How New Real Estate Regulations Are Changing the Homebuying Process in 2025

By: Velorine

With mortgage rates hovering around 7% for the last six months and average home prices across the US continuing to rise, the new rules, which took effect in August, had spurred hope that commissions paid to real estate professionals would plunge, making home buying and selling less expensive for average Americans. Last year, TD Cowen Insights estimated that the new rules could cause fees paid to Realtors to fall by 25% to 50%.

Representatives from NAR did not provide a comment when asked about the settlement.Home sellers mostly still offer to pay commissions, Realtors who spoke to CNN said.

“One thing is certain, if the intention was for sellers not to be paying buyers agents’ compensation, that’s a total fail,” said Summer Goralik, a real estate compliance consultant. “It’s continuing as is and just being repackaged in a different way.”

“Now we’re kind of forced to have that discussion maybe sooner on in your relationship with a buyer,” said Kleingartner, the Realtor from Los Angeles. “I think that has been great.”

Some states already required such agreements before August. 

Key Areas of Change:

1. Shifting Commission Structures:
   
   • What’s New: One of the biggest changes in recent years is the shift in real estate commission structures. Historically, real estate agents have been compensated with a percentage of the sale price, split between the buyer’s and seller’s agents. However, recent regulations have started to challenge this model, particularly with transparency rules pushing for clearer negotiations around commission fees.
     
   • Impact on Homebuyers and Sellers: Buyers and sellers may now have more control over commission fees, but will need to be more diligent about negotiating and understanding the financial details. For some, this could lead to lower costs, while others may find themselves dealing with more complex payment structures.
     
2. Increased Transparency and Disclosure Requirements:
   
   • What’s New: New rules around property disclosures and agent responsibilities mean that buyers will have better access to critical information upfront. Laws are now requiring sellers to disclose more details about the property’s condition and any potential issues, giving buyers a clearer understanding of what they are purchasing.
     
   • Impact on Homebuyers: While this may provide more protection for buyers, it also means the due diligence process may become more rigorous. Buyers will need to be prepared to review detailed reports and disclosures before making decisions.
     
3. Stricter Lending and Mortgage Guidelines:
   
   • What’s New: As part of efforts to protect consumers and prevent another housing crisis, new regulations have been implemented to ensure that homebuyers are not taking on mortgages they cannot afford. These include more stringent credit score requirements, debt-to-income ratio limitations, and more transparency in loan agreements.
     
   • Impact on Homebuyers: While these changes may lead to more responsible borrowing, they may also make it harder for some potential buyers to secure financing. Buyers will need to be more prepared with their finances, and many will face higher qualification standards.
     
4. Technological and Digital Shifts:
   
   • What’s New: Real estate transactions are increasingly going digital, with more states implementing laws that allow for fully electronic closings and virtual notarization. This shift is expected to streamline the process and reduce paperwork but comes with its own set of regulatory challenges.
     
   • Impact on Homebuyers and Sellers: While the use of digital tools may simplify the homebuying process, it also requires all parties involved to be tech-savvy and comfortable with online platforms. This could speed up transactions but also raise questions about security and fraud prevention.
     
5. Impact on Real Estate Professionals:
   
   • What’s New: With the changing landscape, real estate agents, brokers, and attorneys are having to adapt to these new laws. Many are now required to undergo additional training and certifications to remain compliant with the evolving regulations.
     
   • Impact on Buyers and Sellers: Consumers will notice that real estate professionals might be more knowledgeable about the latest regulations and more transparent in their practices. However, it could also mean additional costs, as professionals adapt their business models to meet new legal requirements.