Will the New Commission Rule Cut Costs & Save You Money ? 03/08/2024
OVERVIEW
The recent settlement in the lawsuit against NAR is stirring conversations about the end of the traditional 6% (more like 3%-6%) real estate commission, hinting at more flexibility and possibly lower costs. Yet, the essence of this shift is less about changing fee amounts and more about enhancing transparency in how commissions are negotiated and shared.
The ruling doesn't eliminate or lower commission rates but changes how they are discussed, agreed upon, and communicated. specifically, it prohibits fees from being advertised with properties. This marks a move from automatically split commissions between buyer's and seller's agents to a more negotiated arrangement.
SELLERS
The latest updates in real estate mean the way we discuss commission is changing, yet it remains common for sellers to cover the buyer's agent's commission. The key difference now is that these commission amounts won't be advertised with your home. This change aims to prevent biases, ensuring agents don't just show homes based on higher commission offers, making the market fairer for all properties.
BUYERS
The updated commission framework may initially appear to increase costs for buyers, but it actually just makes the process more transparent and fair. Now, with buyers taking a more active role in commission discussions, there will be a clearer understanding of value and cost. The new approach allows for negotiations that ensure fair compensation for agents while reducing the likelihood of agents' bias towards higher-commission properties and fostering a more transparent buying experience. AND, this doesn't necessarily mean higher out-of-pocket expenses for buyers. There's still room to negotiate, with sellers often covering the commission as before
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