Here's the latest personal finance news, how it may impact your financial plan and what you can do to maintain your financial well-being.
Landmark Real Estate Settlement Changes Homebuying and Selling
In mid-March, the National Association of Realtors (NAR) agreed settle a lawsuit brought by home sellers over agent compensation. The settlement will result in seismic changes to the homebuying and selling process, which are expected to go into effect in July 2024. Here are some of the more notable developments:
- The NAR will no longer require brokers advertising a home for sale on a multiple listing service (MLS) to offer upfront compensation to buyer agents.
- Sellers are prohibited from determining compensation for buyers' agents.
- Agents working with buyers are required to enter a formal agreement to ensure that buyers know what the agent will charge.
Additionally, the NAR, which admitted no wrongdoing, agreed to pay $418 million, which will be split between eligible home sellers who have sold a home since October 31, 2019.
Why It Matters
Technically, real estate agent commissions have always been negotiable, but traditionally, sellers have been expected to pay roughly 6% of the selling price, which is split between the buyer's and seller's agent.
As a result of the settlement, homebuyers and sellers will be responsible for paying their agents separately, with buyers instead of sellers setting their agent's pay. That said, buyers still can negotiate for the seller to pay the buyer's agent. Experts expect that real estate commissions may drop by as much as 30% due to the settlement.
If you're eligible for the settlement payout, though, don't expect much. According to estimates, entitled sellers are expected to receive roughly $13.
What You Can Do
- Learn more about who pays real estate agent commissions.
- Read up on what real estate agents do.
- Determine how to find the right real estate agent.
- Find out why it's a good idea to use an agent to buy a house.
The Federal Tax Deadline Is Coming Up
For most taxpayers, the deadline for filing and paying their 2023 tax bill is April 15, 2024. However, there are some exceptions that may apply to you.
If you live in Maine or Massachusetts, for instance, the deadline is April 17 due to the Patriot's Day holiday. You may also have extra time to file if you reside in a federally declared disaster area.
Why It Matters
It's crucial to file and pay your federal taxes by the IRS deadline each year. Otherwise, you may be on the hook for penalties and interest charges. However, you can review the IRS disaster relief guidance to find out if you're eligible for an extension.
Note that you can request a six-month extension to file your return even if you don't live in a disaster area. However, you'll still need to pay your expected tax bill by the regular April deadline for your state if you want to avoid a failure to pay penalty and interest.
What You Can Do
- Read tips to make your tax filing easier.
- Stay up to date on tax deadlines.
- Learn the various ways to lower your tax bill.
- Read about tax identity theft.
Visa and Mastercard Agree to Lower Merchant Fees
Visa and Mastercard have reached an antitrust settlement with merchants to limit the fees they charge for credit card and debit card transactions. Under the agreement, the payment processing companies agreed to reduce their interchange fees by 0.04% in the U.S. for three years and cap their rates for five years.
The networks, which have denied any wrongdoing, have also agreed to remove anti-steering provisions from their merchant agreements, which have prevented retailers from directing customers to less expensive payment methods. According to court documents, the settlement is expected to save merchants roughly $30 billion.
Why It Matters
Merchants have long complained that Visa and Mastercard charge inflated fees when customers use credit and debit cards. The decision reduces those costs and also gives merchants more flexibility in steering customers to different payment methods.
As a result, merchants, particularly small businesses, may enjoy significant savings, which they may pass on to their customers.
What You Can Do
- Understand how credit cards work.
- Learn about credit card swipe fees.
- Get more details about what credit card payment networks do.
- Know the difference between credit card networks and credit card issuers.
Home Price Growth Returns to Pre-Pandemic Levels
Home prices in the U.S. rose by 0.6% in February, according to real estate technology company Redfin, once again matching the average monthly gain for the eight years preceding the coronavirus pandemic. Year over year, prices increased by 6.7%, which is slightly lower than the 6.9% pre-pandemic average.
Why It Matters
As home prices have become more stable, more sellers are listing their homes, with new listings up 13% year over year. However, persistently high mortgage rates continue to be an obstacle for homebuyers, resulting in pending sales decreasing by 8% from the previous year.
Also, keep in mind that while the average home price growth has stabilized, individual markets may experience much higher or lower fluctuations.
What You Can Do
- Find out what to expect about buying a house in 2024.
- Learn how to deal with high mortgage rates.
- Read up on factors that affect a home's value.
- Consider whether to buy a house when rates are high or wait.
April Is Financial Literacy Month
The U.S. Senate officially designated April as Financial Literacy Month with the intent to raise awareness of the importance of smart money management and financial literacy. The following articles can help you improve your own financial literacy:
Good Credit Can Contribute to a Healthy Financial Plan
While there are aspects of your financial situation that are outside of your control, building and maintaining a good credit score can help you weather challenges and save money in the long run.
With Experian's free credit monitoring service, you'll get access to your FICO® Score☉ and your Experian credit report. With this information in hand, you can gauge your credit health and target areas of your credit profile that you can improve over time. And with real-time alerts whenever your report is updated, you can spot potential issues and fraud and address them quickly.