Richard Eimers Broker August 12, 2024
Buying a home is one of the largest financial transactions most people will ever undertake. Agents who are REALTORS® are a trusted source of advice and stand ready to help you navigate your homebuying journey and make the choices that work best for you. NAR’s recent settlement has led to several changes that benefit homebuyers, and we wanted to clearly lay them out for you.
The National Association of REALTORS® (NAR) settlement has introduced significant changes to the homebuying process, aimed at increasing transparency and negotiability in real estate transactions. These changes, set to take effect on August 17, 2024, will reshape the relationship between homebuyers and their agents.
Under the new guidelines, homebuyers will be required to sign a written agreement with their agent before touring a property. This agreement must clearly outline the terms of service and compensation, ensuring that buyers fully understand the scope and cost of their agent’s services.
The buyer agreement will include four key components regarding compensation:
- A clear disclosure of the agent’s compensation amount or rate.
- Objective compensation terms (e.g., flat fee, percentage, or hourly rate).
- A clause prohibiting the agent from receiving compensation exceeding the agreed-upon amount.
- A statement affirming that broker fees and commissions are negotiable.
These written agreements will apply to both in-person and virtual home tours. However, casual interactions at open houses or general inquiries about an agent’s services will not require such agreements.
While sellers may still offer compensation to buyers’ agents, this information can no longer be shared on Multiple Listing Services (MLS). Sellers can continue to provide buyer concessions, such as assistance with closing costs.
It’s important to note that certain aspects of the homebuying process remain unchanged. REALTOR® agents will continue to guide buyers through the process, adhering to their ethical obligations. Agent compensation remains negotiable, and REALTORS® are bound by their Code of Ethics to have transparent discussions about fees.
Homebuyers are encouraged to actively engage with their agents, asking questions about compensation and services to make informed decisions. The settlement aims to empower buyers with more choices and a clearer understanding of the real estate transaction process.