Navigating the Landmark Real Estate Lawsuit and Buyer Agency Changes: What Consumers Need to Know

By now, you may have heard about the significant lawsuit regarding real estate commissions and buyer agency, often referred to as the “Sitzer/Burnett” or “NAR Settlement.” This case is poised to bring substantial changes to the real estate industry. If you (or your clients) are asking for advice or have concerns about selling their properties, the following FAQs can help clarify the situation.

Are the New Rules Already in Effect?

Not yet. The official implementation date for the new rules is mid-August 2024. However, some states and brokerages are proactively making changes before this deadline.

Will I Need to Pay Realtor Commissions if I Sell My House?

In most cases, yes. Typically, a real estate sale involves two agents: one representing the seller and one representing the buyer, and both agents expect to be compensated for their services. If you are listing their property, the listing agent will charge a fee for professional services or 'commission', and it is common practice for the seller to contribute towards the buyer agent’s commission. Since commissions are always negotiable, clients should discuss their specific situation with their Real Estate Expert to understand the best approach and what is best for their situation.

How Will Shopping for Houses Change?

Moving forward, similar to attorneys requiring retainer agreements before starting a client relationship, Realtors now must have contracts with buyers before performing any work on their behalf, including something as rudimentary as showing houses. Realtors representing buyers will now require a formal agreement establishing their professional relationship.

If I Buy a House, How Will My Agent Be Paid?

Once the new policy changes are in place, buyers will be responsible for their agent’s fees. However, buyers can request sellers to contribute towards the buyer agent’s commission when making an offer, much like sellers currently contribute towards buyers’ closing costs. A Real Estate Expert can help determine reasonable buyer concession requests based on the market, price point, and each clients goals and situation.

What Should You Take Away from This?

This is the most significant shift in the real estate industry in decades, and there are more unknowns than certainties at this point, and actual implementation of these policy changes is still being worked out. Given the complexity and evolving nature of these regulations, I expect it will take some time for the dust to settle and to work out the kinks.

Rest assured, I will keep you updated as more information becomes available. If you have any questions, please do not hesitate to reach out.

Feel free to contact us for more details or any real estate assistance you may need. We're here to help you navigate these changes and ensure a smooth real estate transaction and experience.