The New Landscape of Real Estate Representation: What Buyers Need to Know

A Major Shift in Realtor Compensation

The real estate industry is undergoing its most significant transformation in a century. Following a landmark legal victory against the National Association of REALTORS® in 2023, the traditional compensation structure for real estate professionals has been fundamentally altered, with these changes taking full effect as of August 17, 2024.

How Things Worked Before

Previously, the real estate transaction process operated through a relatively straightforward model:

1. Sellers would hire a listing broker for a percentage or fixed fee
2. Through the listing contract, the seller's broker could offer to share compensation with buyer's agents via the Multiple Listing Service (MLS)
3. This shared compensation model meant buyer representation was effectively built into the system

The New Reality for Home Buyers

Under the new rules, compensation sharing cannot be advertised through the MLS. This creates several important changes:

• Buyers are now responsible for hiring and compensating their own agent
• Written agreements between buyers and their agents are mandatory
• While many sellers may still be willing to contribute toward buyer agent compensation, this must be negotiated rather than assumed

In Oregon specifically, new legislation effective January 1, 2025 will require formal buyer representation agreements before a real estate professional can work on a buyer's behalf. In other regions, a simpler "touring agreement" might suffice, but the trend is clearly moving toward more formalized relationships.

Why Buyer Representation Remains Crucial

Despite these changes, having professional representation when purchasing property offers significant advantages:

Client-Focused Benefits

• You maintain control over who represents you, selecting the professional whose expertise and approach best matches your needs
• Transparent disclosure of legal obligations, services, and any limitations
• Negotiable compensation terms that work for your situation

Fiduciary Protection

• Your agent is legally obligated to prioritize your interests
• They provide objective counsel throughout the transaction
• Their loyalty is exclusively to you, not the seller

Professional Expertise

• Real estate transactions involve complex legal, financial, and logistical components
• An experienced agent knows how to navigate potential pitfalls
• Their knowledge of the changing industry landscape becomes even more valuable during this transition period

The Bottom Line

While the compensation structure has changed, the value of professional representation remains. In many ways, these changes create a more transparent relationship between buyers and their agents. By understanding these new rules and securing experienced representation, you can approach your home purchase with confidence, knowing you have a dedicated professional advocating specifically for your interests in what remains one of life's most significant financial transactions.

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• Buyer-Agent Relationship (1)
• Buying a Home (1)