The NAR Settlement: What Does it Mean For Home Buy

Recently, the Department of Justice sued the National Association of Realtors (NAR) for what
many home sellers thought was price fixing. There are many arguments to be made on both
sides of the issue, and for accurate details you can check it out here: https://www.nar.realtor/
the-facts

After much legal wrangling, a settlement was reached that took effect in August, 2024. First, it
will help to understand a little history ...

For decades agents assisting home buyers have been paid after closing and the funds have
usually come from the seller’s proceeds. Agents representing sellers would input the data and
photos about the home into the Multiple Listing Service (MLS) including the amount of
compensation that was being offered to “cooperating brokers.” Usually this was a code - a
few letters - along with a number that indicated the percentage of the sale price that a buyer’s
agent could expect.

As of August, 2024 there are two new and significant rule changes:
1. MLS listings will no longer address the amount of compensation that may be offered by the
seller, and
2. Buyers seeking to view properties (other than by visiting an open house) must have a
written representation agreement signed in advance with the showing agent

What does this mean for you, the home buyer?
First, your agent must have an honest conversation with you about their fees, your payment
options, and second, the services you can expect in return for hiring them to represent you and
negotiate the best price and terms on the home you choose.

Here are a few options:
A. Your offer can request that the seller cover your buyer broker’s fee by way of “concessions”
paid to you at closing, then you will compensate your broker from that
B. You can pay your buyer broker directly, either by way of a retainer, a fee paid at closing (or
a combination) *You may be able to include the broker compensation in your loan. Check
with your lender on your particular loan type & the rules/regulations*
C. The “concessions” can be split between you and the seller
Initially there will be a bit of confusion, as is the case anytime there is a major change.

However, I believe this change is a good thing and ultimately will be beneficial to all.
For more in depth information and to have all of your questions answered, contact me. I am
here to help!