By Scott Gaertner, Associate Broker
I hadn’t planned to write this article until we knew more about the National Association of Realtors (NAR) settlement, which is pending approval. But the sheer amount of misinformation and confusion surrounding this topic has made me rethink that stance. Much of the media has gotten this so staggeringly wrong I felt it was essential to address the issue accurately and guide you through what this settlement might mean for buyers and sellers in Scottsdale North. With 40 years of experience in real estate and as the founder of Scottsdale’s first exclusive buyer’s agency, I believe I have the perspective needed to shed light on this complex situation.
What We Know So Far
The recent $418 million settlement by the NAR in an antitrust lawsuit has been a hot topic. A federal jury found that the NAR and several large real estate brokerages conspired to inflate agent commissions artificially. This raises a lot of questions, and it’s crucial to address them with clarity and accurate information.
Here’s what we know: Buyer broker compensation will no longer be displayed on the Multiple Listing Service (MLS). Additionally, buyers are now required to sign a Buyer Representation Agreement, which includes the buyer broker’s compensation. This move should lead to greater transparency in the real estate process, as many people didn’t understand how agents were compensated before. That would be a very good thing.
However, this shift also raises questions about how buyer agents will get paid. Traditionally, sellers generally paid buyer agents through the commission split, allowing buyers to have representation without paying out of pocket. With the new agreement, buyers may need to consider how they’ll compensate their agents, which can be a burden for first-time buyers or those with limited resources. This isn’t as much of a concern for buyers in Scottsdale North, who typically have more resources, but it’s a significant issue for many others.
How Will This Affect Your Using A Buyer Agent?
An interesting perspective to consider is what happened when the Northwest Multiple Listing Service (NWMLS), covering Seattle and parts of Washington State, pre-empted this lawsuit in 2022 by allowing sellers to pay buyer agents $0. Despite this change, most listings still paid buyers’ agents 2 to 3%, suggesting that while the industry might evolve, there could be ways for agents to continue receiving compensation. Whether this trend will apply across the board following the NAR settlement is yet to be seen.
Given all these uncertainties, if you’re considering buying a home and want the support of a buyer’s agent, it might be wise to make your move before June. After that, the landscape could shift, requiring buyers to navigate new compensation structures.
I’m Here To Help
My background in real estate provides a unique perspective on this issue. In 1990, I launched Scottsdale’s first exclusive buyer’s real estate agency, Buyers Resource, at a time when everyone in a real estate transaction typically represented the seller. Our consumer-friendly approach made us media favorites, with most news channels and papers showcasing our work. I expected this to shake up the real estate world and bring about swift changes, but the transformation turned out to be slower and less dramatic than I had hoped. This firsthand experience with industry changes that directly impacted how buyers were represented and compensated gives me insight into how to navigate the current uncertainty.
To help guide buyers through these uncertain times, I’ve written a book, “What Every Person Needs to Know About Buying a Home in the Post-NAR Settlement Era.” My publisher tells me it will be out very soon and it is designed to help you stay ahead of the curve and make informed decisions. If you would like to preorder a copy and get a discount, go to scottsbuyerbook.com to secure your book today! Or if you don’t feel like reading, just give me a call!
