REBNY changes buyer’s agent commission rules

The Real Estate Board of New York is implementing new buyer’s agent commission rules as the industry faces backlash nationwide.

The provision will prohibit listing brokers from paying buyer’s agents and will instead require sellers to pay them directly. The rule also requires listing agreements to clearly outline the seller’s offer of compensation to buyer’s agents.

The new rule is one of five revisions coming to the Universal Co-Brokerage Agreement, which governs REBNY and the Residential Listing Service. The amendments will take effect Jan. 1.

REBNY is implementing the changes to “promote transparency and consumer confidence” and “provide for a more efficient RLS,” Ninve James, who runs the group’s residential brokerage services and products, said in an emailed statement.

Some agents oppose the change, fearing it gives buyers’ agents too much leverage, but it does have supporters.

“Transparency on fees is ultimately a good thing for the industry,” Leslie J. Garfield agent Ravi Kantha said. He added that the changes aren’t out of line with guidelines he already follows.

Kantha, a townhouse specialist and co-founder of the Lesser Kantha Team, said many sellers, especially at the high end, already ask to hammer out commission splits before signing listing agreements.

Other brokers, however, expressed concern that the amendment opens the door for buyer’s agents to hold up deals to negotiate their commission with sellers.

Nest Seekers’ Bianca D’Alessio said she’s worried about buyer’s agents using the “final hour” before a sale closes as an opportunity to vye for more money. 

“As the market shifts and gets more difficult, a buyer’s agent that feels they’re more in control can leverage that,” D’Alessio said. 

The update comes as the National Association of Realtors, Keller Williams and HomeServices of America are fighting two monumental class-action lawsuits over buyer’s agent commissions.

At the center of the contention is NAR’s “participation policy,” which requires listing brokers to offer compensation to buyer’s agents. The plaintiffs — home sellers in Missouri and Illinois —  allege the group violates antitrust laws and conspires with brokerages to drive up agents’ pay.

The trial for the smaller of the two cases, called Sitzer/Burnett, kicked off in Kansas City earlier this week. 

REBNY and the RLS are not affiliated with NAR.

Other amendments include an update to the UCBA’s rules on “opt-out” listings, which refer to properties that owners do not want listed publicly. Under the revisions, brokers can submit an opt-out form alerting REBNY of the listing and notify other brokers through individual calls and emails.

The guidelines previously barred brokers from distributing any information about these listings.

REBNY has often pushed against opt-out listings, which Kantha said “harken back to a time when brokers hoarded listings.”

He added that these changes are likely a result of the industry group “trying to help brokers who might feel like they’re between a rock and a hard place while still maintaining a regulatory posture.”

Starting next year, the RLS will accept listings for professional and retail units in residential properties, which D’Alessio said will allow more visibility and oversight in the larger market.

Brokers will also be permitted to relay unsolicited offers to owners with RLS listings with “coming soon” status. If the owner wishes to move forward with the offer, listing brokers will need to switch the listing status to active before continuing communication.

The UCBA will also recognize electronic payments for commission and rent deposits, including wire transfers and applications such as Venmo and Zelle.

Changes to the UCBA are recommended by a committee of REBNY members and confirmed by the group’s board of governors.

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