Adapting to changing Real Estate Industry

For over 40 years, Wisconsin has upheld a standard of transparency and consumer protection by requiring written buyer agency agreements. As one of the 18 states with this requirement prior to the recent National Association of REALTORS® (NAR) settlement, Wisconsin's commitment ensures that consumers are well-informed about the services their agents will provide and the compensation structure involved.

These agreements serve to set clear expectations between the consumer and the real estate agent. The commission structures, although sometimes perceived as standard, have always been negotiable. Buyer’s brokers traditionally found cooperating commissions listed in the MLS, providing a basis for negotiation. Agents could negotiate for higher or lower commissions based on the specifics of each transaction.

Additionally, Wisconsin offers a Customer Disclosure form for consumers who either prefer not to sign a buyer agency agreement or are not yet comfortable doing so. This form details the agent’s responsibilities to all parties in a transaction, ensuring transparency and accountability regardless of the agency status.

Realtors with strong leadership and vision, such as those at REAL, are prepared to navigate these changes confidently. REAL’s President, Sharran Srivatsaa, has been a relentless advocate for positive adaptation, providing daily educational content to agents across various brokerages. This proactive approach has equipped many Realtors to face the upcoming changes with optimism, despite the remaining uncertainties at both local and national levels.

However, there are concerns about agents who have not engaged with these changes or are seeking ways to circumvent the new rules. These agents may face significant challenges as the industry transitions to these new standards. In South Central Wisconsin, with approximately 4,000 Realtors, 62% or roughly 2,500 have conducted five transactions or fewer in the past 12 months. Realtors who have not been active in understanding these changes may find themselves unprepared and facing difficulties.

As a Veteran, I am particularly concerned about how these changes will impact veteran homebuyers utilizing VA loans. Veterans, along with buyers relying on low downpayment or downpayment assistance programs, may struggle to pay their Realtors. Although the Veterans Administration has temporarily allowed seller concessions to cover Realtor commissions, such concessions are rare in competitive markets like Madison, Wisconsin. This situation may leave buyers without adequate representation, potentially delaying or halting their home purchasing plans. This is troubling, especially given the current economic challenges and the need for affordable homeownership options.

Everyone deserves the opportunity to achieve the American Dream of homeownership. As the industry adapts to these changes, it is crucial to ensure that all buyers, especially those most vulnerable, receive the support and representation they need.

For more information on Wisconsin’s buyer agency requirements and how REAL is leading the charge in adapting to these industry changes, please contact:

John Reuter

Integrity Homes 

Broker/Owner

608-669-4226

john@integrityhomeswi.com