Understanding the New Changes in Real Estate Agent Compensation 6.26.24

The real estate industry is undergoing significant changes, particularly in how buyer's agents are compensated. These adjustments aim to enhance transparency, fairness, and competition within the market, ultimately benefiting home buyers. Let's dive into what these changes entail and how they impact both buyers and agents. As all these changes are rolling out over the next several months, we will have to take everything day by day and see what permanent changes will take place.  CALL ME FOR MORE QUESTIONS!!!

The Traditional Compensation Model

Traditionally, the seller pays the commission for both their agent (the listing agent) and the buyer’s agent. This commission is typically a percentage of the home’s sale price and is divided between the two agents. While this model has been the norm for many years, it has faced criticism for its lack of transparency and potential conflicts of interest. Moving forward the sellers will likely still pay the buyer's agent, but it will be via a "concession" not a percentage of the sales price.

What's Changing?

  1. Greater Transparency: New regulations and industry practices are pushing for more clarity regarding how buyer’s agents are compensated. Buyers will now have a clearer understanding of how much their agent is earning from the transaction.

  2. Buyer Responsibility: In some markets, there’s a shift towards buyers directly paying their agents. This can be through an agreed-upon fee or a commission based on the sale price. This change is intended to align the agent’s interests more closely with those of the buyer. IF the agent you are interviewing is NOT going over these changes with how they get paid... this is a red flag. Make sure they are going over "concessions" and what that means when writing an offer on your dream home. 

  3. Negotiable Commissions: Commissions are becoming more negotiable. Buyers and agents can now discuss and agree upon the agent’s compensation upfront, when both listing and buying. This has always been common items negotiated ahead of time, but will not be more clear on WHO is paying for what services. Compensation for all parties involved needs to be in writing when listing a home and when choosing a buyer's agent. 

Impact on Buyers

For buyers, these changes mean more control and transparency in the home-buying process. By understanding exactly how their agent is compensated, buyers can make more informed decisions and ensure that their agent gets paid for services. 

Impact on Agents

Agents may need to adjust their business models and strategies to thrive in this evolving landscape. Demonstrating their value proposition will be crucial, as will adapting to new ways of negotiating fees and ensuring client satisfaction. However, these changes also present an opportunity for agents to build stronger, trust-based relationships with their clients.

What does this look like for you?

The changes in how buyer’s agents are compensated represent a significant shift in the real estate industry. By promoting transparency, fairness, and competition, these adjustments aim to create a more equitable market for buyers and a more dynamic environment for agents. As the industry adapts, both buyers and agents will need to stay informed and flexible to navigate this new landscape successfully.


By embracing these changes, we move towards a more transparent and buyer-friendly real estate market, ultimately benefiting everyone involved.

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