The New Rules: How to Buy & Sell a Home Now

We’re guessing you have heard some stories about how real estate has changed in recent weeks. And it’s true, there have been some big shifts nationwide. But here in Western Washington, we began implementing some of these now mandated changes as early as 2019.

Want to dive into the finer points of the National Association of Realtors settlement? Click here to read more.

In most of our conversations locally, we’ve found that folks just want to know: how do these changes impact ME when it comes time to Buy or Sell?

If the last time you met with a real estate broker was pre-2024, some big changes have happened here in Washington State. Real estate brokers now must enter into a services agreement at the onset of their working relationship with a Buyer. Yes, every broker. And yes, before you go see a home or as soon as it is “reasonably practical.” (That’s what the RCW actually says!)

The Brokerage Services Agreement (commonly called a “buyer agency agreement”) must outline the key terms of this working relationship, including:

• How long you’re working together
• Whether the relationship is exclusive or non-exclusive
• How much the Broker will be paid for their services (most commonly paid by the Buyer or by the Seller of the property being purchased)
• The fact that all of these terms are negotiable

For Sellers in our market, most of the practice changes mandated by the NAR settlement have already been gradually introduced over the past five years.

Starting in 2019, the Northwest Multiple Listing Service (NWMLS) started requiring all offers of compensation made to the buyer’s agent to be published and readily available for buyers to see. At the same time, they stopped requiring Sellers to offer compensation to a Buyer broker.

In 2022, listing brokers in the NWMLS stopped “sharing” compensation. (This is a hot topic when you read national media on the settlement). Previously, Sellers would typically pay one commission to the listing agent and they shared that compensation with the Buyer’s broker. That same year the compensation amount being offered to the Buyer’s broker also became prominent on Page 1 of the Purchase and Sale Agreement.

The goal of all of these changes has been increased transparency. Customers now have a better understanding of who is paying what – and what services they can expect in return.

Which takes us back to the question being asked by most Sellers now:

We think the real question being asked here is “Do I have to pay compensation to a Buyer’s broker?” Clearly, the answer to that question is no, and it has been since 2019. You do not HAVE to offer compensation to a Buyer broker. But it’s important to consider how all of these new rules impact the complex reality of buying and selling homes.

Buyers now must have a signed services agreement to shop for homes with a licensed Broker. Buyer brokers will (understandably) expect to be paid for their services, which extend well beyond showing homes to include navigating multiple offers, negotiating inspections & appraisals, and protecting their clients via increasingly complex contracts. (Never mind being on-call 24/7 for a few months while helping folks through one of the most stressful moments of their life!)

The cost of purchasing a home in our area skyrocketed between 2017 and 2022, increasing monthly payments and the cash needed to close. Combined with an overall inflationary environment, Buyers are struggling to come up with those extra funds – let alone pay their Broker out of pocket. (P.S. This is especially true when talking about VA Buyers who have earned the right to purchase with a 0% down payment. Thank you for your service!)

So, long story short: a Seller who is willing to offer compensation to a Buyer broker (or negotiate that compensation as part of an offer) may widen the pool of prospective Buyers for their home. Sellers should work with their listing Broker to understand all of the options in regard to Buyer broker compensation and decide what makes sense for them.

It’s a lot to digest (believe us, we know!) but our brokers are here to help and happy to answer any questions about how these changes might impact your plans to buy or sell.