Market Update: Navigating the New Real Estate Landscape

Beginning in August, major changes to real estate commissions have taken effect. These changes have reshaped the dynamics between buyers, sellers, and agents, leaving many with questions.

Buyers: Adjusting to New Costs

Up until 8/17/24, it was rare for a buyer to pay their real estate agent anything other than perhaps a few hundred dollars for document fees. Now, with buyers committing to compensate their agents directly through the new Buyer Broker Representation Agreement, buyers are frequently asking, “Is the seller offering a commission, and if so, how much?” The answer to this question is influencing what buyers are willing to pay for properties, which adds a new layer to negotiations. This transition is surprising buyers who were already in the middle of a home search based on the old model of compensation. We’ll see how this all pans out; perhaps this will be the new norm in 6 months, or there may be further changes.

Sellers: Commission Decisions Matter

For sellers, the option to pay a commission to the buyer’s agent remains, though it can no longer be advertised in the MLS. Many sellers continue to offer these commissions, recognizing the strategic advantage it provides. One of the advantages is that it can encourage buyers who have been caught in the middle of this transition to bring an offer to the table. It will always be up to the seller to decide if and how much they are willing to pay toward the buyer’s agent’s fees. However, remember that the goal is to sell your home; if you can achieve the net proceeds you’re seeking, offering a commission might be just what you need to get the deal done.

Looking Ahead

The market is in a period of adjustment. Sellers willing to offer commissions will likely continue to benefit, while buyers will adapt to the new norms. If you have questions about how these changes affect you personally, contact us today for guidance. We’re here to help you navigate the evolving market with confidence.?