NAR Practice Changes

NAR Practice Changes: What Buyers and Sellers Need to Know

The National Association of Realtors (NAR) has agreed to pay $418 million to settle antitrust lawsuits filed in 2019. These lawsuits claimed that the real estate industry unfairly required home sellers to pay buyer broker commissions when listing properties on multiple listing services (MLS). As part of the settlement, NAR has introduced changes aimed at creating more transparency in the home-buying process, which are expected to benefit both consumers and real estate agents.

Although the settlement is still awaiting final approval in November, NAR began enforcing new rules on August 17. These changes address how brokers are compensated and introduce new requirements for buyers and sellers.

Key Changes Affecting Buyers and Sellers

Traditionally, home sellers would cover the buyer's broker commission, with this information publicly available on the MLS. However, the settlement now prohibits broker compensation offers on the MLS.

Key changes for buyers include:

• Buyers must sign a written agreement with their agent before viewing homes listed on the MLS.
• Buyers can negotiate their agent's commission and the services provided.
• The written agreement must outline the compensation amount, either as a fixed dollar amount or percentage, and ensure the agent does not receive more than the agreed amount.

For sellers, the changes allow for more flexibility:

• Sellers can still negotiate commissions and services with their listing broker.
• Sellers can offer buyer broker compensation outside of the MLS through other means like social media or direct contact.
• Sellers can still offer concessions on the MLS, provided they are unrelated to the buyer’s broker compensation.

Despite these updates, homebuyers can still attend open houses independently just need to sign in with buyer brokers’ name.

Expert Tips for Buyers and Sellers

In light of these changes, real estate experts offer advice for navigating the housing market:

For Buyers:

1. Set a Budget: Understand your monthly housing payment, including the home price, down payment, mortgage, and property taxes.
2. Be Flexible: Consider smaller homes in ideal locations or larger homes farther out. Being flexible can help you act quickly when a suitable home becomes available.
3. Monitor the Market: Stay informed about housing inventory and prices in your desired area. A real estate agent can assist in tracking this information.
4. Stay Confident: Buying a home is a significant decision. Stay within your budget and don’t rush into a purchase that doesn’t fit your needs.

For Sellers:

1. Price Competitively: Research comparable homes and price accordingly. In some cases, you may need to make concessions in a buyer’s market.
2. Maintain Your Home: Ensure your home is in top condition to attract buyers. Curb appeal and well-maintained interiors are essential.
3. Work with an Agent: A local agent with strong market knowledge can help you sell your home quickly and for a good price.
4. Address Issues Promptly: Make necessary repairs or improvements to eliminate buyer concerns and highlight your home’s strengths.

Minnie Rzeslawski is a full time broker/owner with over 35 years of experience. She can be reached at (619) 804-5373 or [email protected].