Recent changes in the real estate industry aim to create more dialogue and transparency during the process of buying or selling a home. This will help you better understand the ins and outs of the transaction and lead to more conversations about the complexities of real estate negotiations.

Here’s a summary of the changes and how they affect you as a consumer:

Written buyer agreements

Under the changes, buyers are now required to sign a written agreement with the agent representing them before going to see properties. This agreement clearly establishes what services your real estate professional will provide and the cost of those services. The terms and responsibilities are spelled out to hopefully reduce confusion later on.

This national change isn’t as significant in Utah because the state has required written buyer agreements since the 1990s. The biggest difference is buyers who work with a Realtor will now be asked to sign the agreement at the beginning of the process.

As a buyer, remember these agreements are negotiable. Talk to the agent about the length of the agreement, which could be several months, just a day or for a specific property. You’ll also want to talk about compensation, which could be a flat fee, a percentage, an hourly rate or whatever you mutually agree to. Only sign an agreement when you feel comfortable with the terms.

Buyers should also note they aren’t required to sign an agreement at an open house because the agent at the open house represents the seller.

When you sign an agreement with a Realtor, you’re hiring someone to act as your advocate throughout the transaction and to represent your best interests. They will help you negotiate the best price and terms and help you avoid potential pitfalls.

Offers of compensation

As a buyer, you’ll agree to compensate your agent, but that cost could be offset by the seller or their broker. A seller might choose to pay for the buyer’s agent to boost their home’s appeal.

One option the seller may choose is to authorize their broker to compensate an agent who brings a buyer who successfully purchases the home. This helps reduce out-of-pocket costs for buyers.

One change is brokers will no longer advertise an offer of compensation through a multiple listing service — a database of home listings. If compensation is available, the broker may advertise the offer on flyers, signs, social media posts, brokerage websites, etc. Or you may reach out directly to the seller’s agent/brokerage.

For sellers, you’ll want to discuss with your agent the current market conditions and whether it makes sense to offer compensation. You’ll discuss this as well as the cost of services and other terms when you sign an agreement authorizing the brokerage to list and market your property.

Purchase contract negotiation

If the seller’s brokerage is not offering to offset the cost of the buyer’s agent, a buyer may ask the seller directly.

In this case, you would ask for agent compensation in the purchase offer you submit to the seller. Should the seller agree, the amount agreed to will offset the cost you agreed to pay your agent in your own written buyer agreement.

Though the process may sound complicated, you’re not alone. Your agent will help you navigate any new complexities and negotiations relating to the national changes. Whether you’re a buyer or a seller, your agent — who represents your best interests — will work to get you the best price and terms as well as help you avoid numerous pitfalls along the way.

To learn more about the changes and their impact on your real estate transaction, contact a Northern Wasatch Realtor. Find one at NWAOR.com.

Devi Cooper is the 2024 president of the Northern Wasatch Association of Realtors.