PHOENIX – Blair Ballin has been a real estate agent in the Valley for 25 years.
He says if you want to buy a home, you now have to sign a contract with an agent before you even see a listing.
“It can be for a house, it can be for a day, it can be for a week or however long,” Ballin said.
“Because we haven’t really used it (the contract form), at least not before standardization, there is more potential resistance from certain buyers saying why they should sign it.”
Commission payments must now be negotiated
The change was made in the name of transparency, but it raises a big question: who pays a broker’s commission?
“The lawsuit is actually pretty nonsense because commissions have always been negotiable, at least here in Arizona,” he said.
The NAR agreement will take effect on Saturday, August 17.
READ MORE: NAR Comparison: What Changes When Buying and Selling a Home?
The agreement affects buyers, sellers and real estate professionals. For example, selling agents who list a home for sale on a multiple listing service (MLS) will no longer be able to offer a commission to buyers’ agents through that service.
This leads to confusion about who should pay your broker’s commission.
“The buyer’s agent calls or communicates with the seller’s agent and asks, ‘Are you offering a commission or a fee?’ If the agent says yes, he finds out how much. If the agent says no, he takes a chance and hopes he can negotiate it into the deal,” Ballin said.
What impact does this regulation have on first-time home buyers?
Ballin says first-time home buyers and buyers with less cash are likely to be hit the hardest.
“And it’s sad because they shouldn’t already have to pay more out of pocket for everything else: rising insurance costs, housing costs, inflation of everything, cost of living, it’s sad,” he said.
Ballin said many of these changes will be made on a case-by-case basis and it is too early to make definitive statements about what impact this will have on the Valley’s real estate market.
One thing is certain: handing over the keys to your new home will now cost even more money.
