Leilani Serrao-Baker’s Post

Transcript

- Homeowners and buyers. now that the National Association of Realtors new rules on compensation is in effect, how does that affect you if you are selling your home or purchasing one? Hi, I'm Leilani Serrao-Baker, founder of Civitas Realty. First, it's important to know that commission or compensation structures have always been a key part of the real estate transaction and have always been negotiable. In the past when a home was sold, the seller almost always paid the real estate compensation. The fee was paid to the seller's agent, the agent representing the seller. The seller's agent then would pay a portion of that compensation to the buyer's agent, the one who's representing the buyer. With the new NAR ruling, based upon recommendations from the Department of Justice, sellers can no longer publicize offers of compensation on the multiple listing service. However, they're still allowed to pay compensation or give concessions to the buyer or the buyer's agent. Now understand every state is managing this in various ways. There are over 600 MLSs and each of them are handling these new rules differently. Different states, MLSs and brokerages, will all have their ways of navigating these changes. So, what does this mean? There's a lot to cover on this topic, so let's break it down. First, for sellers, these changes in commission could mean a shift in the financial dynamics when selling their home. With new compensation structures, sellers may now find themselves negotiating compensation differently when hiring their listing agent and when negotiating offers. Now more than ever, it's going to be important to hire the right agent that stands apart from the competition and offers the best value for their compensation. Sellers will need to focus on agents who can provide not just a good rate, but also exceptional service, negotiations and marketing expertise to ensure their homes sell quickly with the most favorable terms for the seller. Our firm will be advising on the pros and cons of the compensation structure, and each scenario is different, but we will be letting sellers know that the compensation to a buyer or a buyer's agent will be coming directly from the seller and no longer from our brokerage. This does not mean that we do not encourage a seller to offer compensation to the buyer's agent. There are several reasons why sellers should continue to offer compensation to the buyer's agent, and it is a strategic move that can significantly impact the success when selling your home. For buyers, the new commission structure are also going to have a significant impact. More often than not in the past, buyers haven't directly paid their agent for their services to help them find their dream home. It's always been negotiable, but most often came from the seller. Now, with this new ruling, buyers might need to factor in the cost to pay their agent a commission for their service. This in turn could affect their overall budget for purchasing a home. Buyers need to know the importance of having a strong agent negotiating their wishes regarding compensation is now more important than ever, specifically when negotiating their agent's fees to be paid by the seller in order to reduce or eliminate you, the buyer, from paying those fees. With all these changes in compensation structure, it will be a new era of transparency and negotiation in the transaction between buyers, sellers, and agents. As these changes are implemented having an experienced agent on your side to help you with the negotiation process and add value to your transaction is now more important than ever. But remember, all things are negotiable between buyer and seller. If you would like more information on the new ruling, please reach out to me or my team. Let us help you navigate these changes as either a buyer or a seller in today's housing market. As always, I'm Leilani Serrao-Baker, founder of Civitas Realty, where we are client driven and community grounded.