Recently, the National Association of Realtors (NAR) reached a significant settlement regarding real estate commission practices. With this development, a lot of questions and concerns were raised by both buyers and sellers about how these changes may impact the home buying process. That’s why today, we’re going over how things work now, how they’re going to change, and what it means for you.
Overview of the current process
To shed some light on the situation, here’s how things currently work: Realtors work with sellers to sell their homes through a multiple listing service (MLS). Part of the procedure involves having a written agreement outlining the entire amount of commission that the listing agent will accept and offering a percentage of it to a buyer’s agents who may have a buyer.
In this scenario, the buyer does not pay the commission because it was previously agreed upon between the listing agent and the seller.
“It may still be in the seller’s best interest to pay for the buyer’s agent’s commission.”
NAR Settlement Changes
For various reasons, the court system does not like how this setup works and has proposed a few amendments. There are two important changes I want to focus on:
1. Commission Communication. Listing agents can no longer advertise the amount of commission offered to buyer’s agents in the MLS. However, sellers can still offer and pay buyer’s agent commissions.
2. Buyer Representation. NAR (National Association of Realtors) and local MLS boards should enforce that buyer’s agents working with a buyer have a written brokerage agreement prior to showing houses.
Implications for sellers and buyers
As sellers, the way commission information is communicated may change, but you are not required to pay a buyer’s agent commission. However, it may still be in your best interest to do so to get the most money possible for your property. Buyers, on the other hand, can still choose to use buyer’s agent services; it just has to be in writing prior to viewing houses. These changes will be implemented in mid-summer 2024.
If you want to know more about the changes happening in the real estate industry, reach out to me. You can call me at 904-405-1995 or send me an email at Jeff@pursuitrealestate.com. I’d be happy to talk with you about it.
