New rules for realtors come into effect on Saturday.
The changes are part of a $418 million settlement by the National Association of Realtors stemming from allegations that the organization engaged in monopolistic practices that inflated realtors’ commissions.
“The biggest change you’re going to see is you will be required to sign a agreement with an agent prior to looking at a home,” Jef Conn, Texas Realtors chairman, told KXAN Austin. “The process of buying and selling a home is going to look very similar today as it will Saturday and beyond.”
The Wall Street Journal reports on everything home buyers and sellers need to know about the new rules. Here’s the start of the story:
The biggest changes in decades to the way real-estate agents get paid are being rolled out around the country. The National Association of Realtors, or NAR, reached a landmark legal settlement earlier this year over commissions, and by Aug. 17 most of its roughly 1.5 million members will be subject to the new rules.
Here is what home buyers and sellers need to know.
How does the system work right now and how is it changing?
For the past 30 years or so, the seller has typically paid the agents on both sides of a transaction and decided how much both agents get paid. Usually, sellers agree to pay their agents a certain amount—often 5% or 6% of the sale price—and the seller’s agent splits that amount with the buyer’s agent. When a home is listed for sale, the listing says how much the buyer’s agent can expect to be paid.
Two main changes are happening now. First, listings in local databases called multiple-listing services will no longer show whether a seller is offering to pay a buyer’s agent, or how much. Second, buyers will be required to sign agreements specifying how much their agents will be paid. Buyers will do this before they start touring homes with agents.