As the Spring real estate market starts to pick up, it’s important for buyers and sellers to understand the effects of last year’s changes to real estate commissions that were part of a settlement agreement by the National Association of Realtors.

Buyers and Sellers are Negotiating Realtor Commissions More

Sellers are no longer obligated to automatically offer compensation to buyers‘ agents via the Multiple Listing Service (MLS). Commissions are now more commonly being negotiated as part of the real estate transaction between buyers and sellers.

Sellers and Buyers Have More Options

Commissions have always been negotiable, but now more options are being discussed. Sellers can still offer to pay all, part or none of a buyer’s agent commission. If the seller contributes to the buyer’s agent fees, the seller can either reimburse the buyer directly or pay their listing broker a higher commission, and then the listing brokerage shares a portion of that with the buyer’s broker.

Buyers May Pay Their Agents Directly

Buyers might now need to negotiate and pay part or all of their own agent’s fees. This can benefit buyers by giving them more options to make their offers more attractive to sellers and also increase competition among realtors who represent buyers, which can result in lower realtor fees and better services. Buyers are also required to now sign a written contract with an agent before touring a home that includes addressing any fees the agent may charge.

The new rules offer greater transparency to the process and commissions, which benefits everyone. With transparency comes trust, and trusting your real estate agent with your largest asset is the key to a smooth transaction that results in everyone involved being happy.