Breaking Down the NAR Settlement: Your Guide to the Latest Changes

Buying a home is one of the largest financial transactions you’ll ever undertake. Realtors are dedicated professionals who offer trusted advice and are ready to guide you through your homebuying journey, ensuring you make the best choices for your needs. Recent changes from the NAR settlement bring several updates that benefit homebuyers, and we’re here to explain them clearly.

What the NAR Settlement Means for Homebuyers:

• Written Agreements Required: Before touring a home, you’ll need to sign a written agreement with your agent. Ensure this agreement accurately reflects the terms you’ve discussed and clearly outlines the services and costs involved.
  

• Compensation Details: The agreement must detail:

  • The exact amount or rate of compensation the agent will receive, or how it will be determined.
  • Compensation must be specific (e.g., $0, a flat fee, a percentage, or an hourly rate) rather than vague (e.g., “buyer broker compensation will be whatever the seller offers”).
  • A term that prevents the agent from receiving more compensation than agreed upon in the buyer agreement.
  • A clear statement that broker fees and commissions are negotiable and not legally fixed.
• Agreement Applicability: Written agreements are required for both in-person and live virtual home tours. However, you don’t need a written agreement if you’re simply asking about services at an open house.
  
• Seller Compensation: The seller may offer compensation to your agent, but this offer cannot be posted on a Multiple Listing Service (MLS). MLSs are used by brokers to share property details.
  
• Concessions from Sellers: You can still accept concessions from the seller, such as offers to cover your closing costs.

These changes will take effect on August 17.

What Remains Unchanged:

• Agent Integrity: REALTORS® are committed to assisting you throughout the homebuying process and are ethically bound to act in your best interest.
• Negotiable Compensation: Compensation remains fully negotiable. If your agent is a REALTOR®, they must follow the REALTOR® Code of Ethics and have transparent discussions about compensation.
• Choice and Guidance: You have options. Work closely with your agent to explore all available choices, helping you make the best decision for your homebuying needs.