The NAR Anti-Trust Settlement is back in the news since the new rules officially took place over the weekend. There is STILL a lot of mis-information out there. Here are the facts. There are TWO key points to note and what it means and doesn't mean.
1. Compensation (Commission) Offers Removed From MLS
NAR has agreed
to put in place a new rule prohibiting offers of compensation on an MLS. What does this mean for Sellers and Listing Agents? Simple. You may
still offer a buyer's agent co-op fee, but it cannot be listed anywhere
in the MLS. This has to be negotiated separately. Offers of compensation CAN continue to be an option that buyers and buyer's agents pursue off-MLS through negotiation and consultation. Sellers CAN also offer Buyer Concessions on an MLS (for
example—concessions for buyer closing costs and Buyers MAY choose to offer a portion of that to their Buyer's Agent).
Frequently Asked Questions - SELLERS
Q: Does this mean Sellers no longer have to offer a commission to a Buyer's Agent?
A. NO. It was NEVER required and it was always (and still is) negotiable. Sellers always had the option of selling with out agents at all (FSBOs) or with a "discount" brokerage. Sellers MAY still offer compensation but it just can't be advertised in the MLS anymore.
Q: I'm a Seller and I WANT to offer a commission to a Buyer's Agent. How do I do that?
A: Listing Agents MAY list any commission offered on their own brokerage website (not via MLS), blog post, on a sign rider, on social media, on a property flyer, etc. and through good 'ol communication with other agents.
Q. Does this mean I'll save money on commissions?
A. Not necessarily. It all depends on what you negotiate with your Listing Agent AND IF a Buyer / Buyer's Agent requests some form of compensation in their offer.
2. Written Agreements Required for Buyer's Agents
While NAR has been advocating for the use of written agreements for
years, this settlement now requires Agents
working with buyers to enter into written agreements before touring a home. Most of us already did this! The Buyer Agency Agreement explains how much the agent is expecting to be paid, and who will be paying it.
Frequently Asked Questions - BUYERS
Q. I'm a Buyer but can't afford to pay a buyer's agent's commission, so what can I do now?
A. Your Buyer's Agent CAN negotiate as part of the purchase contract they they will be paid (X%) by either the Seller or Listing Agent. They can also negotiate the Seller to pay "Buyer Concessions" i.e. that help pay for closing costs and part of their commission.
Q. I'm a Buyer, but don't want to see a house if the seller won't pay my agent's commission. How do we know what listings (sellers) are offering compensation to my agent?
A. Quick answer is, you DON'T! Your agent should still show you every home you're interested in. It is up to him/her to reach out to each listing agent to see IF they are offering compensation. Even if the seller isn't offering anything, but you want to write an offer on that home, your agent can simply ask for compensation as part of the Contract to Buy, or you can ask for "concessions" that will help you pay closing costs and your agent's fee.
Q. I'm a Buyer but don't want to sign a Buyer Agency Agreement, can I just deal directly with the Listing Agent?
A. Yes, of course. Buyers have always had that choice. However, Buyers may NOT be saving any money by going directly with the listing agent. It's possible that the agent will get the "full" commission even if there is no Buyer's Agent. In addition, it's in the Buyer's best interest to be represented, since the Listing Agent is working for the Seller and not YOU.
Q. I heard that prices will come down as a result of this settlement, is that true?
A. Not necessarily. Home prices go up and down based on supply and demand. In a market where there are more homes listed than buyers, prices go down. When there are more buyers than listings, home prices go up.
Q. If I don't have a Buyer's Agent, does that mean I'll get a discount on the price of the home?
A. Not necessarily. It's quite possible that the seller has negotiated a commission of X%, regardless if there's a buyer's agent or not.
Bottom line:
Commissions always have been negotiable and still are!
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