Buying or selling a home is a major life milestone and often one of the most significant financial decisions you’ll make. As of August 17th, some critical changes to how real estate commissions work might affect you if you’re buying or selling a home here in Fairfield County.
Let’s break down what these changes mean for you in a simple and friendly way. Whether you are house hunting or considering selling, staying informed is helpful! In Connecticut, the major change is how commission on a listing is advertised. Previously, if a seller offered to pay the buyer’s agent commission, that offer was visible on the Multiple Listing Service (MLS). Now, the commissions sellers are offering are not publicly available through the MLS and can only be advertised on marketing materials.
For Buyers:
A home buyer must sign a written agreement with your real estate agent before touring a home. This is not new for us in Connecticut—buyer representation agreements have existed since the early ’90s. However, these agreements are now more detailed and designed to ensure you know how your agent is compensated. Here’s what you can expect in this agreement:
- Clear Compensation Terms: As before, you will see exactly how much or what percentage your agent is being paid. No guessing games!
- Negotiable Fees: All fees have always been negotiable. This means you can have an open conversation with your agent to work out a fair deal for both sides.
- Transparency: A clear statement will state that broker fees and commissions aren’t set by law, so you and your agent can work out the terms.
Don’t worry—you don’t have to sign anything if you chat with an agent at an open house or ask general questions about their services. The written agreement only comes into play once you’re ready to start touring homes together, whether in person or virtually.
Most often, the compensation to your buyer’s agent will be paid through the transaction, often by the seller. In a listing where that isn’t the case, your agent will have strategies to help you get the deal done so you do not lose out on your dream house, such as financing it as a part of your mortgage.
For Sellers:
If you’re selling your home, your relationship with your listing agent does not change much. However, there are some important tweaks regarding sharing commission information.
Under the new rules, this offer won’t be shown on the MLS, but it doesn’t mean you can’t still offer to cover part or all of the buyer’s agent’s commission as part of negotiations. It’s handled differently now, with a little more privacy for both sides. Offering buyer’s agent compensation can help make your property more appealing to buyers in the market.
What’s Not Changing?
If you’re working with an agent, the basics remain the same. Your agent is still ethically obligated to work in your best interest. And remember: compensation is always negotiable. Whether you’re buying or selling, have open, honest discussions with your agent about how they’re being paid and what services they’ll provide. Buyer’s agents guide you through the process, ensuring you’re making informed decisions every step of the way, and help you achieve the best outcomes possible in a process that can have a LOT of variables and curveballs.
Bottom Line
These changes are designed to bring more transparency into the home-buying and selling process, especially regarding agent compensation. If you’re buying a home, this written agreement is just a way to ensure everything is laid out for you. And if you’re selling, it offers a bit more discretion in how you handle commissions.
As always, your local realtors are here to help if you have any questions. Reach out to your trusted real estate agent for advice tailored to your unique situation—because when it comes to real estate, there’s no such thing as a one-size-fits-all solution!
Happy house hunting (or selling)!
