03/18/2024
Borrowed this from a friend and fellow Realtor Jessica Howe Mueller who laid out this NAR settlement better than anything I’ve seen so far.
“I am sure many of you have have seen the media outlets shouting about the recent real estate settlement with the DOJ. Originally, I was just going to stay quiet and let it blow over, but with the amount of insanely irresponsible and inaccurate information they are putting out there, I just can’t. So, I ask you to ignore what the media is putting out there and talk to someone that is actually in the field. I will keep this as brief as I can, but here we go.
First, there was never any “standard” commission and it was always negotiable and will remain negotiable. Nothing is changing there.
Second, they keep saying commissions are being cut. There is nothing to “cut” since they were always negotiable.
Third, they keep saying this will reduce the price of homes on the market. I truly do not understand where they come up with this stuff aside from trying to create click bait. Commission has nothing to do with the increase in prices over the years- it is supply and demand, interest rates, and what buyers are willing to pay for homes.
Lastly and most importantly, the media is very conveniently leaving out two EXTREMELY important things- IF this is officially passed, starting in July, only TWO things are changing, not the whole real estate market as they are trying to portray (see attached picture for reference).
1) Buyer’s agent offer of compensations cannot be listed in the MLS but can still be pursued and offered outside of the MLS and
2) Buyers now have to sign a contract with their agent to look at houses, just like a seller signs a contract with their listing agent, which includes a compensation agreement.
What does that mean? That means sellers can still offer to pay the buyer’s agent, it just has to be negotiated and agreed upon ahead of time in writing instead of us being able to quickly see it on the MLS, which means more time and paperwork. But why would a seller want to pay the buyer agent commission, some would ask? Well, that is a much longer conversation for another time that I am happy to have individually, so feel free to reach out for further discussion.
It also means that as a buyer, you must now sign a contract with your agent before you can go see homes, just like a seller signs a listing contract. This contract includes a compensation agreement, meaning if the seller doesn’t agree to pay your agent, then you, the buyer, have to pay. Funny that the media left that part out, isn’t it?
This is not a bad thing- buyer agent agreements are not a new practice and some agents already do this, but it will now be required by law. Some may argue that isn’t a big deal, now some buyers will just buy homes on their own without an agent. FSBO isn’t a new thing, but from my experience, there are MANY reasons why a buyer should be equally represented and protected when making the biggest purchase of their life. I could go on and on about the MANY, MANY hours I have spent behind the scenes trying to ensure a sale goes smoothly, or to help keep sale together for a buyer, and that doesn’t even include the time and effort spent helping them find the right home. But again, that is too much information for this post, but I am happy to discuss the value of a buyer’s agent if anyone wants to reach out personally.
It is very disturbing to see what the media is putting out there about this and makes me second guess ANYTHING I read in the news now. If you have any questions, feel free to reach out, I am happy to clear up any confusion about all of this!”
Thanks for listening and have a great week😀
