On March 15, 2024, the National Association of Realtors announced a proposed settlement to a class action lawsuit alleging collusion to inflate brokerage commissions. This settlement introduces significant changes, notably requiring buyers and sellers to negotiate fees separately with their agents, departing from the traditional model where seller fees covered a portion of broker commissions, including those of the buyer’s agent.

At EmpowerHome, we welcome this shift as a stride towards transparency, empowering buyers and sellers to make decisions based on value rather than adhering to traditional practices. CEO of EmpowerHome, Sarah Reynolds, emphasizes the importance of consumer transparency, a principle long advocated by EmpowerHome.

“This is great news for our industry as it will require more transparency to the consumer, which EmpowerHome has been practicing and teaching, not just to our agents, but to the entire industry for many years. The industry will now be forced to follow our lead and start being transparent with their clients which we are a firm believer in at EmpowerHome.” – Sarah Reynolds, CEO of EmpowerHome

But what exactly does this settlement mean for those involved in buying, selling, and navigating the real estate market? Gaye Ribble, Top Realtor and Expansion Partner of EmpowerHome Team Colorado, breaks it down:

How Does the NAR Settlement Impact Sellers: 

As a seller you will now get to decide how much, if any, you want to pay the Buyers Agent for supplying the buyer and procuring the sale. You always had this choice but many did not realize it, which was the grounds of the lawsuit.

Some sellers will choose to not pay anything to the buyer’s agent. This means only buyers who have enough additional funds to pay their agent directly will likely show your house. When you consider that price is tied to supply and demand, it’s likely that you will not attract as many buyers as the ones who are unable to pay their buyers agents (which is the majority) will instruct them to only show them houses where the seller will pay their agent and as the demand goes down, it’s likely that sales prices will go down as well. This could end up netting you less in the long run than if you decided to pay the buyers agent in the first place.

On the other hand, if you decide to pay the buyer’s agent something, you are likely to see the higher you pay the more buyers will be willing to look.

It’s possible that some buyers will reach out to the Listing Agent directly to see the house. In this case they are hoping to not have to pay a buyer’s agent directly. Since there is more work required from a listing agent who is now helping both the buyer and the seller, they will  need to be compensated for the additional work of helping the buyer to navigate the buying process which means dealing with lenders, inspectors and even issues like Buyer’s Remorse. This additional cost will likely be negotiated between buyer and seller and if the buyer simply can’t pay, it will end up being the sellers responsibility if they want to sell to that buyer. 

Lastly, buyers getting a VA loan are prohibited by law from paying the buyers agent anything so if you want to have Veterans who are using their VA benefits to  see your home you will have to pay their agent’s fee. 

How Does the NAR Settlement Impact Buyers: 

In order to see every house available to you, you will need to be willing to pay your agent’s fee in instances where the seller is not willing to. In many cases the seller will be willing to pay your agent’s fee, in which case even though you were willing to pay your agent if need be, you may not have to. This will enable you to have more money to make a more attractive offer to the seller with the understanding that in a market with low inventory, the home will be awarded to the buyer with the strongest overall offer. This is where it’s important to hire the strongest agent possible as the best agents will help you to navigate and negotiate the best possible scenario for you. A great agent will also be able to help you find properties that are not listed in the MLS which can be very valuable.

If as a buyer you are simply unable to pay a buyer’s agent, you will only be able to consider homes where the sellers are willing to pay them for you or who are willing to pay their agent more for the additional workload.

What Everyone Needs to Know: 

While these changes may seem daunting, Reynolds EmpowerHome Team agents have many programs to assist buyers with financial constraints while ensuring sellers maximize their returns.

In this evolving landscape, the realtor you choose matters more than ever. You need a real estate team that has the systems and guarantees to help you navigate through the process of selling and buying a home. There is no one better to help you than us! Adaptability and innovation are key to navigating these changes successfully and at EmpowerHome, we’re dedicated to empowering and serving our clients to the highest level.

If you’re looking to sell your home, we’ve got you covered. We sell our listings three times faster, which reduces stress for our clients and gets more money in their pockets. Did you know that only 48% of homes that went on the market last year sold the first time with the first agent they hired? Most sellers last year had to call a 2nd or 3rd agent to get the job done, or even worse, not sell at all. The agent you hire the first time matters! Reynolds EmpowerHome Team sells 98% of our listings the first time, so when you hire us, your home is more likely to sell fast & for top dollar!

Curious about how quickly your home could sell? Call or text us at 571-470-5447! Find out the value of your home!