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House hunters fear Realtor settlement could make homebuying harder

Jeff Collins, The Orange County Register on

Published in Business News

Some might seek representation from a home’s listing agent. In a seller’s market, buyers might hesitate to ask an owner to pay their broker fees because it renders them less competitive than other bidders.

“From what I can figure out, it’s not going to benefit the buyer,” Hairo Alonzo, 35, of Buena Park, California, said while touring an open house in nearby Norwalk.

As for who should pay the commission for the buyer’s side of a transaction, he said, “it should stay as it was.”

What’s ahead is uncertain

Seller-paid commissions kept broker fees artificially high, plaintiffs’ lawyers argued in the lawsuits.

The lawyers, some economists and consumer advocates say commissions will fall under the settlement because buyers will negotiate directly with their agents, spawning more competition among brokers.

 

The agreement is long and complex. But two key provisions stand out:

— Sellers would be banned from posting offers to pay buyer broker fees in listing databases, or the MLS (multiple listing service). But they still can find other ways to communicate such offers, ranging from emails and social medial posts to carrier pigeons, as one observer jokingly put it.

— Buyers working with a Realtor would be required to sign contracts spelling out how much their agent will get paid before they can visit a single home.

The settlement, which still needs court approval, is expected to take effect in July.

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