By Scott Gaertner, Associate Broker
You may have heard about some major changes that came from the National Association of Realtors (NAR). They recently settled a few big lawsuits accusing them of keeping real estate commissions high. To wrap it up, NAR agreed to pay $418 million over the next four years, which gets them out from under claims by over a million members and smaller brokerages.
Now, the NAR hasn’t admitted to doing anything wrong, but they’re making some important changes to how things have been done for years. These changes came into effect on Aug. 17, so let’s break down what this means for you—whether you’re buying or selling a home in Scottsdale North.
How Agents Get Paid
Here’s the lowdown on how real estate agents earn their commissions. When you sell your house with an agent, their earnings usually come from a commission or concession, which is often a percentage of the sale price. This is agreed upon when you first list your home. In the past, listing your home on the Multiple Listing Service (MLS)—the biggest marketplace for homes—meant you also had to offer a commission or concession for the buyer’s agent and advertise that amount on the MLS.
One of the big changes is the “decoupling” of broker commissions. The revision requires offers of compensation to the buyer’s agent to originate from the seller, not the listing agent, even if it’s on the seller’s behalf. Said differently, the seller’s agent no longer needs to offer a concession to the buyer’s agent, AND they are prohibited from advertising that amount of that concession in the MLS.
Following the NAR commission decoupling, the key change is that buyers and sellers will now separately negotiate commissions with their respective agents. This means sellers are no longer required to pay the buyer’s agent commission directly. This leads to more flexibility in how commissions are split between buyer and seller sides, potentially resulting in lower overall costs for homebuyers and sellers.
The Effects of the New Rules So Far
Since the new rules went into effect, most sellers are still offering concessions to the buyer’s agent because the MLS remains the main place buyers (and their agents) look for homes. Remember, the MLS is still by far the most powerful tool for advertising your home. It’s where nearly all serious buyers—and their agents—start their search. If your home isn’t listed on the MLS, you’re missing out on the biggest audience of potential buyers. And more eyes on your home means a better chance of finding the right buyer who’s willing to pay top dollar.
The New Rules
The NAR’s new policies aim to create more transparency and fairness. Some key changes include:
• Buyer agent compensation MAY NOT be listed in MLS home listings.
• Brokers are freed from having to subscribe to specific listing services (such as MLS).
• Buyers’ brokers MUST now have written agreements in place with their clients BEFORE showing them any homes.
What Does This Mean for Scottsdale North Homebuyers and Sellers?
For many of you in Scottsdale North, where buyers tend to be older, more experienced, and financially secure, these changes might not have a huge impact. (After all, we have the highest percentage of Baby Boomers in the U.S.) The biggest shift is that as a buyer, you now MUST have a written agreement with an agent if you plan to use one BEFORE you see a home. That is very different from the past.
Basically, it’s all about making sure the real estate game is more fair and transparent for everyone, including folks like you who are looking to move to the next chapter in your lives. Plus, since the intent of the NAR agreement was to bring down commission rates by promoting fair competition, you might end up saving some cash in the long run.
The Scott G Group Is Here to Help You Turn the Page to the Next Chapter
Every home has a story, and as you get ready to turn the page to your next chapter, we’re here to help make that transition as smooth as possible. Whether you’re buying, selling, or both, our experience in Scottsdale North will guide you through the process, ensuring this next part of your story is one you’ll look forward to and enjoy.
When it comes to real estate, our experience is the key to making this new chapter your best one yet. And no one knows Scottsdale North like we do. Let’s turn the page together—reach out today.
Remember, experience in real estate isn’t expensive—it’s priceless.
