August 17th, 2024, marks a pivotal turn for the real estate industry's compensation practices. The National Association of Realtors (NAR) entered into a landmark settlement agreement for lawsuits that were brought by home sellers from markets across the nation. In addition to payments, the settlement terms stipulate that offers of compensation may no longer be advertised in the Multiple Listing Service (MLS). It is important to note that this settlement action was brought by sellers, and that sellers will be the beneficiary of these changes.

Here's what has changed: Offers of compensation are no longer permitted in the MLS. Determining payment of a commission to the buyer's broker has also changed. Who pays? Is it the seller, the listing agent, or the buyer? Buyers and buyer agents now must also have a written agreement in place that discloses to a buyer how payment for their representation will be paid. This agreement must be in place before a property tour may be provided by any Realtor. New contracts have been in use as of Aug 15. Buyer brokers will still be paid, however, usually by the seller.

Here's what has not changed: Sellers will continue to offer commissions. Commissions have always been negotiable, and will continue to be going forward. Fees for expert representation are a small price to pay when transacting such a valuable part of your net worth. Could these changes impact you?