The NAR settlement has several potential effects on home buyers, both positive and negative:
Potential Positive Effects:
Increased Transparency: The settlement mandates written buyer broker agreements starting August 17, 2024.These agreements outline the services provided by the broker, the terms of representation, and the compensation structure. This transparency can help buyers make more informed decisions about which broker to work with and what services they need.
Clarity on Compensation: While commissions have always been negotiable, the settlement aims to clarify the compensation process. It requires that buyer broker compensation offers be made outside the MLS, potentially leading to more direct negotiations between buyers, sellers, and brokers.
Potential Negative Effects:
Potential for Higher Costs: Some experts believe that the requirement for written buyer broker agreements could make it more difficult for buyers to negotiate lower commission rates. This is because the agreements could formalize commission structures and limit flexibility in negotiations.
Reduced Access to Information: The removal of buyer broker compensation offers from the MLS might make it harder for buyers to compare different brokers and their compensation structures. This could lead to less competition among brokers and potentially higher costs for buyers.
Limited Impact on Overall Costs: While the settlement addresses buyer broker compensation, it doesn't directly impact seller agent commissions or other closing costs. Therefore, the overall impact on the total cost of buying a home might be limited.
Overall:
The NAR settlement's effects on home buyers are complex and vary depending on individual circumstances. While increased transparency is a positive step, potential negative impacts on costs and access to information cannot be ignored.
For more information, you can refer to the following resources:
NAR Settlement FAQs: https://www.nar.realtor/the-facts/nar-settlement-faqs
What the NAR Settlement Means for Home Buyers and Sellers: https://www.nar.realtor/competition-in-real-estate/what-the-nar-settlement-means-for-home-buyers-and-sellers
What the Big Realtors Settlement Means for Home Buyers and Sellers - NerdWallet:https://www.nerdwallet.com/article/mortgages/what-nar-settlement-means-for-home-buyers-sellers
By understanding the potential implications of the settlement, home buyers can make informed decisions about how to navigate the real estate market and find the right representation for their needs.