You may have heard the recent news about the settlement between the National Association of Realtors (NAR) and the plaintiffs earlier this year. The big issue was how real estate agents get paid, specifically the traditional commission structure.
Before the settlement, sellers typically covered both their own agent’s commission and the buyer’s agent’s commission. The seller’s broker would then split that commission with the buyer’s broker—often 50/50, but not always. Now, things are changing.
New Rules as of August 17, 2024
Starting on August 17, some important changes will take effect. The main shift is that buyers and sellers will now pay their own agents, negotiating those commissions directly. Another key change is that buyers will need to sign a formal “Buyer Broker Agreement” before they can even start viewing properties.
So, what does this mean for Maui’s real estate market? Let’s break it down.
How the New Rules Impact Maui Buyers and Sellers
- Buyers Need to Sign a Buyer Broker Agreement
As of August 17, Maui buyers will be required to sign a “Buyer Broker Agreement” before they can look at properties. This document lays out the agent’s responsibilities, how much commission they will earn, and the payment options.
In the past, it was common for sellers to cover the buyer’s agent commission, but this update brings more transparency to the process. Sellers still have the option to offer the buyer’s agent commission as an incentive, and we strongly recommend continuing this practice. Doing so ensures that buyers have professional representation throughout the process, which can be complex and risky without expert guidance.
- For Buyers, It’s Time to Plan Ahead
Maui buyers will need to be more intentional in the home-buying process. Before you start looking at homes, plan ahead, consult with a knowledgeable local agent, and have a clear strategy. While some reports have speculated that this new rule will drastically change the market, we believe it’s designed to protect both parties by ensuring clear agreements and fair compensation for agents.
- Commissions Are Still Here—Just Handled Differently
One key thing to note: commissions are not going away. This is how real estate agents are compensated for representing your interests in one of the most significant transactions of your life. What’s changing is that buyers and sellers will negotiate their own agent’s commission directly.
Sellers can still offer compensation to a buyer’s agent or provide a concession as part of the deal. Also, commission rates won’t be displayed in MLS listings anymore, but they can still be shared on agent websites. Buyers and their agents will need to communicate with listing agents to understand what compensation is being offered.
What to Expect Going Forward
These changes will affect how transactions are handled, but here on Maui, we expect the impact to be more about adjusting to the new process rather than a major market shift. At Maui Real Estate Advisors, we’ve already adapted to the new rules and are committed to transparency and protecting your interests.
Why Choose Maui Real Estate Advisors?
At Maui Real Estate Advisors, we pride ourselves on being experts in the Maui real estate market. Our top priority is always looking out for our clients’ best interests. Whether you’re buying or selling, we guide you through every step, ensuring that you have the information and support you need to make the best decisions.
In 2024, we were honored as one of Maui’s Top 3% of Real Estate Agents in production. Having achieved this status since its inception, we appreciate the recognition of our expertise. In addition, we are Maui’s Only ‘Top 100 State of Hawaii Realtor for 17 Consecutive Years‘. With 60+ years of combined experience in navigating Maui’s unique real estate landscape, we understand the complexities and challenges that can arise. Our team understands that dedication to serving our clients is primary and pledge to provide you with the highest level of service, so you can feel confident that your investment is in good hands.
As always, we’re here to help you navigate these changes with expert guidance. If you have any questions or need assistance with Maui’s real estate market, feel free to contact us. We look forward to helping you achieve your real estate goals!
With Sincere Aloha,
Note: Parts of this post were written using ChatGPT.