A little backstory:
Back in March, the National Association of Realtors (NAR) agreed to a settlement deal. The organization agreed to both a monetary settlement as well as real estate practice changes aimed at providing more transparency regarding how real estate agents are paid.
But how exactly does that change things for you? There are two main differences you may be hearing about:
- Offers of compensation for buyer brokers or buyer agents can no longer be shown on the Multiple Listing Service (MLS).
- Real estate agents must enter into a written agreement with a homebuyer before giving them a tour of a property.
Headlines might make these changes seem overwhelming. And while some of the paperwork is new, the reality is that the majority of professionals in the industry will continue to provide the same service they always have.
To help you get a better understanding of what this means for you, here are six key things home buyers and sellers should know about the changes going into effect on August 17, 2024.
What Changes Mean For Homebuyers
#1—Homebuyer Agreements
Your real estate agent needs to have a written agreement signed before they can show you homes (legally at least. I've already heard of some agents not doing this and unfortunately, those agents are working against the law). This doesn’t mean you are locked in for life—some agreements can be for one property, some for one week, and some for a longer period of time.
Be sure to ask about the different options available when interviewing buyer agents, and make sure you understand exactly what services are included.
#2—Know What You're Paying For
This agreement will clearly outline your agent's compensation. If the agreement is not specific, or if you have questions, ask for clarification (and get it in writing) before signing anything.
And, just like before, agent fees are negotiable. This settlement doesn't change that.
#3—Seller Deals Still Exist
Sellers can still offer to cover some of your closing costs, and even the buyer agent fees, as an incentive.
While you won't see the seller’s offers to buyer agents on the MLS listings anymore, that doesn't mean they're gone. Your agent can find out if the seller is offering buyer agent compensation (or negotiate for it should you decide to make an offer on a property).
What Changes Mean For Home Sellers
#1—The Power of Choice
You’re still in control! You can decide if you want to offer compensation to buyer brokers. When interviewing your listing agent, ask about the pros and cons of offering buyer agent compensation to help you determine what the best option is for your situation.
#2—Transparent Terms
Your listing agent must obtain your approval before making any offer of payment to buyer brokers. If you choose to offer compensation, the terms must be transparent and made in writing—including how much and how it will be paid.
#3—MLS Dos and Don’ts
As a seller, you can no longer put offers of buyer broker compensation on the MLS. (This must happen off MLS.) However, you can still offer buyer concessions on the MLS, like buyer closing costs.
Final Thoughts
These changes are designed to make the process of agent compensation when buying or selling a home more transparent. That being said, there are going to be different options available, so it’s important you take the time to understand them all. By working with a knowledgeable real estate agent, you can ensure that your home buying or selling experience is positive and successful.
For more information about these changes, visit facts.realtor or schedule a discovery session with me by e-mailing me at [email protected] or text/call at 573-450-3181.
