Musings from the Mountains

Late today the MLS changes I spoke about last month will become effective.  In the past, we have been able to see the buyer agent commissions being offered on a listing in the MLS.  Due to some class action lawsuit outcomes, MLS’s will no longer be permitted to post commissions.  Now we must call the listing agent for a property to find out how much, if any, commissions the seller is willing to pay a buyer’s agent if the buyer’s agent brings a ready and willing buyer for the seller’s property.  Also, we must tell sellers when listing a home for sale, that paying a buyer’s agent is no longer required.  If the seller chooses, they may not offer any commission to buyer’s agents.  So, how will a buyer’s agent get paid if the seller is not offering any commissions?  We will get paid from the buyer!  That’s correct, the buyer will have to negotiate commissions with a buyer’s agent, sign a Buyer’s Agent Agreement, then the buyer’s agent will be paid at closing.  Also, a buyer’s agent can no longer even tour a home with a perspective buyer until the buyer’s agent has a signed Buyer’s Agent Agreement with the buyer.

As a buyer’s agent, how do I feel about these new rules being forced upon us?  Not so great.  How will a young couple, probably first-time home buyers, who often have a tough time just coming up with a down payment, come up with extra cash to pay their buyer’s agent?  I feel the new rules place a heavy burden on buyers who don’t have the extra cash.  At this point there are still many homes out there for sale that are still offering commissions for buyer’s agents.   I think this is a very wise move for a seller.  If the seller is offering to pay commissions to a buyer’s agent, this solves the problem for a cash-strapped buyer.  Commissions have always been around 6% in this area for selling a home.  The commission percentage has always been negotiable.  When a buyer’s agent brings a buyer with an acceptable offer to the seller, the listing firm would split the 6% commission (or whatever commission was negotiated) with the buyer’s agent.  That can still happen on homes where the seller has agreed to a commission arrangement that honors both the listing agency and the agency representing the buyer.

If you are considering selling a home, or buying a home, please call or come by our office.  We can help you through all the new rules that we must live by and help you negotiate the process for a successful outcome.  Thanks as always!