The Reality of Real Estate

Yes. Compensation is currently negotiable and will continue to be negotiable. Compensation should always be negotiated between agents and the consumers they serve.

MLS participants working on behalf of buyers would be required to enter into written agreements with their buyers before touring a home. These agreements can help consumers understand exactly what services and value will be provided, and for how much.

After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS. The settlement expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS provided that such concessions are not conditioned on the use of or payment to a buyer broker.

We are awaiting further clarification on how leases will be impacted. We will update you as soon as we get more information.

We are awaiting further clarification from NAR.

We are awaiting further clarification from NAR.

After the new rule goes into effect, listing agreements should be amended to reflect that offers of compensation cannot be communicated via the MLS. The settlement expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS provided that such concessions are not conditioned on the use of or payment to a buyer broker.

According to NAR, the VA has not addressed whether it will change its requirement prohibiting VA buyers from paying the commission. NAR has engaged with the VA on this issue, and NAR remains committed to working with the VA so that veterans are not left out of the market or forced to consider alternative loan products.

No. Under the settlement, buyers still have the same options when it comes to compensating their real estate representatives. That is, the listing brokers can compensate the buyer broker, the seller can compensate the buyer broker, or the buyer can compensate their broker directly. Based NAR’s interpretation of current guidance, buyers should still be able to get financing from Fannie Mae, Freddie Mac, and the FHA under these scenarios. NAR is working to verify that this interpretation will hold. However, none of these agencies will allow the buyer to finance a commission into the mortgage at this time.

According to NAR, financing commissions is not feasible under the current structure of the residential mortgage finance system, and there is no clear short-term legislative or regulatory fix.

Yes. According to NAR, a buyer can request the listing broker to pay compensation to the buyer broker.

It is the consumers choice to use a REALTOR®. However, the services REALTORS® offer are invaluable, such as their expert guidance, market knowledge, negotiation skills, ability to tackle complex contracts and much more. You can navigate the real estate market with confidence when you have a REALTOR®.

No. We do not believe that an unrepresented buyer at an Open House invokes the requirement of having a Buyer Representation Agreement in place.

The settlement only deals with properties for sale on this issue of buyer representation, and it does not address rentals or change anything about needing a written agreement prior to showing a rental property. It would still be a smart idea to have a conversation with the client about how the agent will be compensated and have the Buyer/Tenant Representation Agreement signed.