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New Rules from the Real Estate Board of New York: What Buyers and Agents Need to Know

Nov 06, 2023
Practice Area:  Real Estate
Contributor:   Christian F. Dalton  |  Michael L. Landsman

In a significant development for the New York real estate market, the Real Estate Board of New York (REBNY) has recently implemented changes to the rules governing buyer agent commissions. These changes aim to bring greater transparency and fairness to the home buying process, and are sure to impact both buyers and real estate agents moving forward.

Historically, buyer agent commissions have been paid by the seller, and these commissions were typically split between the listing agent and the buyer’s agent. However, this system has sometimes raised questions about potential conflicts of interest and whether it truly serves the best interests of the buyer.

The New Rules Regarding Buyer Agent Commissions

Disclosure of Commissions

One of the most significant changes is the requirement for listing agents to disclose the total commission offered to the buyer’s agent on a property listing. This new level of transparency aims to ensure that buyers have a clear understanding of the financial arrangements involved in a transaction.

No More ‘Blanket’ Commissions

Under the new rules, sellers and listing agents can no longer set a fixed commission rate that applies to all properties. Instead, commissions must be negotiated separately for each property, taking into consideration factors such as the property’s value, location, and market conditions.

Greater Flexibility for Buyers

With the elimination of blanket commissions, buyers now have more room for negotiation. This change empowers buyers to potentially secure more favorable terms and incentives, fostering a more competitive and dynamic market.

Avoiding Conflicts of Interest

By providing transparency in commission disclosures, the REBNY aims to reduce potential conflicts of interest. Buyers can be more confident that their agent is working in their best interest, rather than being swayed by higher commission rates.

What Are the Implications for Buyers?

For buyers, these changes represent a positive shift towards a more transparent and buyer-centric real estate market. With access to clearer information about commission structures, buyers can make more informed decisions and potentially negotiate better deals.

What Are the Implications for Agents?

Real estate agents will need to adapt to these new rules by becoming more adept at negotiating commission rates and providing transparent information to their clients. The changes also underscore the importance of maintaining a client-centric approach, as trust and transparency become even more critical in the buying process.

The recent changes made by the Real Estate Board of New York signal a positive step towards a more transparent and buyer-friendly real estate market. These alterations aim to empower buyers with greater knowledge and negotiating power, while also emphasizing the importance of trust and transparency in agent-client relationships. By embracing these changes, both buyers and agents stand to benefit from a more dynamic and fairer real estate landscape in New York.

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