Understanding the NAR Settlement
and its impact on real estate commissions
The world of real estate is undergoing significant changes, and one recent development that has caught the attention of industry professionals and consumers alike is the new settlement reached by the National Association of Realtors (NAR). The goal of this settlement is to transform how Realtor commissions are paid, with the hope of creating greater transparency for homebuyers and sellers.
What is the NAR?
To begin the process, you will need to appoint us as your listing agent. It’s a straightforward procedure with no upfront fees. Simply click below to complete and sign the Brokerage Client Registration.
For years, critics have raised concerns about potential anti-competitive practices in the real estate industry that may limit choice for consumers and inflate commission fees. The new NAR settlement addresses some of these concerns by introducing measures aimed at increasing competition and transparency.
The Issue at Hand
Understanding Co-op Payments
To begin the process, you will need to appoint us as your listing agent. It’s a straightforward procedure with no upfront fees. Simply click below to complete and sign the Brokerage Client Registration.
Beginning in July 2024, co-op payments through the MLS system are no longer allowed. This change lets buyers negotiate fees directly with their agents. However, it also means buyers must now cover their agents’ fees themselves. This could be tough, especially for those getting mortgages and buyers with limited funds, who now have to add agent fees to their already tight budget for closing costs.
Co-op Payment Prohibition
Co-op Alternatives
Naturally, as with all sudden and substantial change, alternatives can and will be found. One such alternative being discussed is to ask the seller for financial concessions towards closing costs (since your buyer agent fee is now an additional closing cost). For many buyers this means asking the seller to pay 2.5-3% of the sale price to your agent at settlement – effectively maintaining the financial status quo for real estate agents. But what is a problem for others may represent a gain for you.
Prior to this NAR settlement, we at The Flat Rate Real Estate & Title offered a full 100% rebate of the buyer agent co-op to our purchasing clients. Our model works on the theory that if we are paid consistently throughout the process (at a much lower rate) but we eliminate the risk of not being paid on a commission basis, we can rebate buyers the full amount of the buyer agency co-op and everyone wins. We still feel the same – even with these changes. Therefore if we, acting as your buyer agent, are able to negotiate a seller concession for buyer agent fees (which will soon become the norm), we will refund 100% of those fees to you at settlement (provided all of your service fees are paid in full.) Another win for you as a client of The Flat Rate.
Buyer Agency Free Rebate
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