Homeowners across Wisconsin and the U.S. as well as those seeking to become homeowners have likely heard about the class-action lawsuit against the National Association of Realtors (NAR) that was settled earlier this year for $418 million.
One noteworthy part of that settlement for everyone, whether they were involved in the lawsuit or not, is that commissions paid to real estate agents are now negotiable. That means the commissions, which were typically around 6% of the home’s sale price, will likely drop a couple of percentage points. That can make a big difference in the cost of a new home.
Further, sellers will no longer be expected to foot the bill for both the buying and selling agents’ commissions, as was often the case. Now, buyers will also have to agree to what commission their agent will receive before they can begin looking at homes with them.
Prospective buyers must now have a written agreement earlier than previously
As one Wisconsin realtor noted, “The biggest change is that the buyers now are required to have a written agreement with an agent before entering a property so that we are explaining to them that we are either an agent for you as a buyer or we’re in a pre-agency stage.” That requires those in the market for a new home to sign an agreement with their agent earlier than was previously necessary.
This is more likely to mean that someone who doesn’t have a prior relationship with them needs to agree to the terms of a contract before they can start looking at homes with them. One provision in this agreement is the commission they’re agreeing to pay.
Both consumers and real estate professionals are going to be adjusting to these changes for some time. It’s important to know, whether you’re buying or selling a home, what your rights are and to ensure that any agreements you’re signing are not only legally valid but fair. That’s why it’s more important than ever to consider getting legal guidance before making what is likely one of the largest transactions you’ll ever make.