Perspective Real Estate Group

Understanding the Impact of NAR’s Proposed Changes on Homebuyers and Sellers in 2024 + FREE Homeownership Seminar

New changes proposed by National Association of Realtors (NAR) to settle the class action lawsuits include removing the disclosure of buyer broker compensation from the MLS.  The headlines don’t really read quite that clearly, but if it was reported that clearly it wouldn’t be so shocking.  Real Estate commission always have been negotiable, the change here is that now it will NOT be clearly disclosed if the Seller is willing to offer a commission incentive when selling their home.

So what does this mean for home buyers and sellers now?

As of right now we are not seeing much of a change, but come July when this ruling goes into effect, the MLS will no longer allow Realtors to advertise cooperative compensation from listing brokers to buyer brokers.  Because of this change, buyers agents will now be required to inquire directly with the listing agent as to whether a cooperative compensation offering will be paid by the seller prior to showing a home and entering into a Real Estate purchase contract.  Buyers will now have to decide if they want to see homes that are not offering any buyer broker incentives or not because of the next paragraph….keep reading.

This settlement will also require Real Estate agents to work with a buyer broker contract when working with home buyers.  We have always worked with a listing contract when working with home sellers, and now the same will be required, not optional, with home buyers.  This agreement will spell out how a buyers agent will get paid, and by who if the seller is not willing to offer a compensation to a buyers agent.

While many Sellers may choose to continue to offer buyer broker compensation, we have no doubt that some will no longer be willing to offer this.  This will require buyers to make the decision of paying for their own agent out of pocket in addition to their closing costs and down payment, or decide to go through the home buying process without representation.

For first time home buyers, VA buyers who currently cannot pay for representation because of loan guideline restrictions, those who only purchase a home every 10 years or so and aren’t familiar with current practices, this will be a challenge.

For those  who want to become homeowners but are already struggling to save enough money for the down payment an closing costs and still compete in this market where housing costs have risen tremendously…this is not good news.

Not only could the changes make it harder for buyers to afford homeownership, they could also lead to higher risk resulting in costly lawsuits.  As of now, over 70% of Real Estate law suits occur when one of the parties are unrepresented.  That number is mind blowing and a reminder of how crucial it is for both buyers and sellers to understand the legal responsibilities and risks of entering into a Real Estate contract.

This change comes at a time when sellers are cashing in on hundred of thousands of dollars in equity due to the astonishing rise in in home values over the past 4 years, and when buyers are facing higher interest rates, and increased competition from hedge funds and big investors.

For those that think this change will cause housing prices to fall, time will tell.  Uncertainty always has an effect on buyer and seller sentiment, which ultimately will leave a mark on the Real Estate market.  Will it go up, or will it go down?  That is the question right now on both buyers and sellers minds.

While our Real Estate landscape is changing and how we do business may look a little different as the changes come into play, we want you, our valued clients to know that regardless of the changes our commitment to you and your success remains the same.  Our clients goals are always at the forefront of our processes and practices.  Our team believes strongly in great representation and the benefit and value of homeownership, which will never change.

We also believe that experience matters, and the days of the part time agents who sell a house or two a year, may be dwindling.  With almost 80k people holding a Real Estate license in Arizona, it’s time for home buyers and sellers to be more particular with who they chose to work with.  The bar will raise on consumer expectations…finally…and we are here for it!   

Our team is hosting a Roadmap To Homeownership seminar in partnership with our valued lender partners and industry experts.  This event will be fun, interactive, and informational.  We will uncover the process, the pitfalls and how these recent rulings and changes will affect home buyers and sellers.

If you are considering purchasing a home, or you know someone who may be, please join us and bring a friend.  If you have any questions or thoughts on the recent headlines please know that we are here to answer any questions you may have. 


Click the link to REGISTER:

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