By Jaki Underwood, Editor-In-Chief
The National Association of REALTORS® (NAR) settlement, which will take effect on August 17, 2024, will disrupt how we buy and sell homes in Arizona. With changes taking effect in August, homebuyers and agents are full of questions. Here at the Arizona Ascent Magazine, we’re diving deep to provide your answers.
The settlement primarily affects the Multiple Listing Service (MLS) system and buyer’s agent compensation. Fundamental changes include:
- Listing brokers no longer being required to offer compensation to buyer brokers via MLS;
- The MLS removing all broker compensation information; prohibition of alternative compensation offer systems outside MLS;
- Brokers being unable to filter listings based on compensation or brokerage name;
- Mandatory compensation disclosures to all parties;
- Written agreements required between buyer’s agents and clients before property tours.
For homebuyers, these changes bring both new responsibilities and exciting potential benefits. You’ll experience more transparency in how your agent is compensated and must sign an agreement with your agent before touring homes. While MLS won’t offer compensation, you can still negotiate your agent’s fees. Using a buyer’s agent remains your choice, and new compensation models might emerge, potentially reducing your costs and offering you more control over the process.
Buyer agents will need to adapt in several ways. They’ll need to articulate their value to clients clearly, have upfront compensation discussions, and secure written agreements before showing properties. Compensation remains negotiable between agents and clients, and the core ethical standards of honesty and client advocacy remain unchanged.
NAR maintains that the settlement still allows for consumer choice in compensation, potentially increasing fair housing opportunities and accessibility to professional representation. This addresses some concerns about the impact on fair housing that has been raised.
As a homebuyer, you can prepare by discussing compensation with potential agents early on, being ready to sign agreements before viewing homes, considering negotiating agent fees and staying informed about new compensation models that may emerge. The court granted preliminary approval on April 23, 2024, with changes set to take effect on August 17, 2024.
While it’s too early to say definitively if this will make buying a home cheaper, the increased transparency and potential for new compensation models could lead to more competitive pricing in real estate services. It’s important to note that buyers can still use an agent if they choose, and many find great value in buyer agents’ services. This continuity in service should provide a sense of security and confidence during this transition.
Increased agent competition may impact the real estate market, potentially leading to more innovative services and pricing models. This emphasis on transparency and consumer choice could result in a more informed and empowered consumer base, inspiring both buyers and agents to adapt and thrive in this new landscape.
Moving forward, buyers should stay informed about these changes, start conversations with potential agents about their services and compensation, be prepared for more upfront paperwork before viewing homes, and consider how they value various agent services when negotiating fees.
Buyers and agents should stay alert to developments approaching the August implementation date. While change can be challenging, this push for transparency and consumer choice in real estate marks an exciting new chapter in home buying. Your dream home is still out there – you’ll have new tools to help you find it.
