Breaking News

Many of you may have already heard about the proposed settlement from the National Association of Realtors (NAR) in regard to commissions. Don’t believe the sensational headlines. Commissions have not been slashed nationwide! Our media has become so sensational in recent years! Here is what is going on and what you might be interested in knowing. The litigation, as I discussed in an earlier Ask Kathe (available at AskKathe.com), centered around Sellers offering to pay buyers agent commissions. As you can imagine, many buyers don’t have enough funds available to pay their agents themselves.  Sotheby’s parent company, Anywhere, already settled its stake in the litigation and the fall-out to consumers was simply that we had to inform sellers of their options when it comes to offering compensation to Buyers Agents and buyers of their rights and obligations under a Buyer Agency agreement. So what does this new proposed settlement mean? If the settlement is accepted by the court, then as of July (or sooner if adopted by a multilist (MLS) service):

• Realtors will no longer be able to list in the MLS what a seller is offering to pay a buyer’s agent. This does NOT mean sellers will stop paying Buyers agents. It does NOT mean that we can no longer communicate to Buyers agents what the seller is offering. This does NOT mean that buyers cant request, as part of their offer, that Seller’s pay their buyer’s agent commission.  It just means we cant put it in the MLS.
• Realtors will be required to have a signed Buyer Agency Agreement with a consumer before showing them a home. What does this mean? You will need to sit down with the agent before viewing homes to review and sign the Buyer Agency Agreement, by which you will be assuming the responsibility for payment of the Buyer’s Agent commission should the seller not be offering to pay your agent’s fee. Does this mean that you will get stuck with the fee (typically 2.5% – 3%). Not necessarily. 99% of our sellers are still offering payment to the Buyer’s Agent and if they are not, you can still request the fee be paid as a condition of your offer. Unless you are going to open houses, this suggests you will need to sign a Buyer Agency Agreement to view homes. Does this mean you can call an agent to see a home because it looks interesting? Only if you are willing to sign a Buyer Agency Agreement and choose that agent as your agent. What this means to you is you SHOULD NOT push “Contact Agent” on Zillow or any other website and then go see a house with a random agent. You should do your research and choose a Buyer’s Agent before you do anything else. Get educated on what Buyer Agency means for you. And then move forward with all of the benefits that Buyer Agency brings to you, the consumer!

My colleagues report that in New York City, the most expensive city in our country, Sellers are still paying Buyers Agents as they have in the past. It will add an extra layer to your Buyer Agent’s job to ascertain those offers before taking you to see a home so that you can understand your potential liability. This should also wake the consumer up to stop blindly choosing agents, such as  by pushing a “contact agent” button on a website, and take a minute to review agents’ websites online to learn about each agent’s qualifications and value proposition before signing up to be represented by them.