Understanding the Changes in REALTOR® Commissions

Navigating New Waters in Real Estate

You may have heard about the lawsuit regarding changes to the way REALTOR® commissions are handled, and may be wondering how this may affect you (or me!). There is a lot of misinformation and confusion among the general public and even within the real estate community, so I wanted to bring the facts to you myself.

Key Points of the Settlement

1. Changes in MLS Listings: Sellers can, if they choose to, continue to offer compensation for Buyer’s Agents, but such offers cannot be communicated via the MLS. On August 15, 2024, the field in the MLS that discloses what the Seller is offering for the success fee to the cooperating agent (Buyer’s Agent) will no longer exist. Purchase contracts will now specify what the Buyer is asking the Seller to pay for the Buyer Agency Success Fee. When your Agent writes an offer for you, the offer will need to request this fee from the seller or indicate it is coming from the Buyer.

2. Written Agreements Required: Agents acting for Buyers, who are members of our local MLS, are required to either enter into written agreements with their Buyer Clients before touring a home or share a Brokerage Disclosure to Buyer form, detailing the different ways that a Buyer can be represented and how the Agent will be paid for those services.

What Does This Mean for You?

For Sellers: If you are selling a property, we will discuss the possible benefits of offering compensation to a Buyer’s Agent. I’ll share my Buyer’s Agent checklist so you can see all that a great Buyer’s Agent does on behalf of their client and your transaction. An Agent, acting out their fiduciary duty, does more than just bringing a Buyer for your home—they minimize the risk of the Buyer defaulting and terminating their contract.

For Buyers: If you are considering buying property, then we will have a conversation about what my fees are, including the different ways to negotiate how those are paid. We’ll also review a Buyer Agency Agreement that details my fiduciary role as your agent, and my legal obligations to protect your interests and advocate for you.

Clarifying Misconceptions

What This DOESN’T Mean:

• Buyer agents are not going away, and I can still represent you to buy property.
• Home prices are not going to go down as a result of this settlement. Basic supply and demand will continue to impact prices.
• Sellers are still allowed to pay the buyer agent’s fee.
• There is no need to wait to buy or sell until the settlement is final. The best time to purchase or sell a home is when it is right for YOU, based on your specific situation, our local market conditions, and your real estate goals.

Additional Facts

• Last year, 89% of buyers used a real estate agent to represent them in the transaction (Source: 2023 Profile of Home Buyers and Sellers, National Association of REALTORS®).
• Buyer agency agreements are not new to our industry or Colorado.
• The changes above will go into effect on August 15, 2024.
• Consumers have always had choices regarding real estate service levels and compensation, and there has always been a variety of fee structures, from discount services to full-service representation.

If you have questions, and many do, just call me. I am happy to answer any and all questions that you may have.