New York, NY, August 19, 2024 - "New U.S. rules governing real-estate commissions go into effect on Saturday, upending how deals get done and putting downward pressure on costs,” reports the Wall Street Journal.
A landmark settlement by the National Association of Realtors ushered in the biggest changes in a generation to the way real-estate agents get paid. The new policies mean that home sellers will no longer have to offer upfront to cover the cost of the buyer’s agent. Buyers will now negotiate directly with their representatives about those fees.
Though the deadline to adopt the new rules in most of the U.S. is Saturday, some regions enacted the measures earlier this summer. Initial results indicate that commissions are already beginning to fall.
The typical home seller paid 2.55% of the home’s sale price to the agent representing their buyer in the four weeks ended July 14, according to real-estate brokerage Redfin. That is down from 2.62% in January.
‘Agents are calling one another to find out what the seller is willing to pay. The answer is usually that the amount is negotiable,’ Glenn Kelman, Redfin’s chief executive, said in an earnings call this month. ‘Our belief is that there will be some pressure on commissions.’
Commissions would likely fall further if brokerages introduce new pricing models to lower costs for buyers or if more buyers decide not to use real-estate agents.
The new rules are a break from the commission structure of the past three decades. Sellers usually had to pay representatives on both sides of the transaction, which was typically 5% or 6% of the purchase price. Most home listings included information about how much the buyer’s agent could expect to be paid, making it difficult for buyers to negotiate a different amount.
Source: https://www.floordaily.net/flooring-news/realtor-fees-for-homebuying-now-changed