STOCKTON, Calif. — For real estate agents across the nation, the typical Saturday open houses are nowhere near normal this weekend.
Real estate changes taking effect Saturday contribute to the industry's biggest shake-up in the past century, experts say. They are coming in the form of new rules for realtors following a multi-million dollar legal settlement announced by the National Association of Realtors in March.
"We've seen some ups and downs," said Lance McHan, a 20-year veteran broker with Cornerstone Real Estate Group of Stockton. "This is the biggest change we've had in a very long time."
While the goal is to make the process more transparent, it also means more paperwork.
"The commissions are being de-coupled. Historically, the seller always paid," McHan said. "Now, the buyer is responsible for paying their buyer's agent, and the seller is responsible for paying the listing agent. The other thing as well is you're going to have to sign a representation agreement with your buyer in order to see the home."
If the new changes seem complicated, you're not alone.
"We’ve been preparing for the past year," McHan said. "We’ve had multiple meetings. We just had a meeting yesterday."
Few home shoppers in the Stockton and Lodi areas were willing to talk about the new rules at open houses on Saturday, citing confusion over them.
"Most of our buyers — 80% — are first-time home buyers. They don't have a lot of cash. They're cash-strapped," McHan said. "They're trying to get in on a shoestring budget, and so having the buyer responsible for it makes it very challenging. I have a listing right now that's been on the market for 23 days, and we've only had two showings because the seller is unwilling to pay the buyer's side commissions."
While it's yet to be seen exactly how these new rules will impact the market overall, most experts believe that it's other factors such as supply that will continue to have the biggest influence on home prices.
"It'll work itself out," McHan said. "The first 90 days are going to be very painful. People are going to realize that first-time homebuyers don't have a lot of money to buy a home. We just got to get used to the new normal. I think it's going to be more of the same."
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