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New rules that changed the traditional commission structure for real estate transactions are having an impact on the Baton Rouge-area market.
The changes are the result of a $418 million court settlement with the National Association of Realtors.
According to a Redfin report, the new rules began affecting deals once the settlement was announced. The average commission per agent was 2.55% in July, down from 2.62% in January.
One of the biggest changes is that sellers are no longer required to pay commissions for both sides. Now, sellers must decide whether to offer compensation to buyer agents in addition to their own. Buyers must decide what payment type (such as a flat fee or percent commission) to offer their agent and what specific services they want.
When the settlement was announced in March, some local agents believed the new rules would bring transparency.
A month in, one Realtor says it has been an adjustment for everyone and has presented some challenges, particularly in the beginning.
“We had to go back to each of the parties that we had houses listed for and give them the option of how they wanted to handle the commission,” says Quita Cutrer with Burns & Co. “I think the thing to get used to is when you show a house, you’ve got to present a buyer’s agency agreement with what the compensation on that agreement will be to you. That part was a little cumbersome because you have clients you have worked with for 20 years who must sign a document to see a house with you now.”
Cutrer adds that after she notified all of her clients who had houses listed, most chose to pay the commission, which is included in the home price. On pending sales, Realtors had to explain to sellers that they had the option to pay or not pay the commission to the buyer’s agents.
Jerry Del Rio says the new rules have created more work for everyone.
“All the agents are doing is calling and asking, ‘Is your seller going to pay the buyer agents?’ And I either say yes, or no,” But I can tell you, if they don’t pay them, I’m not taking the listing. It is just making a lot of work on everybody, and it’s not really changing anything. The good thing that came out of it is that people will be aware of how much Realtors really do.”
