What to Expect with the New NAR Rules: A Guide for Home Buyers and Home Sellers

The National Association of Realtors (NAR) has introduced new rules aimed at ensuring transparency and fairness in the home-buying process.

Here’s a breakdown of what you can expect as a buyer:

1. Signing a Written Agreement

Before you tour a home, whether in-person or virtually, you will need to sign a written agreement with your real estate agent. This agreement outlines the terms of your relationship, including the services your agent will provide and their compensation.

Note: Some states already have laws requiring buyer agreements. It’s important to check the specific regulations in your state.

2. Exceptions to the Agreement Requirement

You are not required to sign a written agreement if you are:

• Speaking to an agent at an open house.
• Asking an agent about their services.

3. Understanding Your Agreement

Before you sign any agreement, make sure it accurately reflects the terms you have negotiated with your agent. Understand the services and value provided, as well as the costs involved.

4. Negotiable Agent Compensation

Agent compensation for home buyers is fully negotiable and not set by law. You have the right to discuss and agree upon the compensation structure with your agent.

5. Written Buyer Agreement Requirements

Your written buyer agreement should include:

• The terms of the agent's compensation.
• The services provided by the agent.
• The duration of the agreement.

Make sure to ask any questions you have about the agreement to ensure clarity and transparency.

6. Seller's Offer of Compensation

While home sellers may agree to offer compensation to your agent, this offer cannot be shared on a Multiple Listing Service (MLS). Discuss this aspect with your agent to understand how it may impact your home search.

7. Effective Date

These changes go into effect on August 17. Make sure you are prepared for these new practices when working with your agent.

8. Fair Housing Rights

Always remember that as a buyer, you have the right to expect housing to be available without discrimination based on race, color, religion, sex, disability, familial status, or national origin. This remains a cornerstone of fair housing practices.

9. Flexibility in Professional Relationships

You and your agent are not required to enter into any particular type of relationship. You have the flexibility to choose any professional relationship that is permitted by state law.

Here’s what sellers need to know:

1. Offering Compensation to Buyer Brokers

As a seller, you still have the choice to offer compensation to buyer brokers. It’s often in your best interest to pay for buyers' commissions, as this can attract more buyers to your property, similar to setting an accurate list price.

2. Disclosure and Approval Requirements

Agents must conspicuously disclose to sellers and obtain their approval for any payment or offer of payment that a listing broker will make to another broker acting for buyers. This disclosure must:

• Be made in writing.
• Be provided in advance of any payment or agreement to pay another broker.
• Specify the amount or rate of such payment.

3. MLS Listing Restrictions

If you choose to approve an offer of compensation, note that this offer cannot be included on a Multiple Listing Service (MLS).

4. Alternative Advertising Methods

Agents can advertise listings off of MLS platforms. This includes using social media, flyers, and websites to promote your property.

5. Offering Buyer Concessions

You can still offer buyer concessions on an MLS, such as concessions for buyer closing costs. This can be a valuable tool in making your property more attractive to potential buyers.

6. Effective Date

These changes to settlement practices go into effect on August 17. Make sure you are prepared for these new rules when listing your property.

7. Fair Housing Compliance

Always remember that as a home seller, you are required by law to do business with prospective buyers without regard to their race, color, religion, sex, disability, familial status, or national origin. This ensures fair and equal treatment for all buyers.

Navigating the real estate market can be tricky, especially with the new NAR rules. Whether you’re buying or selling, I’m here to help you through these changes. As your realtor, I’ll make sure you understand the details, stay compliant with the latest regulations, and make the most of your opportunities. Let’s work together to reach your real estate goals with confidence. Contact us today to get started!