The new rules for Realtors have been in effect for about a month now and so far it has been somewhat uneventful. I wrote about these rule changes a couple months ago, but I thought it would be a good time to update you.
In the past, sellers have customarily offered compensation to buyer agents for bringing the buyer. That information was always included in the listing information in the Multiple Listing Service (MLS). It was an additional way to market the property, incentivizing Realtors to bring buyers to the property. On August 17th of this year, rule changes from the National Association of REALTORS went in to effect prohibiting this information from being displayed on the MLS.
As a seller, you may still offer compensation to the buyer agent, but your listing agent cannot include it in the MLS information. It can be communicated in other ways, such as the brokerage website, on flyers, on a yard sign, or verbally. Any compensation paid to an agent is fully negotiable and not set by law. This has always been the case.
So far in Central Iowa, it has been business as usual with some new forms and practices. As a buyer, you will be required to enter into a buyer agreement with an agent before they can show any property to you. The buyer agreement will state a specific amount or rate of compensation that the agent will receive for their services, what type of property they are assisting you with finding, in what geographic area, and during what time period the agreement will be in effect. The buyer will agree to compensate the agent, but the agent will work to get that amount from the seller.
In Iowa, it had been illegal to have any mention of agent compensation in the purchase agreement (offer), so Iowa code was changed to allow the compensation to be included in offers. I have not heard of any sellers refusing to pay the buyers’ agent compensation, but all I can attest to is my own experience. I can say that based on the terms of an offer from a buyer, if it is a weak or low offer, a seller could very well accept it on the condition that the buyer pay their agent out of their own pocket.
While this has been a major transition for residential Realtors in Central Iowa, this is not a new concept and it is how commercial real estate agents here have been doing business all along. This is also how residential real estate has been done in some localities throughout the United Sates. Please reach out to me if you have any questions or concerns about these changes and I will be happy to discuss them with you.
Norwalk IA Real Estate –
Jon Niemeyer, Broker/Owner/REALTOR® at EXIT Realty North Star. I list and sell real estate in Central Iowa including Norwalk, Des Moines, West Des Moines, Cumming, Indianola, Carlisle, Waukee, Urbandale, Grimes, Clive, Johnston, Ankeny, Altoona, and Pleasant Hill in the Counties of Warren, Polk, Dallas, and Madison. Call
Jon Niemeyer at
515-490-4675.