The National Association of REALTORS® (NAR) lawsuit settlement has introduced the most significant changes to the real estate industry since the 1980s. These changes stem from a series of lawsuits where buyers claimed there was insufficient disclosure about commission payments, and sellers felt it was unfair to pay buyers’ agents’ fees. As a result, commissions can no longer be displayed on the MLS. Here’s what this means for the market:
For Sellers
- Your agreements with your agent can remain unchanged.
- Buyers will now negotiate their commissions directly with their broker.
- Offers will likely include an “offer of compensation” form.
- If there is no Buyer Representation Agreement, then Seller has no obligation to pay Buyer’s Broker.
- Sellers will continue to negotiate based on the bottom line, factoring in all costs, including commissions.
For Buyers
- You must sign a buyer’s agreement before touring properties with your broker.
- Touring properties without a signed agreement is not allowed.
- The agreement will set your broker’s commission amount, which cannot be exceeded unless a separate agreement is signed.
- If a seller does not cover the buyer’s broker commission, you will be responsible for paying the agreed-upon commission.
The recent changes in commission rules now allow sellers to offer as little as $0 to the buyer’s broker, emphasizing the negotiable nature of commissions. This shift encourages buyers to be more selective and discerning when choosing their agents, potentially leading to a higher standard of service in the industry.
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Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 0203379
