Homebuyers: What the NAR Settlement Means for You

Buying a home is one of the biggest financial decisions you'll ever make. It's a monumental moment, filled with excitement and a fair bit of anxiety. REALTORS® have always been there to guide you through this complex process, offering trusted advice and support. Recently, the National Association of REALTORS® (NAR) reached a settlement that brings some important changes aimed at benefiting homebuyers like you. Let's break down what this means.

Clearer Agreements with Your Agent

Sign Before You Tour

Before you start touring homes, you’ll now sign a written agreement with your agent. This agreement is crucial because it sets the stage for your working relationship. Make sure you fully understand the terms, services, and fees outlined in this document. It’s your roadmap for what you can expect from your agent and what you’re agreeing to pay.

Key Compensation Components

Your buyer agreement will now be crystal clear about compensation. Here’s what it will include:

1. Transparent Disclosure: Your agent must clearly state the amount or rate of their compensation or how it will be determined.

2. Objective Compensation: The agreement should list compensation in specific terms, such as a flat fee, percentage, or hourly rate. It won't be open-ended or vague.

3. Limit on Excess Compensation: Your agent cannot receive more than what’s agreed upon in your contract, regardless of other sources.

4. Negotiability: The agreement will highlight that broker fees and commissions are negotiable and not set by law.

Flexibility in How You Engage

Written Agreements for Tours

Whether you're touring homes in person or virtually, you’ll need a written agreement with your agent. However, if you’re just chatting with an agent at an open house or asking general questions about their services, a written agreement isn’t necessary.

Seller Compensation to Agents

Sellers can still offer compensation to your agent, but this won't be shared on a Multiple Listing Service (MLS). These MLS platforms are used by brokers to share property listings, and this change ensures transparency in how agents are compensated.

Accepting Seller Concessions

You can still benefit from seller concessions, like having them cover your closing costs. This practice remains unchanged and can be a helpful way to manage the financial aspects of buying a home.

What Stays the Same

REALTORS® Are Your Allies

REALTORS® are committed to helping you navigate the homebuying process with your best interests in mind. They are bound by the REALTOR® Code of Ethics, ensuring they act ethically and transparently.

Compensation Discussions

Compensation remains fully negotiable. It's essential to have open discussions with your agent about how they get paid and what services you’ll receive. Don’t hesitate to ask questions and ensure you understand all aspects of your agreement.

You Have Choices

When buying a home, you have a variety of choices. Work closely with your agent to explore all your options, helping you make informed decisions that best meet your needs.

In Conclusion

The NAR settlement brings about significant changes designed to protect and empower you as a homebuyer. By making compensation more transparent and ensuring written agreements are in place before you tour homes, these changes aim to create a fairer and more straightforward homebuying experience. Remember, your agent is there to guide you, so don’t hesitate to lean on their expertise and ask plenty of questions. Happy home hunting!