Buying or Selling a Home? You’ll Want to Read This
By • August 19, 2024 0 389
Over the weekend, a new set of rules took effect for those buying and selling homes. A 2023 legal decision now has sellers deciding how much (or whether at all) to pay a buyer’s broker. This information is no longer allowed to be listed on MLS, the multiple listing service that those in real estate use.
Before this change, when a home sold, a commission of five to six percent was paid by the seller and divided between agents for both the buyer and seller. That model kept commissions higher than they usually would be, according to the lawsuit filed about this matter. Now sellers can negotiate fees down and buyers may find it enticing to not use agents at all.
The old practice before changes took effect led to accusations that buyers’ agents were purposely guiding people toward more expensive homes. In October 2023, a federal jury found brokerages and the National Association of Realtors (NAR) liable for colluding to inflate commission fees, NBC News reported. The group was instructed to pay just under $2 billion in damages.
In March 2024, The Georgetowner interviewed Long & Foster’s President and CEO Patrick Bain about his position and the brand. He commented on the lawsuits facing the industry.
“They’re attacking the industry and, really, what I would say are tried and true practices of trading, listing and selling real estate,” Bain said in the interview. “What is alleged is just plainly not true.”
The lawsuits started with a handful of larger real estate companies like HomeServices of America and Long & Foster, along with the National Association of Realtors. “Like most litigation, there are two sides of the story, and we are aggressively defending our position,” Bain said. “It’s business as usual until there is some rule change or regulatory change or the Department of Justice weighs into this thing.”
Bain doesn’t believe the argument that there is collusion, conspiracy and other allegations.
“We come to it with a high degree of integrity,” he said. “I live it every day and I see that we are a big part of the American dream of home ownership.”
To make sure buyers know the compensation they might be accountable for, as of Saturday, the NAR is requiring agents to enter into written agreements with buyers before showing a home, according to NBC News.
