New NAR Requirements and How It will Effect Home Buyers

The National Association of Realtors (NAR) recently made three major buyer agent commission changes that took effect on August 17, 2024, which could significantly impact home buyers, home sellers, and real estate agents.

1. Written Buyer Representation Agreements:

Buyer Representation Agreements Enforced Before Entering A Property

Anyone that has ever worked with our brokerage at RE/MAX Associates Northeast, always received a buyer representation agreement so this is nothing new. It has always outlined broker and buyer obligations, broker compensation and terms. Broker compensation has always been fully negotiable and not set by law. What is new, this agreement must be signed prior to touring a home in person or virtually. This agreement is intended to improve transparency, ensuring that buyers are aware of any costs they may be responsible for from the start. Buyers do not need an agreement to tour an open house.

 

2. Removal Of Compensation on MLS:
Removing Buyer Agent Commission In The MLS

Multiple Listing Services (MLS) can no longer display offers of compensation for buyer agents. This change eliminates publicly visible agent compensation offers, meaning compensation discussions will need to happen directly between agents and clients.

 

3. Communicating Agent Compensation:

Communicating Buyer Agent Commission Changes

Buyers will need to discuss compensation directly with their chosen agent. Traditionally, sellers paid compensation to the listing broker and it was often split between the buyer’s and seller’s agents. Now, buyers may have to cover their agent’s fees, potentially increasing their out-of-pocket costs at closing. However, buyers can still negotiate to have sellers cover part or all of they buyer’s agent compensation.

What Isn’t Changing With Buyer Agent Compensation

  • Compensation for agents remains fully negotiable, and if the agent is a REALTOR®, the agent must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with consumers about compensation.
  • When finding an agent to work with, buyers and sellers should ask questions about compensation and understand what services they are receiving.
  • Buyers and sellers have choices and are encouraged to work with their agent to understand the full range of these choices and what works best for them.
  • Agents who are REALTORS® are always here to help clients navigate the real estate transaction process and are ethically obligated to work in their client’s best interest.

As always, feel free to call me and I’ll be happy to answer any questions you may have on this NAR settlement and buyer agent commission changes. 

I also have a FREE Home Seller’s Guide and Home Buyer’s Guide available to you for help with your next move.