New Real Estate Rules Bring Added Complexity for US Homebuyers

The journey to owning a home is already one of the most stressful financial endeavors, and it's about to get more complicated for homebuyers across the United States. Changes in real estate transaction practices, effective this weekend, mean prospective buyers must navigate new regulations that may increase both their financial burden and their need for vigilance in signing contracts.

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These changes result from a settlement reached by the National Association of Realtors (NAR) earlier this year. Traditionally, sellers covered the costs of both the listing agent and the buyer’s agent. However, going forward, buyers must shoulder the costs of their own agents, adding a significant new expense. In addition, buyers are now required to sign detailed contracts with their agents before beginning the house-hunting process, a departure from previous practices.

The intention behind these regulations is to offer greater transparency and empower homebuyers in negotiating compensation for real estate agents. But with any major shift in the industry, there are growing pains as both buyers and agents adjust to the new landscape.

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Shifting Costs and Added Complexity

Before this change, the commission for real estate agents was typically shared between the buyer's and seller's agents, usually amounting to around 5% to 6% of the sale price. However, under the new rules, sellers are no longer obligated to advertise this compensation. This leaves buyers responsible for negotiating and covering their own agent’s fees—something that many, especially first-time buyers, may struggle to afford.

"How many typical buyers have 3% of the sales price readily available to pay their agent?" asked Wayne Hassay, an attorney with LegalShield.

This added financial burden can be particularly overwhelming for younger buyers already facing high home prices, limited inventory, and rising mortgage rates. The real estate market, which has been experiencing unprecedented demand over the past few years, may see even greater pressure on buyers to come up with additional funds.

Market Competition and New Negotiation Tactics

These changes could have a ripple effect on the market, especially in competitive areas. Buyers who request sellers to contribute toward agent commissions may find themselves at a disadvantage in bidding wars, where other offers with fewer contingencies are more attractive to sellers.

In hot markets, where multiple bids on homes are common, buyers asking for commission assistance may lose out to other bidders willing to forgo that request. This may push buyers to offer even higher prices to compensate, which could inflate home prices further.

Real estate professionals worry that this could exacerbate existing affordability issues. “If buyers feel pressured to remove contingencies or cover additional costs, the market could become even more challenging for those on tight budgets,” said real estate agent Melissa Savenko.

Contractual Obligations Demand Greater Attention

Another significant change is the increased reliance on formal contracts between buyers and agents. Many buyers may be unaccustomed to signing exclusive representation agreements with agents, as only 41% of U.S. buyers had such contracts in the past. This figure was even lower among first-time buyers. Now, these contracts are mandatory in many cases, demanding that buyers pay close attention to the terms.

This change has already led to confusion. Some buyers find themselves unknowingly locked into exclusive agreements that may entitle agents to commissions on transactions, even if the agent didn’t assist in securing the property. In one case, a buyer assumed their relationship with an agent had ended after a failed offer, only to discover they were still obligated to pay the agent for a subsequent home purchase due to a contract they had signed months earlier.

“Buyers need to thoroughly read and understand these agreements before signing,” said real estate attorney Avi Sinai. “The stakes are high, and these contracts can lock you into obligations you may not be aware of.”

Impact on Buyer-Agent Relationships

The new requirements may also lead to a shift in how agents approach their relationships with clients. With more emphasis on formal contracts and upfront negotiations, buyers may find themselves having to assess an agent’s value more critically. Real estate agents will need to prove their worth through their knowledge, negotiation skills, and ability to guide buyers through the complicated transaction process.

“The relationship between buyers and their agents could start to resemble those between clients and their attorneys or financial advisers,” said Savenko. “Agents will have to offer clear value to justify their commissions, and buyers will likely become more selective in choosing who represents them.”

This shift may also encourage the rise of a la carte services, where agents offer specialized services—such as home showings, contract negotiations, or offer drafting—at set prices or hourly rates. This could provide more flexibility for buyers who prefer to pay for only the services they need, while also creating opportunities for agents to offer diverse packages that cater to different buyer needs.

The Future of Homebuying

While these changes bring added complexity, they also provide an opportunity for the real estate industry to evolve. By requiring formal contracts and shifting compensation negotiations to buyers, the hope is that the new system will ultimately foster greater transparency and professionalism among real estate agents.

At the same time, buyers will need to become more informed and engaged in the process. This could mean spending more time researching agents, negotiating terms, and planning for additional expenses upfront.

As the housing market adapts to these new realities, the role of the real estate agent may evolve as well. Strong agents who can demonstrate their value and provide high-quality service are likely to thrive in this new environment, while those who fail to meet the demands of buyers may find themselves phased out.

“Ultimately, this could lead to a more competitive, professional real estate market where buyers have greater control over the services they receive,” said Sinai. “It’s a step toward ensuring that buyers are better equipped to make informed decisions about what is often the largest investment of their lives.”

These changes signal a new era for homebuying, where buyers must be more prepared, informed, and financially ready than ever before. As the real estate industry shifts, so too must the strategies of prospective homeowners looking to navigate this increasingly complex landscape.

Also Read: U.S. Single-Family Home Construction Drops 14% in July: Market Impact & Trends