The National Association of REALTORS© (NAR) has proposed a settlement to resolve the Burnett v. NAR case and similar lawsuits that have made headlines for the past year. If the settlement is approved by the courts, there are several areas that may affect home buyers as early as July. Here is a simplified guide to what may happen, along with our thoughts!
- Buyer agency service agreements would be required for any agent who represents the buyer side of the sale – IF they are members of the MLS.
This does not mean buyers will receive any improvement in the level of service that they get from a traditional brokerage.
Only Exclusive Buyer Brokers and Exclusive Buyer Agents represent buyers only, 100% of the time, with no conflict of interests. We work for the best interests and protections of the home buyer in everything we do. For details about how important this difference is, read our free e-book, “How to Buy a Home like a Pro.” It’s available for immediate download on our website.
- Home sellers will not be required to offer a commission to buyer agents. They may offer compensation if they wish.
Typically, a home seller would pay a certain percentage of total commission to be shared between the seller’s agent and the buyer’s agent.
Under the settlement, the amount of commission allowed to the seller agent and to the buyer agent, would need to be stipulated in the listing agreement. (Sales commissions have always been negotiable, but consumers were not always aware of it.)
Despite the many opinions floating around in the media, it is unlikely that sellers will refuse to offer commission to a buyer’s agent. For those that do, there will be alternatives for buyer agent compensation. We detail how this works in our own Buyer-Client agreements.
The settlement does not automatically mean that buyers will have to pay their buyer agents directly out of pocket.
- Buyer agents will not be required to belong to a Multiple Listing Service. In other words, if the buyer’s agent is not an MLS member, he or she can skip having a service agreement with the buyer. This wouldn’t be in the best interests of the buyer!
- Buyer agent commissions would no longer be allowed to show on home listings. However, seller incentives towards closing costs, or other credits allowed to the buyer, could be published with the listing.
- Seller agents would not be required to be members of a Multiple Listing Service.
This is an interesting wrinkle. If neither buyer agents nor seller agents are required to belong to an MLS organization, how does it improve service and transparency to buyers and sellers? It doesn’t. What it will do, is open a wide door to “pocket listings” that are not shown on the MLS. This could reduce home choice for buyers, and reduce market exposure for home sellers.
Please note that until the settlement is approved by the courts, everything has the potential to be revised. For now, what was true in the past remains true today, and true in the future: home buyers are best served by Exclusive Buyer Brokers and Exclusive Buyer Agents!
As Exclusive Buyer’s Brokers, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services www.BuyersHome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
