Homebuyers: Here’s What the NAR Settlement Means for You
**Understanding the Recent Changes in Real Estate Practices: What Homebuyers Need to Know**
Buying a home is one of the most significant financial milestones many people achieve. REALTORS® are trusted professionals dedicated to guiding you through the homebuying journey, helping you make informed decisions every step of the way.
Recently, the National Association of Realtors® (NAR) announced updates to its practices as part of a settlement agreement. These changes are designed to increase transparency and ensure buyers fully understand their options. Here’s a clear breakdown of what these updates mean for you as a homebuyer.
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### **What Has Changed for Homebuyers?**
1. **Written Agreements with Your Agent:**
- Before touring a home, you’ll need to sign a written agreement with your real estate agent.
- This agreement outlines the terms you’ve negotiated, including the services your agent will provide, their value, and their compensation structure.
- Take time to review the agreement thoroughly to ensure it reflects your understanding and expectations.
2. **Key Details in Buyer Agreements:**
Your written agreement with your agent must now include:
- A clear, specific disclosure of the compensation amount or rate your agent will receive or how it will be determined.
- Compensation terms that are objective and clearly defined (e.g., a flat fee, percentage, or hourly rate). Open-ended terms, such as “compensation will be whatever the seller offers,” are no longer permitted.
- A prohibition on agents receiving compensation exceeding the agreed-upon amount in the buyer agreement.
- A statement affirming that broker fees and commissions are negotiable and not set by law.
3. **Application of Written Agreements:**
- These agreements apply to in-person and live virtual home tours.
- You’re not required to sign a written agreement to speak with an agent at an open house or to ask questions about their services.
4. **Seller-Offered Compensation:**
- Sellers can still choose to offer compensation to your agent. However, such offers will no longer be shared on the MLS (Multiple Listing Service), which serves as a property information marketplace for brokers.
5. **Seller Concessions Remain an Option:**
- You can still negotiate with sellers for concessions, like covering closing costs, which can help reduce your out-of-pocket expenses.
**Effective Date:**
These updated practices went into effect on **August 17, 2024**.
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### **What Hasn’t Changed?**
1. **REALTORS® Are Committed to You:**
- Agents who are REALTORS® remain dedicated to guiding you through the homebuying process and are ethically obligated to act in your best interest.
2. **Compensation Is Still Negotiable:**
- REALTOR® compensation is entirely negotiable. Your agent must have open and transparent discussions with you about their fees and services.
3. **You Always Have Choices:**
- Work closely with your agent to understand all the options available to you when purchasing a home. This ensures you make informed decisions tailored to your needs and goals.
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### **What This Means for You as a Buyer**
These changes put more control and clarity into your hands as a homebuyer. By formalizing agreements and making compensation terms clear from the start, you’ll have a stronger understanding of the value your agent provides and how they are compensated.
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For more information about these updates, visit [facts.realtor](https://facts.realtor). If you have questions about how these changes might impact your homebuying experience, reach out to me at [Towner-Homes.com](https://Towner-Homes.com). I’m here to help you navigate every step of your journey to homeownership!