Changes Regarding Real Estate Commissions
If you ask some real estate brokers, they might tell you yes. Some brokers might think you’re crazy asking because the market is so busy and not have paid attention to changes that have just taken place. So, what am I talking about?
Starting October 1st real estate companies can (and most will) put on their marketing including their web sites how much compensation will be paid to the selling company as part of the purchase price of homes for sale.
What does it mean?
Real Estate agents have always shared this information between themselves. Most agents explain to sellers that the fee to sell a home includes two sides, the marketing or listing side; and the buyer agents or selling office commission. The selling office commission has been called the “SOC” for years. Well, now that information will be available to buyers (and sellers) to see what is being offered as compensation to the broker working with the buyer to sell and close the sale of your home or property.
So why would some brokers think “The Sky is Falling”? Most buyers do not know how much the broker they are working with will be paid at closing. Some are afraid the transparency will cause issues between them and their clients or customers. Many other agents have resisted have a contractual agreement with buyers before they work with the buyers and now, they must change how they work with potential buyers.
How will it Affect Real Estate Transactions?
The biggest change will be in marketing homes for sale. Most agents already offer discounts if someone buys a home where they are the listing agent. Some companies have this policy too. Now that will most likely become prevalent. The issue will be for the buyers who try only to work with listing agents.
For years I have had buyers call and ask if I would reduce my fee and rebate it to the buyer if they purchased my listing. Since I usually already have an agreement to reduce my fee with the seller if I am the agent that sells the home I do not rebate. The buyer gets the ability to purchase at a lower price (the fee which I have reduced). MLS rules did not allow me to market this to buyers, but now I can do so.
Will this make a difference for buyers and sellers of real estate? I don’t know. Just part of the evolution of change is in every aspect of every person’s life. Real estate is no different. We are going through changes or disruptions of helping people sell and buy homes and property. Transparency of information is usually good for consumers and providers of services. It will take a little while to know if this will change the real estate industry much.