The NAR Settlement: What Buyers Need To Know

If you’re thinking about buying a home, you may have heard about changes to real estate practices following the National Association of REALTORS® settlement. Here’s a simple look at what those changes mean for buyers.

Written buyer agreements are required before touring a home.
Buyers working with an MLS participant must enter into a written agreement before touring a home, including both in-person and live virtual tours. However, if you’re simply visiting an open house on your own, you do not need to sign a written buyer agreement. The agreement should clearly explain the services being provided and how the real estate professional will be compensated.

Compensation remains negotiable.
Broker fees and commissions are not set by law and remain fully negotiable.  Your agreement should clearly state the compensation arrangement you’ve agreed to with your real estate professional.

Sellers may still offer compensation or concessions.
Although offers of compensation are no longer displayed on the MLS, sellers may still choose to offer compensation to a buyer’s agent outside the MLS.  Sellers may also offer concessions toward certain buyer costs as part of a transaction.

What does this mean for you as a buyer?
The important takeaway is to understand your representation and compensation agreement before you begin touring homes.  Ask questions about the services you’ll receive, your obligations under the agreement, and the costs associated with your purchase.

Every transaction is different, so understanding these details early can help you make informed decisions throughout the home-buying process.