Big changes are happening in the real estate industry starting today, and they are set to have a major impact on how buyers and real estate agents interact. After months of anticipation, the new rules are finally here.

Effective August 17th
If you're in the market to buy a residential property, there's a new requirement you need to be aware of. As of this Saturday, all buyers must sign a "Buyer Representation Agreement" before they can enter a property.

Why You Need to Sign the Agreement
From August 17th onwards, no realtor will be able to unlock a door for you without you first signing the agreement. This is a non-negotiable requirement and is part of a legally binding settlement for all realtors.

Understanding the Buyer Representation Agreement
This agreement is a contract between you as the buyer and your realtor. It outlines the details of your relationship, roles and responsibilities, and your realtor's compensation. Importantly, the compensation/commission stated is the maximum amount your broker/agent can receive from the transaction.

Who Pays the Commission?
While the agreement states that the buyer is responsible for commissions, there are situations where others, including the seller or the listing broker, may cover this cost. If you have questions about your specific scenario, it's important to reach out to your agent for clarification.

Changes in Commission Structure

Historically, sellers paid the listing broker a commission, which was then shared with the buyer's broker. However, this led to a misunderstanding that "the seller pays the buyer's agent," which isn't entirely accurate. This misconception resulted in a class-action lawsuit, driving these changes. With the new NAR settlement, agents/brokers cannot advertise any compensation via the MLS, meaning buyer's agents aren't guaranteed compensation like before.

What If I Don't Like My Agent?
The agreement will outline the termination process, so it's crucial to interview and hire your buyer representation carefully.

Key Points to Consider
The length of the agreement is determined by you and your agent—it can be as short or as long as you both agree. Keep in mind that specifics can vary from state to state, so be sure to clarify the terms before signing.

The Importance of Choosing the Right Realtor
Choosing a professional realtor is more critical than ever to successfully close on your next property purchase. With August 17th upon us, a lot of changes are happening behind the scenes. The new rule with the Buyer Representation Agreement is just one aspect of the NAR settlement, which is rapidly changing the real estate industry nationwide. Be sure to talk to your agent about their knowledge of the new rules and process.