As if losing a princess wasn’t bad enough, now NAR has gone and lost us buyer’s agent commissions?! (Ok, not really, but keep reading.)
This week is really testing my faith in mankind.
I’m still firmly on the “if you don’t laugh you’ll cry” bus 🚌, but that doesn’t mean I’m not taking this seriously.
And you should too.
Well, not the search for Kate part. I mean, what you do in your personal TikTok rabbit holes is on you.
Speaking of, didn’t we almost lose our TikTok privileges too this week?
Again, what a week!
Now let’s tackle the proposed NAR settlement as it came out on Friday…
*Deep breaths*
First off this is a PROPOSED settlement(even though the headlines and social media posts would suggest otherwise. 😵💫). The court still has to approve it and let’s not forget our friend the DOJ who is going to be nosing around deciding if this is fixing what they want to fix in the way of decoupling real estate commissions.
I’m not going to dig super deep so if you want more, please do your own research, but in a nutshell NAR has agreed to the following(as seen in Inman article by Taylor Anderson 3/15/24):
1.$418,000,000 in damages to be distributed to the class(this settlement would cover more than just the Sitzer/Burnett case, but any of the cases brought by home sellers) and a few rule changes.
2. Not putting in place any NAR rules that allow listing agents to set compensation for buyer’s brokers.
3. Offers of buyer broker compensation would not be listed in NAR affiliated MLS. This rule would take effect July 2024.
4. NAR affiliated MLS participants will be required to work with buyers to enter into written buyer representation agreements before touring homes.
5. Buyer brokers would still be allowed to negotiate offers of compensation outside the MLS’s, but that communication can’t happen through the MLS.
6. Brokers could still negotiate pay via fixed-fee commissions paid directly by consumers, concessions from sellers or a portion of the listing broker’s compensation.
7. Sellers would be allowed to offer buyer concessions on MLS as long as it was not conditioned on using a buyer broker.
Now, let’s wade through the key takeaways from this proposed settlement:
- This is it. There is no appeal now. If the court approves these terms we will have to comply as members of NAR.
- Be prepared for an increase in your NAR dues to cover this extremely large payout to happen over the next 4 years. NAR hasn’t officially said this yet as they are just trying to spin the settlement as a way of protecting us, but money doesn’t grow on trees last I checked.
P.S. I just loooove the way they are trying to play if off like this settlement is doing us a favor. Too little, too late bro.
- Sellers can still pay concessions to the buyer(which they can show on MLS). They can also still pay commission to the buyer’s broker, however my best guess on how this plays out is that sellers will start paying just their agent’s commission and then paying a percentage of buyer’s closing costs on most transactions. If the buyer chooses to hire an agent and use that money to pay them, it will be their decision.
- My favorite thing to come out of this settlement if it’s approved is the buyer brokerage representation agreement being required before showing homes. Ummm, hello, this is a huge win for buyer’s agents and client loyalty. Gone are the days when the buyer jumped from agent to agent to see houses on a whim. Hello, professionalism! Now the buyer should be fully informed about how the process works and how their agent will be paid. And the fact that it is a rule that everyone MUST follow means you won’t lose a buyer to another agent that doesn’t require them to sign a brokerage agreement.
I know this has been a long one, so I’m going to break it up. Coming Tuesday I’ll be emailing the next steps you should be taking as an agent to prepare for these changes instead of being upset and resistant.
What are your thoughts on this news? How are you feeling? Hit reply and let me know. I’d love to get a feel for how the HH Realtors see this development.
Now, get back to the search for Kate and please let me know if you find her. 😘🔍👀🍀
Yours in rap and real estate, Katy
