On August 17th, a new practice will be going into effect across the country. As of that day, buyer agent compensation will no longer be published on any listing that is active in the HAR MLS.

Currently you will find a buyer's agent compensation being published. The way the industry has worked up until this point is that the listing agent signs a listing agreement with a seller, with a negotiable total compensation for getting the home sold. They also decide what portion of that to offer out to the buyers' agents of the world to bring a buyer.

The biggest misconception I have been seeing and that the news has been pushing is that agent commissions will now be negotiable between all parties.....but this has always been the case. People have been offering above and below 3% for lots of reasons forever.

So I've been thinking about this and reading lots of articles since the announcement. Other than the field leaving the MLS and giving buyers' agents a little more research legwork, I am not anticipating a huge change. Sellers are still able to offer $ concessions that would help a buyer compensate their buyer's agent. They just aren't able to publish the figure. Agents can talk about it. Agents can text about it....it just can't be published in the MLS. I'd like to point out that this change is supposedly to increase the transparency of how Realtors are paid....and ironically it seems like its going to do anything but.

The most concrete change that is going to happen will be on the BUYER's side of transactions.

Historically buyers could look at a home or two and agents would not need any sort of formal agreement, although it was advisable to get one.

NOW, you will need to have a signed buyer representation agreement in order to even book a showing on a house. Also the terms of the buyer's agent's compensation will be agreed to up front in that document and the responsibility of the buyer to compensate their agent, whether on their own or by using a seller "concession" (which is basically how it had worked for the last 50 years.)

The truth is, this will force buyer's agents to begin performing a buyer's consultation presentation where they can educate their clients on the homebuying process and hopefully the buyers will actually see their service level go UP.

Time will tell if some sellers will want to try their luck at not offering a buyer's agent commission at all. I can't see this being an effective strategy because it will:

A) reduce the exposure on the home and

B) cause the buyers that do come....to write the offer a certain percentage lower so they have some ability to compensate their agent per their buyer representation agreement.

The net proceeds to the seller seem like it will ultimately be the same....if not potentially lower thanks to the lack of exposure.

If you have any questions about what's about to happen, you're welcome to call us anytime!