Big news is shaking up the real estate industry, and it’s all about buyer representation and commissions. If you’re a buyer or seller in Northern Colorado, you’ll want to know how these changes, rolling out this week, will affect you. Let’s dive into what’s happening and what it means for you.
Why Are These Changes Happening?
Earlier in 2024, the National Association of Realtors (NAR) proposed a settlement in response to the Sitzer-Burnett class-action lawsuit. This lawsuit claimed that certain practices within NAR and major brokerages led to inflated, “fixed” commission rates, which violated antitrust laws.
To address these concerns, NAR’s proposed settlement includes significant changes:
- Removal of Buyer Agent Commission Listings: The Multiple Listing Service (MLS) will no longer display any commissions offered to buyer agents by sellers.
- Mandatory Buyer Representation Agreements: Buyer agents must now have a signed agreement with their clients before showing any properties.
What Does This Mean for Sellers in Northern Colorado?
For sellers, not much has changed on the surface. Despite what you may have heard from major news outlets, Colorado has never required sellers to pay the buyer’s agent commission. However, here are the key takeaways:
- No MLS Display of Buyer Agent Commissions: If you decide to offer a commission to the agent who brings a buyer, it won’t be published on the MLS.
- Strategic Decisions: It’s crucial to discuss with your real estate agent whether offering a buyer agent commission makes sense for your listing. Every transaction is unique, and understanding the pros and cons will help you make the best decision for your situation.
What Does This Mean for Buyers in Northern Colorado?
The changes for buyers are more significant:
- Signed Agreements Required: Realtors must now have a signed agreement with their buyer clients before showing homes. These agreements can vary in length, from as short as 24 hours to as long as a year.
- Responsibility for Agent Commissions: Buyers are now more directly responsible for their agent’s commission. While this isn’t entirely new, it’s a shift from how things have traditionally been done.
Pro Tip: Make sure to have an in-depth conversation with your agent about their fees before starting your home search. There are multiple ways to structure how your agent’s commission is paid, so it’s essential to understand your options before crafting an offer on your dream home.
Final Thoughts
These changes might seem overwhelming, but with the right knowledge and guidance, you can navigate them smoothly. Whether you’re buying or selling in Northern Colorado, staying informed and working closely with your real estate agent will ensure that you make the best decisions in this new landscape.
Have questions about these changes and how they impact your real estate plans specifically? Get in touch and we can set up a time to chat!
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