Practice Changes Take Effect Saturday

Editor’s Note: This article first appeared in Realtor Magazine.

The moment you’ve been waiting for is here: Real estate practice changes are taking effect, and it’s time to implement them in your business—if you haven’t already. The National Association of Realtors has been hard at work preparing the industry for these changes. Take the time to jog your memory or familiarize yourself with new requirements regarding written buyer agreements and communicating offers of compensation. At facts.realtor, NAR’s hub for resources and information related to its proposed settlement agreement, you’ll also find home buyer and home seller guides to the practice changes that you can share with your clients.

To get a refresher on how the practice changes may shift your business operations, consult this quick guide to practice changes. Also, be aware of what the practice changes may look like practically during a transaction. Here’s a summary of what you need to remember:

• Compensation remains fully negotiable by buyers and sellers and their agents.
• Remind consumers that when they’re searching for an agent to work with, they should ask questions about compensation and understand what services they are receiving.
• Practice change: Buyers must sign a written agreement with their chosen broker before touring a home—whether in person or live virtually. The agreement will reflect the terms they have negotiated with their agent, including what services will be provided, for how much and how the agent will be compensated.
• If sellers have not offered compensation, buyers can request in their offer that sellers compensate the buyer broker. If the seller is not paying buyer broker compensation, the buyer will be responsible for paying their agent if agreed to in the written agreement.
• Buyers do not need a written agreement when just speaking to a listing agent at an open house or asking them about their services.
• Current regulation does not allow agent commission payments to be financed as a part of a mortgage.
• Practice change: The listing broker or the seller may offer compensation to the buyer’s agent, but there are limitations to how that offer can be marketed—i.e., brokers can no longer communicate offers of compensation on an MLS.
• Practice change: If there is an offer of compensation to a buyer broker from a listing broker or the seller, the seller must approve the specific amount or rate of payment in writing.
• The changes further empower consumer choice through transparency.
• Agents who are Realtors are ethically obligated to work in the client’s best interest.

Reprinted from REALTOR® Magazine Online (http://realtormag.realtor.org), Aug. 9, 2024, with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2024. All rights reserved.