Understanding the NAR Settlement: Key Changes for Homebuyers in 2024

HOMEBUYERS:

HERE’S WHAT THE NAR SETTLEMENT MEANS FOR YOU

Buying a home is one of the largest financial transactions most people will ever
undertake. Agents who are REALTORS® are a trusted source of advice and stand
ready to help you navigate your home-buying journey and make the choices that
work best for you. NAR’s recent settlement has led to several changes that
benefit homebuyers, and we wanted to clearly lay them out for you.

Here is what the settlement means for homebuyers:

• You will sign a written agreement with your agent before touring a home.
• Before signing this agreement, you should ensure it reflects the terms you
  have negotiated with your agent and that you understand exactly what
  services and value will be provided, and for how much.
  
  
• The buyer agreement must include four components concerning
  compensation:
• • A specific and conspicuous disclosure of the amount or rate of
    compensation the real estate agent will receive or how this amount
    will be determined.
  • Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly
    rate)—and not open-ended (e.g., cannot be “buyer broker
    compensation shall be whatever the amount the seller is offering to
    the buyer”).
  • A term that prohibits the agent from receiving compensation for
    brokerage services from any source that exceeds the amount or rate
    agreed to in the agreement with the buyer; and,
  • A conspicuous statement that broker fees and commissions are fully
    negotiable and not set by law.
    
    
• Written agreements apply to both in-person and live virtual home tours.
  
  
• You do not need a written agreement if you are just speaking to an agent at
  an open house or asking them about their services.
  
  
• The seller may agree to offer compensation to your agent. This practice is
  permitted but the offer cannot be shared on a Multiple Listing Service (MLS)—
  MLSs are local marketplaces used by both buyer brokers and listing brokers to
  share information about properties for sale.
  
  
• You can still accept concessions from the seller, such as offers to pay your
  closing costs.

These practice changes will go into effect August 17.

Here is what the settlement doesn’t change:

• Agents who are REALTORS® are here to help you navigate the homebuying
  process and are ethically obligated to work in your best interest.
  
  
• Compensation for your agent remains fully negotiable, and if your agent is a
  REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear
  and transparent discussions with you about compensation. When finding an
  agent to work with, ask questions about compensation and understand what
  services you are receiving.
  
  
• You have choices. Work with your agent to understand the full range of these
  choices when buying a home, which will help you make the best possible
  decision for your needs.

More details about these changes and what they mean can be found at:

facts.realtor