What the NAR settlement means for you
In March 2024, the National Association of REALTORS® (NAR) reached a settlement that will change how real estate commissions work. These updates aim to make home buying and selling more transparent and give consumers more choices. If you’re planning to buy or sell a home, here’s what you need to know.
Key Changes From the Settlement
- Commission offers aren’t “standard”
- Buyers must sign an agreement before touring homes
- Transparency, transparency, transparency
No More Automatic Commission Offers on MLS
- Before this settlement, sellers’ agents could list commission offers for buyers’ agents directly on the Multiple Listing Service (MLS).
- Now, that information won’t be displayed, but sellers and buyers can still negotiate commissions privately.
- This means buyers may need to have upfront conversations about how their agent is compensated.
Buyers Must Sign an Agreement with Their Agent
- Buyers will now need to sign a written agreement with their real estate agent before they start touring homes.
- This agreement will outline how the agent will be paid and what services they will provide.
- The goal is to ensure buyers fully understand their agent’s role and any costs involved before they commit to working together.
More Transparency on Commissions
- In the past, many buyers and sellers weren’t clear on how commissions worked.
- Moving forward, there will be more discussions upfront about who pays for what, so consumers can make informed decisions.
- This gives both buyers and sellers more flexibility to negotiate fees with their agents.
A Financial Settlement to Resolve Lawsuits
- NAR agreed to pay $418 million as part of the settlement to resolve claims about past commission practices.
- While this doesn’t directly affect buyers and sellers, it reflects a shift toward more transparency in the industry.
What does this mean for you?
- If You’re Selling a Home: You’ll have more control over how and whether you offer commission to a buyer’s agent, but you may need to find new ways to market your home effectively.
- If You’re Buying a Home: You may need to discuss with your agent how they will be paid. In some cases, buyers might pay their agent directly, or they can negotiate for the seller to cover the cost.
These changes officially took effect on August 17, 2024. If you’re planning to buy or sell, it’s more important than ever to have open discussions with your real estate agent about commissions, fees, and how they’ll advocate for you.
Why Do I Need To Sign A Written Buyer Agreement (Consumer Guide)?
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Have questions about how this impacts your real estate plans? Let’s chat—I’m here to help!
