T
he recent rule change in real estate has significantly altered how agents are compensated. As of August 17th, homebuyers must now negotiate their agent's fees before starting their home search, a departure from the long-standing practice where both buyer's and seller's agents were compensated from the sale proceeds, typically splitting 5% to 6% of the home's price.

    With this new policy, buyers' agents can be compensated in various ways, including a percentage of the home's price or a fixed fee. Additionally, they can still be compensated by the seller if offered. This gives buyers more flexibility in determining their agent's fees, although it may lead to confusion due to increased back-and-forth between the buyer and agent, as well as between the buyer's and seller's agents.

    However, this change in policy also provides buyers with a competitive advantage. By removing the seller's obligation to pay the agent's commission, buyers can make their offers more attractive than others. This new policy has created a new bargaining chip for buyers in their negotiations.

    Although sellers are no longer obligated to cover buyer's agent fees as they previously were, many still choose to do so to make their listings more appealing. According to a recent Redfin report, in slow markets with less demand, like Austin, most sellers are still willing to pay buyer's agent fees to attract buyers, and agent fees remain largely unchanged.

    In competitive markets like San Francisco and Boston, where there's low inventory and high demand, buyers who have already arranged to pay their agents can use this as a bargaining chip in their negotiations. This is especially beneficial in markets where sellers hold most of the power.

    Covering buyer's agent fees can give buyers an edge in markets where sellers have the upper hand. This is similar to other concessions such as offering post-sale occupancy or waiving inspections. Realtor Joe Muck in Michigan believes this will favor more affluent buyers who have the proceeds from a previous home sale to afford this additional cost on top of their down payment.

    For first-time buyers who don't have these resources, this new policy may be challenging. It's important to note that this policy change may favor more affluent buyers who have the financial means to cover these additional costs.

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