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June 2024 Real Estate Blog: What the NAR Settlement Means for You

There’s been a lot of talk about the recent settlement involving the National Association of Realtors (NAR). To help clear up any confusion, I want to explain what this settlement means for you as buyers and sellers in the real estate market.

Before the Settlement:

The Multiple Listing Service (MLS) included a field for offers of compensation to the agent working with the buyer. An agent could meet a buyer, show a home, write a contract, and get paid based on the MLS-advertised offer of compensation, even if the buyer had not signed a buyer agreement. Buyers often didn’t know how much their agent was getting paid or who was paying, as buyer agent compensation was not visible to them.

After the Settlement:

The Multiple Listing Service (MLS) will no longer include a field for offers of compensation. This is an important change aimed at increasing transparency and fairness in the real estate market. Agents must have a written agreement with buyers before showing homes. This agreement outlines the agent’s compensation and how it will be paid. Buyers will know exactly how much their agent will be paid and who is responsible for the payment, fostering a more informed and transparent process.

Addressing Common Misconceptions:

Some sellers believe they were required to pay a buyer’s agent and won’t have to after the practice changes. The truth is, sellers have never been required to pay a buyer’s agent, and this hasn’t changed. The only difference is the removal of the MLS commission advertisement field. In Colorado, the seller listing agreements are structured so that the seller’s broker pays the commission. This will not change after the settlement. Despite inaccurate media coverage, the settlement does not set or lower agent fees. It simply ensures that fees are transparently discussed and agreed upon before any transactions take place.

The NAR settlement represents a significant shift toward greater transparency in the real estate industry. By requiring clear agreements between agents and buyers, it ensures that everyone is fully informed about compensation and payment responsibilities from the start. This change not only protects consumers but also promotes fair competition among agents. As we approach the implementation date in August 2024, it’s crucial for you to work with an agent who is up to date on the ever-changing real estate landscape. If you have any questions, please reach out to me. I’m glad to help!

Photo Credit: Kaytlyn Perez Photography

Chelsea Steen Realtor


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