BUFFALO, NY (WKBW) — Local real estate agents are preparing for big changes in the buying and selling of your home.
On August 17, a recent agreement by the National Association of Realtors will go into effect that changes commission arrangements across the country.
“It’s changing the industry,” said Vienna Laurendi, president of the Buffalo Niagara Association of Realtors.
For decades, real estate sellers have had to pay a commission of five to seven percent, which is split between their agent and the buyer’s agent. But a jury in the Midwest ruled, among other things, that this arrangement can drive up real estate prices and ruled that the commission should no longer automatically come from the seller.
Laurendi described to me how the ruling will change the real estate industry in three key ways:
- Any compensation offered by the home seller will no longer be disclosed through a Multiple Listing Service program.
- If a buyer wants to view a home, he or she must now sign a contract with a buyer’s agent before viewing the property.
- Communication between agents will increase “by 80 percent.”
The changes give sellers more flexibility, but could be more expensive for buyers.
For example, if the seller decides not to pay the commission to the buyer’s agent, the buyer must negotiate compensation with his agent.
So if you want to buy a home for $300,000, a traditional three percent commission could cost the buyer an additional $9,000.
“A buyer never really had to think about whether they would have the extra $9,000 available for their real estate agent. Now they’re proactively talking to their agent about it and working out a plan for how they’re going to pay the commission,” Laurendi said. “We sit down together. We discuss the value I’m offering. They go over the contract and we discuss what I want to make at the time of closing.”
Laurendi believes it will take some time for the real estate industry to adapt to the changes, but is confident that agents are doing everything they can to make it happen.
“We are here for the consumer,” Laurendi said. “We are also here to pay our mortgages, but we are really here for the consumer and we will help everyone get through this crisis as quickly as possible. That will be the new norm.”
If you have any questions about the new changes, you can call the Buffalo Niagara Association of Realtors at 716-636-9000 or email your questions to [email protected].
