National Association of Realtors Settlement

What's Changing
• Cooperative compensation can no longer be advertised on the MLS, and sellers can decide to not offer any compensation to buyers' agents
• Agents must disclose in listing agreements, buyer representation agreements, and pre-closing disclosures that commissions are not set by law and are fully negotiable
• Agents must use a buyer representation agreement before showing a home that includes a set rate of commission
• Sellers can still offer a concession to buyers and that concession can be used to pay the buyers agent should the buyer choose

Potential Impact
• Reduction in commission payouts and overall part-time agents that are in the business
• First-time homebuyers could be at a disadvantage when sellers decide not to offer cooperative compensation and they require buyer representation, they would have to come with additional funds to closing
• New hybrid agent-LO models will emerge driven from earning less per transaction and potentially less opportunities for buyside focused agents
• Listing agents will become more of a focus for referrals since they could come in direct contact with potential homebuyers if they elect to proceed without buyer representation

How will this truly affect the market? Time will tell. Savvy agents will rise to the top with the strategic use of buyer representation agreements, and honest, up front conversations with sellers regarding commissions. Homebuyers should always get pre-qualified with a Castle & Cooke Mortgage loan officer before they start shopping for a home so they have a number to shop with and a pre-qualification letter to present to the seller.

Information provided by Total Expert