Real estate commission changes could be coming this summer – Spectrum News 1

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OHIO —  A new settlement between the National Association of Realtors and the federal government could change the landscape when it comes to the commission that real estate agents receive during the home-buying process.

What You Need To Know

  • The NAR brought an agreement to the federal courts after a lawsuit last fall
  • The agreement could impact commission rates
  • If the government agrees to the settlement then the agreement would go into effect mid-July

Currently, a seller is usually responsible for paying the 3% commission to both the buyer’s and seller’s agents.

The National Association of Realtors (NAR) agreed to no longer include offers of compensation for a buyer’s agent on any of the databases affiliated with them, like the Multiple Listing Service (MLS). The hope is that this will address homeowners’ concern of paying artificially inflated agent commissions when selling their home. 

The agreement also includes a requirement for agents to enter a written agreement with the homebuyer to ensure homebuyers know what their agent will charge them. One real estate professor from the Ohio State University said that while this might increase competition it could make it more expensive to buy a home. 

“With the new arrangement, suppose you are a buyer, suppose you pay 4% and the commission goes to your agent,” said Itzhak Ben-David, who serves as a professor of finance at The Ohio State University. “So instead of bringing to the table $20,000, you will need to bring $24,000, so this will probably put pressure on relatively small homes on their prices to go down and it might deter potential buyers.”

If the court signs off on the agreement brought by the NAR, then these changes would go into effect in mid-July. If you plan to buy a home this year, Ben-David suggests shopping around for different agents and asking questions. 

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