Starting immediately with all new listings signed, Glass House Real Estate will no longer offer a buyer agency commission, online or off. This decision comes in the wake of the recent settlement between the National Association of Realtors (NAR) and plaintiffs in a landmark antitrust lawsuit.
As part of the settlement, NAR has agreed to repeal and modify several key rules, most notably banning the advertising of a blanket offer of compensation to buyer agents in the MLS. However, offers of compensation are still allowed outside the MLS, and new loopholes enable agents and sellers to provide "buyer concessions" as part of their listing strategy. Essentially, these concessions replace the term "commission" but cannot be advertised as such on the MLS.
Additionally, all buyers will now be required to sign buyer agency agreements if they wish to work with a buyer agent. This new requirement reinforces existing buyer agency laws, mandating that these contracts must be signed before touring homes with an agent or discussing any substantive details about purchasing a home. This change aims to ensure that buyers understand the terms and conditions of their relationship with their agent from the outset.
At Glass House Real Estate, we see this as an opportunity to lead the industry and align with the spirit of the settlement. While some brokerages might continue to obscure their fees and practices, we are committed to full transparency. For instance, apparently major brokerages continue to encourage their agents to counsel sellers to offer a buyer commission that can be advertised off the MLS and on their intranet. Brokers will still coach their agents to persuade sellers that offering a buyer commission is in their best interest to attract more showings and motivated buyers and agents.
The prospect of having to pay their own buyer agent commission can be daunting and unaffordable for many buyers. Consequently, buyers and buyer agents may avoid or not show listings where a commission is not offered. While this argument is valid, it has a significant flaw.
Here’s where it gets complex: Any buyer viewing your property with an agent has a written contract that states unequivocally that the agent will be paid a certain fee, whether a percentage of the sale price or a fixed fee. As a seller’s agent, we do not know what that fee is, so offering a blanket commission might result in overpaying. For example, why offer a 2.5% commission when the buyer's agent may only require 1.5%?
At Glass House Real Estate, we believe in tailoring our approach to ensure you are not overpaying and that all transactions are transparent and fair. By eliminating the buyer agency commission from our listings, we place control directly in your hands.
However, it's important to note that buyer agents remain a vital part of the real estate transaction. We should encourage and welcome agents to facilitate these transactions. Over the past 20 years, one thing has become clear: most deals do not come together easily. While type A personalities with the bandwidth and knowledge of the process can handle this themselves, not everyone is built that way. Many buyers need or want hand-holding, guidance, and advice, and most importantly, the reassurance that a good professional relationship provides.
If a buyer wishes to pay their agent via seller concessions, we welcome them to include this in their offer for consideration. Everything is negotiable, and we will guide you through these negotiations, ensuring you are well-informed and protected.
As we move forward, our focus remains on providing exceptional service and ensuring you have all the information you need to make informed decisions. The real estate landscape is changing, and we are here to help you navigate these changes with confidence.
Stay tuned for more updates and feel free to reach out with any questions or concerns.
