Understanding the NAR Settlement: Key Changes in Real Estate and What They Mean for You

 The real estate market is undergoing significant changes nationwide—a true metamorphosis. While change is a natural part of life, it’s fascinating how often we resist it, even though we know it’s inevitable.

Change is constant—nothing stays the same. This reality can feel unsettling, but it also opens the door to new possibilities. Rather than resisting, I find myself leaning into curiosity:

- What opportunities will arise from these shifts?
- How will the changes improve our approach to real estate and beyond?
- What steps can we take now to prepare for and embrace what’s next?

One thing remains clear: those who focus on possibilities discover innovative perspectives and solutions, uncovering opportunities even in uncertain times. 

One of the biggest changes occurs when a buyer first starts home shopping.  

B𝓾𝔂𝓮𝓻𝓼 𝔀𝓲𝓵𝓵 𝓷𝓮𝓮𝓭 𝓽𝓸 𝓼𝓲𝓰𝓷 𝓪𝓷 𝓪𝓰𝓻𝓮𝓮𝓶𝓮𝓷𝓽 𝔀𝓲𝓽𝓱 𝓪𝓷 𝓪𝓰𝓮𝓷𝓽 𝓫𝓮𝓯𝓸𝓻𝓮 𝓽𝓱𝓮𝔂 𝓬𝓪𝓷 𝓫𝓮 𝓼𝓱𝓸𝔀𝓷 𝓪 𝓱𝓸𝓶𝓮...𝓸𝓻 𝓮𝓿𝓮𝓷 𝓰𝓸 𝓲𝓷𝓽𝓸 𝓪𝓷 𝓸𝓹𝓮𝓷 𝓱𝓸𝓾𝓼𝓮. ✍

And that is change for sure.  Let's explore the other big changes taking place as a result of the NAR settlement.

Key Changes in Real Estate and What They Mean For You

1)  Will buyers have to pay their agent's compensation? 🏰

𝗡𝗼. Not unless they choose to buy a house where the seller does not provide concessions to cover the buyer's agent compensation.

AND even if the seller isn't covering the agent's compensation in a more competitive market, buyers still shouldn't have to pay out-of-pocket as there are five different options available to help fund the agent's fee, ensuring you can still move forward with purchasing your dream home—whether or not the seller is fully cooperating. You have options!

2) Does that mean that the seller will no longer pay concessions? (notice the word commission is no longer allowed due to the NAR settlement ruling)

𝗣𝗲𝗿𝗵𝗮𝗽𝘀. 𝗣𝗲𝗿𝗵𝗮𝗽𝘀 𝗻𝗼𝘁.

It's a choice. Not one that a good agent would advise in my opinion.

There's a lot to say about this, but simply put. You want as many interested buyers walking through the door of your home as a seller as soon as possible. Days on the market are not your friend. Multiple offers are your friend...at least as a seller (not so much as a buyer competing for the home). But then again, that's kind of the point. It is a lot like when a home seller over prices their home and doesn't get enough interest. The more days on the market causes a perception of "what's wrong with the home?" Thus resulting in a price reduction to try and draw interest.

The key is to get as much foot traffic in the door as quickly as possible, the ultimate goal to price right, drive traffic, and then have a high-demand home with multiple offers.

So....a seller wants foot traffic. And offering concessions to a buyer to cover their agent's compensation will be an important factor for a buyer when they choose which homes they want to go see.

3) R𝗲𝗮𝗹𝗶𝘁𝘆 𝗶𝘀 𝘁𝗵𝗲 𝗮𝗴𝗲𝗻𝘁𝘀' 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗵𝗮𝘀 𝗮𝗹𝘄𝗮𝘆𝘀 𝗯𝗲𝗲𝗻 𝗲𝗺𝗯𝗲𝗱𝗱𝗲𝗱 𝗶𝗻 𝘁𝗵𝗲 𝗽𝗿𝗶𝗰𝗲 𝗯𝘂𝘆𝗲𝗿𝘀 𝗽𝗮𝘆 𝗳𝗼𝗿 𝗮 𝗵𝗼𝗺𝗲. 

The misconception now may seem that buyers are suddenly responsible for paying their agent’s compensation directly. However, the reality is that an agent’s compensation has always been included in the price buyers pay for a home. Whether disclosed upfront in the MLS or through a separate agreement, the commission has always been a part of the overall home price and negotiation.

This change doesn’t shift the burden onto buyers; it simply makes the process more transparent.

4)  Agents will play "switzerland" and negotiate on behalf of both parties more often. 🏰

It’s becoming increasingly common for buyers attending open houses without representation to consider working with the listing agent—a practice known as dual agency. This arrangement can offer advantages: when one agent represents both the buyer and the seller, it can streamline communication and potentially lead to reduced agent compensation. This, in turn, might make your offer more appealing to the seller and improve your chances of securing the home.

Dual agency, however, is a unique arrangement that requires careful consideration. It involves one agent or broker representing both sides in the same transaction. While it isn’t the ideal fit for every situation, it can work well when handled thoughtfully. My priority in dual agency is to ensure that both parties feel equally supported, fully represented, and confident throughout the process.

In California, dual agency is not new but demands a fair and impartial approach. Success hinges on the agent’s ability to understand each client’s unique needs and negotiate outcomes that benefit both sides equitably.

Having personally experienced dual agency as a buyer—twice—before becoming an agent, I understand what it’s like to feel underrepresented. This perspective shapes my approach today. If I take on dual agency, I do so with great care, ensuring it’s genuinely in the best interests of both parties. My goal is to create a balanced process where all parties feel heard, valued, and fairly treated.

For me, trust and fairness are paramount. Dual agency is a serious decision, and I approach it with the utmost respect and transparency. The golden rule—to treat others as I would want to be treated—guides my actions, informed by my own experiences on the buyer side.

5) 𝗪𝗲 𝗼𝗳𝘁𝗲𝗻 𝗱𝗼𝗻'𝘁 𝗸𝗻𝗼𝘄 𝘄𝗵𝗮𝘁 𝘄𝗲 𝗱𝗼𝗻'𝘁 𝗸𝗻𝗼𝘄. 🤷‍♀️

Now agents have to explain our services, the importance and value of being represented, and in the end all parties then recognize the importance of agent representation and the value of compensation for our services.

There's a lot of misunderstanding about real estate agents, and I get it, thinking it's easy money. While the payout for a transaction can seem high, the legal responsibilities and amount of work to properly handle a client's largest financial purchase is extensive and holds tremendous responsibilities. I am excited to be able to quantify for clients what that all entails of an agent (and legally there is a lot). We just never really had to explain this as a buyer's agent before...and i think it is great that we are required to now!

So, yes. Opportunity for awareness and appreciation. I don't know about you, but I definitely feel better when I know what I am paying for and that it is worth it. And now clients will have that opportunity, both sellers and buyers.
 

Embracing Transparency in Real Estate

 The real estate landscape is shifting, but these changes can ultimately benefit everyone involved. With increased transparency, buyers can better understand the transaction process and the representation they receive, leading to more informed decisions.

Although there’s a bit more paperwork—18 new forms to learn, last time I checked—these changes provide a valuable opportunity for transparency. They clarify what agents do, the services clients need, and what truly matters in a real estate transaction. Most importantly, they ensure that one of the biggest purchases of your life is handled with care and in your best interest.

Need help navigating these changes as a buyer or seller? Reach out—I’m here to assist! Call me at 619-820-9999 or CONTACT me.

Debby Eubank, Realtor, SRES
Nest & Invest Host / Real Estate Maven
Jason Mitchell Group
DRE# 01332306
619-820-9999