Having been an active real estate agent since 1986, I've weathered many shifts in our industry. The recent settlement by the National Association of REALTORS® regarding broker commissions is causing quite a stir, but I'm here to reassure you that the fundamentals of our business remain unchanged. Here's why —
Two Key Changes, Not a Paradigm Shift
First, let's break down the changes. The first key change is that buyers now must work with a Buyer-Broker Agreement, much like sellers have always used listing agreements. This means that agents will negotiate commissions directly with buyers, ensuring they are compensated for helping clients find homes. While this sounds like a significant shift, it's not as revolutionary as it seems.
Historically, sellers have been inclined to pay buyer’s agent commissions to ensure their homes get sold efficiently. Although technically, sellers never had to pay a buyer’s agent, in practice, it was a norm because it facilitated smoother transactions. The concept is simple: incentivize the agents to bring in buyers. This hasn't changed. If you want to sell your house, you'll likely still offer a commission to attract buyer agents.
The other notable change is the removal of commission details from the MLS. Instead, agents will now include this information in flyers, brochures, websites, social media, or even through more creative means. You could even fly a plane with a sign that advertises commission! This shift might seem like a hassle, but in reality, it's just a different method of communication. The origin of displaying commission splits in MLS was to streamline information sharing among agents. The same principle applies to other tools.
Negotiation Complexities and Practical Realities
The new requirement for commission negotiations could complicate transactions. If a seller offers a low buyer's commission, buyers and their agents might need to negotiate commissions before considering an offer. This could lead to a lot of unnecessary back-and-forth and potential loss of interest in your property.
Consider this: when showing properties, if one [property] offers a better commission, it's naturally more attractive. Buyers and their agents shouldn't be bogged down negotiating commissions instead of focusing on the property's value. The ultimate goal is to make the transaction process as smooth as possible, minimizing distractions and keeping the buyer focused on the home, not how their agent gets paid.
KISA: Keep It Simple Agent
As a listing agent, my advice remains consistent: make it easy for the buyer's agent to bring you great offers. This means offering fair commissions to buyer's agents [upfront] to ensure they are motivated to show and sell your property.
It’s the same principle as making your home easy to sell. A house that is occupied, not staged, difficult to get a showing to see, and that needs repairs will not get as many quality offers as a vacant home that is staged, easy to see, and with little to no repairs required.
Make your home easy to show, easy to sell, and easy to love; that will attract multiple solid offers and get you the best possible price.
In conclusion, while the NAR settlement introduces some new paperwork and commission negotiations shifts, the essence of selling your home remains the same. Sellers pay commissions to get their houses sold at the best prices, and agents strive to make the process as straightforward as possible. The motto here is simple: KEEP IT SIMPLE AGENT. Focus on making transactions seamless, and the rest will follow.
Tori Atwell, Broker Associate
Phone: 650.996.0123
Email: [email protected]
LIC.# 00927794
The Agency Los Altos
“Downtown Mountain View’s Most Experienced Real Estate Agent”
