New “Rules of the Road” for Homebuyers and Homesellers

What is normally a time for quiet relaxing as we prepare for fall is much different this year when it comes to real estate. As we have been indicating to you these past few months, the changes because of the NAR (National Association of Realtors®) settlement go into effect this month. These changes are numerous and we’ll provide some links to additional information at the end of this segment. In a nutshell, they are as follows:

• A decoupling of how selling and buying agents are compensated
• Additional disclosure on how compensation works
• Buyer representation agreements are required prior to showing homes
• No offers of buyer agent compensation in the MLS

How these changes will affect buyers and sellers is currently more speculation than fact – we’ll know more as these changes are put into practice. Markets have a way of finding equilibrium. There has been significant effort made by Realtor® associations, brokerages, and agents as forms are being changed, laws being updated, systems being modified, and new processes being implemented. While these changes will bring some frustration and potentially gnashing of teeth, we believe we can help our clients navigate through them to help them with their real estate needs.

One thing to keep in mind – agents and brokerages, along with their respective MLS, are required to follow these new rules as defined by the settlement agreement. Any deviation could result in severe penalties for agents, brokerages, and the MLS. Anyone who says they have a ‘workaround’, ‘shortcut’, or do not plan on following these rules should be avoided, as their ability to practice real estate may be put in jeopardy if they are caught.

Below are two article with more information from NAR:

• Homebuyers: Here’s What the NAR Settlement Means for You
• Home Sellers: Here’s What the NAR Settlement Means for You

How all of this will affect the market is unknown. There are indications that there is some slowing of activity as buyers assess how these changes, along with home prices and interest rates, factor into their budgets. This slowing could also be a seasonal dip we typically see around “Back to School” time. Sellers are starting to see that property condition and price need to be in alignment or the property may take longer to sell. Add into the mix a presidential election and stir vigorously. Uncertainty brings caution and delay. It also brings opportunity. We believe the real estate market may start moving into something more tolerable (pre-COVID) over the next few months. We may have also turned a corner with the direction of interest rates. Time will certainly tell.