Buying or Selling A Home?
What You NEED to Know Before August, 2024
Real estate compensation rules will significantly change on August 17 (sooner in some markets).
Here is what you need to know:
Sellers: If you have a home listed that is not under contract, your agent can no longer offer to compensate a buyer's agent in the Multiple Listing Service.
It would help if you did the following:
-Ask your agent about their brokerages strategy for handling the sale with new rules.
-Should you offer a buyer's agent commission unilaterally?
-Should you agree to compensate the buyers through concessions on a case-by-case basis?
You should sign a new listing agreement spelling out your agent's commission.
You probably have an agreement for 5-6% now, with a large portion of that going to the buyer's agent.
If you are considering concessions on a case-by-case basis, you would only agree to your agent's portion of the commission on the listing agreement.
What am I saying?
You can agree to pay a portion of the seller's closing costs. The buyers ask for this on the offer to purchase. You can consider this on a case-by-case basis. If your home is priced at $500,000.00 and the offer is for $480,000.00 and $15,000.00 in seller-paid buyer costs, you can negotiate this by raising the price, lowering paid costs, or both to get to your bottom line. By agreeing to pay commission upfront, you lose this option.
Buyers, what should you do?
I'm not too fond of uncertainty, so I would buy before the changes while sellers are paying your agent for you.
After that, explore all options when shopping for a buyer's agent.
Do you agree to a percentage of the sales price before shopping?
You will be required to sign a buyer agency agreement stating compensation terms. You can make a short-term or property-specific agreement if you want to "interview" or "test drive" an agent. Remember that you are paying, so pick an appropriate fee.
Examples:
-If you found your dream house online and simply want to look at it and write an offer, a reasonable flat fee sounds great. The agent will have around 10-15 hours worth of work, so $5,000.00- $7,500.00 would be reasonable for their expertise (verify they have some). Remember, you are not paying a good agent for that deal; you are paying them for the experience they gained over the last 100 deals.
-Are you new to an area and need a great deal of time and expertise to figure out the landscape? Find a great agent, check their social media to see if you relate, and sit down with them to go over a fair compensation agreement. This is crucial if you are artistic and spend time volunteering; finding an agent connected to the art community is valuable. If you are a golfer, can your agent get you CC sponsors?
Explore options and find the correct fit at the proper compensation.
Questions, put in comments or reach out, good luck.
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