IMPORTANT INDUSTRY CHANGES
Effective August 1, 2024 there are new changes in Buyer Broker Agreements. Read below to learn more.
National Association of Realtors Commission Lawsuit
The National Association of Realtors (NAR) settlement is a multimillion dollar settlement that will affect real estate transactions and may benefit buyers. The settlement went into affect on August 1, 2024.
Here are some noted changes:
Written Agreements
Agents must have written agreements with buyers before showing a property listed on the Multiple Listing Service (MLS).
Buyer Representation Agreement
Buyers must sign a Buyer Representation Agreement before a showing, which includes the buyer's broker compensation.
Compensation
Offers of compensation are no longer allowed on the MLS platforms, but buyers can still negotiate compensation off-MLS. Sellers can also offer buyer concessions on an MLS, such as closing cost concessions.
Tied Compensation
Tied compensation for buyers' and sellers' agents is no longer allowed on MLS. Buyers and their agents must explicitly agree on the service the agent will provide.
WHAT DOES THIS MEAN FOR YOU?
If you are a home buyer, now more than ever it is extremely important to have conversations around hiring an agent to represent you. In the past, buyers would look at homes, meet or connect with an agent, and then write an offer without really asking what services are being provided. A lot of this was in result as sellers paid buyer agent fees, and buyers agents never really had to discuss commissions with buyers.
With these lawsuit changes, now buyers are required to hire an agent with a formal agreement before seeing properties. This agreement will discuss agent compensation, but also highlight the services you will be receiving.
Without an agreement, buyers forgo representation which would mean the buyer would be unrepresented under contract with a sellers agent representing the seller only. This is not recommended for buyers in any market as it imposes a lot of risk.
LET'S CHAT!
Still have questions? If you have plans in purchasing a home in 2024/2025, now is the time to reach out.
The Studebaker Group is available for questions surrounding these policy changes.