Buyer Broker Agreement Aug 2024

The landscape of real estate transactions is shifting. On March 15, 2024, the National Association of REALTORS® (NAR) reached a significant settlement that, pending court approval, will resolve litigation concerning broker commissions. This agreement also introduces changes to real estate practices that will directly impact how home buyers and sellers navigate the market.

These new practices will go into effect on August 17, 2024. Here’s what you need to know about the changes and how they could affect your next real estate transaction.

Key Changes for Real Estate Transactions:

1. Written Agreements with Buyers:

   • Real estate agents who list properties on a Multiple Listing Service (MLS)—a local marketplace where agents share property listings—must now enter into written agreements with buyers before touring a home. These agreements ensure transparency and clarity regarding services and compensation.

2. Compensation Details:

   • The agreements must clearly disclose the amount or rate of compensation the agent will receive. The compensation structure must be objective and clearly defined (e.g., a flat fee, a percentage, or an hourly rate), eliminating any ambiguity.
   • The agreement will also prohibit the agent from receiving compensation exceeding the agreed-upon amount from any other source.
   • A conspicuous statement within the agreement will remind buyers that broker fees and commissions are fully negotiable and not set by law.

3. Changes in Communication About Compensation:

   • Real estate professionals will no longer be allowed to communicate offers of compensation through MLS platforms. However, sellers can still offer compensation outside of an MLS and offer buyer concessions through the MLS (e.g., concessions for closing costs).

What This Means for You as a Home Buyer or Seller:

• Home Buyers:

  • If you’re planning to tour homes with an agent using an MLS, be prepared to sign a written agreement beforehand. This agreement will outline the services your agent will provide and the associated costs, ensuring you have all the information upfront.
  • Both in-person and virtual home tours now require a signed agreement. However, if you’re just attending an open house or inquiring about services, no agreement is necessary.

• Home Sellers:

  • When selecting an agent, ask about their services and compensation structure. Understanding these changes can help you make informed decisions and negotiate better terms.

Final Thoughts:

These updates aim to increase transparency and ensure that consumers fully understand the services they’re receiving and the costs involved. As always, agent compensation remains fully negotiable, so take the time to discuss and agree on terms that work for you.

For more information about these changes and how they may impact your real estate journey, feel free to reach out or explore additional resources at the blow button.