Learn the three major changes in real estate following the NAR settlement.
The changes from the settlement with the National Association of Realtors will take effect on August 6, 2024. Here are some things that you should know about moving forward:
- MLS will no longer display commissions. This will affect listing and buyer forms, as well as agent operations. Sellers always have the option to pay a commission or not, but now it’s going to be clearer. Realtors must discuss with sellers if they want to offer a commission or concession to a buyer’s agent. Sellers can choose to pay nothing, a fixed amount, or a percentage of the sales price. Once the seller has decided, the listing agent must disclose this information to buyer agents and the public, but not through the MLS.
- Realtors are required to sign buyer agency agreements for showings. Buyers must understand that Realtors will require them to sign a buyer agency agreement for in-person or virtual showings. When interviewing an agent, consider signing an agreement for a specific property for a day. As a buyer, don’t be surprised if a Realtor requests a signed buyer agency agreement before showing you a home.
“You might see Realtors asking for retainer fees since licensed Realtors cannot work for free.“
- Buyer’s agent’s compensation. If the seller offers compensation, they need to fill out a new form called the Cooperating Compensation Agreement. On the other hand, if the seller does not offer compensation, the buyer and agent must agree on how the agent will be paid, either through a fixed amount or a percentage of the closing price.
Buyer agent compensation is a primary concern due to the uncertainty of seller commissions and buyer preferences. You might see Realtors asking for retainer fees since licensed Realtors cannot work for free. If a buyer decides to represent themselves due to financial limitations, agents still need compensation for their time. It’s not going to be an easy transition, but change is necessary.
Continuous conversations about these changes give us a better understanding. I am open to your comments and feedback and appreciate discussing things with you. You can reach me at [email protected] or call me at (919) 759-6359. Let’s have a chat!