The National Association of REALTORS (NAR) settlement has been popular in headlines and misinformation or incomplete articles abound. In the last couple weeks, the proposed NAR settlement was granted preliminary approval.
Before getting into the myths, we would love to hear from our clients: do you have any “my REALTOR is my hero” stories to share? The media has depicted a biased perspective on real estate agents. With all industries, there are good and bad eggs, but in real estate, there are many hardworking agents dedicated to their community and clients. Your “realtor is my hero” could be a story from an agent you worked with before us (because hopefully we are earning your business) or something you’ve heard from a friend.
This week we wanted to share 3 myths that National Association of REALTORS (NAR) busted regarding the settlement. Below are 3 misconceptions regarding the settlement (taken directly from NAR):
Myth: NAR requires a standard 6% commission.
FACT: You know this is untrue, but it’s a myth that has persisted in the media. NAR does not set commissions — they are negotiable. The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation. That offer can be any amount, including zero. And other rules throughout the MLS Handbook and NAR policy expressly prohibit MLSs, associations and brokers from setting or suggesting any such amount that should be included in that field.
Myth: Brokers representing buyers now have to work for free.
FACT: Under the proposed settlement, the types of compensation available for brokers working with buyers would continue to take multiple forms, including but not limited to a fixed-fee commission paid directly by consumers; concessions from the seller (as long as such concessions are not conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative); or a portion of the listing broker’s compensation. NAR has long believed that it is in the interest of the sellers, buyers, and their brokers to make offers of compensation; however, using the MLS to communicate offers of compensation will no longer be an option. Compensation will continue to be negotiable and should always be negotiated between agents and the consumers they represent.
Myth: The practice change will do away with offers of compensation to brokers representing buyers.
FACT: Offers of compensation are an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. The settlement also expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS, provided that such concessions are not conditioned on the use of or payment to a buyer broker.*
In the end, there will be changes to the real estate industry in response to the NAR settlement. Yet, each year homebuyers and home sellers will need the advice and expertise of a professional REALTOR when they go to conduct a real estate transaction. We don’t want to go to medical school, which is why we go to the doctor when we don’t feel well. We’ve invested time, energy, and years of practicing real estate so that our clients get a 5 star experience every time they work with us.
Questions about how the NAR settlement could affect your real estate goals this year? Reach out to us today!
