Upcoming Changes in Real Estate: Understanding a Buyer’s Agreement
There have been many news stories about changes in real estate compensation. While compensation has always been negotiable, new guidelines have been adopted to ensure transparency. These changes will take effect in Iowa on July 1, 2024, and nationwide on August 17, 2024.
Being compensated as a Realtor® means receiving payment for the professional services provided in helping clients buy, sell, or rent properties. Compensation reflects the Realtor’s® expertise, time, and effort in marketing the property, negotiating deals, navigating legal requirements, and ensuring a smooth transaction process.
Effective July 1st, the upcoming changes in the real estate industry will enhance transparency around these commissions, providing buyers and sellers with clearer information about the costs and services involved when buying or selling real property.
Starting July 1st, several important changes in real estate will take effect:
- When a home is listed, the sellers sign a listing agreement indicating the compensation they will pay to the listing broker. Historically, this compensation has been split between the listing and buyer’s agents. As we begin to implement the new Buyer’s Agreement form, sellers can continue to compensate in the listing agreement towards the buyer’s agent, or negotiate how much they are willing to compensate a buyer’s agent. Just as the sellers signing a listing agreement, buyers will now also sign a buyer’s agreement that outlines the real estate agent’s duties, responsibilities, and compensation.
- The buyer’s agreement must be signed before viewing any homes, representing the most significant change consumers will notice. In this document, buyers and their real estate agent will discuss how the agent will be compensated if the seller does not cover the buyer’s agent’s commission.
What This Means for Home Buyers and Sellers
For home buyers and sellers, these changes are poised to create a more equitable and transparent real estate market. Overall, the goal is to foster a marketplace where consumers have better control and understanding of the financial aspects of buying and selling homes.
As the industry adapts to these new changes in real estate, it is important for buyers and sellers to stay informed and proactive. Consulting with your knowledgeable real estate professionals who understand the new rules will be crucial in navigating this evolving landscape.
LKR has a 50 year reputation of good faith and transparency. Buyers and sellers will gain insights into the costs and services associated with real estate transactions. This transparency aims to help consumers make more informed decisions when choosing their real estate representatives. At LKR, we always have our clients best interests at the forefront, our house was built on this principle.
LKR’s Commitment to Transparency
Leading the way in this new era of transparency is LKR, a real estate brokerage that has been practicing transparency for over 50 years. LKR’s long-standing commitment to openness and honesty in real estate transactions serves as a model for the industry. With the upcoming changes, LKR continues to be a trusted resource for buyers and sellers, ensuring they receive the best possible guidance and support.
Final Thoughts
LRK’s expert Realtors® have always worked hard with your best interest in mind, consistently providing top-tier service and transparency. The ruling and subsequent settlement mark a significant shift in the real estate industry. These changes in real estate aim to benefit consumers and create a more balanced marketplace. As July 1st approaches, both industry professionals and consumers should prepare for these adjustments to ensure they can take full advantage of the new opportunities and protections now in place. Contact a LKR trusted agent to walk through these changes.
