NAR Settlement: Understanding the Upcoming Changes with Managing Broker Ryan Blake
Effective August 17th, the recent changes stemming from the settlement of the National Association of Realtors lawsuit will be implemented. Today, Essex Three-Twelve Managing Broker, Ryan Blake provides an overview of these upcoming adjustments and their impact on real estate transactions moving forward.
The NAR lawsuit has been a widely discussed issue within the real estate industry, with considerable speculation about it’s potential impacts. Following the announcement of the changes, it is now clear that two key changes will be implemented.
Change 1: On the Multiple Listing Service (MLS), all commission details for brokers will no longer be allowed to be disclosed.
Change 2: Every buyer is required to have a written buyer’s broker agreement signed with their agent or brokerage before touring properties.
So, how do these two changes affect the way we do business? Well, probably not much. This will add confusion initially but also once everyone gets in the habit of the new normal there will be more transparency between buyer and seller. Let’s break down each change…
Change 1: When Sellers sign an agreement to sell their property using a broker it will explicitly lay out how the brokers are compensated. Traditionally brokers would see this on the MLS. Since that is no longer the place to communicate these details, brokers will have to change their ways of discovering the commission details of the property. As of now, we know that with certain there can be no mention of compensation on the MLS. Other means seem to be fair game.
Change 2: Buyers and buyers’ brokers must now enter into an agreement before beginning to work together. While this is not entirely new, the ruling has led to stricter enforcement. This agreement clarifies the expectations of the broker and the compensation with terms agreed upon by both parties and is a benefit to both the broker and the buyer.
In summary, these two changes are going to cause some initial confusion, and my guess is unforeseen issues will present, leading to future changes. I do not think this is the last of it. I believe both changes have pros and cons. Having buyers and buyers’ brokers formalize their working relationship is good. Adding confusion to commissions is a recipe for problems to come. What I do feel confident in saying is that the buying and selling of real estate should not change too much. The market has ways of naturally fixing things, and the market is always changing. The one thing that does not go away is the value from professionals who service their clients at the highest level.
For more information contact Ryan Blake today.