Effective August 17, 2024
The new rules impact all residential sales of 1-4 units across the country for all Association owned MLS's. The Santa Barbara Association of Realtors (SBAOR) owns our MLS.
For more than one hundred years the total sales commission in a residential real estate transaction was wrapped up in the Listing Agreement between the Seller and the Listing Agent. The Listing Agent shared the total sales commission with the Buyer's Agent. The total sales commission was always in the sale price and a part of the economics of the deal.
THE CHANGES
For Buyers:
Beginning August 17, viewing a property with an agent will require a signed Buyer Representation and Broker Compensation Agreement (BRBC). You will have flexibility in how you structure this agreement. Options include setting the broker representation period for as short as one day, up to three months (the maximum allowed in California), or even making it property-specific.
The terms of compensation/commission for your agent will be clearly outlined in the BRBC.
Any commission (compensation) to the buyer's agent will be addressed in the buyer's offer.
For open houses, be careful what you sign as there are several different forms, ranging from a classic sign-in sheet to potentially an exclusive buyer representation agreement.
For Sellers:
There is a new listing agreement that no longer includes a line item for offering a buyer's agent a selling commission/compensation. The listing agreement will only specify the commission agreed to for your listing agent. You may still compensate the buyer’s agent if you feel it is in your best interest. Additionally, your listing agent can no longer advertise a buyer's agent commission on your behalf in the local MLS even if you wish to offer one.
However, your listing agent can advertise in the MLS that you are willing to consider "Concessions" (which can include commission) to the Buyer's Agent.
Your listing agent will be able to advertise your offer of a selling commission through other platforms and marketing material. The Compass platform will allow a listing agent to advertise the offer of a selling commission to the buyer's agent.