The settlement of the NAR (The National Associations of Realtors) class action lawsuit has been reported on for the last six months in the local and national media. Much of this reporting has been either incomplete and/or inaccurate, and my goal is to give you a real-time, insider’s look at what's really going on and how it affects you and our local market.
Don't hesitate to call/text/email me with any immediate questions, and feel free to forward this to anyone you know who might be interested in hearing about this.
August 17th marked the deadline when NAR’s new commission settlement rules went into effect, significantly impacting both home buyers and sellers by changing the way real estate commissions are handled.
Buyers and sellers will now enjoy increased transparency regarding real estate agent commissions, more negotiating power over fees, and the ability to discuss alternative compensation structures like flat fees or hourly rates. The settlement prohibits the practice of sellers automatically covering buyer agent costs, essentially forcing buyers to directly negotiate commission with their agent, and this could potentially lead to lower overall costs for sellers and more flexibility for buyers to choose their preferred compensation model.
Key points for buyers and sellers:
· Greater transparency - MLS listings will now clearly state that commissions are negotiable and not set by law, giving buyers and sellers more information to discuss fees with their agents.
· Direct negotiation- Buyers will need to explicitly negotiate commission rates with their agent when signing a contract, rather than having the seller automatically cover these costs.
· Potential for lower costs - Sellers may be able to save money by not automatically paying for buyer agent commissions, which could potentially lead to lower selling prices.
· Flexible compensation options - Buyers may have more ability to explore alternative fee structures such as flat fees or hourly rates depending on the services they need.
Buying or selling a home is still a challenging endeavor that for most people and is typically brought on by other significant life changes, like a new job, a growing family, the passing of a relative, an investment opportunity, or other stressful moments.
My company, Coldwell Banker Realty, has spent the last several months training its agents to be prepared for the significant changes this settlement has created in the marketplace, and my team strives to educate and empower our clients every step of the way, and has been educating our active sellers and buyers about their new options and the benefits.
I hope you enjoyed this update, and as I mentioned before please feel free to share this with any friends or colleagues that are interested in real estate.