NAR Settlement Outcome

How has the NAR Settlement affected real estate? I’m happy to report that overall it hasn’t changed much. Both listing agent and buyer agent compensation has always been negotiable and continues to be now. What has changed is that selling agents can no longer share what they’re offering as a cooperating compensation to buyer’s agents on the MLS. So how are the cooperating compensations shared? Through communication off of the MLS. In practice this is usually by phone, email or text.

The other result of the settlement is that across the country it’s now required to have a Buyer Representation Agreement in place before a buyer tours any property with an agent.  This was previously already required in Montana so that hasn’t actually changed for us. What has changed is some of the wording in the Buyer Representation Agreement in an effort to make communication about compensation more clear.

If you’re a buyer and wondering how your buyer’s agent professional fee (or compensation) is going to be paid here’s what you should know - it can be paid in three ways. First, through a cooperating compensation agreement with the listing agent. Secondly, by the seller through a seller concession. Third, by you as the buyer outright. Your buyer’s agent should be reaching out to the listing agent of each home you’ll look at beforehand to determine what the cooperating compensation is, if any. If you happen to be interested in a property that is not offering any cooperating compensation you and your agent will have to discuss how to proceed, either using option 2 or 3 mentioned above.

You might be wondering how likely it is that you’ll have to pay your buyer’s agent professional fee yourself as a buyer. In my opinion it is not going to be very likely. I believe that sellers will see the benefit of offering compensation to the buyer’s agent in some form. There are so many benefits of having a good buyer’s agent for all parties, including but not limited to transactional ease, reducing liability and increasing the likelihood of a successful closing.

If you have any questions about the changes or real estate in general, please don’t hesitate to reach out!