JULY 23, 2024. You may have heard that there was a Realtors lawsuit. Some sellers were not clear about real estate commissions being negotiable — commissions have always been negotiable. The three KS franchises named in the class-action lawsuit lost, and as a result NAR (National Association of Realtors) stepped up with a $418Million cease + desist settlement. Bottom line: now Realtors must be extra clear up front about how commission is paid, when listing a property or starting to work with a Buyer as a Buyers’ Agent. 

BUYERS: If you are a buyer; once you pick the Realtor that you want to work with and help you in your real estate journey you will sign a Buyer Agency form. This has always been the case in PA – but some states do not have this form. Up front you will learn that there might be a fee to compensate that Buyer Agent for their time, expertise, offer-writing, home tours, transaction guidance, etc. unless the Seller of the property that you purchase is offering a Buyer’s Agent split on commission. 

SELLERS: When you list your property for sale the real estate commission to sell the property is negotiable. Since the 1990s when Buyer Agency was introduced in the US, that commission could include a ‘split’ for a Buyers’ Brokerage when an agent is representing the buyers’ interests and not the Sellers’. This is still an option, to offer a Buyers’ Brokerage part of a split. So strictly for example – if you decide on a commission of 6% and want to offer 3% to Buyers Brokers as an incentive to show the property and possibly sell it that is still possible. Also possible to just offer zero $$ a Buyers Broker, and only pay the Listing Agent (Sellers Brokerage), or some degree of that.

As Independent Contractors, Realtors work on pure commission – there is no salary.  This is why agents like to have a Buyer Agency agreement in place, before investing a lot of time and effort into a search with clients. 

NAR Lawsuit Impact: Realtors have new forms and contracts that spell out roles and commissions more clearly now, and they go into effect this August. If a buyer cannot afford to pay for a Buyer Agent’s services out of pocket, this may be added onto an offer price for a property as a ‘seller assist’ in the sale, which then serves a commission for the Buyers’ Agency/ Brokerage. So — essentially what has happened is that now the real estate sales commission might be paid up front from a Sellers’ side in a listing agreement — and if not, it might take form as a ‘seller assist’ in closing costs.

As rents go up, up, up – home ownership is still one of the best ways to build generational wealth… the economic outlook is solid! as NAR’s brilliant Chief Economist Dr Lawrence Yun highlights in his latest post: Dr Lawrence Yun NAR Economic Outlook

If you have a steady job and are ready to save a bit of money towards home ownership give us a ring at www.freebridgerealty.com 610.252.2552. We are also offering $250 in Stellar Home Services (cleaning exterior windows/ carpet cleaning etc) when you list a property for sale with us. Celebrating TEN years in business, as a Boutique Brokerage – you can trust Free Bridge Realty with your real estate needs. An independent broker, with no extra fees (which you may find at many real estate franchises).