Homebuyers now have to negotiate agent fees upfront—upending how the real estate industry has worked for decades

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Homebuyers must negotiate their agent fees upfront, changing the way the that the industry has worked for decades.

— comes from a court settlement involving the National Association of Realtors. Traditionally, both buyer's and seller's agents commissions of 5% to 6% of the home price were paid by the seller using the sale proceeds. Now, buyers must negotiate and pay their agent's fees separately.

On one hand, buyers have much more flexibility in negotiating how much they pay for an agent. On the other hand, the options can be confusing for homebuyers who aren't sure what they should do. Here's an overview of what to know about the new rules.While you might be able to save money by avoiding a buyer's agent altogether, it's probably not a good idea unless you have experience buying properties.

It's not yet clear how the rule changes will affect the market for buyer's agents, but there's definitely more flexibility to negotiate. "I see slightly lower sales expenses across the board with these changes, just with more variation, given some fee-for-service models will surface and capture a segment of the market share," says Hardy.This is a tricky one. If you're a "savvy" buyer comfortable finding properties on your own, you might opt for reduced service to close an offer for a property, says Jones. This could be a smaller percentage of the purchase price, a flat fee or an hourly rate.

 

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