The National Association of Realtors (NAR) recently agreed to a $418 million settlement that is expected to bring about significant changes in the US real estate market. Here’s how it could affect buyers, sellers and agents:

Buyers:

• The settlement eliminates the requirement for a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer’s agent. This could potentially lower costs for home buyers.

• Buyers will no longer be influenced by agents who might have previously been incentivized to show them listings where the seller’s broker was offering a higher commission.

• Starting from July 2024, MLS members dealing with buyers must enter formal representation agreements with them. This ensures homebuyers know what their agent will charge them for their services.

Buyers Agents:

• Agents cannot be compelled to join MLSs to transact or receive payment.

• The settlement prohibits NAR from instituting any regulations allowing a seller’s agent to determine compensation for a buyer’s agent.

• The rule change leaves it open for individual home sellers to negotiate such offers with a buyer’s agent outside of the MLS platforms.

Sellers:

• The standard 6% commission goes away. This could potentially lower the cost of selling their homes.

• Sellers would no longer have to make a compensation proposal to prospective buyers and their agents. This could lead to more price competition and potentially lower home prices.

• The rule change leaves it open for individual home sellers to negotiate such offers with a buyer’s agent outside of the MLS platforms. This could give sellers more flexibility in how they choose to sell their homes.

Seller’s Agents:

• The settlement prohibits NAR from instituting any regulations allowing a seller’s agent to determine compensation for a buyer’s agent. This could change how seller’s agents negotiate their fees.

• Seller’s agents cannot be compelled to join MLSs to transact or receive payment. This could give them more freedom in how they choose to operate.