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

𝗔𝘀 𝗺𝗮𝗻𝘆 𝗼𝗳 𝘆𝗼𝘂 𝗸𝗻𝗼𝘄, 𝘁𝗵𝗲 𝗿𝗲𝗮𝗹 𝗲𝘀𝘁𝗮𝘁𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗮𝘀 𝘄𝗲 𝗸𝗻𝗼𝘄 𝗶𝘁 𝗻𝗮𝘁𝗶𝗼𝗻𝘄𝗶𝗱𝗲 𝗶𝘀 𝗴𝗼𝗶𝗻𝗴 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗮 𝗺𝗲𝘁𝗮𝗺𝗼𝗿𝗽𝗵𝗼𝘀𝗶𝘀 𝗼𝗳 𝘀𝗼𝗿𝘁𝘀.

I have so so much I could say about it, and you all know when I start writing....it goes on for a bit.

⚡️What strikes me most is how much we as humans resist change, when we know inherently that change is the only constant in life. ⚡️

Everything comes and goes, nothing permanent, and ever evolving. I think this is a good thing. And as I observe the resistance, it brings curiosity to my mind instead.

What's possible? How will things change for the better? What can we do to make the most of what's to come?

And what I know to be true is those who look for what is possible find new ways of looking at things and solutions that actually bring about opportunities.

𝓢𝓸 𝔂𝓮𝓼, 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.

AND here's two of the biggest most often asked questions:
.
𝗗𝗼𝗲𝘀 𝘁𝗵𝗮𝘁 𝗺𝗲𝗮𝗻 𝘁𝗵𝗮𝘁 𝗯𝘂𝘆𝗲𝗿𝘀 𝘄𝗶𝗹𝗹 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.
.
𝗗𝗼𝗲𝘀 𝘁𝗵𝗮𝘁 𝗺𝗲𝗮𝗻 𝘁𝗵𝗮𝘁 𝘀𝗲𝗹𝗹𝗲𝗿𝘀 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 in choosing which homes they want to go see.

𝗔𝗻𝗱 𝗜 𝗵𝗮𝘃𝗲 𝘁𝗼 𝘀𝗮𝘆...

I just must, from personal experience, not as an agent but as a buyer, it is not a smart choice to go unrepresented as a buyer. And now that I am an agent and can see just how much legally is required to be in compliance and protect your client, it is just not a good idea.

Keep in mind, I was a Compliance Manager for Bank of America for 12 years and dotting i's and crossing t's is ingrained in me. And in real estate there are a LOT of i's and t's.

Yes. Some buyers are going to dredge that path. We all have our own journey, and I can see the writing on the wall. Lawsuits to come.

And I am going to stretch outside of what other agents might say. I am not a fan of dual agency. What is that? When a broker/agent represents both the buyer and the seller.

Let's think about this for a second. Just from a human being perspective, even one who means well. Representing two parties and their interests both wanting to make and save as much money as possible, seems counter intuitive.

𝗛𝗼𝘄 𝗱𝗼 𝘆𝗼𝘂 𝗽𝗹𝗮𝘆 𝗦𝘄𝗶𝘁𝘇𝗲𝗿𝗹𝗮𝗻𝗱 𝗮𝗻𝗱 𝗮𝗹𝘀𝗼 𝗻𝗲𝗴𝗼𝘁𝗶𝗮𝘁𝗲 𝗼𝗻 𝗯𝗼𝘁𝗵 𝗽𝗮𝗿𝘁𝗶𝗲𝘀 𝗯𝗲𝗵𝗮𝗹𝗳?🏰

Now there are agents out there who do and I am not knocking them. More power to them, but if I am being honest this really is a very difficult thing to do. And even the perception can get an agent in trouble. So I am not a fan. Sure, as an agent you can double your income potentially, but our company founder says the most lawsuits come from dual agency transactions.

Why do I bring this up? Well, this change in the industry due to the NAR settlement will ultimately result in some buyers going straight to the listing agent either directly or at their open house. And the likelihood that the listing agent will represent both the seller and the buyer is greater if the buyer is not represented by their own agent yet.

𝗡𝗼 𝗕𝘂𝗲𝗻𝗼 𝗶𝗻 𝗺𝘆 𝗼𝗽𝗶𝗻𝗶𝗼𝗻. ❌

Life gives us our lessons, and I have been personally party in my own home purchases twice to a dual agency. And I have to be honest, I never felt 100% fully represented or my interests protected knowing my agents were going between us and the sellers to negotiate.

It is not a good feeling. Twice. And I found myself having to really make sure everything was in my best interests because in both cases it was a dual agency representation.

So, long long way of saying. Things will and are changing. Do I love all the extra paper work and processes as a result of the settlement? No. Last count I think 18 new forms to learn and present.

But what does it do for everyone? It gives everyone a chance for transparency, what do we do as agents, what services does a client need and receive? What is important in a real estate transaction? How do you ensure that one of the biggest purchases of your life is handled in the utmost manner and in your best interest?

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

Now us 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. I can promise you, while the payout for a transaction can be high, the legal responsibilities and amount of work to properly handle a client's largest financial purchase is extensive. I am excited to be able to quantify for clients all the responsibilities (and legally there is a lot) of an agent. We just never really had to as a buyer's agent before.

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.

𝗔𝗻𝗱 𝘁𝗵𝗲 𝗿𝗲𝗮𝗹𝗶𝘁𝘆 𝗶𝘀 𝘁𝗵𝗮𝘁 𝘁𝗵𝗲 𝗮𝗴𝗲𝗻𝘁𝘀' 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗵𝗮𝘀 𝗮𝗹𝘄𝗮𝘆𝘀 𝗯𝗲𝗲𝗻 𝗲𝗺𝗯𝗲𝗱𝗱𝗲𝗱 𝗶𝗻 𝘁𝗵𝗲 𝗽𝗿𝗶𝗰𝗲 𝗯𝘂𝘆𝗲𝗿𝘀 𝗽𝗮𝘆 𝗳𝗼𝗿 𝗮 𝗵𝗼𝗺𝗲.

Who knew I was going to sit down and write all this after a day full of meetings to learn about the changes and also taking care of my clients (which I love to do)?

Want more information or assistance in navigating the new changes as a buyer OR seller? Reach out to me and I'd be happy to assist!  You can reach me by phone at 619-820-9999 or CONTACT me.

Debby Eubank
Realtor, SRES
Jason Mitchell Group
DRE#: 01332306