Changes are coming for homebuyers purchasing houses on or after Aug. 17. Due to the settlement of an antitrust lawsuit, the rules in place will be different.
One significant change is that buyers will now have the authority to determine the payment for their real estate agent’s services, rather than having the seller’s agent cover the payment. Negotiating with the home’s seller to cover the agent’s fees will become a common practice.
This shift in the purchasing process will deviate from the traditional approach followed by previous generations who bought homes before the legal settlement with the National Association of Realtors. Here’s what you need to know about the new process:
You’ll sign an agreement before touring homes
Prior to touring a home, you will be required to sign an agreement outlining the agent’s services. This agreement can be short-term or long-term, based on your negotiations with the agent.
You’ll sign an agreement when the search gets serious
Eventually, you will hire a buyer’s agent and sign a detailed contract that specifies the agent’s responsibilities and payment terms. While this agreement has been required in some states before, it will now be mandatory almost everywhere.
You’ll negotiate the agent’s pay
The contract will clearly state the payment terms for the agent’s services, which could be a flat fee or a percentage of the home’s purchase price. Negotiating the commission percentage is recommended to ensure it aligns with your preferences.
You’ll deal with contract elements besides pay
In addition to negotiating the agent’s pay, you can discuss the duration of the contract and any additional fees apart from the commission. It’s important to clarify any unclear terms in the contract and seek legal advice if needed.
You can ask the seller to pay your agent’s commission
Buyers can request the seller to cover the agent’s commission as a seller’s concession. This negotiation can help alleviate financial stress during the homebuying process.
How negotiating a better deal can land you a home
By negotiating a lower commission with your agent, you might stand out among competing buyers and secure a favorable deal. Calculating the cost implications of the commission percentage can guide you in making informed decisions during negotiations.
The article What Home Shoppers Need to Know About the New Buyer’s Contracts originally appeared on NerdWallet.
