The NAR settlement was heavily covered in the media; now that the dust has settled, what changes should buyers and sellers be expecting?

There are two (somewhat significant) changes going into effect on August 17th,  2024. The litigation and eventual changes were brought on due to a lack of consumer transparency concerning compensation and service. While it’s long been required for a  client and agent to have a contractual agreement at the onset when selling a property, it  has been far less common when buying a property that an agent and client enter into a  contractual agreement at the beginning of the buying process. This brings us to our first  change. By mid-August, a buyer will need to enter into a written contract with an agent,  even in order to view a property— open house situations exist outside of this  requirement. The Buyer Representation Agreement will (1) outline the services being  rendered on the client’s behalf, as well as (2) detail the commission amount to be  compensated to the agent for services provided— bringing us to the second change coming in August.  

It’s long been the norm (though not required) for a property seller to offer the  buyer’s agent compensation for bringing a willing and able buyer to the transaction  table. It’s also been the norm for the compensation details to be shared alongside the  online property advertisement. This commission structure, however, has created a  disconnect between buyer’s, their agents, and how buyer’s agents are compensated.  The second change to come addresses this. By late-August, cooperating commission  amount will no longer be disclosed through online advertising platforms, but will be  negotiated and discussed between a seller’s agent and a buyer’s agent, up to a  maximum of the amount agreed to in the Buyer’s Representation Agreement. 

While some buyers are concerned these changes will make home-buying even  more expensive, as they will have to pay their agent out-of-pocket, that’s not expected  to be the case. Seller’s (as always) will be encouraged to offer concessions which can  go toward the buyer’s closing costs— including agent compensation— to encourage  buyer’s to purchase the property. Ultimately, this underscores the importance of having  strong, trustworthy representation throughout the transaction process, so that when it  comes time to negotiate concessions, along with repair requests and the purchase  price, you’re confident someone is advocating for your best interest.