In an attempt to get ahead of looming outside forces, broker-owned multiple listing service Northwest MLS is changing its rules to allow the public display of buyer broker commissions, starting October 1.
The rule changes will allow the NWMLS’s 30,000 agent and broker members to publish the amount of commission the seller is offering a buyer’s broker on the subscribers’ websites along with other listing details.
“Making this information readily available to consumers will allow for complete transparency with regard to buyers’ broker’s compensation and provide consumers with additional information at the outset of the transaction,”
Where a lot of confusion came in was the fee paid to the Buyer’s agent. That money was traditionally always offered as a promised split of the overall commission to the Buyer’s agent. So technically the Seller was paying for the Buyer’s agent, and that Buyer’s agent then proceeded to represent the buyer and negotiate “AGAINST” the Seller for a lower price, or on inspection items, ETC… So the Seller was paying for someone to literally work on the other side of a transaction and often against them.
And honestly many Buyers and Sellers didn’t understand how that worked.
Now the Selling Office Commission offered or (SOC) will be publicly displayed and can be negotiated.
What will most likely happen is Buyer’s agents will have what’s called a Buyer’s Agency Agreement with their clients. This agreement will guarantee them a certain commission.
NWMLS has also removed a requirement that a seller offer a buyer broker commission when listing a property for sale.
“Letting brokerage websites publish the commission that a homeowner is offering the buyer’s agent will show everyone all the incentives at work in a home sale and make it easy for agents to explain the costs of our services,” Redfin CEO Glenn Kelman said in a statement.
“And being explicit that a listing can offer buyers’ agents any commission or now even no commission will assure consumers and agents alike that Seattle’s real estate market is wide open for competition.”
This represents a sharp break from current practices among the 600 or so MLSs nationwide, some of whom have threatened to cut off brokerages who have attempted to publicly display commissions.
Fact: Real estate brokers’ commission rates are not regulated in any state and are ALWAYS 100% negotiable.
Surprisingly, many people think that real estate brokerage commission rates are “set” in their area and they have to pay a specific percentage of the sales price to the agent in order to get their services. This is absolutely not the case. In fact, you can pay whatever you and the agent have agreed upon.
Heather Morgan | Real Estate Broker