As you may have heard, there are practice changes by the National Association of REALTORS® (NAR) going into effect on August 17, 2024. There have been plenty of headlines in the media causing confusion. To clarify some of the misinformation about the settlement, we want to share some facts and what it means for you.
Firstly, commissions have always been, and will continue to be, negotiated through transparent conversations with our clients. We strongly believe in transparency around broker compensation. While buyer's agent commissions can no longer be displayed on the MLS, seller concessions can still be offered, advertised, and negotiated outside of the MLS.
Sellers retain the discretion to offer closing concessions to buyers. The settlement does NOT prohibit their ability to do so. The distinction is that sellers can no longer directly offer compensation to buyer's Brokers; rather, the buyer himself/herself/themselves pays the broker directly. However, the seller can offer a concession to a buyer to pay this fee. In this case, the buyer does not need to deposit any extra funds into escrow to pay for his agent, since the seller's concession is reduced from the buyer's total costs. The buyer then credits the buyer's Agent, which leads us to the next part...
Every buyer represented by an agent is now required to sign a Buyer Representation and Broker Compensation Agreement (BRBC) formalizing the relationship between the buyer and broker before touring properties listed on the MLS, something that has been required in many states for over a decade. This document will govern the amount the buyer's Agent will receive, either directly from the buyer, or, if the seller is offering concessions to the buyer, as described above. At closing, Escrow will issue the commission as normal to Buyer's Agent as outlined in this Buyer Representative document.
Buyers deserve representation at every income level. Our experience has shown that transactions flow more smoothly when there is professional representation on each side, facilitating clear lines of communication, which benefits all parties involved.
Compass agents provide tremendous value to our clients. As a result, we will continue a transparent commission conversation that reflects the time, effort, expertise, and support we invest in each transaction.
We see these updates as being positive both for our clients and for the brokerage community, as they provide enhanced transparency and clarity that will encourage the most professional agents to thrive. Real Estate is a relationship-based business, and the trust we’ve earned with our clients is something we greatly value.
Together, we will navigate any changes to rules and regulations in our industry while continuing to provide the same exceptional service we always have. If you have any questions, please don’t hesitate to reach out.st we’ve earned with our clients is something we greatly value. Together, we will navigate any changes to rules and regulations in our industry while continuing to provide the same exceptional service we always have. If you have any questions, please don’t hesitate to reach out.