If you’ve been watching the news lately, you may have heard that there have been some changes made to the way real estate is being handled in Massachusetts, and essentially, all over the country. Lawsuits filed in the last few years have claimed that Realtors have been unfairly charging sellers a fee that also pays for the buyer’s agent in the transaction. People feel like that practice is unfair and needed to be rectified so the Department of Justice stepped in to strongly encourage Realtor associations to amend their policies.
If you have sold a house at any point before August 17, 2024, the initial conversation with your agent probably outlined that they would be charging a fee to sell your home (often referred to as a commission), and that a portion of that fee would be used to compensate a buyer’s agent for brining the buyer that would ultimately help you get your house sold. The fee may have been a percentage of the home sale.
The complaint filed stated that it was unfair to charge the seller a fee that the buyer should be responsible for. How can someone accurately represent a client (buyer side) if their fee is coming from the seller side? Why should the seller have to pay the buyer broker’s fee? Can the agent representing the buyer act in the best interest of that buyer if they are not the one paying for the services? As a seller, how confident can I be that my agent is not trying to close both sides of the deal and therefore may not be advertising or promoting my property fairly?
Those questions, and many others, prompted a change. In Massachusetts, Realtors now must have what are called exclusive buyer agreements with our buyer clients. This contract outlines the relationship between the agent and the buyer, and it states that the fee for services is agreed upon by those two parties alone, and does not take the seller’s side into account. If the buyer is paying the agent a set fee, they can feel much more confident that they are being represented as fairly as possible.
Now, that doesn’t mean that a buyer all of a sudden needs to come up with thousands of more dollars to buy a house. In today’s market, that would be crazy! Just like before the change, that fee can be presented within the confines of the offer itself. When you make an offer on a home, the fee for services, as well as the purchase price, sometimes closing costs, and other items are built in. If you are getting financing from a bank, and the appraiser deems the house is worth the offer amount, nothing is going to change in that regard.
This is a very basic interpretation of the rules changes. If you want or need more information, please don’t hesitate to reach out with questions. That’s what I’m here for.
Until next time,
Dave
