Important Legal Changes in Real Estate Practice

VIA SBINSIDER NEWS\ANALYSIS  August 11th, 2024

The Supreme Court Of The United States (SCOTUS) handed down a decision that has completely re-arranged the relationship among home sellers, buyers and their agents. For many years the Multiple Listing Service controlled the listing\selling of homes process. That is, to purchase or sell a home and you wanted to use a Realtor, you must have agreed to certain things in order for that property to listed in the old catalogs and now the web. As part of the process, a seller had to agree to a commission that for that transaction.

The SCOTUS said that a buyer\seller must be free to negotiate thee commissions paid and whatever that is, the agent has to list the property on the web. Commissions were always negotiable but the average seller\buyer did not invest much time negotiating the fees and a de facto fixed rate prevailed. (Agents are self-employed and receive a 1099 from their brokerage. )

The biggest change for consumers will be on the buyer’s side. In order to view a listed house with a Realtor, the buy must sign an agreement that says binds the buyer to that agent. The representation contract spells out the commission to be paid the agent, and can be limited to a single property or any property the agent shows the prospective buyer.

This ruling does not include Open Houses, so buyers are free to browse those without a buyer-contract with an agent.

Lynn Slaton our real estate guru, when asked, said that Long Realty has a 3 page form that needs to be signed by a prospective buyer to show specific properties so buyers need to know to expect that change. Otherwise, she does not foresee any upheaval in the industry.