Skip to content

What Buyers Need to Know

Understanding the NAR Lawsuit Settlement

Navigating the recent developments surrounding the National Association of Realtors (NAR) lawsuit and its upcoming settlement can be daunting. This settlement represents a significant shift in how real estate transactions will be managed, particularly concerning commission structures. Changes are projected to start August 17, 2024

Changes in Real Estate Transactions

The primary goal of the settlement is to decouple commissions, reaffirming that commission rates have always been negotiable. This lawsuit settlement challenges traditional commission practices within the industry, aiming to enhance transparency. For more detailed information on the NAR lawsuit and its implications, please visit our NAR Lawsuit Information Page for updates and resources.

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.

Seller Compensation and Loan Considerations

Seller Participation:

Sellers can still offer compensation to the buyer's agent, though commission rates will no longer be listed on Multiple Listing Services. Many sellers may opt to offer compensation through concessions.

Buyer Obligations:

If a seller does not offer compensation, the buyer is obligated under the agreement 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 Buyer’s Journey

We advise interviewing your agent to understand the services they provide before signing a Buyer’s Representation Agreement. For a comprehensive list of services you should expect as a buyer, click here.