HARRISONBURG, Va. (WHSV) – New rules have taken effect on the national level that change how real estate agents are paid to help people buy or sell homes. These changes are part of a $418 million lawsuit settlement by the National Association of Realtors (NAR).
“The accusations were that through a practice of commission paying that’s called cooperative compensation, which basically means the seller pays a listing broker and then that amount is dispersed to a buyer-agent who represents a buyer in the transaction,” said Zach Koops, a Harrisonburg and Rockingham County Realtor brokered by Real. “The accusation was that it caused price fixing and anti-competitive practices because agents could collude in order to inflate seller commissions by requiring them to pay a buyer-agent.”
Koops said the NAR’s settlement is not an admission of guilt and that it continues to deny any wrongdoing. With the settlement, there are now two major changes to how realtors across the U.S. are paid.
Home buyers are now required to have a signed written agreement with their real estate agent outlining their payment upfront prior to touring a property. Koops said this was already required in Virginia, but it was not in many other states.
The other major change is that realtors can no longer offer or display buyer-agent commissions in the Multiple Listing Service (MLS). This means realtors will have to negotiate how they will be paid between buyers and sellers.
“At the end of the day, what really happens is more conversations and more negotiations between buyers and sellers and agents as well,” Koops said. “I look at that as a positive — more conversations, more negotiations are always a good thing.”
Koops said these changes will affect home buyers and sellers differently. Buyers can gain more control when negotiating an agent’s fees, but it could be harder to pay them, especially for first-time buyers, Koops said. On the other hand, Koops said, sellers could save money without having to pay buyer-agent commissions, though they may encounter more negotiation challenges and pressure from buyers.
Koops said he believes these changes will create more competition between real estate agents and that there will likely be some confusion initially.
“If you’re a home buyer and you’d like to go see a property, don’t be afraid to talk to a buyer-agent,” Koops said. “There are ways to work out how that buyer-agent is paid. It’s still possible for the seller to pay that person or for the listing company to pay that person, it’s just not done in the same way on paper anymore.”
While the changes will be significant for relators and those looking to buy or sell a home, Koops said he does not think the changes will significantly impact housing prices.
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