On March 15, 2024, the National Association of REALTORS® (NAR) announced a $418 million settlement with a nationwide class of plaintiffs in an antitrust lawsuit. The lawsuit centered around claims that REALTORS® conspired to artificially inflate commission rates by not being transparent about how buyer’s agents are compensated.
So, what’s changing about how buyer’s agents are compensated?
Today, when a seller’s agent lists a home on a REALTOR®-owned Multiple Listing Service (MLS), they are able to include an offer of compensation to the buyer’s agent as part of the listing. Moving forward, this compensation cannot be advertised on the MLS.
The practice of putting the buyer’s agent commission percentage on the MLS has led many to believe that number is fixed. And many agents have not done a good job explaining that commissions are negotiable.
If the court approves NAR’s settlement, agents will no longer be able to advertise any buyer’s agent’s compensation when they list a home on a REALTOR®-owned MLS.
This will encourage agents to have more in-depth conversations with their clients around compensation, promoting greater transparency across the industry.
Buying a home is a huge investment, perhaps the largest single purchase a person will make; Transparency is good.
Now, buyers will be required to sign buyer’s agency agreements to ensure they fully understand the buyer-broker relationship, obligations between broker and client, and how their buyer’s agent is compensated.
As a real estate agent, I represent both Buyers and Sellers - from experienced investors to first-time homeowners. I work hard to get my clients the best deal possible, either as a buyer or seller. This is a good opportunity to clearly explain the value, expertise, market understanding, and professional network that a seasoned Buyer's Agent brings to any purchase. Working with an experienced agent is always in the best interest of any buyer or seller.
All in all, it’s too soon to tell exactly how the proposed rule change will impact the housing market. What we do know is that there are too few homes and too much demand — even with current mortgage rates — for home sellers to worry about competing on price, generally speaking.
