As I have written about previously, the effect of multiple lawsuits and changes in State law are going to fundamentally change the way Realtors work.
As of August 17th of this year, Buyers will no longer be able to engage a Realtor to show them any property (except at an Open House) without signing a Buyer Representation Agreement. This agreement can be exclusive (meaning you only sign with one Realtor) or non-exclusive (if you are working with multiple Realtors). Although this seems like a huge change, it makes sense. When we show property to a Buyer, we are providing access to someone's home on the assumption that they are qualified and in the market to buy a home. While consumers loved the convenience of sites like Redfin and Zillow allowing them to arrange a showing of a house with the push of a button, I think it came at a cost. As the listing agent, I never knew for sure whether showings by these virtual agents were legitimate or just curious members of the general public.
The second big shift is that as of that same date (August 17th, 2024), Realtors will no longer be able to advertise in the Regional Multiple Listing Service (the main database that we use that also feeds information to all the secondary sites–Redfin, Zillow, Sotheby's, etc) the amount that their sellers are willing to pay a Buyer's Agent should they bring an acceptable offer on their property. This means that Buyers looking for homes will not know if the price includes the cost of representation for them. Historically, we have been able to easily show a client what the seller was offering to pay us if we brought an acceptable offer.
Though listing agents will not be allowed to advertise if our Sellers are offering a commission to the Buyer's Agent on the Regional Multiple Listing Service database, we will be allowed to include this information on our Company websites, signs, flyers, and emails to other Realtors. It just won’t be in the place most of us reference to get all the details of the property. That means if a Buyer has signed a Buyer Representation Agreement and agreed to pay their Realtor a fee, the only way to assure that the seller will pay that fee as a part of the transaction will be to make that part of the written offer.
The good news is that lenders (including VA in the last couple of weeks) have agreed that they will allow sellers to pay for the Buyer's Agent Commission as a part of the transaction, so Buyers will not be required to come up with that amount in cash.
The bottom line is that we are all figuring out how to do this in an elegant way that protects our clients and allows us to be paid for our work. It is a work in progress, and we will keep you posted as it rolls out!