On March 15, 2024, the National Association of Realtors announced a proposed settlement to a class action lawsuit alleging collusion to inflate brokerage commissions. This settlement introduces significant changes, notably requiring buyers and sellers to negotiate fees separately with their agents, departing from the traditional model where seller fees covered a portion of broker commissions, including those of the buyer’s agent.

At EmpowerHome, we welcome this shift as a stride towards transparency, empowering buyers and sellers to make decisions based on value rather than adhering to traditional practices. CEO of EmpowerHome, Sarah Reynolds, emphasizes the importance of consumer transparency, a principle long advocated by EmpowerHome.

“This is great news for our industry as it will require more transparency to the consumer, which EmpowerHome has been practicing and teaching, not just to our agents, but to the entire industry for many years. The industry will now be forced to follow our lead and start being transparent with their clients which we are a firm believer in at EmpowerHome.” – Sarah Reynolds, CEO of EmpowerHome

But what exactly does this settlement mean for those involved in buying, selling, and navigating the real estate market? 

In this article, we’re going to discuss:

  • Understanding the NAR Settlement
    • What the Settlement Means for Sellers
    • What the Settlement Means for Buyers
  • Implications for Sellers
  • Implications for Buyers
  • Key Takeaways and Recommendations

Understanding the NAR Settlement

What the Settlement Means for Sellers:

As a seller, you now have the power to decide how much, if any, you want to pay the buyer’s agent for their services. While this choice has always existed, it wasn’t widely recognized, which was a central issue in the lawsuit.

Some sellers may opt not to pay anything to the buyer’s agent. However, this decision could limit your pool of potential buyers, as only those who can afford to pay their agent directly will likely consider your property. This might decrease demand, potentially leading to lower sale prices in the long run.

Conversely, if you choose to compensate the buyer’s agent, you may attract more potential buyers. The amount you offer could influence the willingness of buyers to explore your property.

What the Settlement Means for Buyers:

To ensure access to all available properties, buyers must be prepared to cover their agent’s fee in instances where the seller is unwilling to do so. However, many sellers may still be willing to pay the buyer’s agent, alleviating this financial burden for buyers.

Having more funds available can enable buyers to make stronger offers, particularly in competitive markets with low inventory. Working with a skilled agent becomes crucial in navigating negotiations and exploring off-market properties, providing buyers with a strategic advantage.

Implications for Sellers:

  • Sellers need to consider the potential impact on buyer interest and sale prices when deciding whether to pay the buyer’s agent.
  • Direct negotiations between buyers and sellers may lead to varying agreements regarding agent compensation.
  • Additional costs may arise if buyers seek assistance from the listing agent, potentially impacting the seller’s responsibilities and expenses.

Implications for Buyers:

  • Buyers must be prepared to cover their agent’s fee to access all available properties.
  • Financial constraints may limit the properties buyers can consider if sellers are unwilling to pay the buyer’s agent.
  • Working with a knowledgeable agent becomes crucial in navigating negotiations and identifying hidden opportunities in the market.

 

What Everyone Needs to Know:

While these changes may seem daunting, EmpowerHome Team agents have many programs to assist buyers with financial constraints while ensuring sellers maximize their returns.

In this evolving landscape, the realtor you choose matters more than ever. You need a real estate team that has the systems and guarantees to help you navigate through the process of selling and buying a home. There is no one better to help you than us! Adaptability and innovation are key to navigating these changes successfully and at EmpowerHome, we’re dedicated to empowering and serving our clients to the highest level.

If you’re looking to sell your home fast and for top dollar, we’re here to help. We sell our listings three times faster, which reduces stress for our clients and gets more money in their pockets. Did you know that only 48% of homes that went on the market last year sold the first time with the first agent they hired? Most sellers last year had to call a 2nd or 3rd agent to get the job done, or even worse, not sell at all. The agent you hire the first time matters! EmpowerHome Team sells 98% of our listings the first time, so when you hire us, your home is more likely to sell fast & for top dollar!

Curious about how quickly your home could sell? Call or text us at 866-525-2056! Find out the value of your home!