NAR members and REALTOR® associations must implement the practice changes stemming from NAR’s proposed settlement agreement fully and in good faith.
Consumer choice is paramount, particularly when it comes to determining the nature and cost of professional representation in a real estate transaction. As such, it is deeply concerning to see others take positions on listing agreements and offers of compensation that would harm consumers by leaving them with less choice than ever before.
Form agreements serve as a positive foundation for real estate professionals to engage in clear and open conversations with consumers about the full range of choices when it comes to professional representation and compensation. Ahead of the Aug. 17 practice change implementation date, NAR encourages associations and other form providers to address form updates early and educate real estate professionals to ensure they can confidently engage with consumers about what the practice changes and form agreements mean for consumers. To be clear, NAR opposes any attempts to circumvent the settlement: Members and associations must implement the practice changes fully and in good faith, doing so with the goal of promoting consumer empowerment, consumer choice, and healthy competition.
Offers of compensation also remain an important option available to consumers. Under NAR’s proposed settlement related to broker commissions, home sellers can continue to choose to offer compensation to the buyer’s broker off-MLS. Offers of compensation help make homeownership and the benefits of professional representation more accessible to buyers, including first-time home buyers, increase homeownership opportunities for historically underserved groups, and benefit sellers by expanding the potential buyer pool.
The ability for listing brokers to make an offer compensation to a buyer broker has significant implications for buyers who struggle to come up with cash to make it to the closing table. Proposals to limit or eliminate this option would put an additional strain on their finances, resulting in these buyers sitting out of the housing market or going through the biggest transaction of their lives without professional representation. There are those who suggest the onus should be put on buyers to ask for compensation for their agent as part of their offer. Competing against multiple offers, cash buyers, and investors, a first-time buyer or a buyer lacking generational wealth will see such an offer move to the bottom of the pile. Other suggestions—for example, that buyers bid up the home price in order to win a concession from the seller—will have the perverse effect of driving up home prices in the midst of a housing shortage and historic affordability crisis.
Members and consumers are encouraged to visit facts.realtor(link is external) for more information on the proposed settlement, including NAR’s overviews of how buyers and sellers can prepare for how the settlement practice changes will impact their home buying and selling experiences
National Association of REALTORS®
Reprinted with permission
