The commission lawsuits have drawn a lot of media attention and we are still waiting on court approval for any new regulations that will be passed or MLS changes. All details are still being worked out but if they are approved, they will be implemented around mid-July. The NAR denied any wrong doing in these lawsuits, they settled to protect the over one million members and avoid bankruptcy. I think there may be some changes and more education for buyers and sellers but in South Carolina, we always had clear listing agreements that specified what commissions were being paid to the buyers agent. Some states did not have this.
Commissions have always been negotiable, it is up the company you chose to represent you and what their commission policy is. People have always had the choice to use flat rate and discount brokerages versus full service brokerages. While it was always encouraged that buyers sign buyer agency agreements prior to viewing properties with a realtor, it was not always a realistic practice, this is now going to be a requirement. The biggest potential concern coming out of this is that the MLS will not advertise the commission which is decreasing the transparency upfront on what commissions are being paid or not for the buyers (on zillow, realtor.com, etc) . This will most likely be addressed by Realtors contacting the listing agent prior to showings to clarify commissions being paid and discuss it with the buyers.
There will be sellers that will opt out of paying the buyers to pay a buyer’s agent commission but there are issues that come with that - if the buyers will be allowed to finance it, if they have the funds to do that in addition to the down payment and some types of loans will not allow buyers to pay fees like commissions. The commissions have historically been rolled into the transaction as a seller’s cost, along with deed stamps so it was taken into consideration when negotiating. If a seller opts not to pay the buyer’s agent commission, it may not necessarily change what they get for their home because the buyer will be paying it directly to the broker so they will be taking into consideration.
For most people buying and selling a home is the biggest financial decision they will make in their lifetime so it would not make sense to not be represented or not have a full service brokerage that is looking out for your best interests represent you. Just like a financial advisor that is making money from your investments, realtors are working for you and your investment. The perception is that Realtors make a lot of money and yes that is correct but i know that i save people a lot of money, work hard to protect my clients, am fully committed to my clients and looking out for their best interests. There is a lot of risk to both sides of the transaction to not be represented fully.
I strongly recommend all buyers be represented by a realtor that you trust, unrepresented buyers going directly to a listing agent for a seller should know the listing agent is representing and working for the seller so it may or not be a cost savings to a buyer. Realtors representing buyers advise on many terms of the contract to protect the buyers in addition to price, comps and resale potential, neighborhood and community regulations - especially if you are looking for an investment property, inspections, repairs, contractors, taxes, vendors, insurance, lenders and much more. I am an advocate for my clients before, during, and after the home sale transaction.
