WHAT THE INDUSTRY IS FEELING AND SAYING ABOUT THE NAR SETTLEMENT

To break down the proposed settlement’s terms: buyer’s agent commissions will not be displayed on MLS listings, and homebuyers must sign contracts with their buyer’s agent.

This is a big change from how commissions have historically been handled, and leaves a lot of questions floating throughout the industry about the potential effects—good and bad—that the changes could have.

Real estate professionals throughout the industry have turned to social media platforms such as X, Reddit and Facebook to discuss the settlement, voicing their thoughts, opinions and fears about where the industry goes from here.

Here are some of the main settlement discussions circulating in the real estate sphere of social media:

The outcome of the settlement: the effect on buyer’s, and buyer’s agents

Since buyer’s agent commissions will not be offered on MLS listings anymore, how will buyer’s agents receive their commissions?

Nothing in the settlement prevents a buyer’s agent commission from coming from the seller, as it has previously. It can still be included as part of the seller’s costs in negotiation (for example: a seller could pay a 6% commission, split 3% and 3% to each agent). Many in conversation on X suggest working with one another to keep this model going.

However, since a seller paying a buyer’s agent’s commission will no longer be the necessity or “requirement” it once was, some sellers may not agree to these terms and will only pay the commission of their seller’s agent.

If a buyer’s agent’s commission is not paid by the seller, responsibility will fall on buyers themselves to cover this cost. This creates a new affordability barrier to homeownership for many prospective buyers in the market.

Prices are still inflated in the housing market, and mortgage rates still remain rather high (despite decreases). In addition—as some users on Reddit pointed out—because commissions may be cut for seller’s agents doesn’t automatically mean home prices will see a decrease. Home prices may see little change overall beyond the usual market trends.

A possible outcome of this new homeownership barrier is that many buyers will move forward in the market without an agent. This creates another barrier, but for buyer’s agents. They may see a distinct loss in business.

To sum up, if buyers can’t afford commission it makes it harder for them to buy a house, and it makes it harder for buyer’s agents to find work.  The biggest issue for buyers is trying to navigate the complex process of buying without the trusted advice of a buyer’s agent, if the buyer doesn’t want to pay an agents commission.

The takeaway

There’s going to be more conversations and even more changes in the real estate industry and housing market as this settlement is reviewed and possibly approved. There’s no answers as to what exactly will be approved—and what exactly will happen in response.

-Courtesy of RISMedia