Understanding the New Policy Changes in Real Estate Transactions: What Buyers and Sellers Need to Know
The National Association of REALTORS® (NAR) recently reached a settlement to resolve litigation related to broker commissions. This agreement, pending court approval, brings significant changes to real estate transactions effective August 17, 2024. Here’s a breakdown of what buyers and sellers need to know about these new policies:
Key Changes to Real Estate Transactions
1. Written Agreements for Buyers:
• Mandatory Written Agreements: Real estate agents using a Multiple Listing Service (MLS) must now enter into written agreements with buyers before touring a home.
• Clear Compensation Disclosure: These agreements must include a clear disclosure of the agent’s compensation, specifying the amount or rate in an objective manner (e.g., a flat fee, percentage, or hourly rate).
• No Open-Ended Compensation: The agreement must prohibit agents from receiving compensation beyond the agreed amount.
• Negotiable Broker Fees: A conspicuous statement must declare that broker fees and commissions are fully negotiable and not set by law.
2. Changes in Communication of Compensation:
• No Offers on MLS Platforms: Real estate professionals can no longer communicate offers of compensation on MLS platforms.
• Off-MLS Compensation Offers: Sellers can still offer compensation off an MLS and can offer buyer concessions (such as closing cost assistance) on an MLS.
What Buyers Need to Know
• Signing Agreements: Before touring a home, whether in-person or virtually, you must sign a written agreement with your agent to understand the services provided and their cost.
• Exemptions: You do not need a written agreement if you are merely speaking to an agent at an open house or inquiring about their services.
• Negotiable Fees: Agent compensation remains fully negotiable, allowing you to discuss and agree on a fair rate.
What Sellers Need to Know
• Compensation Flexibility: You can still offer compensation to buyer agents off an MLS and provide buyer concessions on an MLS.
• Negotiable Commissions: As always, commissions are negotiable, ensuring you can find an arrangement that works best for your situation.
Final Thoughts
These changes aim to bring more transparency and clarity to the real estate transaction process. By requiring written agreements and clear disclosure of compensation, buyers and sellers can better understand the services provided and the costs involved. If you have any questions or need assistance navigating these new policies, feel free to contact us. We’re here to help you make informed decisions in your real estate journey.
For more details about selling your home under the new rules, or purchasing a home in Miami, contact us today for assistance with all of your real estate needs.
The Benmeir Team, ONE Sotheby’s International Realty
Mobile: 786.510.9115
Email: info@thebenmeirteam.com