It’s been 45 days since the way we sell and buy real estate changed.
I’ve written a dozen essays about the NAR Settlement. Here, here, and here are good places for you to get caught up.
But today I’ll share what my colleagues and I are seeing as this new way of business roles out. Some industry experts say it’s a “nothing burger.” I don’t agree with that thinking, and as you’ll read below, I think it’s more for sellers than it is for buyers.
The NAR Settlement Post Implementation
At first, I’ve written a lot about the Buyer Broker Agreement (BBA). Prior to August 17th (the day everything changed) a majority of our realtor training centered around how we educate buyers about this new step in the process. Interestingly, the buyer-broker agreement was standard practice in 18 of our 50 states.
There’s been plenty of long customer conversations about how we must get buyers to sign the BBA prior to touring any property(s). At first it felt odd, but I’ve yet to have any buying customer say “no.”
What we’ve learned is that most of this new NAR Settlement procedures applies to sellers. Prior to this settlement, sellers would sign a listing agreement for X% with their listing agent. That compensation amount was published in the MLS for all agents to see.
They called it a Cooperating Compensation Agreement.
The lawsuit claimed this Cooperating Compensation Agreement must be abolished. Why should a seller lay out their cards prior to receiving an offer from a buyer. Makes great sense. So, in the NAR Settlement, its been removed. There is no longer information in MLS’s across the country about compensation for realtors who use the system.
Now, sellers sign a listing agreement with compensation to pay their listing agent, only. That’s it. It makes the process easier for the seller. That puts the negotiation more open for both the seller and buyer.
The NAR Settlement Removes “Steering”
Buyers who hire agents will agree to their “fee for service” and include that amount in the offer. This is to help offset, or eliminate, any “steering” that the lawsuit wants to eliminate.
(Steering is when an agent shows properties to their buyers that pay a higher compensation and “steer” them away from lower compensation listings). Not smart. The NAR Settlement is adamant about this practice and removing it for good.
So far, buyers are getting comfortable with the buyer broker agreement. And there’s not one standard form. There are exclusives (when your relationship with your agent is solid), and non-exclusive (when you need to “test-drive” your relationship with your agent). And, they can be for one showing, multiple showings… or for a period of time.
Under the NAR Settlement, they want agreements with buyers, just like we’ve done with sellers for decades.
For sellers, it’s still about the “net” amount they want to achieve. So, by allowing negotiations to happen without showing their full cards in advance, it’ll be better for consumers. As an agent representing both sellers and buyers… it just feels better.
So, while there’s a big hoopla going on inside the industry where they’re talking about more strict rules, lawyers finding new ways to tap into the coffers of brokerages who may break new procedures… the NAR Settlement appears to be starting out better than most thought.
(Photo above: My wife loves orchids! Here are our hanging Orchids during sunset)
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*** My Latest Video is getting a huge amount of views. I guess it hit a nerve. It’s an important video to check out if you’re considering buying a condo in Florida.
*** Regular readers know I lean, green. Meaning, I like sustainable ideas that are both good for business and for our environment. If that’s something you want to pursue, start with my Green Real Estate page that’ll give you ideas on how to save money & help environmental issues that drive tourism to our state.
*** Question: Do you know someone who’s leading a charge in the Sustainability or Resilient space? I’m looking for people in Florida making progress in sustainable home building, green real estate, or entrepreneurs in eco-materials supporting our real estate industry. If so, I have an audience each Wednesday who’d love to hear from them. If so, please help me connects some dots.
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*** South Florida’s Surging Supply Update ***
* This morning’s Inventory is 50,424 *
* Last week supply was 49,993 *
That’s a 431 unit Increase in one week
September Inventory Rose 2,405 units
