New rules governing how homes are bought, sold will soon go into effect
HOUSTON - A massive settlement that changes the way homes are bought and sold goes into effect August 17. In the spring, the National Association of Realtors agreed to a $418 million settlement and rule changes to answer a class-action suit alleging a fee conspiracy to inflate broker commissions.
The settlement is supposed to make home buying more transparent, but adds another complication to an already-tight housing market.
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Houston real estate agent Tricia Turner says tight inventory, high prices, and inflated interest rates are already making home sales a tough-sell for many, "50% of all real estate agents have not sold a single home this year. Not one single home. So, they are already struggling."
The Houston Association of Realtors reports June sales were down more than 11%, over a year ago. Now, the new settlement rules will add work and costs to would-be buyers.
Before the agreement, when a house went on the market, the seller typically paid the cost of all of the agents involved. It was usually about 6%; 3% for each side, and that information was stipulated on the listing. Specifically, it stipulated how much the buyers agent would receive for finding someone to buy the home.
That's what's changing.
Now, if you want to buy a home, you'll have to find your own agent or broker, negotiate how much money they will earn, and sign an agreement every time you come to look at a house.
It will all mean a lot of extra work just to view a potential purchase, as brokers will have to justify what they earn for what they do. All of it is designed to give buyers and sellers flexibility over what they pay.
"If you're a buyers agent, you're going to want something rather than nothing, so you're going to have to make the deal work," says Turner. "(But) those buyers agreements can be amended. So, just because a buyers agent says, 'I want you to pay me 2%,' and the buyer agrees, those can be amended and changed."
The net-effect is that sellers will generally make a little more money on the sale of their home. Buyers, meantime, will often have to pay for a professional service that was previously rolled-into the deal. Consequently, they'll want to find someone who knows what they're doing. That's where research and recommendations will be vital.