Members of the Coastal Association of Realtors are prepared to tackle recently implemented changes as licensed real estate agents will have to change the way they handle transactions.
Residences in North Ocean City are pictured in an aerial shot.
File photo
By Bethany Hooper, Associate Editor
The Coastal Association of Realtors says it is prepared for industry changes that took effect last week, as licensed real estate agents will have to change the way they handle real estate transactions.
And while there will be new rules related to broker commissions, CAR CEO Bernie Flax said business practices will not change that much.
“Maryland’s been doing most of these things all along …,” she said. “There’s nothing that’s really changed in how we are doing our business.”
Traditionally, real estate commissions – historically at 5% or 6% – are paid by the seller and split between the seller’s agent and the buyer’s agent. The compensation amount is also shared upfront on the Multiple Listing Service (MLS), an online tool for brokers to share information about available properties.
However, recent antitrust lawsuits challenged that transaction model, with plaintiffs arguing it reduced competition and incentivized buyer agents to avoid showing listings with lower compensations. And in March, the National Association of Realtors announced a $418 million settlement agreement that denied all wrongdoing but set new rules for compensation.
“NAR has long maintained—and we continue to believe—that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers,” its website reads. “They promote access to property ownership, particularly for lower- and middle-income buyers who can have a difficult-enough time saving for a down payment. With this settlement, NAR is confident it and its members can still achieve all those goals.”
As part of the settlement, compensation offers will be removed from the MLS, meaning that negotiations will be handled offline. Agents will also be required to enter into written agreements with buyers before touring a home. These written agreements must include new provisions that specify the rate of compensation a real estate agent receives and states that commissions are fully negotiable.
“Maryland Realtors support this and other changes, as they contribute to transparency in real estate transactions, which is crucial for both buyers and sellers,” Chuck Kasky, CEO of Maryland Realtors, said in a video statement this week. “In fact, Maryland law has required written buyer agreements since October 2016, reflecting our commitment to clarity and accountability in real estate services.”
Flax said this week that compensation has always been negotiable. However, officials say the new rules will give buyers and sellers more power to negotiate lower commissions.
“In real estate, there will always be two sides to each transaction,” 2024 CAR President Brigit Taylor said in March. “CAR, NAR, and Maryland Realtors stand behind the need for both the seller and the buyer to be represented by a professional who knows their market and the communities, how to prepare a home for sale, and how to prepare each party for the process of a home sale or purchase.”