The pay of real estate agents who help people buy and sell homes will soon look different.
The changes came after a number of consumers sued the National Associations of Realtors and other brokerage firms, demanding that sellers pay for their agents and buyers pay for their brokers.
Zach Griest, owner of Zach Taylor Real Estate, explained the two most important changes coming on August 17th.
“Any mention of commissions is being removed from the MLS. Traditionally, you could help a buyer, show them a few houses, and the ad would say if you bring me a buyer, you’ll get two and a half percent, three percent or whatever, so that’s being removed. The second biggest change is any time you show a buyer a house. You now have to have a written agreement before you step foot in the door,” Griest said.
Real estate agents must now come up with other ways to negotiate commissions.
Griest said this was originally intended to make housing more affordable, but in the short term it will make things a little more difficult for future homebuyers.
“It might be a little more difficult for some buyers because if we try to decouple the commissions and the seller is just paying the agent or the buyers don’t have a lot of money left over from their down payment and closing costs, how are they going to pay the agent now,” Griest said.
Not having a representative is not the best outcome for the consumer either.
“You don’t want to be an unrepresented consumer and you don’t want to go directly to the agent because they represent the seller’s interests and not yours. It’s very similar to going to court and the other side has a lawyer and you think, ‘I don’t need one; you don’t have a good chance,'” Griest said.
He believes the changes can both hurt and help the real estate industry.
“Also with our agents, I really focus on that they need to know their value and be able to clearly explain it to consumers because if you’re just a door grower, you’re also going to get paid like a door grower. You really need to understand your value and put it on the table and those that can’t do that are actually going to get hurt and their commission is going to go down,” Griest said.
These are all proposed settlement terms agreed to in November. A judge is expected to make everything official.
