DALLAS — I have a quick follow-up to a recent Right on the Money episode, in which we discussed the big changes in the way homes are bought and sold following landmark lawsuit settlements that, among other things, affect how a buyer’s agent gets paid.
Generally speaking, buyers can now expect to have to sign a commission payment agreement with their agent upfront before they see properties. And that agreement could total thousands of dollars; a fee that previously was often paid by sellers at closing. Sellers can still pay that fee to entice buyers, but more sellers may choose not to now.
Under the changes, sellers also can’t offer to pay the commission of a buyer’s agent in the Multiple Listing Service (MLS), where most homes for sale are listed. But sellers can still offer verbally, or in other forms of advertising, to pay the fee of a buyer’s agent.
So, more buyers might tell their agents they don’t even want to look at houses where the seller isn’t expressly offering (somewhere other than in the MLS) to help with commission. Justin Landon, CEO of MetroTex Association of Realtors confirms, “I think some consumers are saying this: Only show me properties where I know I'm not going to have to pay my agent out of my pocket”.
But for those who are thinking that way, Landon cautions that for a very long time, “Buyers have been shopping for homes and there have been all kinds of things they didn’t know about that home before they saw it. They didn’t know if they would like the lighting. They didn't know if the layout would make sense. And more pertinent to this conversation, they didn’t know whether the seller was going to be able to help them with closing costs. They didn’t know whether the seller was going to buy down a point on their loan.”
To put a finer point on that, many people who have shopped for homes can probably remember looking at a lot of houses where they did not have certain answers in the beginning, “And they discovered them during the negotiation and offer process. And they determined whether this was the house for them.”
In other words, Landon is telling potential buyers that it doesn’t hurt to look -- even at homes where it is not immediately apparent that the seller is willing to offer to help pay an agent’s commission. Filtering out properties where a commission offer isn’t obvious could cause you to miss the home that is "the one," and where the seller might have been willing to make a concession, but just hadn’t advertised it. If you really like a place, you can always ask whether the seller will contribute to your agent’s commission.
One more buyer beware: Instead of signing a required payment agreement upfront with an agent now, some buyers may choose to just look on their own–to represent themselves. Landon’s thought on that: “We believe many of those people, after trying it once, will immediately seek out a professional to help them next time”.
He’s saying that buying a home, which is often the biggest purchase in a person's lifetime, can be a more complex and daunting process than some might think. That is especially true when you are alone and dealing with a seller on the other side who is represented by a real estate professional with a lot of training, experience, and fiduciary responsibility to strike the best deal possible for the seller.