By Eric Engelbert
The real estate industry has undergone significant changes following the National Association of Realtors (NAR) settlement, impacting how both buyers and sellers handle agent compensation. These updates aim to bring more transparency to the process and provide more control to both parties. Here’s what you need to know about how these changes will affect buying and selling homes, particularly in Orange County.
What Has Changed for Buyers
Historically, sellers often paid both the listing agent 
and the buyer’s agent commissions, though there was no legal requirement for them to do so. Buyers and sellers always had the opportunity to negotiate commissions, but this wasn’t frequently emphasized by realtors. The recent changes now make it clear that buyers may directly handle their agent’s compensation, which could mean paying the fee themselves or negotiating it as part of the home purchase agreement.
Additionally, NAR, California Association of Realtors (CAR), and the Orange County Association of Realtors (OCAR) now require a signed agreement between the buyer and their broker or real estate agent before touring a home. At Orange County Real Estate, Inc., we believe this step should not precede the establishment of trust. While we fully comply with the new laws, we think it’s more important to establish trust and build working relationships first. That’s why we use a Touring Agreement specific to each property, designed to meet legal requirements while offering flexibility. This allows us to focus on delivering results and building trust through performance.
What Has Changed for Sellers
For sellers, these updates bring more clarity and options when it comes to agent compensation. While many sellers historically covered the buyer’s agent commission as part of the sale, the recent changes emphasize that this is not mandatory. Sellers can still choose to offer compensation to the buyer’s agent to make their listing more attractive
In Orange County, it’s typical for offers to include a request for the seller to pay the buyer’s broker compensation. As a seller, be prepared to see this new document included in the offer package. I’ve been advising sellers to be open to all offers, including those with a request for compensation to the buyer’s agent. Of course, it’s important to choose the offer that makes the most sense for your personal situation. In 99% of cases, the offer that provides the highest net proceeds is the one selected.
Another notable change is that offers of compensation can no longer be listed on the MLS, a platform that real estate agents use to share property listings. A key reason for this removal is to prevent "steering," a practice where buyer agents would only show properties with higher commissions. This change ensures that buyers are shown homes that genuinely match their needs, rather than those offering higher payouts to their agent. As a seller, you’ll want to work closely with your agent to position your property competitively in the market.
How This Affects You
If you’re buying a house, it’s essential to discuss commission fees with your agent early in the process. With buyers potentially responsible for paying their agent’s fees, you’ll want to explore options such as adjusting your down payment or negotiating the commission as part of the purchase agreement. Sellers should carefully consider how offering compensation to the buyer’s agent could help make their property more appealing in a competitive market.
Partnering with a knowledgeable brokerage like Orange County Real Estate, Inc. is critical in navigating these changes. We excel at sourcing properties, negotiating deals, and guiding our clients through the complexities of the evolving real estate market. Whether you’re buying or selling, we’ll help you make informed decisions every step of the way.
