By Chip Collins
On August 17, 2024, significant changes were introduced by the National Association of Realtors (NAR), impacting how real estate transactions are conducted. These new rules are designed to enhance transparency and fairness but require buyers, sellers, and licensed real estate agents to adapt to new processes.
One of the updates affecting buyers is the requirement for a signed written agreement before a buyer can view a listed property with an agent. South Carolina has always required an upfront discussion regarding agency and compensation; however, the new rule creates a requirement for a written understanding to be established much further up in the buyer’s search process.
This change ensures that buyers are fully informed about how their agent will be compensated and what sort of representation they will receive before they start viewing properties in person (or virtually via FaceTime, etc.). It also protects agents by establishing clear terms with their buyer customer/client from the outset.
Another significant shift involves how agent compensation is handled within the Multiple Listing Service (MLS). Previously, the compensation that a seller offered to a buyer’s agent was visibly displayed and promoted within the MLS listings. This allowed all parties to see how much the buyer’s brokerage would earn from a transaction.
Under the new rules, this information will no longer be published online or provided to the MLS. This change is intended to promote more direct and transparent negotiations between agents and their clients.
Compensation discussions will now take place outside of the MLS, ensuring that buyers are fully aware of any compensation agreements and can make informed decisions. It also encourages more direct communication between buyer agents and listing agents, fostering stronger professional relationships and more dynamic negotiations.
These new practices mean you’ll need to have more strategic conversations with your listing agent. Determining what (if any) level of compensation to offer a buyer’s agent will require careful consideration and may involve more personalized negotiation strategies. These discussions and decisions will help establish the overall financial scenario of your transaction, allowing buyers and their agents to formulate their approach when it comes to considering interest and offers on your property.
While new processes and rules such as this may take a little time to settle into the “new normal,” these particular changes are going to create opportunities to enhance the overall client experience. The resulting “decoupling” of seller-side and buyer-side compensation structures is widening the array of agent-compensation options for both buyers and sellers. With the proper guidance and preparation, buyers, sellers, and agents can confidently navigate these changes, ensure successful “win-win” transactions for everyone involved.