Buying or selling a home? Here are the new rules you need to know
Since the middle of August, those selling and buying homes in the Lehigh Valley and beyond have had a new set of rules to consider when using a real estate agent.
A new policy negotiated by the National Association of Realtors changed the way the buyer's agent is compensated. It was part of a $418 million settlement into antitrust claims.
Home sellers traditionally offered a blanket commission to a buyer's agent when they listed their home on the market. But that is no longer allowed for brokers or agents looking to buy or sell a home on a multiple listing service affiliated with the NAR.
Gone are the informal rules where home sellers normally paid a commission of 5% or 6% that was split between their agent on the one representing the buyer.
A buyer may still negotiate an offer from the seller, but could be responsible for fees to the agent if the seller declines.
The significant changes are:
Yarrow Wilkins, broker/owner of Re/Max Crossroads in East Stroudsburg, said consumers are still confused by the changes. The NAR website has a series of videos and links to explain them, but incorrect information is making the rounds on social media.
"There's a big misconception out there," said Wilkins, who has clients in the Poconos and the Lehigh Valley. "One of the challenges that we all deal with in any industry right now is the social media part. So it seems to be blown a little bit out of proportion on the TikToks and the Instagrams and everything else."
However, the change in procedure for buyers and sellers isn't a new concept for Pennsylvania.
Wilkins said buyer's agency, an agreement where a buyer hires a real estate professional to represent them, has been a part of Pennsylvania regulations.
"We've had a buyer's agency in Pennsylvania for a long time, and so for us in this state, [the new regulations] are not as different," Wilkins said. "We as a buyer's agent have always been able to be compensated in a variety of ways.
"Now I just think it's more public, and they're making the buyers more aware and the sellers more aware that there are different options out there in how a buyer's agent can be compensated. So it's not really a difference, and I think that's probably one of the biggest misnomers out there, because it's just not quite accurate," she said.
Allyson Lysaght, director of professional development for the Greater Lehigh Valley Realtors, said the agents didn't have to do much of a pivot with the new rules.
"I think for us, it was a little bit of an 'OK, no problem. We got this,' '' Lysaght said. "We've been doing this since the late '90s. The timing is more strict that you must have it signed before you tour a home. Some people would wait until they were far further into the process, until they got that buyer agency contract signed. Now you have to have it before you even show your client the home."
The main difference after the rules went into effect has been additional forms, which "gives us the ability to have a conversation with the buyer prior to seeing a piece of property," Wilkins said.
It will also let the buyer know that the seller is not contributing to the commission. Some sellers may also elect to make a partial contribution.
Keeping an open line of communication is even more important now.
"It really has become a negotiating process and a communication process between the clients and the agents much more so than they ever have been," Lysaght said. "Usually, you just pull up the listing on the multi list and just see what the compensation was, and that was the end of it. Now there's actually discussions and negotiations, which is a good thing, going on between the clients and the agents."
Wilkins said it's an opportunity to help educate clients on the process.
"I think [the changes] are a little terrifying to some, because change can be scary for all parties involved," she said. "So I think as long as buyers are doing their homework, Realtors are doing their homework, and giving a clear understanding, it is only going to benefit the public. There's definitely people out there that are, from every perspective, a little bit unclear, and so our job is to bring as much clarity as we can."
Morning Call reporter Evan Jones can be reached at
