You may have heard some buzz about the recent settlement agreement that the National Association of REALTORS® (NAR) entered into, which changed some aspects of real estate transactions. These changes went into effect on August 17, 2024. The good news is that buyers and sellers will continue to have options and even more flexibility within their real estate transactions. Here are some things that you should know:

• If you are a buyer and your real estate agent is using the Multiple Listing Service (MLS), you will need to enter into a written agreement with the agent before you tour any homes either in person or through a live, virtual home tour. The written agreement includes the rate of compensation that the agent will receive. 

• You do NOT need to enter into a written agreement with an agent if you are inquiring with them about their services or talking to an agent at an open house. 

• Agent compensation for buyers and sellers is entirely negotiable. Sellers can still offer compensation to the buyer’s broker/agent. If the seller or the seller’s agent does not provide compensation to the buyer's agent, the buyer is responsible to compensate their agent as agreed upon in writing by the buyer and the buyer’s agent.

• Buyers should not panic about this potential additional cost. Many sellers are offering seller concessions to buyers to assist with commission costs and buyers can negotiate with sellers for these concessions when needed.

More than ever, you should treat hiring your real estate agent like conducting a job interview. When searching for an agent, ask questions about their compensation, their services, and the written agreements you will need to enter into with them. 

Sources:

National Association of REALTORS®, What the NAR Settlement Means for Home Buyers and Sellers

National Association of REALTORS®, Home Sellers: Here's What the NAR Settlement Means For You

National Association of REALTORS® , Understanding Real Estate Practice Changes and the Impact on the Consumer