The recent settlement involving the National Association of Realtors (NAR) has sent ripples through the real estate industry, signaling significant changes for both home buyers and sellers. Starting on August 17th, buyers will need to sign agreements with their agents before viewing homes, both in-person and virtually. Additionally, sellers are no longer required to pay buyer's agent commissions, shifting the negotiation dynamics in the housing market. For anyone navigating the housing market, understanding the implications of this settlement is crucial, as it could affect everything from the price you pay for a home to the services you receive from your real estate agent. In this blog, I will highlight what the NAR Settlement means to homebuyers and sellers.
Watch Our Video Podcast
To further help you understand the details of the NAR settlement and what it means to you as a homebuyer or seller, please watch my informative video podcast. I am joined by Elena Boland from Wholesale Mortgage to discuss the significant changes coming to real estate commissions following the National Realtor Association's recent lawsuit.
NAR Settlement - Home Sellers
NAR’s recent settlement has led to several changes related to broker commissions that benefit sellers. The National Association of Realtors has put together this list of what the settlement means for home sellers:
- You still have the choice of offering compensation to buyer brokers. You may consider doing this as a way of marketing your home or making your listing more attractive to buyers.
- Your agent must conspicuously disclose to you and obtain your 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 you in writing in advance of any payment or agreement to pay another broker acting for buyers, and must specify the amount or rate of such payment.
- If you choose to approve an offer of compensation, there are changes to how this can happen.
- You as the seller can still make an offer of compensation, but your agent cannot include it on a Multiple Listing Service (MLS).
- Your agent can advertise your listing via off-MLS platforms such as social media, flyers, and websites.
- You as the seller can still offer buyer concessions on an MLS (for example, concessions for buyer closing costs).
- These changes go into effect on August 17, 2024.
NAR Settlement - Home Buyers
NAR’s recent settlement has led to several changes that benefit homebuyers. The National Association of Realtors has put together this list of what the settlement means for home buyers:
- You will sign a written agreement with your agent before touring a home.
- Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand exactly what services and value will be provided, and for how much.
- The buyer agreement must include four components concerning compensation:
- a. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
- b. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).
- c. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and,
- d. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.
- Written agreements apply to both in-person and live virtual home tours.
- You do not need a written agreement if you are just speaking to an agent at an open house or asking them about their services.
- The seller may agree to offer compensation to your agent. This practice is permitted but the offer cannot be shared on a Multiple Listing Service (MLS).
- You can still accept concessions from the seller, such as offers to pay your closing costs.
- These changes go into effect on August 17, 2024.
Here is what the settlement doesn’t change:
- Agents who are REALTORS® are here to help you navigate the home-buying process and are ethically obligated to work in your best interest.
- Compensation for your agent remains fully negotiable, and if your agent is a REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with you about compensation. When finding an agent to work with, ask questions about compensation and understand what services you are receiving.
- You have choices. Work with your agent to understand the full range of these choices when buying a home, which will help you make the best possible decision for your needs.
- More details about these changes and what they mean can also be found online at facts.realtor.
About the Angst Real Estate Team
Looking for an experienced Real Estate Team in Reno/Sparks and Northern Nevada? Look no further than the Angst Real Estate Team! With a demonstrated history of success working with buyers, sellers, and investors, we are the top authority in the area. Stay up-to-date on the latest trends and topics in the Reno/Sparks real estate market with our weekly podcast, designed to provide you with the information you need to make informed decisions. Whether you're looking to buy, sell, or invest in property, we have the expertise you need to achieve your goals. Contact us today to learn more! 775-525-0309
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