Finance
What homebuyers and sellers need to know as seismic changes take hold
Big changes take effect this month that will mean seismic shifts in how most Americans buy or sell a home and could ultimately drive down residential real estate prices.
Starting on Aug. 17, agents who list homes for sellers on widely used realtor databases won’t be able to offer any payments to buyers’ agents.
That means the power to negotiate realtor commissions will shift away from agents in favor of buyers and sellers.
It also means sellers will no longer be on the hook to fund commissions for all realtors involved in the transaction — a fee that usually amounts to 5% to 6% of the home’s sales price. The seller’s agent commonly shared roughly half of that commission with the buyer’s agent.
Instead, buyers will be entitled to separately negotiate their own agent’s pay and get a signed contract formalizing the terms — all before touring any properties for sale.
“Under the old system, if you were a buyer and you had an agent, you didn’t get any say in what your agent got paid, unless your agent agreed to credit some of that to your purchase price,” said Venable LLP partner Jill Rowe, who represents real estate brokers and owners.
The new terms are far-reaching because they apply to properties listed on Multiple Listing Services (MLSs), databases controlled by the National Association of Realtors that host more than 90% of all US home sales.
These changes are designed to eliminate conflicts of interest in the real estate industry and make the process friendlier for consumers.
They could drive down real estate commissions and home prices, some said, while transitioning the business of real estate services to more of an à la carte industry.
The new rules came about as a result of a class-action lawsuit from home sellers who argued the old fee-splitting structure was unfair.
The core of their argument was that the old structure artificially fixed commission rates and influenced agents to steer clients to homes that paid higher commissions. That, in turn, inflated home prices.
The new rules were agreed to as part of a $418 million settlement with the National Association of Realtors and several large real estate firms last March, ending the first in a string of similar cases to go to trial.
Here is a closer look at what buyers and sellers now need to know:
‘What kind of commission am I paying?’
It will require some homework and patience to understand your rights and obligations under the new system and benefit from the new arrangement.
The “big change,” according to Rowe, is that agents who list homes for sellers on MLS databases won’t be able to offer any payments to buyer’s agents — as was the practice for decades.
The other significant change is that agents representing buyers will no longer be allowed to take a prospective client to tour any properties without first obtaining written consent about the fees and commissions that the client will have to pay.
All of these details can be negotiated by the buyer. The contract must explain if the agent’s compensation will be calculated as a flat fee, as a percentage of the home’s purchase price, as an hourly rate, or otherwise.
And under no circumstances can that agent’s commission be open-ended or dictated by a seller’s agent.
Plus, agents must disclose that their commissions are fully negotiable and not set by law.
“If I were a buyer or seller of a residential property right now, what I would say to my broker is: What kind of commission am I paying?” Rowe said. “What am I getting for that? And what would I get if I had a 1% lower commission, or a 2% lower commission?”
Jennifer Stevenson, a New York State Realtor and NAR regional vice president, said in the past agents could also use listings to offer compensation to other seller’s agents and to cooperating brokers.
“Now we’ll no longer be able to do that,” Stevenson said.
She noted that buyers and sellers were always permitted to negotiate commissions with agents and that under the new rules listing agents will still be allowed to negotiate commission splits, but only outside of the MLS.
A ‘different value proposition’
The ultimate effect on the residential real estate industry is not yet known, although some certainly expect commissions, and even home prices, to fall.
At minimum, it’s expected to place more power in the hands of clients, especially those already using residential real estate platforms like Zillow (Z), Redfin (RDFN), Realtor.com, and Trulia, to find homes and home details posted on MLS databases.
These platforms had already been disrupting the residential real estate industry by allowing sellers and buyers to efficiently search for information that only relators using MLSs once provided.
“You can just go online, and you can see everything that is available … what its price is, all of the different terms, look at the neighborhood, and see pictures of what it looks like,” Rowe said.
That technology has tremendously reduced the amount of time that agents, and particularly buyer’s agents, spend on behalf of their clients.
“Quite often, the buyers are finding something online and saying, ‘I want to take a look at that,’ and either going by themselves to the open house, or having their agents call the seller’s agent and arrange a look,” Rowe said.
“So it’s just a different value proposition.”
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
Click here for real estate and housing market news, reports, and analysis to inform your investing decisions
The seven-week military conflict in the Middle East will redefine Hong Kong’s role as a global financial centre, positioning the city as a safe harbour for capital and investments.
Anecdotal evidence suggested that more banks had turned to Hong Kong to protect their businesses and committed themselves to expanding their presence in the city. At the same time, inquiries about adding allocations of mainland Chinese assets among global investors had recently increased, potentially enlarging the customer base for the city’s asset-management industry and family offices and driving demand for offshore yuan-linked financial products.
For years, Hong Kong’s status as a financial centre in the Asia-Pacific region has been challenged by Dubai, which has risen to prominence as a gateway linking Asia and Europe in capital flows, transport and logistics. With the war destabilising the Middle East – at one point forcing the closure of the Dubai International Airport and sending stocks in the Gulf region plunging – Hong Kong has re-emerged due to its geographical location, a pegged exchange rate, free capital flows and support from China’s economic strength.
“In that context, China and Hong Kong are attracting renewed attention,” said Gary Dugan, CEO of The Global CIO Office in Dubai, which advises family offices and ultra-high-net-worth individuals globally. “There is growing interest among some clients in increasing exposure to China and Hong Kong. It is less a simple flight to safety and more a reassessment of where investors see relative value, policy consistency and long-term strategic opportunity.”
Dubai now relies on trade, tourism and finance as the pillars of its economy, reflecting the success of its four-decade diversification away from oil for sustained growth. The United Arab Emirates city is home to Jebel Ali Free Zone, the biggest free-trade zone in the Middle East, and the second-largest stock market in the region, with combined market values of US$1.01 trillion. The city, also a global hub for gold trading, has a population of 4 million, about 80 per cent of which are foreign expatriates. Dubai’s economy grew by 4.7 per cent in the January-to-September period last year.
Before seeking a new referendum MPS needs to rebuild trust in the community through completing state audits, putting in place controls to prevent overspending and routine reports to the public.
For MPS Superintendent Brenda Cassellius, who just wrapped up her first year leading Milwaukee’s public school system, her tenure has been punctuated by some very big numbers.
The first is $252 million. That is the amount of new spending voters narrowly approved in an April 2024 referendum to support operations in Wisconsin’s largest school district. Just months later, MPS was rocked by revelations the district was months behind in filing key financial reports to the state, which led to former Superintendent Keith Posley’s resignation.
The second is $1 billion. MPS faces a deferred maintenance backlog exceeding $1 billion. The district’s enrollment has declined 30% over the last 30 years, leaving many schools at less than 50% full. That, in part, is driving a plan to close some schools and to improve others to help lower costs.
The final is $46 million, the deficit MPS was running for the 2024-25 school year, an unexpected shortfall which has led to hundreds of staff layoffs.
Getting the district’s accounting, budgeting and financial reporting back on track has dominated Cassellius’s first year at MPS. In an April 15 interview with the Journal Sentinel’s editorial board, she talked in detail about the challenges putting that into order and progress she sees in restoring transparency into its operations.
State funding and aging buildings create budget nightmares
Cassellius says state needs to keep up its share of school funding
In an interview with the Journal Sentinel editorial board, MPS leader Brenda Cassellius says budgets and buildings are her two top worries.
Cassellius said the on-going budget crisis is her top concern. She said the state’s failure to live up to its share of funding is exacerbating MPS’ budget woes. A group of school districts, teachers and parents filed suit against the state Legislature and its Joint Finance Committee claiming the current state funding system is unconstitutional and prevents schools from meeting students’ educational needs.
Funding for special education is especially critical. About 20% of MPS students have disabilities, almost twice the share of the city’s charter schools, and the average of 14% across Wisconsin.
“What’s keeping me up now, you know, is really just the budget crisis we’re in, with not only this year but multiple years going out without additional state aid, we’ve been not getting funding for what our needs are for our students, and particularly our students with special needs,” she said.
Although the state budget increased special education funding to a 42% reimbursement rate, the actual rate has been about 35%. Another component to the budget headache is the age of MPS buildings. The average age is 85 years-old compared to 45 across the nation.
“We have just kicked this can down the curb or kicked it down the street or whatever you call it for too long. And it’s time that we really take on a serious conversation about the conditions of the learning environments in which we send our children,” she said. “Particularly in Milwaukee Public Schools, we serve the most vulnerable children. Children who have language barriers, children who have disabilities, children in high-concentrated poverty.”
What needs to happen before MPS seeks another referendum
Voters need to be comfortable MPS has made tough budget decisions
In an interview with Journal Sentinel editorial board, Brenda Cassellius said voters will need to see budget improvements before seeking more spending
Cassellius said MPS will definitely need to go back to voters for a new referendum in the future. In addition to the 2024 measure, voters approved an $87 million plan in 2020.
Before doing that, she said the district first needs to rebuild trust in the community through completing required state audits, putting into place controls to prevent overspending and routine reports to the school board and public about finances.
“I don’t think that the voters are going to want us to bring something forward until they feel comfortable that we have done the cleanup that is necessary,” she said. “And we’ve built the trust that we have the sufficient controls in place.”
In the interim, she’s hoping the state will meet its constitutional responsibility to adequately fund public schools.
“What the public expects is you know where the money is, you’re spending it as close as you can to children, you’re getting good on the promise around art, music, and PE, and the things the public said they wanted to fund,” Cassellius said. “And they want their kids to have so that they have a quality education and an excellent education in Milwaukee Public Schools, and that they had the right amount of staff that they actually need. In the school to be safe and to run a good operation.”
Rebuilding finance staff in wake of $46 million in overspending
MPS is rebuilding school finance staff in wake of reporting lapses
In an interview with the Journal Sentinel editorial board April 15, MPS superintendent discusses accountability for district’s financial problems.
The $46 million budget shortfall from the 2024-25 school year started coming into view last fall and was confirmed in mid-January. Cassellius noted that in addition to hiring a new superintendent, MPS also parted ways with its comptroller and CFO.
“We are really rebuilding the personnel and staff of the finance department. That is what’s critical, is having the right people in the right seats doing the work,” she said. “Also critical is making sure that you have the right controls in place. The audit findings found that we did not have proper controls in place and now we have those proper controls in place and when we find things we put new SOPs in place and that is what any business does.”
Identifying that shortfall, though painful, was the result of better accounting.
“Being three years behind in auditing means that you don’t have full sight on your actual revenues and expenditures. And so we have now full sight of our revenues and our expenditures and that’s why we were able to see this new deficit of $46 million,” she said. “And we still continue to work with DPI on those processes to make sure that every month we’re doing monthly to actuals and doing those accounting, reporting that to the board. In a way that is consumable to the public that they can understand.”
Jim Fitzhenry is the Ideas Lab Editor/Director of Community Engagement for the Milwaukee Journal Sentinel. Reach him at jfitzhen@gannett.com or 920-993-7154.
Property markets move in cycles, and with interest rates rising and other pressures like high fuel costs, some markets are clearly slowing down. Many first-home buyers who have only ever seen markets going up are conditioned to think that when purchasing, competition is always intense and decisions need to be made quickly.
In those times, buyers often feel they need to act fast, stretch their budget and secure a property at almost any cost. But things have definitely changed.
In a softer market, the dynamic shifts. Properties take longer to sell, competition thins, and it’s the vendors who begin to feel pressure.
RELATED
For buyers who understand how to navigate that change, the balance of power quickly moves in their favour. The opportunity is not simply to buy at a lower price. It is to negotiate from a position of strength.
If that’s you right now, these are the key skills first-home buyers need to take advantage of in softer market conditions.
The most important shift in a soft market is psychological. In a rising market, buyers often feel like they are competing for limited opportunities. In a softer market, the opposite is true. There are more properties available, fewer active buyers and less urgency overall. This gives buyers options.
When buyers understand that they are not competing with multiple parties on every property, their decision-making improves. They are more willing to walk away, compare opportunities and avoid overpaying. Negotiation strength comes from not needing to transact immediately. When that pressure is removed, buyers are able to engage more strategically.
One of the most common mistakes first-home buyers make is continuing to apply strategies that only work in rising markets. Auction urgency is a clear example. In strong markets, auctions often attract multiple bidders and create competitive tension. In softer conditions, properties are more likely to pass in, shifting the process away from a public bidding environment into a private negotiation.
This is where leverage increases.
Private negotiations allow buyers to introduce conditions that protect their position. These may include finance clauses, longer settlement periods or price adjustments based on due diligence. Opportunities that are rarely available in competitive markets become standard in softer ones.
-
North Carolina48 seconds ago
NC Lottery Pick 3 Day, Pick 3 Evening results for April 19, 2026
-
North Dakota7 minutes agoWindy conditions fuel shop fire in rural Mapleton
-
Ohio13 minutes agoWanda Lou Bailey, Louisville, Ohio
-
Oklahoma19 minutes agoCord Rager’s Return, Consistent Hitting Earns Oklahoma First SEC Sweep of Missouri
-
Oregon25 minutes agoSmall Oregon town residents’ trust shaken as state sues disaster nonprofit founder
-
Pennsylvania31 minutes agoMother, 6 children die in Central Pennsylvania house explosion, state police say
-
Rhode Island37 minutes agoThe Real Housewives of Rhode Island Recap: Wrong Side of the Tracks
-
South-Carolina43 minutes agoSouth Carolina Lottery Pick 3, Pick 4 results for April 19, 2026