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Buying or Selling a Home? You Need to Know These New Rules

New changes to how commissions are done could save (or cost) you thousands.


spinner image a miniature house on top of a stack of bills
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Most older adults plan to age in place. But that’s not always possible — health conditions, budget changes and other “life happens” moments can mean you need to sell your home and/or buy a new one.

If you find yourself navigating the real estate market, you’ll want to get up to date on some major rule changes when it comes to agent commissions. Why? It could mean thousands of dollars in or out of your pocket. Here’s what you need to know.

Who do the new rules apply to?

The changes apply to brokers and agents representing clients looking to buy or sell a home advertised on a multiple listing service (MLS) database affiliated with the National Association of Realtors (NAR). These databases are strictly for the use of licensed real estate professionals as a means to share information about houses on the market — how many bedrooms, location, square footage and other details — and are not accessible to the general public for safety and privacy reasons. That said, your real estate broker will share specific listings with you related to what you’re looking for. ​

And what’s changed exactly?

It’s complicated, but it boils down to this:

For sellers: Blanket offers of compensation on behalf of sellers to buyers’ agents will no longer be included in listings posted on the MLS. However, they will still be allowed to appear practically anywhere else, including the agent’s own website, a display at an open house or when communicating directly with an agent representing a prospective homebuyer.

Sellers may still elect to pay for a buyer’s agent’s compensation, but without the pressure of making a public, blanket offer on the MLS. Some may opt to pocket the savings and only cover their own agent’s commission.

For buyers: Homebuyers will be impacted the most as they’ll now have to factor in the cost of hiring an agent if a seller isn’t willing to cover it.

Homebuyers who want to work with an agent will have to sign an agreement upfront that details the services that agent will provide and how much they will be paid, including whether it’s through a commission split with a seller’s agent.

Generally, an agent who represents a buyer typically receives around 2.5-3 percent commission based on the purchase price of the home. Agents then share part of their commission with their brokerage.

The new rules require that buyer agreements be completed before an agent begins working on a client’s behalf, including before the agent takes a buyer to tour a home, whether in person or virtually. However, a buyer can still go to an open house without signing a representation agreement.

How much does the housing market play into this?

In a sluggish housing market where homes are taking longer to move and sellers are having to lower prices, it’s more likely that a buyer will be able to negotiate for the seller to cover their agent’s commission.

In a hotter market, where properties are selling fast and receiving multiple offers, sellers will have the leverage to accept an offer from a buyer who isn’t asking for them to cover their agent’s fees.

Still, real estate agents say sellers should keep offering to cover the buyer’s agent commission.

“We’ve advised that it would be wise for sellers to continue to be open to covering some or all of the buyer’s costs, because the last thing you want to do when you are selling something is to make it complicated for someone to buy it or to limit the number of people who can buy it,” said Alex McEwen, associate broker with Selling Utah in Orem, Utah.

Will commissions actually come down?

It’s unclear whether the policy changes will spur sellers or buyers to negotiate lower broker commissions, and whether they’ll succeed if they do.

Buyer-agent commissions have eased somewhat this year. The average buyer’s agent commission fell nationally from 2.62 percent at the beginning of the year to 2.55 percent through July 14, according to an analysis by Redfin. However, because home prices have kept rising this year, the average commission paid to a buyer’s agent in dollar terms has risen about 1.7 percent since January to $15,377.

Stephen Brobeck, senior fellow at Consumer Federation of America, expects that more sellers will be encouraged to negotiate with their agent to lower their commission by at least half a percentage point.

“That represents, over the course of a year in the housing market, a very large sum of money,” he said. 

Suzette Lohmeyer, the home, family and auto editor for aarp.org, contributed to this article.

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