How new rules taking effect will impact Utah homebuyers and sellers
Aug 16, 2024, 4:58 PM | Updated: Aug 20, 2024, 9:42 am
SALT LAKE CITY — The rules are about to change when it comes to buying and selling a home.
Starting Saturday, terms of a $418 million settlement between the National Association of Realtors and home sellers will go into effect.
Sellers will no longer be able to promise compensation for a buyer’s real estate agent on the system where homes are listed for sale. Commissions will have to be negotiated separately.
The change – which comes after the NAR was sued by home sellers, alleging the trade group kept real estate commissions artificially high – is certain to have an impact.
What will the impact be?
Dejan Eskic, housing analyst at the Kem C. Gardner Policy Institute at the University of Utah, said buyers will likely notice it most.
“It really, for lack of a better word, puts the buyer at a disadvantage,” Eskic said, “because they might have to put up a little bit of a fee upfront to go look at houses.”
Brittanie Reid, a Utah County-based realtor, agreed.
“A lot of sellers now are going to feel like they don’t need to offer a buyer’s commission,” Reid said.
In that case, Reid said, buyers in Utah will have three options: Pay for a realtor themselves, work with the seller’s agent directly, or go unrepresented.
“It definitely is putting some leverage back into the seller’s hands,” said Reid.
‘A little uncertain’
Steve Tuttle is both a buyer and seller. He has lived in Highland for eight years but wants to downsize. He recently listed his house for sale and is looking for another home in northern Utah County – even though the landscape as a buyer is a little uncertain.
“Potentially, I might have to come up with more money to get into a home,” Tuttle said.
As a seller, Tuttle is offering to pay the buyer’s agent commission. But he’s a little worried.
“I don’t want to get burned on both sides,” Tuttle said. “What if I pay for the buyer’s (commission) on my house, but then the house I buy, they won’t pay it? And then I have to pay it again.”
Tuttle added the overall housing landscape is “a little uncertain right now.”
The other change going into effect Saturday is that buyers must now sign an agreement with their realtor. But real estate professionals told KSL TV that’s already been happening in Utah – even before this lawsuit was settled.
The financial question
Some have questioned whether this settlement – and the resulting changes – will impact housing prices.
Eskic doubts it. He said commissions are not going away but will instead just be applied differently.
“I don’t foresee it really impacting prices in either direction,” he said.
As for Reid, the realtor expects the changes will have a financial impact, even if it’s not reflected in housing prices.
“I think at the end of the day, we will see a little shift where sellers will end up saving a little bit more, and then buyers are probably going to be spending a little bit more,” she said.
