As of Friday, March 15, 2024, the real estate industry looks different for agents, buyers, and sellers. On that day, the National Association of REALTORS® (NAR) agreed to a proposed settlement worth $418 million in response to class-action lawsuits filed by sellers over commission rates. This deal will continue to enable potential buyers and sellers to negotiate commission rates with their agents, just as NAR has always advocated.
- This proposed settlement will pose a situation for potential buyers, as sellers will not be as willing to contribute towards the commission of the buyer’s agency as was commonplace before. Buyers are now at the mercy of sellers to contribute to the commissions to get the deal done. More buyers will have to seek their agent’s and lenders’ assistance in negotiating solutions to enable them to purchase.
Here at Guidry & Company Real Estate, we have a plan that works in our clients’ best interests while protecting our agents in light of this proposed settlement.
What Does the Proposed Settlement Mean?
Historically, when a real estate deal was completed, the seller paid a total commission from the sale proceeds, which covered the listing agent and the buyer’s agent. The seller agreed to the total amount of commission, with a portion being paid to a buyer’s agent. While the commission has always been negotiable, the amount a listing agent offered a buyer’s agent was then stated on the private portion of the Multiple Listing Service (MLS) for members only. The proposed settlement agreement continues to allow cooperative compensation but will not allow any offer of compensation to be stated on the MLS. As the proposed settlement terms are worked out, real estate brokerages will have to cooperate using other means.
How to Protect Your Commission
At Guidry & Company Real Estate, we are serious about protecting our clients and getting their properties sold. We also protect our agents, ensuring they get the commissions they work hard for. Considering these recent changes, we have made some changes ourselves.
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Our REALTORS® working with a buyer will enter into a written agreement before the buyer tours any home. Buyer Representation Agreements will be used to ensure no agent is working for free. These agreements put a plan in place to protect the agent. For example, if the Buyer Representation Agreement states that the brokerage (buyer’s agency) will receive 3% of the final sale price and the seller only contributes 2%, then the buyer is responsible for the other 1%. Real Estate Commissions are negotiable and each REALTOR® works for a specific rate which will be discussed at the Buyer Consultation.
Guidry & Company Real Estate Can Guide You
When changes occur, it can be challenging to understand what this could mean for you. With Guidry & Company Real Estate’s extensive industry knowledge, we will help guide everyone through the new modifications to show how these deals are done. Learn more about what is changing in our industry by visiting our website or giving us a call! We make buying and selling real estate easy!
