COLUMBIA, S.C. — New rules have changed how home buyers and sellers negotiate commission fees with real estate brokers. Historically, home sellers paid the commission fees for the buyer’s and seller’s real estate agents. However, the sellers now have a choice.
Gary Pickren, a Midlands lawyer and founding member of the Blair Cato law firm, explained the change.
“Today, more likely what's going to happen is you will agree to pay your agent, the listing agent, and then when the contract is presented, or maybe right before the contract, you as the seller will decide what, if anything, you will pay the buyer's agent," Pickren said.
The new rules, introduced by the National Association of Realtors, are reshaping how real estate agents are compensated and who is responsible for paying them. This shift is forcing real estate agents like Taley Hunt to communicate these changes clearly to their clients.
“I think it's extra important to talk to consumers in a way that educates them, so our approach to how we speak to consumers has been amplified a little bit,” Hunt said.
These changes stem from a 2023 legal decision regarding real estate agent compensation. While commissions and compensation have always been negotiable, Hunt noted that many people are unaware of this.
“Commissions and compensation have always been negotiable; that's not new, but a lot of people thought it was new,” Hunt said.
From a real estate agent’s perspective, Hunt believes sellers who choose not to cover the buyer’s realtor commission fees might face challenges.
“If you're not offering this, the buyers will go find someone who is -- especially because our market is full of new construction, and most builders are offering buyer agent compensation,” Hunt said.
In addition to these changes, real estate agents are now prohibited from advertising buyer’s agent commissions on the Multiple Listing Service (MLS), which Pickren believes reduces consumer transparency.
“Today, it does not have to be advertised anywhere. It can be hidden," Pickren said. "And so, that does bring up the very strong possibility of discrimination—that a seller may decide, I agree to pay for this person's [buyer side], or I won't pay for this person's [buyer side] because of what they look like, where they come from, or who they are in a relationship with—that is horrific.”
However, Pickren sees potential solutions.
“I told agents in a seminar yesterday that it doesn't really matter because no one can advertise," he said. "There's no expectation that anyone can advertise. Everybody knows that the commissions will be set when we negotiate the contract. So, I don't see this big reason that we need to be worried about not being able to print [the commission] on the multiple listing service. You can put it on your website; you can put it on the sign in the front yard.”
Pickren does not believe these changes will significantly impact real estate agents.
“Consumers are still going to want real estate agents," Pickren said. "This change is just going to change how we do business, but it's not overall going to change the need for us in the business.”
From a realtor's point of view, while Hunt doesn’t think consumers will be heavily impacted, agents need to ensure they thoroughly explain the new rules.
“I haven't seen a lot of change on my end, but I have seen a lot of people be misinformed about what's going on,” Hunt said.
As these new rules take effect, buyers and sellers must adapt to the evolving landscape of real estate transactions. Real estate agents are expected to be key in guiding their clients through these changes.