NAR Settlement Impact
for Buyers and Sellers 

August 8, 2024

Many people are aware of the NAR Settlement which has been talked about quite a bit in the news. What we hear in the news is not always the most accurate information. Previously, TK Homes published a blog regarding the myths surrounding the NAR Settlement. For the purpose of this blog, I wanted to reiterate what this settlement means for buyers and sellers starting August 17, which is the day the NAR Settlement changes officially begin. At that time, the Multiple Listing Service (MLS) will no longer show the buyer’s agent commission for each listing. Before we get into how the settlement has impacted buyers and sellers, just for awareness, the term for commission has changed to compensation.

For Sellers

Due to multiple news sources, some sellers are excited because they are under the impression that they no longer have to pay buyer’s agent compensation and think they will net more at the closing table. As mentioned previously, compensation has always been negotiable, and sellers have never had to pay for the buyer’s agent compensation, meaning that part isn’t new. At TK Homes, having our client’s best interest in mind is most important. When counseling our sellers, we are letting them know that although they do not have to pay the buyer’s agent compensation, we still recommend that they do. The main reason is that some buyers because they already have to pay their closing costs and down payment cannot also afford to pay their buyer’s agent. This means that if no compensation is being paid to their buyer’s agent, they can no longer afford to purchase a home where the buyer’s compensation is not being paid. The end result is that if a seller decides not to compensate the buyer’s agent, they are limiting their buyer pool. Most sellers understand that this is not a good thing.

For Buyers

It is important to understand that due to the lawsuit and all of the media coverage around buyer agent’s compensation, some sellers may not initially offer to pay a co-op compensation. This creates a situation where there is a chance that a buyer may have to pay their buyer agent’s compensation (after all, no one works for free). However, if a buyer’s agent compensation is not being paid, TK Homes will attempt to negotiate that it is paid for by the seller and/or listing agent’s brokerage firm, just as we would negotiate any other part of the contract, such as inspections, appraisals, etc. If the seller is still not willing to compensate us, we will then look at the situation again and see what it would look like to compensate us. We will look at how that would adjust the price of the home and if that makes sense to our buyer. If it doesn’t, we can move onto the next house. Due to these new changes, buyer agent’s compensation is now treated just like any other term within a contract and will now play a role in the home’s specific value based on the end cost to purchase, just like a remodeled kitchen versus a dated kitchen would. At TK Homes, we understand how our compensation can impact your buying process, and we will do everything we can to ensure you’re able to purchase your dream home at the most favorable cost to you. We will continue to have your best interests in mind.

Unfortunately, some agents are not aware of what is going on with these new rules and the potential negative impact it can have on their clients. At TK Homes, we feel it is important to stay well informed with what is going on in the real estate industry. That is just one more thing that sets us apart. We know how to give the best advice to both our buyers and sellers. If you are looking to buy or sell, you can count on us at TK Homes to have the necessary conversations with you, to educate you, and help you to figure out what will work best for you. Contact us today, and let’s talk about how these new rules might affect your real estate goals!

~ Written by TK Homes REALTOR® Mary Smith