A New Horizon for Real Estate
You’ve probably seen headlines about how changes in the real estate market will make home-buying more affordable or transform how we buy and sell homes. Let’s be honest: there is a lot of noise and theory right now. Three key things to know: advertising of any shared compensation between brokerages is now prohibited on the MLS – this was intended to prevent collusion. Second, per the MLS and antitrust lawsuit, every agent must have a signed agreement with buyers and prospective buyers before touring homes. Third, the seller or listing agency may compensate the buy-side brokerage, as well as the buyer – three defined ways to allocate compensation. The whole idea is more transparency and understanding up front.
Ultimately, this is a good thing – consumers will be more informed and we, as agents who focus on customer needs, will be just fine. We’ll continue to make a living, build relationships, and better define the industry moving forward. This is an opportunity, as full-time career real estate professionals, to keep delivering legendary customer service and do it confidently.
The reality: Home valuations and realistic market pricing hinge on the basics of supply and demand—location, recent sales, age, and condition of the property. Agent compensation? They’re a footnote in the grand scheme of market values and have always been paid by the buyer.
When we talk about housing affordability, some argue that the traditional compensation structure has made it easier for buyers to get representation. It reduces upfront costs and broadens the pool of potential buyers since sellers often cover the commission (but for those mathematicians, the buyer, who finances the property ultimately still pays for their agent), letting buyers aim for higher-priced homes.
Remember, agent compensation has always been negotiable. They’re agreed upon between you and your agent. My recent conversations have been reassuring: all of my clients who I’ve discussed this with in have expressed encouragement that “my time and service is valuable” and want to ensure things play out positively. Our industry has always had low-cost providers, but you often get what you pay for. For buyers wanting top-notch representation, it’s crucial to select your agent and resources wisely.
In Colorado, we’re lucky to have buyer’s agency—some 36 states don’t offer the option to have a buyer’s agency, or the right to be represented. It’s safe to say Colorado’s had a more progressive stance when it comes to buyer representation. When picking an agent, remember your home or investment property is likely the biggest purchase of your life. Utilizing not only the services, but the network of a skilled Realtor is vital to navigating the complexities of real estate and putting yourself in a position to win.
There are a lot of questions and will continue to be. If you’re curious how this may affect you in your current situation, please reach out. We can discuss strategy and approach to set you up for success.
Here’s where I’ll land, and what I do know for certain: we are human beings, we crave connection, and the more opportunities we provide to connect with clients, the more knowledge we can share – the deeper the partnership we build with clients. This is paramount to meeting expectations and also delivering a first-class experience.
This is an exciting time, we’ll continue to see great agents forge ahead.
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My approach to real estate involves strategy to position you for life’s changes plus setting you up for future economic security. I do this by being a resource long before, during, and after the opportunity to work with you. That’s why I put an immense amount of effort into understanding and delivering information that will help position you to take on the market and any transaction you find yourself in. Interested in discussing more? Connect > Craig.David@WestAndMain.com