Big changes take effect this month that will mean seismic shifts in how most Americans buy or sell a home and could ultimately drive down residential real estate prices.
Starting on Aug. 17, agents who list homes for sellers on widely used realtor databases won’t be able to offer any payments to buyers’ agents.
That means the power to negotiate realtor commissions will shift away from agents in favor of buyers and sellers.
It also means sellers will no longer be on the hook to fund commissions for all realtors involved in the transaction — a fee that usually amounts to 5% to 6% of the home’s sales price. The seller’s agent commonly shared roughly half of that commission with the buyer’s agent.
Instead, buyers will be entitled to separately negotiate their own agent’s pay and get a signed contract formalizing the terms — all before touring any properties for sale.
“Under the old system, if you were a buyer and you had an agent, you didn’t get any say in what your agent got paid, unless your agent agreed to credit some of that to your purchase price,” said Venable LLP partner Jill Rowe, who represents real estate brokers and owners.
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