Breaking Down The NAR Settlement | Real Estate Industry Changing
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- čas přidán 7. 07. 2024
- The National Association of Realtors (NAR) settled for $418M in a lawsuit known as Sitzer-Burnett, and it shook up the real estate industry.
Sitzer-Burnett is a class-action lawsuit that was filed in Missouri federal court by a group of home sellers in the state against NAR and other defendants, including Anywhere, Berkshire Hathaway HomeServices, Keller Williams and RE/MAX. The plaintiffs claimed that real estate commission rates are too high, buyers’ representatives are paid too much, and NAR’s Code of Ethics and MLS Handbook, along with the corporate defendants’ practices, lead to inflated commission rates.
What's next for real estate agents and the industry as a whole? At this time, there are only proposed changes. If the settlement is approved, these changes would go into effect in mid-July 2024.
See below for the proposed changes:
1. Agents would have to have a signed Buyer Agency Agreement with buyers PRIOR to showing homes that outlines how much they will be paid.
2. Cooperative compensation (commission offered to agents of buyers) would not be allowed to be advertised on MLS.
3. Sellers could still publicly advertise cooperative compensation everywhere else - just not in MLS.
4. Buyers can still request contribution from the seller for buyers agent commissions. This would need to be formally requested in the offer to purchase.
I hope this video gives some clarity to the situation! These changes are nothing to panic about! Real estate agents offer value and guidance to their clients while they undergo buying or selling one of their largest assets.
If you have any questions about the lawsuits or real estate in general, please do not hesitate to reach out to me! I would love to help :)
Find me on Facebook, Instagram, TikTok & CZcams at @athomewithmarissa or send me an email at marissamiller@kw.com
Great Information!
Thanks so much Tyler! 😊
I would encourage you to change your business model and become exclusively a seller‘s agent. I’m a real estate investor in Michigan and as a result of this settlement agreement, I am going to dump my buyer‘s agent. Now that there is no obligation to offer a commission to a buyer‘s agent, the seller (not the seller‘s agent) will simply refused to pay it. That will foist this expense onto the buyer. And it won’t b long before buyers wise up to this and dump their agents to reduce their purchase cost.
Hi there! I appreciate your take on this subject! While I agree it may make using a buyers agent less cost-effective for some buyers, I still believe representation will still be important.
Also, the settlement has not be approved yet, so these changes might take a long time to actually happen.
I do believe that sellers will see an advantage in offering buyer agent compensation because more buyers will be able to afford the purchase if they don't have to pay the full commission to their buyer agent. By offering buyer agent compensation, sellers may get more activity on their listing because it's an incentive to the buyer - just like offering a home warranty or seller concessions/credits.
I also agree with your point that listings will be key if these changes go into effect. There's an old saying "if you don't list, you don't last", and that still rings true! However, I think it's important that all parties receive representation if they want it. So I will still be assisting both buyers and sellers in my business :)
@@athomewithmarissa Fair enough. I think that you and I are both trying to predict the future using logic and reasoning, and that is not alway the driving force behind how it actually unfolds. We will simply have to wait and see and, like everything else, it probably won’t unfold as I predict or as you predict, but rather, it will unfold as some combination of the two. Nice chatting with you!
@@MrSethmo13 Completely agree! Well said 👏🏼😊
This will be a very interesting season, I believe the cream will rise to the top regardless.
Totally agree! 👏🏼