Real estate agent explains big change to industry
INDIANAPOLIS (WISH) — New rules are changing the way real estate agents do business, and the shakeup is set to take effect Saturday.
Mike Jones, the managing broker and owner at Re/Max At The Crossing says the changes come down to the way buyers real estate agents are compensated, and the contracts they will be required to sign.
In the past, the seller was on the hook for the commission for both the buyer’s agent and their own.
Now, the buyer could be required to pay some of that cost.
“If the seller is not offering a compensation or offering a compensation that’s lower than what you and your buyer agent have agreed to have your buyer agent work for, then it’s possible that the buyer could be on the hook to pay that difference in commission,” Jones said.
Buyers must sign a contract with agents before seeing a home. The contract will include how much the buyer’s agent will be paid.
Jones says it is important to make sure people like their agents before signing binding agreements.
“This will then put the buyer responsible in the event that they buy the house, or buy a house, depending on what their agreement says, they could end up stuck with an agent that they didn’t want to be stuck with for a number of months.”
Jones says the change was designed to create clarity but might end up creating more confusion.
“I would understand if they made the decision and said the buyer agent information needed to be available to the public and put on all websites and that kind of stuff,” Jones said. “They actually went the exact opposite direction with it and said compensation can still be offered but it can’t be advertised anywhere.”
Jones says that the two agents had to split the fee from the seller in the past, but the listing agent could decide to take more. Now, the buyer’s agent will know how much they are getting up front.