Lisa Mailhot | April 22, 2024
Buyers
In the ever-evolving landscape of real estate, understanding the subtleties of mortgage rules and commission payments can be crucial for both buyers and sellers. Recent guidance from Fannie Mae and Freddie Mac has reaffirmed that sellers can continue to pay buyer's agents' commissions without it counting as a concession. This article delves into these clarifications and what they truly mean for the real estate market.
During a recent announcement, representatives from Fannie Mae and Freddie Mac clarified important aspects regarding the payment of buyer’s agent commissions. This guidance comes amidst widespread speculation and misconceptions following a proposed settlement that could alter the longstanding practices of how agents are compensated.
The key takeaway from the recent bulletins is that payments made by sellers to buyer’s agents will not be considered seller concessions. This means these payments do not count towards the cap on "interested party contributions" (IPCs), which are typically limited to between 2% and 9% of the property’s value depending on various factors. Importantly, this preserves the traditional method of compensating buyer's agents without additional financial implications for the seller or buyer under current guidelines.
This clarification ensures that the existing system of commission payments remains intact, allowing sellers to continue incentivizing buyers' agents through traditional channels. It provides stability and predictability in how commissions are handled, ensuring that there are no sudden shifts in financial responsibilities when closing deals.
While the clarifications confirm the status quo, there is ongoing discussion about potentially "decoupling" commissions. This would mean that buyers might negotiate and directly pay their agent's fees, shifting away from the seller-paid commission model. This proposed change is part of broader industry reflections on enhancing transparency and fairness in real estate transactions. Although these discussions signal possible future changes, the current practices as clarified by Fannie Mae and Freddie Mac remain unchanged, and it is this current guidance that remains our focus today.
As the real estate industry continues to adapt and evolve, understanding the nuances of these regulatory clarifications is more important than ever. For those considering a move or investment in real estate, staying informed about these changes is crucial. If you're looking to navigate the complexities of buying or selling a home with ease, let's connect and make your real estate journey a success.
Stay up to date on the latest real estate trends.
Lisa Mailhot | May 3, 2024
Discover the untapped potential of using auctions to rejuvenate your real estate listings. Learn how to leverage auctions for faster sales and market value without a p… Read more
Lisa Mailhot | May 2, 2024
As Californians invest in wildfire mitigation, homeowners face an insurance crisis. Lawmakers aim to bridge the gap by recognizing mitigation in underwriting and rate-… Read more
Lisa Mailhot | May 1, 2024
Discover how to truly understand and convey your value as a real estate agent. Learn about the importance of self-worth, fee-setting, and mastering commission conversa… Read more
Lisa Mailhot | April 30, 2024
Craving an unforgettable luxury experience? Michelin, the renowned restaurant guide, unveils its prestigious "keys" for exceptional US hotels. Discover the 11 extraord… Read more
Lisa Mailhot | April 29, 2024
Explore the current state of the real estate market with insights into the February 2024 pending home sales data. Learn about the challenges and opportunities in home … Read more
Lisa Mailhot | April 26, 2024
Discover the essential strategies for leading real estate agents with a focus on empowerment over micromanagement. Learn how setting realistic goals and providing supp… Read more
Lisa Mailhot | April 25, 2024
Explore the challenges older homeowners face when downsizing and aging in place, including the lack of suitable housing options and difficulty accessing home equity. D… Read more
Lisa Mailhot | April 24, 2024
Explore creative ways to save for a down payment on your dream home, including side hustles, strategic budgeting, and high-yield savings. Learn how couples are moderni… Read more
Lisa Mailhot | April 23, 2024
Explore the intricacies of California's "builder's remedy" law, which empowers developers to bypass local zoning restrictions in cities without state-approved housing … Read more
You’ve got questions and we can’t wait to answer them.