03/19/2024
PLEASE READ - THIS IMPACTS YOU!!!!
Many of you by now have heard of the recent settlement of a lawsuit, Sitzer vs National Association of Realtors (NAR), regarding real estate agent compensation. This decision will undoubtedly initiate some changes and perceptions of the real estate industry and I want to share my thoughts and what some of these changes will mean for you. While the terms of the settlement will still need to be signed off by a judge, and the following changes will not take effect until mid-July, it is important to me to be upfront and informative as possible.
Realtors and Sellers will be prohibited from making offers of compensation to a Buyer’s Agent/Brokerage through the Multiple Listing Service (MLS). Sellers can still offer a buyer’s brokerage compensation for producing a willing and able buyer, just not through the MLS. It will have to be communicated to the public through their real estate agent or other sources. If a seller isn’t offering any compensation, buyers will need to compensate their agent’s brokerage directly for services provided.
The other requirement of the settlement is a Buyer working with an Agent must enter into a written agreement addressing compensation before the buyer is allowed to tour any home with any agent. This ensures a buyer understands the responsibilities of the buyer and their agent during the transaction.
And just as the saying goes, “for every action, there will be an equal or greater reaction” there will be some unintended casualties of these new rule implementations. I am deeply concerned for First Time Homebuyers who are coming in with the minimum down payment and by the skin of their teeth to get in on the American Dream. Most consumers are unaware that a buyer is limited to “soft costs” allowable by a lender program to finance. Meaning, buyers may find it restrictive to finance the fees paid to their agent if a seller isn’t offering compensation to a buyer’s agent. This also has the potential of reducing a whole population of buyers available to a seller who isn’t offering compensation to a buyer’s agent. Buyer’s may have to consider other properties whose seller has communicated thru their agent that they are offering compensation to their agent.
The other consumer who will be impacted by this decision is the “Looky Loos”, or people who just call a random floor agent and want to see a property. These are consumers just on the edge of becoming a committed buyer, who are still mulling over the idea and doing their due diligence. These people will need to commit to an agent, even if they aren’t fully ready to buy, in order to tour or view a property.
These changes will undoubtedly result in a greater reliance on better practices, better communication, and better real estate agents to make transactions between buyer and seller happen.
My process has always been to sit down personally with clients to review, discuss, and come to an agreement with regards to home buying/selling and client representation. I look forward to answering your questions and being of service to you for your real estate needs.
Craig Ellis, Realtor / Coldwell Banker Tomlinson
