NAR Settlement
Understanding the NAR lawsuit settlement
What you need to know
Navigating the recent developments surrounding the National Association of Realtors (NAR) lawsuit can be confusing. This settlement represents a significant shift in how real estate transactions will be managed, particularly concerning commission structures. Changes are now in effect as of August 17, 2024.
Impact on buyers
These new changes aim to clarify financial agreements between buyers and their agents, empowering buyers to navigate transactions effectively. Here are some crucial changes potential buyers should understand:
Buyer’s Representation Agreement:
Prior to viewing any property, buyers must enter into a Buyer’s Representation Agreement. This agreement outlines how the buyer’s agent will represent them and details the obligations of both parties.
Offer of Compensation:
The agreement requires a clear offer of compensation to the buyer's agent, ensuring transparency in how the agent will be paid for their services.
Timeline:
Specific timelines will be included in the agreement, providing clarity on duration and scope of representation. The agreements can be no longer than 90 days in duration and can be exclusive or non-exclusive agreements.
Seller compensation and loan considerations
Seller Participation:
Sellers can legally pay buyers compensation, though commission rates will no longer be published on the Listing agreement or the Multiple Listing Services. Many sellers may still opt to pay buyers compensation with negotiation in the purchase contract.
Buyer Obligations:
If a seller does not agree to pay compensation, the buyer is obligated under their agreement with their agent to pay the agreed amount to purchase the home.
VA and FHA Loans:
FHA and VA loans have temporarily adjusted their rules to allow buyers to pay their own agent's compensation.
Navigating your journey
Now more than ever hiring a skilled negotiator is key to your success.
We advise interviewing any agent you are considering to understand the services they provide before signing a Buyer’s Representation Agreement. We hope you’ll choose Better Altitude, where you’ll find expertise in all things real estate in Calaveras County CA.