Changing Business Practices for Real Estate Transactions

Changing Business Practices for Buying and Selling a Home

If you've heard, or maybe you haven't.. either way, because of the there has been a lawsuit about how homes are sold in the United States. As a results of the latest NAR (National Association of Realtors) settlement agreement, the nature of all residential Real Estate transactions across the USA has two key changes to the way members and MLS participants do business:

1. NAR agreed to create a new MLS rule prohibiting offers of compensation on the MLS. This would mean that offers of compensation could not be communicated via an MLS, but they could continue to be an option consumers could pursue off-MLS through negotiation and consultation with real estate professionals.
2. NAR also agreed to create a new rule requiring MLS participants working with buyers to enter into written agreements with their buyers before the buyer tours a home. NAR has long encouraged its members to use written agreements to help consumers understand exactly what services and value they provide, and for how much.

Buyer representation agreements will be commonplace, requiring buyers to "hire" their agents prior to touring homes. This does not apply should potential buyers wish to visit open houses on their own, however if they want to make an offer on a home, some form of an agreement will needs to be in place at that time. 

NAR does not set commissions, and commissions were negotiable long before this settlement. They are and will remain entirely negotiable between brokers and their clients. And housing prices are dictated by market forces beyond members’ control.

Getting the facts right is important, especially because the settlement agreement is complex. NAR is continuing to engage with media to correct inaccurate reporting about the settlement. Members are also encouraged to refer to official NAR sources, like facts.realtor, for the most accurate and up-to-date information about the settlement and what it means for consumers.

If you're wondering how this may effect you, feel free to contact us for more information.