Local real estate industry adapting to recent changes

August 29, 2024 3

Back in March, in an effort to settle multiple lawsuits, the National Association of Realtors agreed to several procedural changes to the buying and selling of property that, in theory, should benefit consumers. Included among the changes were the removal of compensation offers from Multiple Listing Services, and requiring agents working with a buyer to enter into a written buyer agreement before touring a home.

Those changes went into effect Aug. 17, and while they are expected to affect the local real estate industry, local industry experts are reporting that it’s too early to tell exactly how.

Adriane Gallagher, Sussex County Association of Realtors board president and rental manager for Berkshire Hathaway HomeServices PenFed Realty, said nobody likes change, but a little more than a week into implementation, she hasn’t heard too much grumbling about the updates.

Agents have known about the changes for months, said Gallagher. It’s a new course of business, but there have been plenty of educational opportunities, she said.

“If I had a Magic 8 Ball, I could take a guess, but I really don’t think any of us know how things are going to shake out,” said Gallagher. “Realtors will continue to do what we’re supposed to do, which is better for the consumer.”

Some agents are more bullish on what the changes will mean for the industry.

Dustin Parker, owner of The Parker Group, said it’s a seismic shift that will redefine the foundation of how homes are bought and sold in America by promoting transparency and putting consumers’ interests first. By prohibiting the disclosure of broker compensation in the MLS, these rules ensure that agents focus on finding the best homes for their clients, not the most lucrative sales for themselves, said Parker.

“The old guard of real estate, with its opaque practices, is giving way to a new paradigm of transparency,” said Parker in a press release the day the changes went into effect. “The increased transparency means buyers will have the information they need to understand and, if they choose, negotiate their agent’s compensation structure. This shift puts the power back in the hands of the consumer, allowing them to make informed decisions about who represents them and how.”

Industry experts are predicting that some agents will continue to charge commissions in the 5% to 6% range, while others will have commissions at 2% or lower.

Marco Smith, a Realtor at the Maryland and Delaware Group of Long and Foster, said ultimately, consumers will get what they pay for. For example, he said, his firm can provide staging solutions, direct access to contractors, and has relationships with insurance companies.

“We know what we provide. Unfortunately, some agents aren’t going to be able to provide those services, which is why some have already begun to leave the industry,” said Smith.

There will be more work for the buyer up front because of the changes, but in the end, it will be a benefit to them, said Smith. It will be up to the agent to articulate why they’re worth the commission being charged and to prove to the buyer that if something goes wrong in the process, that agent has the ability to pick up the slack, he said.

In the end, Gallagher said market demand and inventory are always going to determine the cost of a property. These changes give the consumer a better chance to be more educated on the costs associated with a given property, but there are certain aspects that aren’t going to change, she said.

Buying a house is likely going to be the largest investment a person is going to make, said Gallagher. Working with an agent, and doing the due diligence, is always going to be beneficial to buyers and sellers, she said.