Confused About the NAR Settlement?

There is LOTS OF CONFUSION out there related to the pending (not finalized in the courts) National Association of Realtors settlement. Here is what you need to know as a buyer or seller. The following applies to residential real estate – single families, condos, and 2–4-unit multi-families.

Buyers

• Unless you are touring a property with the listing broker, you will need to have a signed buyer representation agreement with a licensed agent.

• Buyer representation agreements must be in writing and the new agreements (provided to Realtors by the Maine Association of Realtors) make it even more clear what ‘you, as a buyer, will pay or cause that agency/agent to be paid.’ 

• Given the changes on the seller side, there is a higher probability that you as the buyer will have to pay your agency/agent out of pocket for their services.

• Many agencies/agents, upon offer submittal, will add language in the purchase and sale that attempts to obligate the seller to pay the buyer broker/their agency. Of course, this can vary by agent and agency.

• This does not mean – you should go it alone and not have a highly qualified, local buyer broker on your side. Just the opposite – it is more critical than ever.

• SUMMARY – sign up with a buyer broker, get the agreement in writing, and understand what you might have to pay them in advance.

Sellers

• Listing agents can no longer:

  1. Offer a buyer broker/buyer agency bonus; for example, ‘bring a buyer and close by November 1st and receive a $1,000 buyer broker bonus.

  2. Advertise the amount of cooperating commission in MLS (Multiple Listing Service). In non-Realtor speak, this means that the way a listing agent communicates the amount of compensation they will share with a buyer's agent can no longer go in the MLS or on any real estate websites tied to the MLS.

• This does not mean – that listing agents and sellers should forgo offering a commission to buyer brokers or in any way depart from the way agents have been paid over the last 100+/- years. In my opinion, a departure from this and therefore placing the payment for buyer broker representation on the buyer is not in a seller’s best interest. 

• SUMMARY – work with an established and experienced local listing agent, follow their lead, and don’t cheap out and think you are saving by not paying a buyer broker (these agents work hard, deserve to be paid, and if you don’t pay them and a buyer has to – your home won’t be shown as much, will linger on the market and sell for less).