Big changes are imminent in the way homes are bought and sold, as the new forms for transactions in California are coming.
The forms are linked to the proposed legal settlement by the National Association of Realtors, which ends the long-standing practice of having a home seller’s agent pay a commission to the buyer’s agent. It benefited buyers who may not have saved up enough money to pay their agent.
George Lopez, a real estate agent in Indian Wells, explained buyers will now have to negotiate a separate contract to hire and pay their own agent.
“Even with these changes, a buyer can still purchase a home without having the money to pay their agent,” Lopez explained. “The general public needs to understand that the real estate commissions have been, and will always be, negotiable – and that if they don’t have money to pay their agent, they can still potentially negotiate it in their sale.”
The lawsuit contended the old way of selling homes tended to drive up costs, as buyers’ agents had more incentive to steer people to sellers willing to pay a higher commission. The changes are intended to empower homebuyers to negotiate for a better deal.
Lopez thinks most sellers will still offer to pay a real estate broker, rather than risk losing out on a big chunk of the prospective buyer pool. But it will have to be negotiated in the offer, as commissions will no longer be stated in the Multiple Listing Service. The changes also mean buyers’ agents cannot just meet prospective clients “on the fly” anymore, to go check out a home for sale.
“You have to meet me at the office; we have to have a meeting,” Lopez pointed out. “We have to have an agreement in place that said that you’re hiring me, or I can’t show you any homes.”
The new forms real estate agents use to complete transactions will take effect nationwide on Aug. 17.
