Wednesday, August 21, 2024
New rules for real estate agents change disclosures and commissions when buying or selling a home.
Urban Living
Posted By Babs De Lay on August 21, 2024, 4:00 AM
If you haven't heard, real estate practices in the U.S. have a new layer of disclosures for buyers and sellers that will affect not just clients and customers, but brokers and agents as well.
The new rules are a result of a lawsuit and subsequent out-of-court settlement between the National Association of Realtors and the Department of Justice, regarding anti-competitive actions by some realtors that have now impacted all of us.
Basically, here's the new rules:
1. If you're a buyer, you will need to either sign with a licensed real estate agent to represent you specifically in buying property, agree to be represented by the seller's agent as well in a transaction (known as "limited agency") or represent yourself. You're welcome to wander into open houses anytime, but once you want to make an offer you must sign in writing to agree to one of those three options. This hasn't changed—agency disclosure is required in writing by law, but:
2. As a realtor, I must get a buyer agency contract, in writing, with any buyer I choose to work with (and who wants to work with me) which states how much that buyer agrees to pay me for my services. This is a big change in that formerly—prior to Aug. 17 of this year—commissions were negotiated at the time of the seller's listing contract and then advertised on the Multiple Listing Service (MLS) what a seller was willing to pay to a buyer's agent/broker if a sale took place.
The commission was always (and is always) negotiable. A common commission for many brokers is 6% of the sales price, which has generally been split 50/50 between the buyers and sellers' real estate agents/brokers at close of escrow.
3. There are now a half-dozen new forms that disclose how much a buyer's agent/broker can ask to get paid, including a whole new real estate purchase contract to utilize. On that contract, which is new to this age-old form, is a section that allows for a buyer to ask that the seller pay for the buyer's agent/broker's commission ... or not.
Basically, in a normal real estate transaction, a buyer must have some skin in the game to buy a property—like a down payment (unless they are a veteran, as VA loans have zero down payment) and mortgage closing costs. Now, a buyer must pay their buyer's agent or request that the seller pay the commission or split the cost of commission between the buyer and seller.
The National Association of Realtors is the largest trade organization in the U.S. Not all real estate agents are realtors, though, as it's a membership organization requiring dues, education and adherence to a Code of Ethics.
You'll want to talk to your agent/broker if you're actively buying, selling or both as to how this will impact your investment plans, to review the new rules and decide what your realtor's value is to you in the process.
About The Author
Babs De Lay
A full-time broker/owner of Urban Utah Homes and Estates, Babs De Lay serves on the Salt Lake City Historic Landmark Commission. A writer and golfer, you'll find them working as a staff guardian at the Temple at Burning Man each year.
More by Babs De Lay
-
Affordability
Urban Living
- Sep 11, 2024
-
City Council vote opens the door to 600-foot high rises in downtown Salt Lake.
Urban Living
- Sep 4, 2024
-
Utah's gender pay cap adds to the challenge of home ownership.
Urban Living
- Aug 28, 2024
- More »
Latest in Urban Living
