The NAR Lawsuit and REALTOR® Compensation Explained
Mainstream news reports lately have created some confusion about REALTORS® and compensation that desperately needs clarification. In this blog post, teammate Donna Ball helps us summarize the key points to the NAR lawsuit and the compensation of real estate agents.
NEWSFLASH…REALTOR® compensation has ALWAYS been negotiable! It's shocking to hear that some consumers are not aware of that! Home buyers and sellers have always had a choice to work with a REALTOR® or not... and they have always had the power to negotiate what they pay their agent should they choose to work with one. Which means that nothing changes there!
However, what WILL be changing in August is a new MLS restriction prohibiting a Listing Agent from publishing whether or not a Seller is willing to cooperate with Buyer’s Agents and compensate them for their role in a successful transaction. Compensation information will no longer be widely published along with the other property details on the MLS. That’s the only thing affecting commissions as a result of the lawsuit settlement.
Most Sellers realize that a good Buyer’s Agent works for the Buyer, but they also do a lot to ensure a successful transaction for the Seller as well and offering a Buyer's Agent compensation for their involvement can improve the overall outcome for the Seller in the long run. Buyer’s Agents locate and market the property to a Buyer who they know is qualified to make the purchase. They make showing appointments, tour the property with the Buyer, and provide valuable feedback to the Seller about a Buyer’s opinions of the property. They help a Buyer determine appropriate offer terms and they prepare the legal contract documents for an offer. They negotiate the offer on the Buyer’s behalf with the Seller’s Agent and/or the Seller. Then they coordinate with all parties involved in the transaction to help ensure it gets to the closing table. The average transaction will take 30 days to close after contract signing and involve at least 8 – 12 parties including the Buyer, the Seller, the Seller’s Agent, the lender, the title company, inspectors, appraisers and sometimes contractors and attorneys. A Buyer’s Agent is instrumental in making sure things go smoothly as there are so many parties involved and a home purchase is usually a person's largest financial purchase!
Determining agent commissions is a critical strategic element in any house sale and should most definitely be part of the conversation when deciding to list your house. It’s important to work with a REALTOR® who not only offers the services you are looking for at a competitive rate, but also someone who communicates clearly to provide you with the information needed to make the most educated decisions possible! So don't be afraid to ask your REALTOR® what services are included in their commission package and if offering a co-op commission to Buyer's Agents is recommended.
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