There has been much confusion about the recent lawsuit that was settled with the National Association of Realtors — and a lot of bad information from news sources. (Shocking, I know!) The good news is that as a realtor, I can summarize what happened (and dispel some inaccuracies) in just a few paragraphs.

First of all, Wisconsin and Minnesota agents were never sued in these lawsuits because we had buyer agency agreements. Over 30 states in the US did not, and those states make up the majority of the litigation.

Even though we did things correctly here, Wisconsin and Minnesota have updated their forms to explain how sellers and buyers pay commissions super clearly.

Spoiler alert: buyers have always paid for the new home, so ultimately, the commission has always come from the buyer. Yes, the seller agrees on how to divide the commission with the agents, but the buyer is the one bringing the money to the table at closing. It’s pretty straightforward.

Now, contrary to what agents are saying, in Wisconsin and Minnesota, you don’t have to sign a lengthy buyer agency contract for an agent to show you a home. We have pre-agency agreements in WI and showing agreements in MN that help define the relationship a person has with a real estate agent. Bare minimally, they let you in the door even if you don’t want to commit to a realtor.

So, it’s not until you want to write an offer that you need to define the relationship. In my case, 99% of buyers have chosen an agent/client relationship where I can fully represent them.

The last thing I want to note is that sellers are still going to provide a commission (from the money the buyer is bringing to the table) to the buyer’s agent in the vast majority of transactions. Sellers understand — and listing agents remind them — that the best way to get interest, offers, and the highest price is to bring more buyers to the table, and that means paying the buyer’s agent fairly for their part in the transaction.

In the ~5% of cases where a buyer’s agent isn’t fairly compensated for their work, we have options. We can a) increase the purchase price to offset the commission that the buyer’s agent will receive, b) ask the seller to pay the commission, or c) have the buyer pay some of the commission at closing out-of-pocket (though this is rare).

So, what does this lawsuit mean? Ultimately, more paperwork for realtors.

Every person interested in touring a house will need to sign some type of document first. Agents will also need to do more paperwork to establish how much the seller is willing to pay the buyer’s agent at a successful closing. It will take time — but it’s all in the name of full transparency.

As for what doesn’t change… almost everything else! That’s why it’s important to find a realtor who is going to fight for you from start to finish. They should provide you with everything you need to know, every step of the way, to complete this transaction. They should also provide you with a variety of resources, such as inspectors, lenders, plumbers, electricians, and other contractors.

The great realtors are about to rise to the top.

If you’re looking to buy a home in the St. Croix Valley, feel free to reach out. I’m happy to show you my worth as a buyer’s agent so that in the extreme case where you do need to pay me directly, you’ll be glad you did.