Indiana law introduces big changes to home buying
Contributed By: Joe Ulery, Newsservice.org
6% standard commission paid by sellers goes away
Indiana home buyers are now required to sign written agreements with real estate brokers due to a new law aimed at enhancing transparency and consumer protection.
The requirement mandates a Buyer’s Exclusive Agency agreement, potentially shifting commission payments from sellers to buyers.
The change is among 172 new laws approved this year by the Indiana General Assembly which kicked in this month. The change stems from a major settlement between home sellers and the National Association of Realtors.
For decades, the NAR has required home sale listing brokers to provide an offer of compensation to a buyer’s agent up front. The standard was 6% paid by the seller; split between a seller’s broker and a buyer’s agent.
The 6% commission goes away. Sellers will no longer have to make a compensation proposal to their agents or prospective buyers’ agents.
Maggie McShane, senior vice president of government affairs for the Indiana Association of Realtors, said professional representation is crucial for homebuyers navigating a complex and challenging market.
"Many states already require this," McShane pointed out. "We don't run into opposition from consumers in those states. The change in practice might take some consumers by surprise but they're being represented contractually as well."
Now, buyers might need to pay their agent's commission if the seller opts out. It is important to note buyers can still visit open houses without an agent.
McShane noted the new state law clarifies the relationship between buyers and real estate brokers, detailing terms and compensation.
“If down the road there is a separation between those two sides,” McShane said, "consumers have a written agreement and the agent has a written agreement with their client on how that should proceed."
Experts reminded Hoosiers the impact of the change will unfold as the market adapts, and to remember everything in real estate is negotiable.
Story Posted:07/12/2024
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