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The real estate profession is as old as time – or about 125 years of time anyway. Brokers and agents first started facilitating real estate transactions in the early 1900s.
Back then, agents would station themselves in a home for 12 hours a day, showing off modern wonders like electric lighting. A lot has changed since then, most prominently the innovation of online listings, allowing prospective buyers to virtually visit homes for sale anywhere, anytime.
Homebuying is undergoing a change again. Specifically, two significant changes are affecting the relationship between homebuyers and buyer agents. When it’s time to begin searching for a first home or to upsize, downsize or relocate, here’s what to know and why these changes are good for consumers:
Open communication about agent fees
Historically, property listings in databases known as Multiple Listing Services (MLS) commonly included a commission percentage offered to buyer agents. Going forward, properties listed for sale in MLS databases will not include an offer of compensation for buyer agents.
What does this mean for homebuyers? It means you’ll need to have direct conversations with potential buyer agents to understand their fee structure. It opens the door for a transparent and personalized discussion about the services you need and how much they will cost. It empowers you to select an agent based on the expertise, experience and value they bring to the table.
Formalizing the buyer-agent relationship
The second change is that working with a buyer agent will require a formal written agreement before touring a property, either in-person or virtually.
The agreement must outline the services the agent will provide and the corresponding fees. The amount of compensation stated in the agreement cannot be open-ended. For example, it cannot be “whatever compensation the seller is offering to the buyer.” The compensation must be defined.
This will enable homebuyers to have complete clarity about the services provided by an agent and the cost of those services.
Negotiating fees: Then and now
Can consumers negotiate buyer agent fees? Absolutely. Agent compensation has always been, and continues to be, negotiable.
Bear in mind that many factors can influence buyer agent compensation such as: housing market conditions; specifics of the property you’re interested in buying; the complexity of a prospective real estate transaction; and an agent’s individual experience.
What’s key is focusing on value – the value of the services you will receive to help you turn your dream of buying a home into reality.
Not every agent is a Realtor
As these changes take effect, know that not every real estate agent is a Realtor. There’s a difference and that difference matters.
The expertise of a Realtor extends far beyond simply showing houses. Like a financial planner or accountant, a Realtor is a trusted professional advisor.
Realtors subscribe to a strict Code of Ethics that emphasizes honesty and protecting client interests. Working with a Realtor can help you avoid costly pitfalls in a real estate transaction. Realtors also offer guidance to make, evaluate and negotiate offers, and help you keep your personal objectives at the forefront during what oftentimes is an emotionally intense decision.
With consumers through the changes
Lebanon County Association of Realtors has a long-standing commitment to advocating for consumer protection in the real estate industry. We actively champion policies and practices to safeguard consumer interests and have encouraged brokers to use written agreements with buyers even before buyer agency was enacted in 1999.
According to a 2023 National Association of Realtors report, 9 out of 10 homebuyers found their real estate agent to be a useful information source for the homebuying process. This equates to the almost 90% of buyers who said they purchased their home using an agent.
The changes in the relationship between homebuyer and buyer agent promise to reinforce transparency and further benefit consumers on their homebuying journey.
Realtors throughout Lebanon County are ready to walk with you on that journey. If buying or selling a home is in your future, we’ll help you get there.
Amanda Krall is the President of the Lebanon County Association of Realtors.
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