2 Changes You Should Be Aware of in the Real Estate Industry

Just a quick heads up about some changes coming on August 17th due to the NAR settlement.

  1. Offers of compensation, otherwise known as cooperative compensation, are no longer allowed to be advertised on a Multiple Listing Service (MLS).
    • Cooperative compensation was when a listing agent made an offer to share a portion of their commission (with the seller’s approval) with a buyer’s agent if that agent’s buyer purchased their client’s home. This was to compensate that agent for cooperating in getting their client’s home sold.
    • Only the advertisement of this type of compensation is prohibited on the MLS and any MLS-affiliate websites.
    • Offers of compensation may continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Sellers can still offer buyer concessions on an MLS (for example, concessions for buyer closing costs).
  2. REALTORS who are MLS Participants working with buyers must enter into written agreements with their buyers before touring a home.
    • This means that buyer agents will no longer be allowed to show a home to anyone. Consumers must hire an agent and enter into a written agreement with that agent before they can start touring homes listed for sale.
    • Consumers do have the option to “go it alone” by trying to contact each individual listing agent and remain unrepresented, but I wouldn’t recommend this option.

The recent changes brought about by the NAR settlement are unlikely to significantly impact most real estate professionals. Offering buyer agent compensation will likely remain advantageous for sellers, and the use of written buyer representation agreements was already a best practice utilized by many.

For more information regarding this settlement and what it means for buyers and sellers, you can reach out to me at jay@tricities.homes, or (423) 302-0862. You can also check out NAR’s resource page, http://facts.realtor.

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