Understanding New Real Estate Practice Changes After NAR’s Settlement
Recent changes in real estate practices following the National Association of Realtors’ (NAR) settlement agreement are shaping how buyers, sellers, and agents approach transactions. The settlement resolves claims brought by home sellers related to broker compensation, and it introduces two key practice changes that consumers should be aware of. These changes promote greater transparency and choice for both buyers and sellers in the real estate process.
1. Written Buyer Agreements Are Now Required
One of the major changes is the requirement for written agreements between buyers and their agents. Before touring any homes, buyers and their agents must agree on how the agent will be compensated, and this agreement needs to be documented in writing. This new requirement ensures that there is a clear understanding of how the buyer’s agent will be paid for their services.
What Does This Mean for Buyers?
Upfront Clarity: Buyers will need to discuss and agree on the terms of compensation with their agent before seeing properties.
Transparency: The written agreement will provide buyers with more transparency around how their agent is being compensated and what services are included.
This change helps set expectations early in the process, ensuring that buyers and agents are aligned on the terms of their relationship.
2. Offers of Compensation No Longer Displayed on MLS
The second significant change involves how offers of compensation are shared. Traditionally, when a seller or their agent offered compensation to a buyer’s agent, these offers were displayed on Multiple Listing Services (MLS), the local marketplaces where agents share information about homes for sale. Moving forward, offers of compensation will no longer be displayed on MLS.
What Does This Mean for Sellers and Buyers?
Off-MLS Communication: Sellers can still offer compensation to buyer agents, but any offers must now be communicated off-MLS, directly between the parties involved.
More Control for Sellers: Sellers have more control over whether and how they offer compensation to buyer agents, which can be handled privately rather than being publicly shared on the MLS.
This change provides both sellers and buyers with more options in how compensation arrangements are handled, contributing to greater flexibility in the transaction process.
Key Takeaway: More Choice and Transparency for Consumers
These new practice changes are designed to give consumers on both sides of a real estate transaction more control and transparency. Buyers will have a clearer understanding of how their agents are compensated, while sellers have more flexibility in offering compensation to buyer agents. As these changes take effect, it’s important for both buyers and sellers to stay informed and understand how the real estate landscape is evolving.
At Bee Home Real Estate Team of Silvercreek Realty Group, we’re committed to helping our clients navigate these changes with ease. If you have any questions about these new requirements or how they may affect your next real estate transaction, feel free to reach out. We’re here to provide guidance and ensure that your home buying or selling experience remains seamless.