Imagine we’re sitting down over a cup of coffee, and you’ve just asked about the buzz surrounding the NAR (National Association of Realtors®) Commission Suit Settlement. There’s been a whirlwind of talk, and I get how it can stir up confusion, so let me lay it out for you.
So, traditionally, here’s how things have gone down: when you decide to sell your house and we sign a listing agreement, part of our arrangement involves you, the seller, paying a commission. Usually, 5-6%, but this is negotiated between seller and agent. This commission is for the work of selling your home. NAR has never set the commission rate, as portrayed in media outlets. A slice of this commission is earmarked for the buyer’s agent, because, let’s face it, very few folks are in the business of showing homes and negotiating deals for free.
Now, here’s where the settlement shakes things up. It’s aiming to change how this compensation dance has been choreographed. Should the court give it the green light in July, we’re looking at a new step where we can’t publicly advertise buyer’s agent commissions in the MLS (Multiple Listing Service) anymore. It’s not that you can’t compensate the buyer’s agent; it’s just that this detail won’t be something everyone can see on the MLS listings. Essentially, de-coupling this portion of the agreement on commissions from MLS, and making it an agreement via a buyers rep agreement on the buyers side.
Why does this matter? Well, it’s about transparency and choice. The idea is to give you, the seller, more control and flexibility over how much you offer to the buyer’s agent. It also opens the door for buyers to have more discussions with their agents about commissions, which could potentially shake up how negotiations and agent relationships work.
If approved, in July, every buyer’s agent, will have to have a buyers rep agreement in place. Most agents in Texas are required to do this already. I require my agents to have one in place, in my brokerage, so nothing new for me or my agents.
If a seller is not offering compensation, there are some home buyers that may not be able to pay their agent. This may move that potential buyer away from certain houses. In some scenarios, some buyers may go directly to the seller’s agent, as an un-represented buyer. Something, I do not recommend as the selling agent only has a fiduciary responsibility to his/her client. There are many different scenarios that can and will unfold, as we navigate this new landscape.
Think of it this way: everything around us, from the coffee we’re sipping to the chairs we’re sitting on, got here because someone bought it and someone else sold it. And when it comes to getting things done, whether that’s sorting out a legal issue, fixing a health concern, designing a new gadget, or yes, even finding the perfect home, we turn to the pros. Lawyers, doctors, engineers, and, of course, sales folks in all sorts of fields – they’re the ones we count on.
It’s a big change, and like any big change, it’s got people talking about what it’ll mean for buying and selling homes. Some folks are thrilled, seeing it as a step toward more fairness and flexibility in real estate transactions. Others are a bit wary, wondering how it’ll impact the dynamics of selling and buying, especially in markets that are already tight.
But here’s the bottom line: it’s all about adapting. We’re here to navigate these changes together, making sure you’re positioned in the best possible way, whether you’re selling your home, buying a new one, or both. And as always, I’m here to answer any questions and help demystify this process for you. Let me know if you want to jump on a call to discuss further.
