New Real Estate Commission Rules: What buyers and sellers need to know before August 17

A new real estate commission structure is set to go into effect starting mid-August. 

These commission changes have come about as part of a lawsuit between the National Association of Realtors and home sellers. 

We spoke to local broker who shared his industry insight on what this means for agents, home sellers, buyers, and their pocket books.

The new guidelines are being implemented by the National Association of Realtors starting August 17. 

"The biggest change that's going to happen is every buyer now will have to enter into a buyer representation agreement before they even look at a house," said Broker Realtor, Stephen Powell.

These changes are attempting to create more transparency regarding agent fees.

As outlined in the National Association of Realtors Settlement Overview page, the association is now prohibiting offers of compensation through an NAR multiple listing service. 

"For instances of dual agency, it's going to make it even more clear when a real estate agent is entering a dual representation agreement with the seller. That's more clearly defined than it ever has been in the in the listing process," added Powell.

The NAR also sharing in it’s Settlement Overview page that the association has agreed to require MLS participants working with buyers to enter into written agreements with their buyers before touring a home. 

"One of the notable changes that's going to take effect are the open houses. So when a buyer goes to an open house now they're going to have to actually sign a non-agency agreement form before they can even go in the house and talk to the agent," added Powell. "Because if they don't, they can think that the agent is representing them because they're answering questions."

Powell says hopeful homeowners will have to enter in a buyer agreement or sign an open house non-agency agreement in order to see a home. 

The new guidelines may also add additional costs for buyers.

"They will ask you to enter in a buyer representation agreement, and they're going to ask you to commit to a certain percentage of commission, of which the buyer is obligated to pay initially, if the seller doesn't agree to picking up that expense," said Powell.

The settlement is subject to final court approval. The final approval hearing is scheduled to take place on November 26, 2024.

You can read the entire National Association of Realtors Settlement Overview HERE.