Buying a Home in Spokane is About to Change – Here's What You Need to Know

Buying a home in Spokane is about to undergo some significant changes, and it's likely not in the way you might have expected. Recent legal settlements within the real estate industry are reshaping how homebuyers and sellers navigate the market, and these changes will impact how you purchase or sell a home in Spokane. Let’s dive into what’s new and how it could affect your next move.

Recent Legal Settlements Shake Up the Real Estate Industry

Earlier this year, the National Association of Realtors (NAR) was involved in a massive lawsuit surrounding transparency in real estate commissions. The result? A $418 million settlement and a series of new rules designed to create a more transparent process for buyers and sellers alike.

But what do these new rules mean for you, whether you're buying or selling a home in Spokane? Let’s break it down.

What’s Changing in Real Estate Transactions?

The most immediate and impactful change is that real estate agents must now have a signed buyer representation agreement before showing any private properties, including virtual tours. This is a significant shift from the past when agents could show homes without needing any formal agreement upfront.

What Is a Buyer Representation Agreement?

This agreement outlines how much an agent will be compensated, and here’s where things get interesting. In the past, when a seller listed a home on the MLS (Multiple Listing Service), the buyer’s agent’s compensation was also listed, typically covered by the seller. However, under the new rules, this information will no longer be publicly displayed on the MLS.

How Does This Impact Buyers and Sellers?

For Buyers:

You’ll need to have a clear discussion with your agent about their fees before you start house hunting. You’ll need to know exactly what they’re charging and whether that aligns with what the seller is offering, or if you’ll need to cover the difference. Gone are the days of assuming the seller will automatically cover your agent’s commission—everything is now up for negotiation.

For Sellers:

You’ll need to be strategic in how you compensate buyer agents. While you can still offer compensation as before, it’s no longer automatically displayed on the MLS. You and your listing agent will need to decide whether to publicly offer a commission amount or remain open to negotiations based on the offers you receive from buyer agents.

Clearing Up Common Myths

With these changes, there has been some confusion. Let’s debunk a few myths floating around about these new real estate rules:

Myth #1: Buyers Will Always Pay Out of Pocket for Realtor Commissions

While it’s true that buyers may need to cover some agent fees in certain situations, it’s not the norm. Sellers can still choose to offer compensation to buyer agents, but this will now be negotiated rather than automatically displayed upfront.

Myth #2: Buyers Must Sign a Representation Agreement for Every Home Viewing

It’s easy to assume that with this new rule, you’ll need to sign an agreement for every home you view. However, while a formal agreement is required for private showings, you can still attend open houses or approach the listing agent directly without signing anything.

Myth #3: You Can’t Buy or Sell Without a Realtor

You’ve always had the option to buy or sell without an agent, and that hasn’t changed. However, with the new rules, there is a greater emphasis on transparency and clear agreements before any deals are made. While it’s possible to go it alone, most buyers and sellers benefit from having professional representation.

How These Changes Affect Spokane Buyers and Sellers

If you’re looking to buy a home in Spokane, these new rules mean you need to have upfront conversations with your agent about their fees and the services they’ll provide. The days of assuming the seller will cover everything are over, so make sure you know how these changes might affect your budget.

For sellers, it’s more important than ever to be deliberate in how you list your property and compensate buyer agents. Offering competitive compensation to buyer agents can still be a key factor in attracting offers, but you’ll need to discuss these details with your listing agent before listing your home.

The Key Takeaway: Transparency is King

These changes are designed to make the homebuying process more transparent, but they also introduce new challenges. Whether you’re buying or selling, the most important thing you can do is ensure you’re having clear, informed conversations with your real estate agent. If your agent isn’t taking the time to walk you through these new rules, you might want to seek further guidance.

Need Help Navigating Spokane’s Changing Real Estate Market?

If you're thinking about buying or selling a home in Spokane and want to understand how these changes might affect your situation, feel free to reach out. You can schedule a meeting with me, or download our relocation guide for more information on the Spokane area.