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News web sites incl New York Timesthey spread disinformation about the latest National Association of Realtors. These news organizations reported that NAR has agreed to chop agent commissions, but this is categorically unfaithful. Watch the video below to learn more about the settlement and its real impact on the real estate industry.
National Association of Realtors Settlement Takeaways
The truth is that NAR’s settlement comes right down to it selecting to separate the buyer’s and seller’s commissions.
In certain circumstances, buyer representation costs could also be passed on to the buyer. And as all of us know, the buyer (who brings the entire amount into the transaction) is the one who can least afford to pay the transaction commission. However, this does not mean that buyers do not need representation.
Buying a home for most families is the costliest and necessary financial decision they make in their lives. Highly qualified real estate agents will likely be paid exactly what they are value. The market will reward real estate agents who add significant value to the transaction. Real estate agents who add little value will receive little compensation or go out of business altogether. (Which ultimately I do not think is a bad thing.)
Here is my summary of the settlement, which can likely take effect in mid-July 2024:
- Buyer representation agreements will likely be required for agents showing homes listed on the Multiple Listing Service (MLS).
- Sellers can still offer a buyer’s agent fee, but it can’t be determined in the MLS. It could be advertised publicly elsewhere.
- Agents must disclose information regarding commissions, including disclosing that commissions are not set by law and are fully negotiable.
As a result, buyers might want to specify in the contract the amount they are willing to pay to the agent who will represent them.
Sellers may find it necessary to supply buyers’ agents a fee to encourage them to point out their properties, maximum exposure and the highest price possible.
While MLSs are prohibited from publishing the amount a seller is willing to pay toward a buyer’s agent’s fee, the settlement allows brokerages and their agents to post seller-approved compensation offers for their very own listings (but not those of other brokerages) on their web sites , in e-mails, text messages and other communications.
I imagine buyer agents might want to display much more expertise to justify their fees. This change will attract more buyers to the seller’s agent. This agent has the responsibility to barter on behalf of the seller and represent him. There will likely be more dual agency (one agent representing each seller and buyer) and conflicts of interest will result in more litigation.