An Update on the August 17th National Association of Realtors (NAR) Settlement
Without getting into too much detail (and there’s A LOT of detail), the NAR was a defendant in a class action lawsuit – Burnett v. NAR. The suit alleged antitrust violations, including price-fixing and a lack of transparency in commission rates. The NAR has settled with the plaintiffs, and the settlement affects both buyers and sellers. Here’s how it will impact you.
What This Means for Sellers
Compensation for selling your home remains fully negotiable. You can negotiate how much you are willing to pay the agent who lists your home and how much you are willing to pay the agent who brings a buyer to your home. The listing agent will no longer be allowed to post in the Multiple Listing Service (MLS) how much you are willing to pay the buyer’s agent for bringing a buyer. If you wish to offer compensation to a buyer’s agent, your listing agent can put that information on a sign, website, flyers, or social media.
What This Means for Buyers
You must sign a written agreement before entering a home or seeing a live video tour with a buyer’s agent. The agreement states specifically the amount of compensation the buyer’s agent will receive from you (dollar amount, percentage, flat fee). The seller is still free to offer compensation to the buyer’s agent. If the seller does so, it may not exceed the amount on this written agreement. And of course, if the seller is offering compensation to the buyer’s agent, the buyer does not need to pay the commission. The agreement must also state that broker fees and commissions are fully negotiable and not set by law. This agreement is modifiable.
Transparency for All
The positive thing about this ruling and the settlement is transparency. All fees and commissions are negotiable. Sellers are still free to pay commissions to buyer agents, as I think the majority still will. I have already used the buyer-broker forms with my buyers when showing them houses. And, yes, the sellers of those houses have agreed to pay the buyer’s realtor commissions. So, when we meet at a house to look inside, you’ll understand when I whip out my trusty clipboard and have you sign a buyer-broker agreement. Here are more facts from the National Association of Realtors if you would like to know more about this settlement.
