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Seriously, What the F*** is Going On in the Real Estate Industry Right Now?

Writer's picture: Nicolas SandimNicolas Sandim

Knowledge is power. Read below for a brief summary on what is going on in the American Real Estate Industry right now regarding the NAR settlement surrounding Buyer Agent commissions.


NAR Settlement Realtor Commissions in USA

Navigating the Changing Tides of Real Estate Commissions


It's been making headlines lately - the impending changes in how real estate commissions are paid. You might have seen the buzz:


  • "Real estate commissions under the knife!"

  • "Selling your home: the cheaper route ahead!"

  • "Say goodbye to hefty agent fees!"


Exciting, right? But hold onto your butts, because while it sounds like a real estate revolution is on the horizon, the details are still a bit fuzzy.


Picture this: real estate agents everywhere scratching their heads, trying to make sense of the sudden shift. The news hit like a whirlwind, catching everyone off guard. No heads-up, no sit-downs with agents - just a flurry of headlines leaving everyone in the dark.


And those headlines? Well, they're a bit like the weather forecast - you never quite know what's coming. Claims of slashed commissions or massive savings for consumers are as uncertain as the weather in April. The changes might cut commissions, or they might hike them up. It's like shaking a magic eight ball - the outcome remains hazy.


But before you start bombarding your local agent with questions, here's the scoop: it's all still up in the air. This isn't a done deal yet; it's a proposed settlement, waiting for the court's nod. And even if it gets the green light, the changes won't kick in until July.


Unless you’re in the business, you probably have no desire to read through all of the court documents or proposed settlement. You just want to know what changes will possibly impact you. Here is an excerpt from the NAR press release that sums it all up pretty neatly:

“In addition to the financial payment, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. This would mean that offers of broker compensation could not be communicated via the MLS, but they could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers. They are also consistent with the real estate laws in the many states that expressly authorize them.
Further, NAR has agreed to enact a new rule that would require MLS participants working with buyers to enter into written agreements with their buyers. NAR continues, as it has done for years, to encourage its members to use buyer brokerage agreements that help consumers understand exactly what services and value will be provided, and for how much. These changes will go into effect in mid-July 2024.”

So, what's the lowdown for buyers and sellers? Let's break it down in a nutshell:


For Sellers:

  • NAR does not set commissions!

  • You won't be able to flaunt commission offers to buyers' agents in your listing anymore.

  • But fear not, you can still dish out those commissions, just not on public display.

  • Oh, and buyers will now need to ink a written deal with an agent before diving into the market.

Did you know?

Based on recent findings by the National Association of REALTORS®, the typical agent brings in an annual income ranging from $44,951 to $58,528. However, achieving these figures demands relentless dedication. Agents seldom enjoy days off or vacations, often exceeding the standard 40-hour workweek. While you might encounter agents willing to lower their rates, opting for the cheapest option isn't always the wisest choice. Like in any industry, prioritizing cost over quality may lead to greater expenses in the long run.

For Buyers

  • Say hello to signing agreements with your buyer's agent - it's the new norm.

  • And don't expect agents to slash their rates; they've got bills to pay, too.


But wait, before you dive headfirst into this brave new world, here are a few things to chew on:


Selling a House?

  • Offering a commission to buyers' agents might still be your golden ticket to a speedy sale.

  • And hey, don't be surprised if buyers expect a discount if they're flying solo.


Buying a House?

  • You'll need to pick a buyer's agent and seal the deal with a contract.

  • And remember, DIY house hunting isn't all sunshine and rainbows; there's a lot more to it than meets the eye.

  • Years ago buyers didn’t have an agent dedicated to representing their interests, and were often unaware that the seller’s agent didn’t actually represent their interests as well.

  • For many buyers, this isn’t that great of a change for you unless you cherish the idea of representing yourself and figuring out how to do everything that needs to get done, or just trusting that the seller’s agent will be able to truly represent your best interests as well as the seller.

  • The sellers’ agent won’t be doing the work of the non-existent buyers’ agent.


So, while the real estate scene is gearing up for change, one thing's for sure: uncertainty still reigns supreme. The best move? Keep your local agent on speed dial. They'll be your guiding light through the shifting sands of real estate.


Did you know?

Dual agency, where an agent represents both the buyer and the seller, stands as a prominent catalyst for lawsuits within the industry. Our new shared-reality may breed numerous scenarios where consumers lack independent representation, potentially leaving either the buyer or seller with a sense of unfulfilled interests.

In Conclusion:

While the headlines tout a seismic shift in real estate commissions, the reality remains murky. If the proposed settlement sails through, sellers will need to rethink how they advertise commissions, while buyers might face new challenges navigating the market solo. So, before you dive in, consult your local agent for insights and guidance through the changing tide of real estate.


Need a local agent? Hit me up, I work with the best in the business.




A personal note from Tradecraft's owner, Nicolas Sandim

Tradecraft, a Nicolas Sandim Project's primary mission is to help small to mid-size local businesses on Cape Cod, the South Shore, and the South Coast connect in genuine and meaningful ways with their communities. By offering our clients thoughtfully elevated marketing, web design, social media and online reputation management, branding, graphic design, and operations consulting services, (and more!) we propel their businesses to new heights while reconnecting them to their core principles, and often their reasons for starting the business in the first place. I have found this process to be a beautiful exploration of business theory and leadership, and I often learn things about myself and my own business when consulting with and getting to know a new client.


I believe that businesses have certain responsibilities to the communities in which they operate. By encouraging and helping our clients to tailor their brand identity, value proposition, and marketing messages around this belief, we help businesses reconnect with their community, and sometimes even to determine who their community =IS and only then how best to connect with and support them, often for the first time ever. It is a powerful and inspiring process to be a part of. I am truly grateful for the connections and creativity this business has already fostered, and we are only just getting started.


Over nearly a decade working with teams from Cambridge to Provincetown, launching and growing businesses, I have learned a lot about what it takes to make positive change in one's business. With this venture, I have the privilege to work exclusively with businesses who are willing to trust our process, who are open to getting more involved in their community, and whose standards are as high as our own. If you are interested in learning how an updated brand, online presence, and shifting to a more community focused marketing message can help you love AND grow your business, please reach out today by sending me an email at nicolas@teamtradecraft.com or selecting a time for us to meet here.


I look forward to hearing from you.

Let's build something beautiful.

-Nic



1 Comment


Gajender Pal
Gajender Pal
Mar 23, 2024

Why a buyer's agent representing the buyer needs to get incentives from whom they are not work for. Ask from whom you are working, BUYER, right? Questions: 1. In In buying process, buyer is paying for attorney fees, lender commission, appraisal fee then why he is going to pay his agent fee. When the buyer's agent working so hard (seldom leaves, work more than 40 hours weekly) for BUYER, then Buyer would agree to pay as part of closing cost. 2.. If buyer's agent is not allowed to take commissions or gifts from attorney or lender, then why allowed from seller's agent who is competing against your buyer? 3. How buyer's agent will work honesty for buyer when he is paid by other…

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