Welcome to Extreme Investor Network, where we provide you with the latest and most valuable information on personal finance topics. Today, we are diving into the recent changes in the real estate industry due to a class-action lawsuit settlement that has transformed the way homes are bought and sold.
In March, the National Association of Realtors agreed to a $418 million settlement in an antitrust lawsuit, exposing a conspiracy to artificially inflate agent commissions on real estate transactions. This settlement took effect on August 17, changing the landscape of how real estate transactions are conducted.
Prior to the settlement, the NAR’s multiple listing service dictated the compensation rates for both buyer’s and seller’s agents. Sellers were obligated to offer a set commission to both agents, limiting their flexibility in negotiations. However, with the settlement now in place, commission rates have been removed from the MLS, giving sellers the freedom to choose how much each agent makes.
What’s New with Buyer and Listing Agents
As real estate agents adjust to the new rules, potential homebuyers may encounter inconsistencies in the market. Real estate attorney Claudia Cobreiro notes that agents are receiving varying instructions on implementing the settlement changes, leading to consumer confusion.
On the listing side, agents are educating sellers on the benefits of offering commission to the buyer’s agent, even if it’s not mandatory. This can attract more agents to showcase the property, potentially leading to a higher sales price.
Understanding Buyer-Broker Agreements
A buyer-broker agreement is a contract between a real estate agent and a homebuyer that outlines their working relationship. It specifies the terms of commission for the agent when the buyer purchases a property that meets the agreement criteria within a specific timeframe.
Buyers need to familiarize themselves with these agreements and be prepared to ask questions about the terms and language. It’s crucial for buyers to understand their responsibility for the buyer’s agent commission in case the seller does not offer it.
At Extreme Investor Network, we keep you informed on the latest developments in personal finance and empower you to make savvy financial decisions. Stay tuned for more insights on how to navigate the ever-changing landscape of the financial world.