seek the assistance and wisdom of a realtor when it comes to selling and purchasing.

However, in the future, using the MLS to communicate that value will no longer be an option. Compensation will continue to be negotiable but will now be even more open. (Source: Realtor Magazine)

Clint Freeman is broker/owner of RidgecrestCaHomes. Know more about Clint