NAR Settlement - Several Changes in the Real Estate Industry

 News that will affect the real estate industry is happening--largely affecting the buyer's side of things. This is all subject to court approval, and could take months to go into effect. 

The main takeaways are:

• Listing agents can no longer offer buyer's broker compensation on any MLS boards
• Buyer's Broker compensation offers can still be made (Meaning offers may be made to seller asking for Buyer's broker compensation)
• Buyers must now sign a Buyer's Rep form with an agent before any real estate activity is done
• Commissions will continue to be negotiable via contracts and Buyers may ask Sellers for their Broker's compensation

The new laws are not yet set in stone but expected to go to into effect in July 2024, but more details to follow as things solidify, get modified, added, deleted, etc.

I have to ask, is this any different from how attorneys operate? Or a CPA? Or if you hire any specialist? 

How will this affect all sides? Some possible scenarios:

• Buyers may be hurt the most because on top of the high real estate prices, they're going to have to pay for a buyer's agent if they want representation (this is basically how it's worked in NY). Of course buyers don't have to use a buyer's agent at all, but then buyers will likely pay more for the house because there won't be negotiating done on their behalf. 
• Sellers and even seller's agents can choose to pay buyer's agents or not. This will become a negotiating point but will likely continue to remain competitive. 
• VA and FHA loan buyers will likely lose out the most because they won't have the extra funds to pay for a buyer's agent.
• Sellers could end up with less buyers because many buyers won't be able to afford to pay a buyer's agent. 
• Sellers may still have to pay a buyer's agent to remain competitive in a slow market.
• Commissions may be allowed to be listed on non-MLS websites.
• Buyer's agents and buyers may only want to buy properties in which a Seller is offering compensation the buyer's agent, so that the buyer doesn't have to pay the buyer's agent.
• Listing agents may be asked to draft offers for buyers, but again, a buyer's representation agreement is now mandatory.
• More buyers may pay for and hire an attorney to draft up an offer. 
• Property values likely won't change much if at all, with extra being charged to the buyer.
• Buyers will scramble to buy before July 2024 to avoid the possibility of paying a buyer's agent
• Who pays the buyer's agent, if any are involved? Seller, Buyer, or BOTH. No longer is it being offered by the listing agent.