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On March 15, 2024 the National Association of REALTORS entered into a settlement agreement after they were sued related to broker compensations by home sellers.  In this landmark antiturst lawsuit, Sitzer/Burnett sought to decouple commissions between buyer brokerages and listing brokerages on the sale of property listings within the multiple listing service (MLS).

As far as the public is concerned, they all think they've won - both buyers and sellers alike.  However, the day that the buyers realize that the seismic shift is all to their disadvantage will be the true shitty day, and maybe the beginning of another lawsuit.

In real estate, there is a delicate balance between the buyer side and the seller side.  Both sides need each other and thinking that they don't is the same thought process that causes so many divorces.  Without home buyers, sellers are stuck with properties that do not sell and without homes to buy, buyers have no place to go.  It seems pretty simple, however many times the simple things escape the masses and many times we can label that as 'common sense'.

Simply, What Do the NAR Settlement Changes Mean For Our Real Estate Experience

  • Going forward (August 2024) buyer broker compensation can’t be listed on the Multiple Listing Service or MLS-related systems and buyers will have to sign representation agreements before seeing properties.
  • Sellers and their agents can STILL make offers of buyer broker compensation via off-MLS negotiations, consults and brokerage systems (meaning seller-paid buyer agent compensation still can and will happen).
  • NAR also agreed to a new rule that require MLS participants working with buyers—to enter into written representation agreements with their buyers before visiting/touring/showing properties.

Buyers: What Does This Mean For Me

Buyers will be required to sign a buyer broker agreements before looking at properties (excluding open houses). Buyers are also going to have to be more aware of buyer agent compensation and whether it is offered on the property of interest (unless the buyer does not mind covering buyer agent compensation out of their own funds).

Buyers may have additional hurdles now having to negotiate their agent’s compensation in the transaction negotiations should they not desire or cannot afford to pay it, personally.  There will continue to be seller-paid buyer brokerage options for buyers.

Now more than ever, buyers will need to interview potential buyer broker representatives and make sure they are highly educated, experienced, and can handle the transaction without issue.

Sellers: What Does This Mean For Me

Sellers will continue to have the opportunity to offer or not to offer cooperative compensation for a buyer agent as they always have. Going forward, Seller are limited to where they may market cooperative compensation (cannot be attached to the property MLS listing) and will face a hardships when wanting to offer Buyer Agent bonuses or other creative offers when marketing their property listings.

Sellers will continue to have to find ways to competitively market their properties in the marketplace.

How Will These Changes Affect Real Estate Agents

Agents will have more work to do across the board. Listing agents will be harder time marketing the competitiveness of unilateral offers of compensation for their Sellers. Buyer agents will have to do another level of research on compensation to properly advise their buyer clients.

The agents, buyers, and sellers will all have more of documents to complete and track. There will be LESS transparency across the board with offers of compensation moved into the shadows. And, there will be more opportunities for commission steering and discrimination.

If you would like to read more about the changes, click here or reach out to me and I will be happy to have a one-on-one conversation with you.

Hey Robbie, Let's Talk...

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