Local real estate agents face uncertain future with new negotiation rules
KINGSPORT, Tenn. (WJHL) — Local real estate agents said proposed changes to the rules that help determine agent commissions leave them facing an uncertain future.
The changes are part of a proposed settlement agreement that would resolve multiple lawsuits against the National Association of Realtors.
If the agreement is adopted, brokers selling a home would no longer be required to offer upfront compensation to a buyer’s agent. In most current transactions, both agents split a commission of around 6%; however, the changes would give home sellers the opportunity to negotiate lower commissions.
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The agreement also gives homeowners the option to advertise their home on the Multiple Listing Services (MLS) without using a broker.
Kingsport realtor BJ Walsh has bought and sold homes as an agent for almost 20 years. Now, Walsh says she’s deep in research, working to understand the new rules that will govern most real estate transactions in the country.
“I think we anticipated changes coming,” Walsh told News Channel 11. “But I think when you see what it’s going to entail, it’s sort of a scrambling mode a little bit. “
Currently, agents can advertise ‘cooperative compensation’ as part of a listing, but opponents have argued that the process forces home sellers into paying higher commission rates.
If the settlement is approved, agents will have to negotiate on each sale starting in mid-July. Walsh said that change won’t impact listing agents much, but those working with buyers will have to adapt.
“We’re going to have to go to the listing agent and see if sellers are willing to compensate,” Walsh said. “Because I work with a lot of buyers who don’t have, you know, a down payment, closing costs and commission to be paid. “
Like Walsh, agent and CEO of Griffin Home Group, Jim Griffin, worries the negotiating power gained by sellers will create costs for buyers.
“They’re going to have to compensate somebody,” Griffin told News Channel 11. “Even though they’re saying that this is going to be a benefit to [the] consumer, well, it just passes the buck on to somebody else.”
Griffin and sales partner Maria Lovelady said some agents might leave the business altogether, as the negotiation process becomes more complicated.
“If you read any type of statistics for real estate agents, is it one out of three leaves the business within the first year?” Lovelady said. “That might go up a little bit, but that also comes with learning to navigate the new system and the new way of doing business in the future.”
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