TYLER, Texas — If you’re in the market to buy a new home, the National Association of Realtors warns that changes are likely coming to your budget.
When it comes to buying a home, there seems to be a common misconception among buyers that there’s a standard six percent buyer's commission.
David Kurtz, broker and owner at Dwell Realty in Tyler, said "there is no fixed fee, there is no fixed 6%."
"It's always been negotiable. You know, my fee might be 6% that I charge. Another person, could be a discount broker and charge a flat fee. You can sell it for sale by owner," Kurtz said.
After July, you can still talk with your agent about the commission, but you won't see the percentages on sites like Zillow.
"The MLS (multiple listing service) is now going to remove the field where you offer buyer compensation and the reason for that is this is a decoupling of the commissions," Kurtz said.
National Association of Realtors is changing how the fees work. Instead of the seller paying the whole 6%, the seller will pay for their agent and the buyer will pay for theirs.
"The problem with this, it really hurts the consumer, especially the first-time homebuyer because homes are already at record level highs. You have high interest rates, you're having trouble qualifying," Kurtz said.
Kurtz added that not only does a buyer have a down payment, but they're also paying closing costs. Now, the buyer has to come up with their 2 or 3 percent buyer’s agent commission that the buyer has negotiated, and they have to pay that out of pocket.
"Nobody is going to want to do that, obviously, unless the buyer's agent is providing a lot of value and navigating them through the transaction in which the consumer wants representation," Kurtz said.
Depending on the buyer's loan type, you might not be allowed to cover any extra costs beyond those closing costs.
"A VA buyer, a veteran cannot pay out of pocket commissions. It's not it's not allowed by the VA and FHA," Kurtz said. "So what are they supposed to do if they find their dream house and at 0% and their buyer agent's looking at them and they got to come up with something."
Kurtz said this will likely lead to closing costs being rolled into the sale price to account for the buyer agent compensation.