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Buying And Selling Real Estate Is About To Get Interesting

Beginning next month, the new NAR guidelines will go into effect which means buying and selling real estate is about to get interesting. The Realtors® Legislative Meeting was recently held in D.C. to educate real estate agents on the new practices as well as the importance of meeting fair housing requirements when negotiating with buyers and sellers.   

What do the new guidelines mean for buyers? Beginning in August, it will be up to the buyer to set their own agents’ pay. Every agent will offer different pricing and all rates will be negotiable. Buyers will be able to request their agent’s commission be paid during negotiations with the seller. This would allow them to include the price of the commission in their mortgage loan. Otherwise, buyers will pay their agent out of pocket. If they choose representation, they’ll need to sign a clear-cut deal with a broker before working with one. 

What do the new guidelines mean for sellers? Sellers of real estate will no longer have to make compensation proposals to prospective buyers and their agents. They will no longer have to cover the cost of the standard 6% commission typically split between the seller’s broker and the buyer’s agent. Sellers will pay a lot less in commission because negotiations will become commonplace, and they’ll stand to make a bigger profit in the sale of their homes. 

How will the new guidelines affect Veterans applying for VA loans?  Currently, VA loan applicants are not legally allowed to pay for a buyer’s agent out of pocket. Because of the new requirement specifying buyers must pay for their own agent, the National Association of Realtors® is currently working with the VA and Congress to ensure proper and fair representation for all buyers. 

How will the new guidelines affect real estate agents? Every aspect of how a realtor conducts business is about to change. They will be prohibited from posting their compensation on the MLS. Buyers’ agents won’t be guaranteed to receive upfront compensation from the seller. They will be able to negotiate fees with buyers and sellers privately. They will need to create required buyer agreements using specific terms laid out in the new NAR practices before working with a homebuyer. 

Buying and selling real estate will get interesting in the coming months but the facts remain; buyers and sellers will have choices of real estate services and fees, and real estate agents will continue to be required to put the best interests of their clients first.