What Are The New Real Estate Rules?

Starting August 13, 2024 (CRMLS), significant new real estate rules will come into effect as part of a settlement agreement involving the National Association of Realtors (NAR). These changes primarily impact how compensation and agreements are handled in residential real estate transactions:

1. Elimination of Seller-Paid Buyer Agent Commissions on MLS: Listing brokers and sellers will no longer be able to offer commissions to buyer’s agents through the Multiple Listing Service (MLS). Offers can be structured to encourage a seller to pay buyer agent commission without forfeiting other points of negotiation during the home buying process.
2. Written Agreements Required for Buyers: Agents working with buyers will now need to enter into written agreements before touring homes. This agreement will outline the services provided by the agent and the compensation expected. This requirement ensures that buyers understand the financial arrangement with their agent before beginning the home search process​ (The Real Deal)​​ (www.nar.realtor)​.
3. Prohibition of Compensation Filtering: MLSs will no longer be allowed to enable participants to filter or sort listings based on the offer of compensation, the listing firm, or the listing agent. This rule is designed to ensure that all listings are equally visible to potential buyers, regardless of the commission offered​ (www.nar.realtor)​.
4. Increased Transparency and Disclosure: There will be a requirement for compensation disclosures to both sellers and prospective buyers. This measure is intended to provide greater transparency in real estate transactions and help consumers make more informed decisions​ (www.nar.realtor)​.
5. Impact on Agents and Market Dynamics: The new rules are expected to change how agents earn their commissions, potentially increasing upfront costs for buyers who need to pay their agents directly.

Working with a knowledgeable agent, with strong negotiation skills will be critical to maximizing your savings without sacrificing quality of services provided. This impacts both buyers and sellers, in terms of liability protection, ease of transaction, etc.

A skilled agent is needed - I am here when you are ready. Call me at 626-773-6789 - Buyer or Seller - I am here to protect your interests!

This is provided as an overview only and not intended as legal advice - you are always encouraged to contact a qualified CA real estate attorney.