This week marks the end of an era. The multiple listing service, MLS is a database for Realtors of homes for sale. We must add homes to the database when we list them for sale. The MLS is the source of homes for sale fed to real estate websites.
As of August 17th payment for buyer’s agents will no longer be listed in the MLS, yet buyer’s agents will still expect to be paid. Which ends an era of guaranteed compensation for buyer’s agents.
This new system has never been tried before or tested. It is part of a settlement for some lawsuits against the National Association of Realtors and others.
Generally, the home buyer did not have to pay his or her Realtor. The seller paid a commission to the listing broker who shared it with the buyer’s broker. That practice can continue and probably will but buyer agent compensation can not be listed in the MLS.
This change and lack of transparency is certain to have unintended consequences. We won’t know how well it will work until we see how consumers respond.
Other changes go into effect at the end of the week as well. Real estate is local and several of the new rules have been in place in Minnesota for many years.
If you are a home buyer you can expect to sign a contract with a buyer’s agent before touring any houses. In Minnesota. buyer representation contracts have been required for decades but we could show houses without a contract.
It is uncertain how the new rules will help or how they will hinder consumers as they buy and sell real estate. Fewer Realtors may be willing to work with home buyers.
I’ll revisit this topic in a month.
