You might have seen in the news and on social posts about the proposed NAR (National Association of Realtors) settlement. There’s a lot of misinformation out there and click-bait articles, so I wanted to share some information with you.
So, how does the settlement affect home sellers and home buyers?
According to an FAQ document released by NAR,
“This settlement would preserve the choices consumers have regarding real estate services and compensation. After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS. MLS participants acting for buyers would be required to enter into written agreements with their buyers before touring a home. These agreements can help consumers understand exactly what services and value will be provided, and for how much.”
Sellers may still elect to pay for buyer compensation, and a written buyer agreement is beneficial for buyers. However, articles about industry standard commissions and claims that this settlement will lower home prices can be misleading.
My goal as your real estate professional is to always lead with integrity and provide clarity to help you make informed decisions.
If you’d like to discuss this further or have any specific questions, please reply and let me know. As always, I’ll continue to share up-to-date info on real estate and our local market.
*Note this info was compiled as of 3/28/2024
Below are some FAQs about the settlement and how it might affect you as a buyer or seller.
Q: Does this settlement mean that a seller cannot compensate a buyer’s
agent?
A: Absolutely not, in fact, it is still highly recommended that sellers do offer buyer
agent compensation.
Q: What is the NAR Settlement, and how does it affect me as a buyer/seller?
A: The NAR Settlement is an agreement between the National Association of
Realtors (NAR) and the Department of Justice aimed at promoting competition
and transparency in the real estate industry. As a buyer/seller, the settlement
introduces changes that impact how listings are shared and how agent
compensation is handled.
SELLER: The only way it has changed for you, is that you have the sole discretion
to offer ANY buyer agent compensation. Whereas before the seller was required
to pay offering compensation.
BUYER: You need to know and understand that you need to be under a Buyer
Brokerage Agreement (BBA), whereas before the buyer didn’t have to sign this
contract. Choose wisely, do your research, and make sure that you’re working with
a true professional. You want to make sure you select an agent that will be
successful in closing your transaction. Ensure that the agent you work with has the
right market knowledge and experience to guide you through a successful
transaction.
Q: Will the NAR Settlement affect the level of service I receive from my
agent?
A: Absolutely not. The NAR Settlement aims to enhance competition and
transparency while ensuring that consumers continue to receive the highest level
of service from their real estate agents. Your agent remains dedicated to guiding
you through every step of the buying/selling process and achieving your goals.
Q: Will the NAR Settlement impact the negotiation process?
A: The settlement primarily focuses on enhancing competition and transparency
in the real estate market, rather than directly affecting the negotiation process.
Your agent will continue to negotiate on your behalf and ensure that your interests
are represented throughout the transaction.
Q: Will the NAR Settlement impact the terms of my sale/purchase?
A: It could impact the terms of your sale/purchase.
Q: How does the settlement affect agent compensation, and does it impact
the cost of buying/selling a property?
A: The overall costs of a real estate transaction have stayed the same, what has
potentially changed is who is paying these costs.
Q: Will the NAR Settlement affect the timeline or outcome of my real estate
transaction?
A: The NAR Settlement is not expected to significantly impact the timeline or
outcome of your real estate transaction. Your agent remains committed to
facilitating a smooth and successful transaction, and they will continue to work
diligently to ensure that your goals are met within the agreed-upon timeframe.
Q: Will the NAR Settlement affect the costs I incur as a buyer?
A: Potentially. Even though buyers will now be required to sign a Buyer Brokerage
Agreement, the seller could potentially agree to cover that compensation.
Q: Will the NAR Settlement affect the commission I pay as a seller?
A: It may lead to more competitive pricing and improved services from agents as
they strive to provide the best value for their clients. Rest assured, I’ll work with
you to ensure that you receive the best possible value for your money. If you elect
not to pay buyer broker compensation, you might be saving money on
compensation however that decision could impact time on the market and can
increase your carrying cost. In some cases, it could end up costing you more
money than the cost of buyer-broker compensation. The bottom line of the
settlement is that before, you as a seller were required to offer as little as $1 to a
cooperating buyer broker, and now you can offer $0.
