Real estate agents face major shakeup

(CNN)– Realtors nationwide are bracing for major changes in how they do business.

On August 17, new rules will take effect that overhaul the way real estate agents get paid to help people buy and sell homes.

It’s part of a $418 million settlement announced in March by the National Association of Realtors.

The changes scrap informal rules that propped up the industry’s traditional payment structure. Up until now home sellers typically had to pay 5% or 6% commission.

Going forward, buyers’ agents must discuss their compensation upfront. They will have to enter into a written agreement with a prospective home buyer before touring a property together.

This agreement is designed to inform buyers they are responsible for paying their own realtors if a seller chooses not to cover the cost.

Another change prohibits agents’ compensation from being included on multiple listing services.