Let’s Talk Commissions + The Recent Changes to the Real Estate Industry Nationwide
You may have heard about some recent changes in the real estate industry that were implemented on August 17, 2024. The biggest impact will be seen in the commission structure, where sellers traditionally, though not always, paid both their own agent's and the buyer's agent's commissions. This change is expected to bring more flexibility to real estate transactions, reshaping the way real estate services are paid.
Buyers + Seller Commission Changes and What They Mean
Commissions have always been negotiable and will continue to be negotiable moving forward, however, this does mean a shift from the traditional process. Now, at the start of the process, buyers will negotiate and determine the commissions for their buying agent and sellers will negotiate and determine the commissions for their selling agent.
However, sellers will still have the option to cover the buyer's agent's commission, though this cannot be disclosed in the multiple listing service (MLS). Instead, by offering “concessions,” which could be used to cover the buyer's agent commission or part of it. This would allow the sellers to gain a competitive advantage, particularly when attracting first-time homebuyers, who may find commission costs a financial challenge. This shift adds more transparency + flexibility to negotiations and may influence buyer and seller strategies in the Bakersfield real estate market + national real estate market.
What to Expect When You Buy or Sell A Home
The biggest change to be expected is that if you are looking to buy a home, you’ll now need to sign a contract with your agent before touring any homes. As of the date of this article, the length of time required for these contracts are flexible and can vary.
However, this contract will not be needed to tour open houses both nationwide and locally here in Kern County. As mentioned earlier, sellers may still offer to cover the costs of the buyer's agent as long as it is not listed in the MLS, which could be especially helpful for sellers targeting first-time homebuyers.
Here’s The Breakdown of the New Real Estate Rules:
Buyer’s agent pays their agent.
Seller’s agent pays their agent.
Buyers and sellers are now more transparent about commission rates.
Agents must disclose commission structures to both parties upfront.
Buyers can negotiate their agent’s commission rate directly.
Sellers can choose to offer to pay the buyer’s agent with concessions.
Listen to my break down on Instagram and give us a follow.
We’re Here to Help You
John and I believe that there is a lot of good in these changes as they offer transparency and flexibility to home buyers + sellers. If you have any questions or concerns, shoot us an email back and we’d be happy to discuss.
If you or anyone you know is thinking about buying or selling real estate in the Bakersfield area, feel free to contact us today! We will make your home buying or selling journey as smooth as possible.