Effective August 17, 2024, significant changes are coming to real estate commissions and practices. These changes stem from a settlement agreement reached by the National Association of Realtors (NAR) and plaintiffs in a lawsuit regarding broker commissions.
Key Changes
Written Buyer Agreements: Realtors must now have a written agreement with buyers before showing them homes listed on the MLS. This agreement should clearly outline the agent’s compensation and that commissions are negotiable.
No Commission Offers on MLS: Offers of compensation to buyer agents can no longer be displayed on the MLS. However, sellers can still offer compensation through other means, such as direct negotiation or marketing materials.
Continued Negotiation: It’s crucial to remember that commissions are still negotiable and agents can discuss compensation options with clients outside of the MLS.
Impact on Realtors
While these changes may require adjustments, they also offer opportunities to enhance transparency and professionalism. Key steps for Realtors include:
Update Buyer Agreements: Ensure your buyer agreements comply with the new requirements, clearly outlining compensation terms.
Understand Compensation Options: Familiarize yourself with alternative ways to communicate compensation offers to buyers.
Educate Clients: Inform clients about the changes and the continued ability to negotiate commissions.
By understanding and adapting to these new rules, Realtors can continue to provide excellent service while maintaining compliance.
Note: This is a summary and does not constitute legal advice. It’s essential to consult with legal counsel for specific guidance on how these changes impact your business.