Effective August 17th: Preparing for NAR's Upcoming Industry Changes

Blog posted On August 15, 2024

The National Association of REALTORS® (NAR) are implementing practice changes, effective on Saturday, August 17^th. Some of these changes include updates to compensation offers, written agreements, and communications with communities and consumers. These updates will affect anyone involved with real estate, including home buyers and real estate professionals. With this deadline fast approaching, let’s take a look at these practice changes one by one and what to expect going forward.

NAR’s Interim CEO Nykia Wright stated that, “we want members to understand we are here to support them in the midst of these changes and provide the tools they need to best serve their clients.” She assured members that a range of resources will be made available, including their Accredited Buyer Representative course, which offers training, skills, and resources that help real estate professionals succeed as buyer's representatives.

What’s changing?

• Content and resource updates across NAR channels: if you’re a real estate agent, make sure you’re subscribed to NAR’s weekly newsletter to receive these updates as they come, including industry events and virtual meetings. The NAR legal team will be conducting upcoming webinars to teach members more about these key resources and how to maneuver through these changes. NAR also recommends bookmarking their site specifically addressing the NAR settlement changes. This site is continuously updated and includes helpful videos, an outline of key dates, and a comprehensive FAQ.
• Mandatory buyer-broker agreements: These changes require buyers to sign agreements that disclose their broker’s commission before they can be represented, including specific compensation details and who will take on the cost. This new state requirement is a major shift, aiming to improve transparency with homeowners and level the playing field for all parties.
• Modification to MLS listings: Another key update is that broker compensation offers will not be listed on the MLS database any longer. These offers will now have to be worked out through direct consultation with real estate professionals.

Overall impact

Impact on home buyers: The buyer-broker agreement is the most notable change for buyers. This update provides clear transparency for borrowers. Through this change, buyers can gain a better understanding of the services their agent will provide and how much it will cost overall. It also allows buyers to negotiate better terms, to budget their finances more effectively, and to receive a defined level of service and support from brokers.

Impact on sellers: These changes alter the nature of negotiability for sellers, meaning that they must now discuss and agree on commission rates with their agents explicitly.

What isn’t changing?

The National Association of REALTORS® wanted to note that, despite these changes, many things are staying the same. Commissions have always been negotiable, a fact that NAR has been emphasizing throughout the settlement. The aim of these changes is to provide transaction transparency for buyers and realtors alike.

The best thing you can continue to do is leverage the expertise of your trusted real estate professionals and lender. Whether you’re buying or selling a home, we’re always here to help you stay informed.

SOURCE: National Association of REALTORS®, Skyline Title Support