NAR Settlement Changes: What Buyers and Sellers Need to Know

By Gregg Tepper

I have been married to my wonderful wife Letha for 27 years. We have 3 children: Max, Alexander and Charlotte. I have been a licensed Realtor in the New Orleans area for 17 years and am the Operator of The Tepper Group with Keller Williams Realty in Mandeville. Our team services the entire New Orleans and Baton Rouge metro areas. Our team of partners has over 40 years of experience. We helped 141 families buy, sell or lease in 2022.

Most people know by now that the recent National Association of Realtors settlement is changing how real estate transactions are done, but do you know exactly what these changes are? Today, I’ll explain the key changes and new rules buyers and sellers must know in the evolving housing market landscape.

• Buyer-broker commissions are no longer advertised. Previously, when a seller listed a home, they would typically offer a commission split between their listing agent and the buyer’s agent. This commission split was publicly visible in the MLS, where other agents could see it. Under the new rules, this practice is no longer allowed. Now, the buyer-broker commission is not automatically disclosed, which changes how compensation is handled and negotiated.

• Written disclosures and agreements. The settlement also mandates that real estate agents must provide a disclosure outlining their services, compensation, and other terms in a written agreement that buyers must sign before they can start viewing homes.

• Industry implications. The new rules mean thousands of agents nationwide must adapt their practices to comply. As the market adjusts to this “new equilibrium,” there will be a period of discovery and adaptation, potentially creating confusion and challenges.

• Negotiable commission rates. Some sellers might offer no commission to the buyer’s broker or a reduced rate, while others may still offer a standard percentage. It’s now a negotiable item that can become a line item in the offer stage.

• Buyer risks. With agents now requiring signed agreements before even showing a house, there’s a risk of inadvertently signing multiple buyer agreements with different agents. This could lead to legal complications, such as multiple agents claiming a commission. The best advice for buyers is to carefully select one trusted agent to work with and avoid signing agreements without fully understanding their implications.

Agents, buyers, and sellers will all need to adapt to new norms. As the market continues to evolve, staying informed and working with experienced professionals will be key to successfully navigating this new landscape. For any questions, don’t hesitate to call us at (985) 727-7000. I look forward to talking with you!