5120498 - happy couple with sold sign for home pumping their fists in the air in celebration. square composition.

You may have heard about the antitrust lawsuit by home sellers against the NAR (National Association of Realtors) and several major brokerages over the way agent commissions are set. The National Association of Realtors have agreed to a $418 million settlement.
In one aspect of the complex lawsuit, sellers and/or buyers felt that sale prices were higher because there was a buyer agent commission included in the MLS. In some states, they felt that it was not disclosed and so folks were unaware of them. In California we have had the listing agent compensation and buyer agent compensation separated and disclosed in our listing agreements for quite some time. More than likely this will add to a formal contract with a buyer and their agent called a Buyer Broker Agreement; thereby formalizing their fiduciary duty to the buyer, exclusivity protection, and payment for their services, much like the listing contract with the seller and listing agent.
Buyer compensation will be separated, no longer part of the MLS listing. You are going to think this is crazy, but this is not necessarily a bad thing. Is it best for each party in a transaction to have their own representation? There is a reason attorneys will not represent both parties in a negotiation. They cannot possibly aggressively protect opposing interests. It is a conflict of interest to do so. If one wants the best advice, would you ask someone who has a conflict of interest?
As it has always been, all commissions are negotiable. Some feel the sellers will not want to pay a commission to a buyer’s agent (thinking it through, maybe/maybe not).
Commission will no longer be allowed to be advertised in the MLS
However, commissions can be advertised in social media, fliers, marketing and agent and broker websites. If listing agents and sellers are vying for the largest buyer pool, hoping for multiple offers, will they advertise their buyer agent compensation? You can bet they will.
Will it cut down the number of buyers who can purchase? Possibly. If there is no offer of compensation to their agent, buyers may not have the resources to provide down payment, closing costs and buyer agent commissions?
Will buyers move on to other properties, where sellers are offering compensation to buyer agents? Or, will they just drop out and decide not to buy? Buyers can ask the seller to pay compensation, but will they be too afraid the seller will say no? Or will they ask their agent to only show them properties where there is an offer of compensation to their buyer agent?
No one knows how it will all play out, with buyers struggling to come up with down payments and closing costs, it might be more of an issue than the litigators even realized. Sellers, it is still your decision whether and how much to offer compensation to a buyer’s agent and how it will impact the marketing of your property and whether buyers will make an offer. It will all play out, but at least we will have more formal representation for all parties of the transaction. That is a good thing to build upon.

Terrylynn Fisher, Broker Associate buystagesell.com