The home-buying process is undergoing significant shifts, thanks to recent changes by the National Association of Realtors (NAR).

 

If you're looking to buy a home, it's important to understand how these changes will affect your journey, especially how you interact with real estate agents and the costs involved.

 

What's Changing?

 

As of August 2024, the NAR has implemented new rules that change how homebuyers and their agents navigate the purchase process.

 

These updates are part of a larger settlement meant to increase transparency and fairness in the real estate market.

 

Here's what you can expect:

 

Buyer Broker Agreements Are Now Required

 

One of the biggest changes is the requirement for signed buyer's representation agreements.

 

Before you even tour a property, you'll need to sign an agreement with your real estate agent detailing the specifics of your working relationship, time frame, and agent compensation.

 

This might be a shift for some buyers, but it ensures that all parties are clear on the terms of the relationship from the beginning.

 

Does this new requirement make you nervous? Let's talk about it! We're confident we can find a solution you're comfortable with.

 

Changes to Commission Transparency

 

Previously, commissions paid to buyer agents were typically displayed in MLS (Multiple Listing Service) listings, and in many cases, sellers would cover these costs.

 

Now, MLS listings will no longer show the buyer's agent commission. This means buyers and their agents will need to negotiate compensation directly, and buyers might end up paying more out of pocket for their agent's services.

 

While sellers can still offer to cover the commission, it won't be as straightforward as before.

 

More Flexible Payment Options

 

While it might seem like a downside that buyers may have to cover their agent's commission, these changes might also normalize more flexible compensation models (these existed before the NAR changes; they were just less common).

 

Buyers can negotiate alternative payment structures, like flat fees or hourly rates, which might save them money in the long run. This shift could allow buyers to choose services that fit their needs and budget, making the process more customizable.

 

Here at Duck Brothers, we provide our clients with full-service representation and don't offer flat-fee options or hourly rates. These compensation structures generally come with scaled-back services or reduced agent obligations, and that's just not how we operate.

 

We're proud to provide our clients with top-notch service and support from first consultation to well beyond the closing table. We're here to help you and your family as long as you need us, to the fullest extent possible.

 

We take our fiduciary duty very seriously and aren't willing to compromise on the quality of service we believe our clients deserve.

 

What Does This Mean for You?

 

While the new rules add some complexity, they're intended to give buyers more control over the home-buying process. Here are a few things to keep in mind as you prepare to navigate the "new normal":

 

Be Aware of Additional Costs

 

In the past, many buyers didn't have to worry about their agent's commission since the seller typically paid for it. Now, you'll want to factor this possibility into your budget. If your agent's commission is around 2-3%, this can significantly add to your out-of-pocket costs, especially in competitive markets.

 

Take Advantage of Negotiation

 

The good news is that you now have more room to negotiate not only the price of the home but also how you pay your agent. If you're working with a real estate agent, have a conversation about payment options upfront. 

 

Many sellers will still offer buyer's agent compensation from the start, so this will be a non-issue. If it's not provided upfront, we'll still be able to negotiate our commission somewhere into the deal in most cases.

 

Even if the seller flat refuses to pay a buyer's agent commission, there are still options that make this expense manageable. We can discuss those further at your consultation!

 

Understand Your Representation

 

One goal of the NAR changes is to ensure that buyers are fully aware of the value and services their agents provide.

 

With a written agreement, you'll clearly understand what your agent will do for you, from negotiating the purchase price to handling inspections and paperwork.

 

At your buyer's consult, we'll discuss every aspect of the purchase process, explain our role in each step, and answer any questions you might have. We'll also walk through all the paperwork so you know exactly what you're signing and why.

 

Is It a Good Time to Buy?

 

Despite the changes, now is still a great time to buy a home, especially as we move into the fall market. The key is to be prepared for the potential shifts in costs and to work closely with your agent to find the best solution for your needs.

 

In this new landscape, a solid understanding of your financial situation and being ready to negotiate will help ensure the home-buying process goes smoothly.

 

As always, we're here to guide you through these changes and help you find the home of your dreams—while ensuring you understand every step.