NAR Settlement Update

Navigating the New NAR Settlement Changes: A Guide for Buyers and Sellers

The recent National Association of Realtors (NAR) Settlement has introduced significant changes to the real estate landscape. These updates, impacting both buyers and sellers, are crucial to understand for anyone involved in buying or selling a home. With new regulations on buyer agreements and adjustments in how buyer agency commissions are handled, staying informed is more important than ever.

Key Dates for the NAR Settlement Implementation

As part of a $418 million settlement in the ongoing NAR lawsuit, the real estate industry is undergoing several changes. These changes are slated to take effect nationwide on August 17th, affecting all realtor-owned Multiple Listing Services (MLS). Although the settlement’s final approval is pending, the changes are moving forward as scheduled, with some areas seeing early implementation.

For example, our local board in [your area] has decided to adopt these changes starting August 1st. This means that all the new rules and procedures are now in effect, and [Your Real Estate Team] is fully prepared to guide you through these updates.

What’s New in Buyer Agreements and Home Viewings?

One of the most notable changes is the requirement for buyer agreements to be in place before viewing a home. This applies to anyone participating in the home viewing process, including family members or friends who might be assisting in the decision-making. This new requirement aims to create a more structured and informed buying process, reducing the likelihood of rushed or uninformed decisions.

While this might seem like an added step, it also encourages more thorough buyer consultations. These consultations will provide a better understanding of the buying process, financial requirements, and market strategies, benefiting both the buyer and the agent. However, it does mean that spontaneous, last-minute showings (often referred to as "pop-tart showings") will require more planning.

If you're still in the process of selecting an agent and aren’t ready for a full buyer agency agreement, consider setting a shorter term or limiting the agreement to specific properties. This allows you to build a relationship with the agent while ensuring that all parties are protected and informed.

Changes in Buyer Agency Fees: What to Expect

Another significant change is the way buyer agency commissions are handled. Previously, these commissions were often split between the listing agent and the buyer's agent and were advertised in the MLS. This setup meant that buyers didn’t have to directly worry about these costs, as they were typically covered by the seller as part of the overall transaction.

Under the new rules, buyer agent commissions will no longer be listed in the MLS. Instead, compensation details may be shared through other channels, such as direct communication or online platforms. While some brokers may still arrange for sellers to cover these costs, the process will now be less transparent and more negotiable.

At [Your Real Estate Team], we have decided to no longer engage in broker-to-broker commission sharing. Instead, we will focus on negotiating seller concessions, where the seller may choose to cover some or all of the buyer’s agent fees as part of the contract. This approach aligns with the spirit of the new regulations, ensuring that all parties are clear on the terms of the transaction.

What This Means for Buyers

If you’re a buyer, you’ll need to have a detailed discussion with your agent about how their fees will be handled. This conversation should take place before you start viewing homes, ensuring that you’re fully aware of any costs you might be responsible for. In many cases, these fees can be negotiated into the contract, with sellers offering concessions to cover them.

These seller concessions can be used for a variety of purposes, including closing costs, rate buy-downs, or the buyer’s agent commission. While this change may seem complex, it ultimately provides more flexibility in how transactions are structured.

Impact on Sellers: Preparing for New Costs

For sellers, these changes mean an adjustment in how you plan your transaction. The traditional model of listing and buyer agent fees being bundled together is shifting. Now, the focus will be on your listing fee, with any potential buyer agent fees being negotiated separately as part of the sale.

This shift requires careful planning, especially when it comes to offering seller concessions. These concessions can be a powerful tool in attracting buyers, as they can be applied to various aspects of the transaction, from closing costs to buyer agent fees. However, they also represent an additional cost that sellers need to be prepared for.

Will These Changes Address the Housing Affordability Crisis?

Some have speculated that these changes might help address the ongoing housing affordability crisis. However, it’s important to manage expectations. Even if commissions decrease slightly, this is unlikely to make a significant dent in the broader issue of affordability. The real drivers of home prices—such as inflation, interest rates, and government spending—are far beyond the scope of these changes.

While sellers might see some benefit from lower buyer agency fees, the overall impact on the market is expected to be minimal. Buyers may still face significant costs, particularly in high-demand markets where prices continue to rise.

Moving Forward with Confidence

As the top real estate team in [your area], [Your Real Estate Team] is committed to helping you navigate these changes with confidence. Whether you’re buying or selling, we’ll work with you to ensure that you understand the new rules and how they affect your transaction. Our goal is to help you achieve the best possible outcome, minimizing surprises and maximizing value.

If you have any questions or need guidance on these recent changes, don’t hesitate to reach out to us. We’re here to support you every step of the way.

Information was pulled from MLS, Matt Curtis, and other resources. **