Austin realtors share how market could change after national realtor settlement

After changes to Realtor commission policies were announced last week, Austin Realtors said local effects might not be as sweeping as in other parts of the country.

AUSTIN (KXAN) — After changes to Realtor commission policies were announced last week, Austin realtors said local effects might not be as sweeping as in other parts of the country.

The National Association of Realtors said Friday that it would prohibit offers of broker compensation on the Multiple Listing Service, or MLS, and also require MLS participants to enter written agreements with buyers. A $418 million settlement will also end lawsuits over broker commissions.

The changes will go into effect mid-July, but the final decision is subject to court approval, according to the NAR.

Travis County has about 27,000 active real estate licenses, according to the Texas Real Estate Commission, but not all of these license holders are Realtors.

The Austin Board of Realtors said on Friday the settlement announcement was "a critical development."

"The ABoR and Unlock MLS Legal teams are reviewing the details of the proposal and will assess the impact of this proposed settlement on our market," an ABoR statement read in part.

What do local realtors think?

Ryan Rodenbeck, broker/owner of Spyglass Realty, said the Friday announcement was a bit of a shock, but he thinks the Austin real estate market will largely continue as it has been in the past.

He said his agency started making buyer representation agreements mandatory earlier this year.

"It doesn't really have any impact on what we're doing," he said. "We may see a time where there may be more negotiations on commissions."

Rodenbeck said he thinks the proposed change will require agents to demonstrate their value to their clients.

"I think this is not only good for buyers, but good for agents to be able to explain a contract and show and demonstrate their value and be able to demonstrate why they may be a better choice for someone to sign a buyer rep agreement over someone else," Rodenbeck said. "Competition is great, and it's good for consumers."

Jennifer Martin, a broker associate at Twelve Rivers Realty, said the effects are still to be determined.

"I think there's gonna be some testing of the waters," she said. "I think that the buyer's agents who were just opening doors and not really providing any value might have a little bit of a harder time defending their value."

The impact in Texas and Austin may be different than in other states. Martin said Austin Board of Realtors and Texas Association of Realtors agreements have blank spaces for listing agent and buyer's agent fees — meaning commission fees are already negotiable.

She said the changes may deter some first-time homebuyers who already have a difficult time in this market.

Martin said she worries they might not have enough money to pay for good representation. She said a good real estate agent should be able to negotiate for their clients.

"If you don't have representation, and you don't understand the complexity of the legal document that you're signing, first-time homebuyers could get in significant financial distress," she said. "Especially if they're having to come out of pocket to pay for services that previously they weren't having to come out of pocket to pay."