Aloha OahuRE.com Client,
As you probably know through the news, the National Association of Realtors has reached a settlement where buyer’s agent commissions will now be negotiated for all offers.
As of August 12, 2024, our MLS will remove any offer to the buyer’s agents to pay a commission, and going forward, there will be no reference to a guaranteed commission as there has been in the past.
Client Care will be sending out a form to sign stating this, as the Hawaii Association of Realtors wants to make sure all sellers are aware of this.
When you receive an offer, you might receive a request for a specific commission, and you can now negotiate it just like every other term on your offer.
I know some of our sellers have already chosen to negotiate commission, but now all listings from all sellers nationwide will negotiate commission.
Please keep in mind that along with this change, buyers will not be able to see a home with a realtor without signing a representation agreement that promises to pay that realtor a certain amount. The amount can be a fixed fee or a percentage of the contract price.
The buyer’s agent is not allowed to collect anything over this fixed amount from anyone. This is important, as this will prevent Realtors from saying they will show a home for $10 or some other low amount because if they put that on the contract, that is all they can collect, no matter what.
This means if you decide not to pay the buyer’s agent a commission, the buyer must still pay their agent the amount they agreed to.
This could be an issue as a buyer might be more likely to cancel escrow if they promised to pay 2% to their agent and the seller is not covering it.
I also expect a lot more buyers to want to see properties without an agent, which offers an opportunity for sellers to sell to a buyer without using an agent, and thereby not have to pay any buyer’s agent commission.
The reason for this is buyers are used to working with a buyer’s agent at no charge, but now, before they can work with a Realtor, they have to sign an agreement, and that agreement might stipulate they will pay the agent 2% or more at closing.
Putting myself in a buyer’s shoes, I would not want to sign an agreement like that right off the bat; I would prefer to see the house at an Open House or set an appointment directly to see it without any promises having to be made to pay a Realtor.
This could work to the buyer’s advantage too, because if a buyer comes to a seller with no Realtor, thereby no buyer’s agent commission has to be paid, and this is attractive for the seller, so it increases the opportunity for the buyer to have their offer accepted.
No one knows precisely how all this will play out. It is just speculation at this point.
My recommendation is not to state verbally or via email how much commission you might be willing to pay. I think the best course of action is to get an offer, review the offer price, the commission requested, and all other details, then decide what to do and if you want to counter the offer price, the commission, or both.
Please let us know if you have any questions.
Thanks
