NAR Settlement and What it Means for You

The recent significant settlement by the National Association of Realtors (NAR) has made national headlines and will have profound implications for buyers, sellers, and agents in the real estate market. This is a crucial update that you need to be aware of.

One of the standout aspects of the settlement is the emphasis on written buyer's agreements. In many states, buyers have operated under informal arrangements with agents, but now, having a formal agreement in place has become indispensable. Virginia law has required real estate licensees to have a written buyer brokerage agreement with their clients since July 1, 2012. That means that most of you are already familiar with this. However, one critical difference will be the requirement of the agreement in place BEFORE you tour any home with your agent. 

Many buyers may not know they are responsible for compensating their agent. For decades, it has been common practice to pay the buyer's agent through cooperative compensation by the seller's broker.

The new rules allow sellers to decide whether to offer any compensation to the buyer. This means that buyers may have to fully compensate their agent in some scenarios. In other cases, the seller will pay part of the buyer's agent compensation or, like it was in the past, pay all of it. It's essential to be aware of these changes to avoid any surprises during the transaction. 

The most significant shift for agents will be that we can no longer advertise on the MLS if and how much the buyer's agent gets paid. Agents might still communicate through other channels, like social media, personal websites, or a simple phone call. Realtors are required to show prospective buyers all available properties regardless of the compensation offered.

Moving forward, clear communication with all parties involved in the transaction will be crucial, as will excellent negotiation skills. For a deeper dive, watch this video by Sharran Srivatsaa, president of REAL brokerage.