Understanding new Buyer and Seller Guidelines

As many of us have been following the news about the NAR lawsuit over the last couple of months the new laws and procedures are now in place. I wanted to break down what this means for clients, both buyers and sellers, and how to navigate the upcoming changes and insuring our clients are successful in their real estate goals.

For Sellers: As of August 17, 2024, sellers will no longer be required to offer compensation to a buyer’s agent, and listing agents will not be able to market any cooperating broker fee in the MLS. While these fees have always been negotiable, we previously had to state some buyer broker fee that the seller agreed to in the MLS. Sellers can still choose to offer compensation to the buyer’s agent, but this will now be marketed outside of the MLS, through broker websites and similar platforms or via agent to agent communication.

For Buyers: If you’re planning to purchase a property in the near future, be prepared to sign a Buyer Broker Agreement before viewing any properties. These agreements can be customized for a single property showing, a day of touring multiple homes, or a monthly time frame in a specific area. Buyer-side commissions will be determined between you and your agent through this agreement before any activities, such as property tours, begin. This fee may be paid by the seller, the buyer, or a combination of both. While the buyer’s agent’s compensation might be rolled into the mortgage, we’re still waiting for clarification from lenders on regulations, as commissions and fees are not fixed assets.

I think clients and agent are in for a couple months of adjustments and figuring out best practices, I do believe these changes should be positive for the industry. Consumers will have full transparency, and both buyers and sellers will have the opportunity to customize their experiences and the structure of their deals. Agents will need to clearly demonstrate their value, ensuring the best outcomes for their clients. On the buying side, this means securing the best value, and on the selling side, it means explaining new strategies while maximizing market exposure and achieving the highest possible net for the seller, even if that includes offering a buyer’s agent commission.

Key Takeaways: If you’re planning to buy or sell soon, it’s essential to establish your team of professionals. Interview agents to ensure a good fit, and make sure your agent is bringing value and prioritizing your best interests. Some agents may struggle to adapt to these changes, and you don’t want to be stuck with someone who is playing catch-up. New strategies will emerge to secure the best deal, so ensure your agent is presenting all aspects so you can make the best decision.

Feel free to reach out if you have any questions or would like to discuss this further.