Clarification on Commission Rules |
| On August 17, 2024, the new rules in the National Association of Realtor (NAR) settlement will take effect. News channels have been inaccurately reporting what those ‘rules’ are, and saying that realtors will now be paid differently. There are only two new rules in Utah. The Buyer’s agent commission will no longer be published on the MLS and agents are supposed to have a signed buyer broker agreement before they show buyers homes. National Association of Realtors Provides Final Reminder of NAR Practice Change Implementation on August 17, 2024 Although listing agents will not be allowed to post commissions for buyer’s agents publicly, they will likely still be offered by sellers who want the highest market demand for their homes. We are already seeing new ways to advertise what buyer agent commission is being offered. They are often posted in showing instructions, on separate websites and in the attached listing paperwork. To provide a little background, realtors are paid on commission and the amount is negotiated with the seller—often 5% or 6% of the sale price–with half of that commission going to the buyer’s agent and the other half to the seller’s agent. Both agents pay their fees, taxes, and expenses from the total commission they receive. Agents do not receive an hourly rate or salary, so most of their work is unpaid until or unless they receive a commission when a home is purchased or sold. Even though there are no legal requirements in Utah for a seller to offer a buyer’s agent a certain commission, market demand does come into play. Many agents will not promote listings that offer, for example, only a $500 commission or 1%. So, our advice to sellers has always been to offer a full commission of 2.5% or 3% to get the most eyes on, and best offers for, their home. By not compensating the buyer’s agent, the seller often ends up selling the property for less. Another part of the settlement is that realtors must have a buyer-broker agreement before showing homes. This was already supposed to be happening, but now these agreements will be more important because they will list what the obligation will be of a buyer to pay their agent if the seller is not offering a commission.  It’s important to note that these changes were not done to benefit buyers. Sellers wanted to control the commission amount, which was always the case in Utah, but not in some other states. Buyers in Utah have always had the option of whether or not to use a realtor. Some prefer to go at it alone to try and negotiate a lower price, which often is not any lower than an experienced realtor can negotiate on their behalf. However, the majority of buyers do appreciate the help of a realtor. Most people only buy/sell 2-3 homes in their lifetime, and it can be a scary and daunting process. It is reassuring to have someone who can oversee the process, and help navigate repairs and appraisals. We would love to help you buy or sell your next home. We offer a full concierge real estate service with staging, photography, floor plans, and of course, a combined 20+ years of experience. 801-830-1717  Follow us on Facebook and Instagram for travel tips, new listings, and home design inspiration. |
