Understanding the Recent NAR Settlement: Key Points for Buyers, Sellers, and Agents
Here's everything you need to know about the recent NAR settlement.
Key Changes Effective July-August 2024:
- Buyer Broker Compensation: Buyer broker compensation will no longer be listed on the multiple listing service (MLS).
- Off-MLS Negotiations: Sellers and their agents can still offer buyer broker compensation through off-MLS negotiations and consultations, meaning seller-paid buyer agent commissions remain an option.
- Written Representation Agreements: MLS participants working with buyers will be required to enter into written representation agreements with their buyers.
Forms of Buyer Broker Compensation:
Consumers will still have various options for compensating buyer brokers off-MLS, including:
- Fixed-Fee Commission: Paid directly by consumers.
- Seller Concessions: Compensation from the seller.
- Portion of Listing Broker’s Compensation: Part of the listing broker’s commission.
- Negotiable Compensation: All compensation remains negotiable and should be discussed between agents and the consumers they represent.
What This Means for Parties to Future Real Estate Transactions:
For Real Estate Agents, this will present the opportunity to transparently showcase our value, strengthen client relationships, and offer more tailored services.
Buyers will benefit from buyer broker agreements, which provide increased clarity regarding your agent’s services and offer more variable commission structures. In addition, written agreements must specify and conspicuously disclose the amount or rate of compensation & how this amount will be determined. It will also prohibit any compensation for brokerage services from any source that exceeds the amount or rate agreed on.
Sellers will gain more control over commission negotiations, potentially leading to cost savings and more personalized service agreements. Now any REALTOR® acting on your behalf must obtain your approval in writing before any payment or agreement is made to pay another broker, agent, or other representative acting for buyers. This written disclosure/agreement must also specify the amount or rate of such payment.
Have questions? Comment below or send me a message – I’m here to help! You can also see the full list of FAQ's on the Recent NAR Settlement online here.
