With the recent settlement of the NAR lawsuit for $418 million a lot of agents are left wondering what this means for their future career in real estate. Many wonder if buyer’s agents will even exist after this all settles. The truth is no one really knows that answer. At this point NAR has decided to settle, we have not yet heard the DOJ’s stance on the settlement so it is still pending. This means we are still in a time where the answers could change.
The long and short of it is that agents as a whole need to do a better job of explaining their role in a transaction to ensure the parties involved understand how their agents are getting paid. The best solution for this is the one that has existed all along. It is to use an exclusive buyer’s agency agreement. The settlement currently states that all MLS subscribers will use this agreement with all buyers no later than July 2024.
For some agents this means business as usual and for others it means getting over their fear of the agreement and presenting it to buyers. The agreement is a great way to have the agent and client speak about the transaction and how everything works including pay. The agreement really adds a level of professionalism to the relationship.
One of the most important items in the agreement is how the agent will be compensated. It usually lines out whether the buyer will be paying the agent or if the agent will be seeking pay from the seller/seller’s agent. Most commonly we see the buyer’s agent looking to the seller/seller’s agent for cooperating compensation first then if it does not satisfy the agreed amount seeking the rest from the buyer. The truth is like everything real estate compensation wise it is a negotiation and there is no fixed amount.
These new changes may seem scary but in my opinion buyer’s agents are not going away. Make sure to provide your clients with value and make sure to take time to properly explain your role. Buyers are likely spending the most amount of money they ever have in their life when purchasing a home. With that type of purchase most will elect to have representation there to protect their investment. The agents who provide the most clearly defined value will thrive in this new market dynamic. Keep working to protect and educate your clients and they will be happy to work with you as an exclusive buyers agent in the future.
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