A Brief Background on the Lawsuit and Settlement

The lawsuit challenged a common practice where sellers cover the commissions for both their listing agent and the buyer’s agent. The cooperative-compensation rule meant that the buyer's agent's commission was typically shown in the MLS (Multiple Listing Service), a database for real estate agents. Critics argued that this system reduced competition and drove up both commissions and home prices.

While NAR defends its policies as promoting ethical standards and transparency, the lawsuit resulted in a settlement that introduced new rules to provide more clarity and choice for consumers. These changes aim to increase transparency in real estate transactions, giving buyers and agents more control and flexibility when negotiating compensation.

Key Changes for Homebuyers

If you’re buying a home, here are some key changes to be aware of:

1. Written Agreement Before Touring Homes: Before a REALTOR® can show you homes, you’ll need to sign a written agreement that outlines their services and how they will be paid. In Arizona, this agreement is called the Buyer Broker Exclusive Employment Agreement. This helps ensure both you and your agent are clear on expectations from the start.

2. No More Seller Compensation Offers in the MLS: In the past, sellers would often offer compensation to the buyer’s agent, and this information was listed in the MLS. Under the new rules, this compensation can no longer be displayed in the MLS. Now, the buyer and agent will negotiate this compensation directly, increasing transparency in the process.

What Stays the Same?

Just like any other professional service, real estate agents and brokerages have always been able to set their own pricing based on their services, expertise, and market knowledge. This flexibility remains unchanged. At Elpis Real Estate Boutique, our pricing reflects the high level of value, expertise, and service we offer, ensuring your home-buying experience is seamless and successful.

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"When you're the cheapest nobody believes you're the best, and when you're the best, no one expects you to be the cheapest."

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Although pricing may vary between agents and brokerages, your ability to choose the best real estate agent near you remains the same. When looking for an agent, consider their level of expertise and how they align with your specific needs.

FAQs

Q: How can I cover my agent’s fees?

There are several options available for compensating your buyer’s agent, and the method you choose will depend on your specific situation. Here’s a breakdown of the main options:

• Buyer Pays Directly at Closing:
  This is similar to hiring your own attorney. You would pay your agent directly at closing for their services.
  

• Seller Offers to Pay as a Marketing Tactic
  Some sellers might offer to pay the buyer broker’s commission to make their property more attractive to buyers, similar to a car dealership offering a 0% interest deal.
  

• Buyer and Seller Negotiate All or Part of the Buyer Broker’s Compensation
  Buyers and sellers can negotiate how much the seller will contribute toward the buyer broker’s fee as part of the offer process.
  

• Lender Credit
  Just like a lender might offer a credit toward closing costs, they could also cover some or all of the buyer broker’s compensation through a credit.
  

Q: I am renting a home. Do I still have to have a written agreement with a REALTOR®?

A: If you're working with a REALTOR® to help you find a rental home, a written agreement will still be required.

Q: Who does this settlement impact?

A: This settlement affects all 1.5 million NAR members, including REALTORS® and brokerages who use the Multiple Listing Service (MLS) to share property information and conduct transactions. It applies nationwide to all buyers, sellers, and real estate professionals involved in these transactions.

Q: When did these changes take effect?

A: The changes took effect in Arizona on August 1, 2024, and are being implemented nationwide for all NAR members.

Q: Do I need to sign an agreement before touring homes?

A: Yes, an agreement must be signed before touring homes with an agent. This ensures that both parties are clear on what services will be provided and how the agent will be compensated. However, no written agreement is needed when attending an open house or casually speaking with an agent.

Q: Where can I find more information about these changes?

A: For more detailed information about the settlement and how it affects you, visit NAR’s official facts page.