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Understanding Recent Changes in Buyer and Seller Agent Commissions

In the ever-evolving world of real estate, transparency and trust are paramount. Recently, there have been significant changes in how buyer and seller agent commissions are handled, particularly in light of ongoing lawsuits involving the National Association of Realtors (NAR) in various states. As your dedicated real estate guide in Washington State, I want to reassure you and provide a clear, positive explanation of these changes and how they impact our services.

What’s Changed?

Historically, when a home was sold, the seller would determine a commission amount that would be split between the listing agent (seller’s agent) and the buyer’s agent. This system meant that buyers did not directly pay their agents; instead, the commission was covered by the proceeds from the home sale.

Now, things are a bit different:

Buyer’s Agent Commission: Buyers can choose to pay their agent out-of-pocket or negotiate with the seller to cover the buyer’s agent commission as part of the sale proceeds. This adds a new layer to the negotiation process but ensures greater transparency and choice for buyers.
Seller’s Agent Commission: Sellers now have the flexibility to determine the commission for their listing agent and decide if they want to offer any commission to buyer’s agents.

The Importance of Representation

It’s unfortunate that sellers in certain states involved in the NAR lawsuits felt inadequately informed or represented. At American Classic, we pride ourselves on ensuring our clients are fully aware and confident in their real estate decisions. It’s important to note that we are not required to be representatives of the National Association of Realtors and, as such, do not fall under their admission lawsuit. This independence allows us to focus solely on your best interests without external influences.

How We Get Paid

Our compensation comes directly from the buyers and sellers we represent, and it’s crucial to understand that we do not receive kickbacks from lenders, builders, or any other entities. Our paycheck is a reflection of the dedicated service we provide over months, sometimes years, to ensure you find the perfect home or successfully sell your property.

Breakdown of Agent Expenses

Our commission is reinvested into various essential expenses to provide you with top-notch service and ensure a successful real estate experience. Once these costs are covered, the remaining amount becomes our “paycheck” for the hours of work and dedication we put into helping you achieve your goals. Here’s a breakdown of where our commission goes:

Common Expenses for Both Buyer’s and Seller’s Agents

Taxes and Insurance: A significant portion of commission goes towards federal, state, and local taxes, as well as errors and omissions insurance to protect against potential legal claims.
Travel: Covering the costs of traveling to and from property showings, client meetings, and other related activities.
Licensing, Association Fees, and Continuing Education: Maintaining licenses, memberships, and ongoing training courses to stay updated on industry standards and regulations.
Technology and Software: Costs for CRM systems, virtual tour software, and other essential tech tools.
Overhead: Expenses for computers, printers, phones, and other office necessities.
Marketing: Effective marketing of your home, including professional photography, videography, listings, open houses, flyers, brochures, business cards, and for-sale signs.
Overhead & Client Services: Overhead costs for maintaining our office and technology.
Professional Memberships: Fees for local real estate boards and other professional organizations.

By understanding these expenses, you can see that the commission we earn is reinvested into providing top-notch service and ensuring a smooth, successful transaction for our clients. Our commitment to excellence requires substantial investment in both time and resources, reflecting our dedication to representing you effectively in the real estate market.

Moving Forward

Navigating these changes might seem daunting, but rest assured, our commitment to guiding you through every step of the process remains unwavering. We believe in clear communication, informed decisions, and a positive real estate experience.

If you have any questions or need further clarification on these recent changes, please don’t hesitate to reach out. We’re here to ensure your journey in the Pacific Northwest real estate market is smooth, transparent, and successful.

Stay informed and confident with your local real estate expert!

Maureen Briere

Hey there! I’m Maureen, a community blogger and Real Estate Broker at American Classic Homes Real Estate in the Pacific Northwest. Here to help you find your perfect home and share tips on living your best life in the PNW. Let’s come home together to the Pacific Northwest!