So much has changed in the way people buy and sell homes since the National Association of Realtors reached one settlement of commissions earlier this year. It includes an open house.
The door will still be wide open to fancy and serious buyers alike – but when entering, some estate agents will ask visitors to fill out a form indicating whether they are a buyer with or without representation. The form will also ask visitors to acknowledge that the agent hosting the open house does not represent them.
Shapes like these are part of new rules come into force on 17 August which will reform how buyer’s and seller’s agents are compensated.
For years, the seller typically paid the agents on each side of the transaction – usually 5% or 6% of the selling price, which the seller’s agent can share 50-50 with the buyer’s. Although buyers have always been able to negotiate how much their agent is paid, they often agreed to the commission set by the seller.
Now a buyer must draw up their own contract with an agent and decide for themselves how much commission to pay – something they must sign before they can visit a property with an agent.
Although a seller is still allowed to offer to cover the buyer’s agent fee, buyers should not take it for granted. If a seller does not choose to cover the entire fee, the buyer will be on the hook for the rest.
If a seller decides to offer compensation to a buyer’s agent, they won’t be able to include that figure in the official listing – although they can advertise it elsewhere.
So when it comes to attending an open house, does that mean a buyer will be turned away at the door if they refuse to sign a disclosure form?
“Each company is going to set their own policy on what to do if someone doesn’t want to sign,” said Tricia Thomas, CEO of the Bay East Association of Realtors. “There is no standard on it.”
It remains to be seen how this new policy — and the others — shake up the industry.
Thomas promised that estate agents do not play the games to get new clients – they are about making it clear who is represented and who is not.
“You can have conversations with the listing agent up to a certain point,” Thomas said. “There’s a line where some of the questions and advice you ask slips into the representation line, where a listing agent can’t answer those questions.”