Baldwin REALTORS® Reminds Members and Consumers of NAR Practice Change Implementation on August 17, 2024
Robertsdale, AL (August 2024) – Baldwin REALTORS® reminds members, real estate professionals and consumers that on August 17, 2024, the practice changes following NAR’s Settlement Agreement that would resolve claims brought on behalf of home sellers related to broker commissions will be implemented across the country.
Realtor® MLSs (those owned exclusively by one or more Realtor® Associations) – must implement the changes by this date to remain in compliance with NAR policy. Baldwin REALTORS® will be implementing changes on Friday, August 16, 2024. The national practice changes are outlined in detail on facts.realtor.
“As a member of NAR, we are implementing these changes to be in compliance with the lawsuit settlement. We strive to keep up with industry best practices. As Realtors®, we need to know our value and be able to explain it to consumers,” shared Jaime Cooper, 2024 President of Baldwin REALTORS®.
NAR’s recent settlement has led to several changes that benefit homebuyers and sellers, and Baldwin REALTORS® wishes to clearly lay them out for the public. Agents who are REALTORS® are a trusted source of advice and stand ready to help anyone navigate through complex and emotional transactions with expertise and dedication.
Here is what the settlement means for homebuyers:
· Buyers will sign a written agreement with your agent before touring a home.
· Before signing this agreement, buyers should ensure it reflects the terms you have negotiated with their agent and that they understand exactly what services and value will be provided, and for how much.
· The buyer agreement must include four components concerning compensation:
1. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
2. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).
3. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and,
4. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.
· Written agreements apply to both in-person and live virtual home tours.
· Buyers do not need a written agreement if they are just speaking to an agent at an open house or asking them about their services.
· The seller may agree to offer compensation to the buyer’s agent. This practice is permitted but the offer cannot be shared on a Multiple Listing Service (MLS)— MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
· Buyers can still accept concessions from the seller, such as offers to pay your closing costs.
Here is what the settlement means for home sellers:
· Sellers still have the choice of offering compensation to buyer brokers. Sellers may consider doing this as a way of marketing your home or making their listing more attractive to buyers.
· The seller’s agent must conspicuously disclose to the seller and obtain their approval for any payment or offer of payment that a listing broker will make to another broker acting for buyers.
· This disclosure must be made to the seller in writing in advance of any payment or agreement to pay another broker acting for buyers and must specify the amount or rate of such payment.
· If a seller chooses to approve an offer of compensation, there are changes to how this can happen.
· The seller can still make an offer compensation, but their agent cannot include it on a Multiple Listing Service (MLS)—MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
· The seller’s agent can advertise their listing via off-MLS platforms such as social media, flyers and websites.
· The seller can still offer buyer concessions on an MLS (for example, concessions for buyer closing costs).
Here is what the settlement doesn’t change:
· Agents who are REALTORS® are here to help you navigate the homebuying or selling process and are ethically obligated to work in their client’s best interest.
· Compensation for an agent remains fully negotiable, and if an agent is a REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with their clients about compensation. When finding an agent to work with, ask questions about compensation and understand what services you are receiving.
· You have choices. Work with your agent to understand the full range of these choices when buying or selling a home, which will help you make the best possible decision for your needs.
Change can be tough, but these new rules help move our industry in a positive direction. They raise the bar on transparency and fairness, and they emphasize the importance of clear, negotiated agreements that protect both agents and buyers. REALTORS® have been and will always remain committed to offering exceptional service and building trusted relationships with the buyers and sellers they work with, and now with even clearer guidelines to support us all.
About Baldwin REALTORS®
Baldwin REALTORS® is the source for real estate in Southern Alabama. We provide resources, education and tools to over 3,000 professionals across the region. We work to protect the interests of property owners, and our members serve buyers and sellers as REAL Advocates, Advisors, and Experts. Realtors agree to abide by a strict code of ethics and are held to a high ethical standard by their peers through their association membership. The term Realtor is a federally registered trademark owned by the National Association of REALTORS® and denotes membership in the Nonprofit Association.
