Commission changes for real estate agents have been one of the hottest topics in the news for spring 2024. A direct result of a settlement the National Association of Realtors (NAR) made, the new laws are set to go into effect nationwide this August. As a prospective home buyer or seller in San Diego, you might have questions about how these changes will affect your plans and whether you should try to make a move now or wait until after the new laws are on the books.
I pride myself on my local expertise, knowledge, and ability to consistently deliver maximum value for my clients. The news and social media have spread a lot of misinformation about what these commission changes entail and how consumers will be affected. In this blog, I'll summarize everything you need to know, including what you can expect to change—or stay the same—come August.
New Laws for San Diego Real Estate Agents
Most news headlines have trumpeted that the settlement means "the end of the 6% commission," but what's important to understand is that real estate commissions were never fixed. During listing contract negotiations, the commission has always been open to discussion and adjustment prior to signing. Many people assume 6% was "standard" because it was a very typical commission amount, with approximately half going to the listing agent and the other half going to the buyer's agent at closing.
How the New Laws Affect San Diego Home Sellers
Once the new law goes into effect, sellers will no longer effectively be responsible for ensuring the buyer's agent gets paid for bringing the buyer. When signing a listing agreement, instead of negotiating a commission amount that includes a provision for the percentage that will go to the buyer's agent, the seller can choose to compensate only their own agent. That said, a seller can still choose to offer compensation to the buyer's agent. A seller may decide this is a strategy they want to pursue to generate as much interest in their property as possible, but the choice rests with them.
How the New Laws Affect San Diego Home Buyers
If you've ever heard of a Buyer Broker Agreement being used in the past, this is now the document you will be signing as a prospective home buyer who wishes to engage the services of a San Diego real estate agent. This form is not new, but it has been used optionally by some agents as backup protection. Now that more sellers may choose not to offer any commission at all to the buyer's agent, this is the way a buyer's agent ensures they will get paid for their time, expertise, and professional representation. As on the listing side, the buyer can negotiate this amount before signing an agreement with their agent.
Should You Wait to Move Until August 2024?
With these new laws on the horizon, should you wait to sell or buy a home until after the dust settles? As an award-winning San Diego real estate agent with more than $300 million in career sales, I don't advise waiting unless it doesn't make sense for you to make a move right now. I am a true advocate for my clients, and that includes helping them understand all the current market factors and conditions so they can make the best possible decision for themselves. Late spring and early summer are traditionally the key times to make a move, so if 2024 is the right time for you to enter the housing market, don't wait. Take advantage of this window of opportunity now!
If you still have questions about these new real estate laws, I would love to schedule a time to discuss these changes. Please reach out at your convenience.
