BUFFALO, N.Y. (WKBW) — Local realtors are bracing for some big changes in how you buy and sell your home.
On August 17, a recent settlement from the National Association of Realtors will go into effect, changing commission agreements across the country.
"It's reshaping the industry," said Vienna Laurendi, President of the Buffalo Niagara Association of Realtors.
For decades, people selling their homes have traditionally been responsible for a five to seven percent commission split between their agent and the buyer's agent. But a Midwest jury ruled in part, that agreement can drive up home prices, and decided that commission should no longer automatically come from the seller.
Laurendi described to me how the ruling will change the real estate industry in three significant ways:
- Any compensation offered by the home seller will no longer be published using a multiple listing service program.
- When a buyer wants to tour a home they now have to sign a contract with a buyers agent before they start touring the property.
- Communication between agents will increase "by 80 percent."
The changes will give sellers more flexibility but could make things more costly for buyers.
For example, if the seller decides not to pay the commission to the buyer's agent then the buyer would need to negotiate compensation with their agent.
So if you are looking to buy a $300,000 home, a traditional three percent commission could cost a buyer an additional $9,000.
"A buyer never really had to think about having that extra $9,000 available to cover their real estate agent. Now they will proactively talk about it with their realtor and come up with a game plan as to how they are going to pay the commission," said Laurendi. "We are going to sit down. We are going to discuss the value that I offer. You are going to go over the contract and we are going to discuss what I would like to earn at the time of closing."
Laurendi believes it will take some time for the real estate industry to adapt to the changes but believes realtors are dedicated to making it work.
"We are here for the consumer," said Laurendi. "We are also here to pay our mortgages, but we truly are here for the consumer and we are going to help everyone get through this as quickly as possible. It's going to be the new norm."
If you have questions about the new changes you can call the Buffalo Niagara Association of Realtors at 716-636-9000 or email your questions to president@bnar.org
