Things are changing around the Office! (The NAR Settlement and How it Affects You)

THE OLD WAY

Traditionally, the seller would hire a listing agent to sell their home.  The listing agent charges a commission and splits that commission with the buyer’s agent, who brings the buyer who wrote the contract for the house.  A number of class action lawsuits were brought by sellers who, in essence, were saying, “Why are we being forced to pay the buyer’s agent?” After the dust settled in court, we now have a new way.

THE NEW WAY

When an agent lists a house, they explicitly inform the seller that they are not obligated to pay the buyer’s agent’s commission.  The commission rate for the listing agent is negotiated between the listing agent and the seller.  And the seller can then agree to pay the buyer’s agent’s commission, pay a portion of it, or pay none of it at all.  Agents who work with buyers are now obligated to have the buyer sign a buyer agency contract before they are shown any homes.  In this contract, the agent lays out how much they are expected to be paid (this can be a percentage of the sales price, flat rate, hourly rate, etc)  If the buyer wants to write an offer on a home in which the seller is not agreeing to pay the buyer’s agent, then the buyer would be expected to pay it.

This is not a comprehensive guide to the new guidelines, but only an overview.  For more information, you can visit the National Association of Realtors website: https://www.nar.realtor/the-facts/nar-settlement-faqs.  And as always, feel free to call us for a consultation where we can explain the new guidelines and forms in person.

OUR APPROACH

FOR SELLERS:  The decision is yours as to whether you want to offer compensation to a prospective buyer’s agent.  There is no pressure to offer a certain percentage or for that matter, any percentage at all.

FOR BUYERS: We won’t ask you, as a buyer, to sign a long term contract with a predetermined commission.  Instead, we will enter into property specific agreements with you, as you look for the home you will ultimately buy.