Major Changes in Home Buying Process in South Florida
A recent lawsuit against the National Realtors Association (NARA) has led to a significant shift in the way commissions are set and split between buying and selling agents in South Florida.
Elimination of 6% Commission
The 6% commission that has been common in the industry for years is expected to disappear. The NARA has agreed to prohibit compensation offers on the MLS, allowing consumers to negotiate compensation offers off the MLS and permitting sellers to offer buyer concessions on the MLS, similar to closing costs.
Impact on Home Prices
The change is expected to have a significant impact on home prices in South Florida. Critics argue that commissions have been inflating home prices by tens of thousands of dollars. With buyers now able to negotiate commission fees, home prices may come down considerably.
Negotiating Commission Fees
Realtors are advising buyers to negotiate commission fees upfront and put the agreed-upon amount into a written contract. According to experts, the fees could end up being close to where they are now, but buyers will now have more control over the amount they pay.
Current Commission Rates
Realtors say that commission rates have already been compressing, with some listing agents taking listings and offering lower commission rates. This trend is expected to continue as buyers become more aware of their ability to negotiate commission fees.
Settlement Agreement
The NARA has agreed to a $418 million settlement, which provides closure on the issue and eliminates ambiguity on a national level. Experts believe that this settlement will help calm the markets and allow the real estate industry to move forward.
Implementation Timeline
The new rules are expected to be ironed out over the next few months, with Realtors anticipating that the changes will be in place by the middle of July.
Conclusion
The recent lawsuit against the NARA has brought about significant changes to the way commissions are set and split between buying and selling agents in South Florida. While the impact on home prices is still unclear, buyers will now have more control over the commission fees they pay. Realtors are advising buyers to negotiate fees upfront and put the agreed-upon amount into a written contract.
FAQs
Q: What does the settlement agreement mean for buyers?
A: The settlement agreement allows buyers to negotiate commission fees with their agents and puts the agreed-upon amount into a written contract.
Q: Will commission fees go down?
A: While it is possible that commission fees may come down, it is also possible that they could remain the same or even increase. The outcome will depend on the negotiations between buyers and agents.
Q: When will the new rules take effect?
A: The new rules are expected to be in place by the middle of July.
Q: What does the settlement agreement mean for Realtors?
A: The settlement agreement eliminates ambiguity on a national level and provides Realtors with a clear framework for negotiating commission fees with their clients.
Q: Can buyers still negotiate commission fees with their agents?
A: Yes, buyers will be able to negotiate commission fees with their agents, and the agreed-upon amount will be put into a written contract.
