By AZ Home Girls
As you may have noticed, the real estate industry has been making headlines quite frequently over the past six months. The news has been dominated by reports of significant lawsuits and antitrust issues that could reshape the landscape of the industry. With proposed settlement dates rapidly approaching, we believe it’s crucial to provide our readers with accurate and comprehensive information to stay informed about these pivotal developments.
In April 2024, the court granted preliminary approval for a settlement that would resolve a class action lawsuit brought on by home sellers regarding broker commissions with the National Association of Realtors (NAR). The proposed settlement is to take effect by Aug. 17 and pending final court approval on Nov. 26. With the proposed settlement, NAR hopes to protect the choices consumers have regarding real estate services, and compensation and to continue to make home ownership accessible for all.
The intended impact of the settlement is ultimately to foster greater transparency regarding compensation and fees. Traditionally, compensation for the buyer’s agent was paid through the seller’s agent sharing a portion of their compensation with the buyer’s agent. This allowed buyers to have their own representation without out-of-pocket costs. This offer of compensation was communicated through the Multiple Listing Service (MLS), and locally will no longer be available as of Aug. 1.
The settlement aims to enhance transparency in real estate transactions by mandating written buyer agreements that specify agent compensation. Under the proposed terms, buyer agents will be required to enter into written employment agreements with buyers before engaging in services like property showings, negotiating or submitting offers. Compensation for buyer agents will be clearly detailed in these agreements. As it now stands, the settlement still allows the offer of cooperative compensation between buyer and seller. The request for cooperative compensation may be negotiated at or before an offer to purchase a property is presented. This will require a separate fee agreement with the buyer and seller or between cooperating brokers.
As always, the amount of compensation is negotiable for both buyers and sellers. Ultimately the changes provide for more options for both buyers and sellers. The settlement provides a strong base for real estate professionals to have clear and open conversations with consumers about all the options for representation and compensation.
The impact on the market value, if any, is still unknown. However, our brokerage has noticed an uptick in unrepresented buyers this year so far. As your trusted real estate resource, and to keep the theme of transparency, in the upcoming months we will delve into the myths and realities of representation and keep you abreast of any changes in the market or industry.
The AZ Home Girls are a real estate trio with over 50 years of combined industry experience. Each member brings unique strengths and perspectives, creating a well-rounded and dynamic approach to real estate. Whether negotiating the best deals, providing innovative marketing strategies, or offering customized plans for buyers and sellers, the AZ Home Girls are dedicated to delivering an unparalleled real estate experience. Ready to take the next step in your real estate journey? Email [email protected], visit azhomegirls.com, or call 602-832-7762.
