What Homebuyers MUST Know About New Real Estate Rules
“Who pays the agent?!”
Starting August 17, 2024, groundbreaking new rules in the real estate industry changed how homebuyers pay and work with their agents. It will take time for homebuyers, sellers and their agents to adjust. In the meantime, it’s never been more important that homebuyers – especially first-time homebuyers – understand how to navigate and protect their best interests when buying a home.
For more background about the settlement that initiated these changes, search “National Association of Realtors (NAR) settlement changes.”
Here’s what has changed for homebuyers under the new rules:
- Buyers must sign a legally binding agreement (contract) with a real estate agent before that agent can show them a home. The terms can be flexible to meet the buyer’s needs, though. For example, the contract could be limited to touring one particular house, or for touring homes for just one day, week, month, etc.
- Buyers are now responsible for paying their agent when they purchase a home. The new rule makes it essential to negotiate and come to an agreement about the agent’s compensation before signing anything. Prior to these new rules, the seller typically paid both agents. It’s important to note that sellers can still benefit from paying both agents and may still do so. (Keep reading to understand how!)
Advice buyers should remember:
- Interview your real estate agent before agreeing to work together! Especially now, it is important that you understand the value of any agent offering their service.
- If you attend an open house, don’t be pressured to sign a contract with the agent hosting. The open house agent represents the seller, so they are putting the needs of the seller first – not yours.
- Beware of any “discounts” from agents. Keep any agreement straightforward.
- The agent’s fee can be financed as part of your mortgage, as long as the seller agrees to include the fee as a part of the home’s sales price. The seller usually will welcome this agreement, since they will not be losing money and it’s another incentive to help sell their home.
Expert and not-so-expert advice and opinions about these rules will continue to change and evolve. For unbiased advice about the homebuying process, INHP’s homebuying experts can help. Get started here.
