NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS. In other words, neither a buyer nor a buyer's agent will see the compensation offered the buyer's Agent, if any, on the MLS. Sellers, however, can offer buyers concessions on the MLS (e.g. concessions for Buyer closing costs).
Additionally, buyer's agents will be required to enter into written agreements with their buyers. Both of these changes will go into effect in mid-July 2024.
Myth 1: The buyer's agent commission was always fixed
Fact: Commissions have always been negotiable in real estate. Sellers have the right to choose what, if any commission, they will provide a buyer's agent.
Myth 2: Sellers no longer need to compensate buyer’s agents
Fact: This is true and always has been. Commissions to a buyer's agent is a choice made by the seller in consultation with their listing agent.
Myth 3: Only a seller can compensate the buyer's agent.
Fact: Buyers' agents can be paid by either the seller or the buyer. If the responsibility of paying the buyer's agent fee is put on the buyer, then they will have the added burden of paying the buyer's agent fee directly from their pocket. This added cost, along with higher interest rate mortgages, rising home prices, and higher property insurance rates will likely be reflected in a lower offer price. It's a simple function of economics.
Myth 4: Buyers no longer need a buyer's agent
Fact: Buyers are best protected by professional real estate agents. When making one of the most significant financial transactions of their lifetime, buyers deserve a trusted advisor to guide them through the process and represent their interest.
Myth 5: The settlement will change the way Americans buy and sell homes
Fact: Real estate professionals will continue to help buyers and sellers navigate one of the most costly and complex transactions of their lives.
Myth 6: Sellers are now prohibited from offering buyer’s compensation
Fact: Offering a buyer’s agent commission has always been up to the seller. Sellers can continue to offer compensation and concessions to buyer’s agents and buyers, if they believe it will lead to the best outcome for the sale of their property.
As always, please reach out if you have any questions about this topic or any other real estate matters.