National Association of Realtors Rule Changes- Top Home Buyer Concerns and What You Need to Know.
“Navigating the new 2024 NAR buyer agent commission rules changes: Top Home Buyer Concerns and What You Need to Know.
In August 2024, the National Association of Realtors® (NAR) implemented new rules affecting real estate transactions. These changes have raised several concerns among homebuyers:
How do the new rules impact buyer-agent commissions?
Under the new regulations, sellers are no longer required to cover buyer-agent commissions. This means buyers may need to negotiate and pay their agent’s fees directly, potentially increasing out-of-pocket expenses.
Fees in Michigan have always been negotiable, but now, buyer agent commissions are negotiated Buyers can choose only to see properties where the seller is willing to pay the buyer agent commission. Since the change, in most instances, sellers are willing to pay a buyer commission directly, or in the form of concessions for a ready buyer at the right price and the process causes agents to fully explain the agency process in advance – a good thing. Since the settlement in August, commissions have not changed much. however the process has changed and needs to be understood by all parties.
Will I need to sign a contract with my agent before viewing homes?
Yes, the new rules mandate that buyers enter into written agreements with their agents before touring properties. This change aims to clarify the services provided and the associated costs upfront.
Buyers can sign a very limited agreement for one property, one day, one area etc. Real estate agents face penalties for not following these rules. You can attend open houses without signing an agreement.
NATIONAL ASSOCIATION OF REALTORS
How do these changes affect the overall cost of buying a home?
With buyers responsible for their agent’s commission, more of the total cost of purchasing a home could be shifted to the buyer. However, this also opens opportunities for buyers to negotiate commission rates and seek services that align with their budget.
In most cases, sellers are willing to compensate a buyer agent for a ready buyer at the right price. Also, buyers may opt not to see homes where the seller is not willing to cover the buyer agent commission.
BARRON’S
Are commission rates negotiable under the new rules?
Yes, commission rates are negotiable and they always have been in Michigan. The new regulations encourage transparency, allowing buyers to discuss and agree upon commission fees with their agents before entering into a contract.
THE WALL STREET JOURNAL
How might these changes influence the home-buying process?
The new rules are leading to more upfront discussions about fees and services, making the home-buying process more transparent. However, they could also introduce complexities as buyers navigate additional negotiations and contractual agreements.
We now negotiate home sale price and commission. Previously, the seller agreed on a buyer agent fee in their listing agreement and it was advertised to real estate agents through the their Multiple Listing System. Now buyer agent fees are not allowed to be posted.
BARRON’S
Understanding these changes is crucial for buyers to navigate the evolving real estate landscape effectively. Consulting with a knowledgeable real estate professional can provide personalized guidance tailored to individual circumstances.
