NEW RULES for REAL ESTATE AGENTS Takes Effect AUGUST 17th 2024!
The National Association of Realtors recently settled a lawsuit filed by homeowner’s in other states that claimed unfair practices related to commissions. North Carolina is a flagship state for demonstrating how professional real estate agents are to behave in a fair and ethical manner, however the settlement has imposed some new rules on NC agents.
NO MORE ORAL BUYER AGENCY
In the past, your agent was able to show you homes and have discussions with you about the market and your transaction prior to signing any agreements and making offers. Today, we must have a written and signed Buyer Agency Agreement in place before showing any homes or discussing your transaction.
COMMISSIONS NO LONGER ADVERTISED ON MLS
In the past, listing agents whose sellers agreed to allow them to share their commission amounts with cooperating firms (buyer’s agents) would do so by advertising the shared commission amount on MLS. Buyer agents would then be able to see that they were going to be paid at closing by the seller and listing agent. Today, that will no longer be advertised on MLS.
The main reason for these changes is to facilitate up-front conversations about how commissions are to be paid in a transaction. In our Buyer Agency Agreement the language clearly states that the buyer is responsible for paying their agents commission. But in the past agents have not mentioned this to their buyers because the listing firm was clearly advertising some amount of compensation on the MLS listing.
Moving forward, sellers will have three options when it comes to commissions:
Agree to pay a commission to their listing firm that is intended to be shared with a cooperating firm (buyer’s agent).
Agree to ONLY pay their listing firm a commission and to separately agree to providing some amount of closing costs credit to potential buyers, a credit that they may use to pay for their agent.
Agree to ONLY pay a commission to their listing firm and pay nothing for the buyer.
Each scenario will have a big impact on the transaction so it’s important to discuss with your agent before deciding. Buyers may need to prepare to pay for your agent at closing either in cash or additional financing.