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Redefining Real Estate Commissions: Empowering Miami Home Sellers
En Español
The National Association of Realtors has recently reached a groundbreaking settlement agreement that challenges the traditional commission structure in real estate transactions. The settlement's new commission rules received preliminary approval from a federal judge in April, with final court approval anticipated in November.
The settlement seeks to improve transparency and provide cost-saving opportunities for sellers by enabling them to pay only their own agent's commission, rather than both their agent and the buyer's agent. This revolutionary shift has the potential to alter the conventional 5%-6% commission split, resulting in substantial savings for Miami home sellers.
The new standard for Realtors dictates that commission rates will no longer be visible on the Multiple Listing Service (MLS) back office. This removes the option for buyer agents to select properties with higher commission rates to showcase, which was one aspect of the lawsuit.
Adapting to Change
In response to this shift, I adjusted my business to accommodate the upcoming changes and provide Miami home sellers two flexible options to meet the diverse needs.
Below, you will find the seller's Listing Agreement Options available.
Seller's Listing Agreement Options
1)
Option A, Seller Only Representation: The commission stands at 3% for their exclusive seller representation. This implies that if a buyer lacks buyer agent representation, the seller's agent will not be able to assist the buyer in the transaction.
2)
Option B, Seller/Buyer/Buyer Agent Representation: The commission stands at 3.75% which empowers sellers to actively extend presentation to buyers without agents or those with real estate agents representing them, all for a commission of 3.75%.
My emphasis on Option B is to position seller clients in the most advantageous scenario for a stress-free and seamless sale.
If you're contemplating selling your Miami home, don't hesitate to
contact me to discuss the details further. I'm transparent and straightforward, no hidden agendas, just clear and simple terms.
Impact on Buyers and Buyer’s Agents
This shift in commission structures will impact both buyer and buyer's agent, as they will now be required to enter into a Buyer Representation Agreement to provide a real estate services for a fee. While this may be a novel approach for real estate agents in Florida, it's not unfamiliar territory for agents in other states.
Buyers will soon be faced with the task of selecting a buyer agent and considering their associated service fees, prompting a conundrum: How should they handle their agent's commission fees? Should they delve into their savings, potentially impacting their down payment or closing costs? Alternatively, should they attempt to negotiate with the seller to cover a portion of the commission, risking the possibility of losing the home to another buyer? Will they be able to take out a personal loan that would increase buyer's fiancial liability?
Currently, financing buyer's agent commission is not feasible under the structure of the residential mortgage finance system, and no immediate legislative or regulatory solution is apparent. The National Association of Realtors is actively seeking clear confirmation on this matter.
Also, I expect that individuals who casually browse properties without a genuine intent to buy, often referred to as "looky-loos," will decrease and show less interest in engaging a buyer agent solely for viewing purposes. It's important to remember that real estate agents incur various expenses in running their own businesses, and providing services without earning income is a concern for us all.
This new reality will enable agents to allocate their time more efficiently, focusing on qualified buyers who are willing to collaborate and engage their services for a fee.
Enhancing Professionalism in Miami Real Estate Transactions
Maintaining accessibility to real estate agent representation as a seller or buyer is crucial to ensure seamless transaction experiences for all parties involved.
Real estate transactions involve navigating various complexties abd stakeholders, from escrow agents to lenders, highlighting the need for professional guidance for optimal outcomes.
Despite potential adjustments, this shift presents an opportunity to elevate professionalism and expertise in Miami real estate transactions. Requiring buyers to engage in formal representation agreements ensures that all parties benefit from dedicated and experienced real estate professionals throughout the process. This commitment underscores the value of seasoned professionals who bring insight and proficiency to intricate transactions.
About the Author: Liz Kenneally is a seasoned real estate agent in Miami with extensive experience in the city's dynamic market. She is also licensed in community association management. Liz specializes in coveted neighborhoods of Coral Gables, Dadeland, Continental Park, East Kendall, Palmetto Bay, Pinecrest, South Miami, and The Falls, Liz ensures smooth transactions for her diverse clientele. Fluent in both English and Spanish, she can be contacted at 786-423-3348 or through the EMAIL AGENT form provided alongside this blog.