How much folks must pay to buy & sell homes in SC may change soon. Here’s what to know

More people may see cost savings when buying and selling homes in South Carolina because of new rules from a major lawsuit settlement set to begin Saturday.

The $418 million settlement , announced earlier this year by the National Association of Realtors, calls for the organization to end decades-old rules on commissions — making it easier for buyers to negotiate fees with their agents or forego using them at all. Home sellers will less likely be pressured to list through the MLS and or with a licensed agent, lowering their costs. Yet at the same time, the rule changes may let some sellers shift a percentage of their costs onto buyers, some real estate experts say.

NAR lawsuit

NAR has historically required home sale listing brokers to detail an offer of compensation upfront to a buyer’s listing agent. That typically ends up as a 6% split between a seller’s broker and a buyer’s agent. Some critics however have compared this setup to that of a cartel.

The new settlement rules will negate the standard 6% commission. Sellers will no longer be required to propose compensation to potential buyers and their agents, which, in theory, could encourage more negotiation and competition in some markets.

Another rule change from the settlement requires homebuyers to sign a deal with a broker before they start working with one. Doing so is to make sure homebuyers know what their agent will charge for services at the start.

Impact on SC buyers

The deal requirement with a realtor could give buyers more freedom to pay for the services they want and do some services themselves to avoid paying at all.

It should be noted though, that South Carolina has had a similar rule in place for years.

“Given South Carolina’s prior adoption of buyer representation requirements, the transition here may be smoother than in other states, but it remains vital that buyers thoroughly review and understand these agreements,” said Karen Yip, broker and owner of Yip Premier Real Estate in Columbia.

Yip added that all fees and commissions are not set by law and are fully negotiable, but worries that some buyers will choose to forego representation to save some money — “a decision that, in my opinion, could be quite costly and risky given that purchasing a home is likely the one of the largest investments one will make in their lifetime”

Jill Moylan, broker and owner of Home Advantage Realty in Columbia, has said she’s concerned the change may put more minorities and young, first-time homebuyers at a disadvantage.

“It’s going to be really hard for a first-time homebuyer to come up with the funds for a small down payment of 3-5% and money to pay a buyer agent,” Moylan said. “What’s going to happen, I’m afraid, is they’re going to go without representation and they’re not going to have the education they need about the process.

Impact on SC sellers

According to NAR, under the new rules, an agent must disclose to a seller and obtain their approval for any payment or offer of payment that a listing broker will make to another broker acting for buyers. This disclosure must be made to the seller in writing in advance of any payment or agreement of payment and must specify the amount.

Also, sellers can still make an offer of compensation, but the agent cannot include that on an MLS.

The idea behind all this is to make things more transparent and help lower service costs for sellers.

Some researchers have analyzed comparable countries with sellers’ commissions that are typically below 2% to predict what such rates could mean for the U.S. housing market. Commissions that low would generate billions in additional annual revenue for U.S. households that engage in real estate transactions, the research shows.

Yip said however that with the decoupling of listing agent and buyer agent fees, sellers may choose to forgo covering the buyer agent’s commission as part of the listing price.

“This shift could result in buyers shouldering these costs out of pocket at closing, which would directly diminish their purchasing power,” Yip said. “As our market continues to grow and prices rise, sellers must carefully consider how their approach to buyer agent compensation could influence their property’s competitiveness.”

Yip noted that the settlement’s rule against listing buyer compensation in the MLS introduces a new layer of complexity.

“This shift could slow down the offer process and create inefficiencies, as buyer agents now need to independently verify compensation details” she said. “In a market as active as ours, where timing can be everything, this change could lead to missed opportunities for both buyers and sellers.”