MYTHS AND FACTS: NAR Reaches $418 Million Settlement
By Michael Citron
If you’ve been keeping up, you’ve likely heard about the recent $418 million NAR settlement and its potential impact on the real estate commission landscape. But let’s clear the air and address some common myths and misinformation that are circulating.
Myth 1: The Settlement Forces Brokers to Reduce Their Compensation
To be clear. The proposed settlement doesn’t impose new rules or limitations on Realtors regarding fees or services. Commissions have always been negotiable, allowing sellers to decide what they deem appropriate. As they say, “You get what you pay for.” Discount real estate companies tried their luck, but the model proved unsuccessful. Offering commission attracts quality buyers and ensures expert representation on both sides.
Myth 2: The Settlement Allows Sellers to Stop Paying Compensation to Buyer’s Agents
False. Sellers have never been obligated to pay buyer’s commissions. The MLS required a minimum offer of $1 to potential buyer’s agents for listing inclusion. Now, with this requirement removed, sellers can negotiate commissions or opt for other forms of compensation.
Myth 3: The Settlement Relieves Sellers of the Financial Burden
Not quite. While buyer commissions won’t be displayed on the MLS, sellers can still offer compensation through separate platforms. Negotiations remain key, allowing buyers and sellers to find mutually beneficial solutions.
Myth 4: The Settlement Will Lower Prices and Increase Homeownership Affordability
Home values are dictated by supply and demand, not Realtor commissions. While the government estimates potential savings for buyers and sellers, the impact on affordability is marginal. External factors like mortgage rates and living costs play a more significant role in homeownership affordability.
Myth 5: The Settlement Benefits Buyers by Allowing Fee Negotiation
Buyers already enjoy Realtor representation without additional commission burdens. The shift in transparency may lead to better communication and service, enhancing the overall buying experience. Imposing more fees on Buyers during the home-buying process may, in turn, limit their affordability to buyers on a budget and ultimately hurt the entire industry.
Myth 6: The Settlement Provides Significant Restitution to Consumers
In reality, the settlement’s financial impact on consumers is minimal. While attorneys profit from legal fees, homeowners receive minor compensation, reminiscent of those tiny class action lawsuit checks we’ve all received (i.e., $5-$100 per homeowner).
The real outcome of the settlement is:
1. The buyer’s agent commission will no longer be allowed to be posted on the MLS and syndicated on major websites such as Zillow.com and Realtor.com but may be posted on private brokerage websites.
2. Buyer’s agents must have a buyer brokerage agreement signed before showing any homes to prospective buyers.
As a Realtor with nearly two decades of experience, I advocate for fair compensation and transparency in the industry. Our role goes beyond transactions. As real estate agents, we guide clients through significant financial decisions like doctors or financial advisors.
Despite industry changes, I remain committed to delivering exceptional service and value to my clients. Adapting to these changes in the industry is key, whether navigating market crashes, pandemics, or regulatory shifts. With resilience and dedication, we continue to drive success in our local real estate market.
So, to all homeowners and buyers in Coral Springs and Parkland, FL, rest assured that your interests remain paramount in this evolving landscape. Stay informed, stay empowered, and remember, the best deals are crafted with expertise and integrity.
If you would like to learn more about the settlement and discuss your biggest financial asset, then schedule an interview with me at Parrot Realty Group.
Buy & Sell With Confidence!
Michael Citron – Owner & Realtor of Parrot Realty
Michael Citron – Parrot Realty.
