The recent National Association of Realtors (NAR) settlement has been a hot topic in the media, sparking discussions and a fair amount of confusion about what this means for home buyers and sellers. Here at Dickson Realty, we want to clear the air and dispel some of the most common myths circulating.
Myth #1: The NAR settlement forces real estate agents to reduce their fees.
Fact: Breathe easy! The settlement has no impact on how much a realtor charges. Real estate fees are, and always have been, negotiable. There’s a wide range of pricing depending on the market, experience level, and services offered. Just like any other professional service, realtor fees reflect the value they bring to the transaction – expertise in negotiation, market knowledge, navigating complex paperwork, and ensuring a smooth process.
Myth #2: Sellers can no longer pay compensation to buyer’s agents.
Fact: Sellers retain complete control over whether or not they offer compensation to a buyer’s agent. The settlement simply prohibits advertising buyer agent compensation on the MLS listings. Sellers can still factor this cost into their asking price or negotiate it as part of the offer process.
Myth #3: This settlement will make homeownership more affordable.
Fact: While everyone wants a more affordable housing market, the settlement isn’t a magic bullet. The cost of real estate is primarily driven by supply and demand, not realtor commissions. While commissions are a factor, they represent a small portion of the overall cost of buying a home. The settlement is unlikely to have a significant impact on affordability.
Myth #4: The settlement means buyers are now on their own.
Fact: Not at all! Qualified realtors offer valuable expertise and can help buyers navigate the complexities of the purchasing process. From market analysis and property searches to negotiation and closing, a buyer’s agent can be a crucial asset. In fact, some buyers may choose to directly compensate their agent under the new system.
Myth #5: The NAR settlement eliminates the need for written agreements between buyers and agents.
Fact: This is a misconception with a positive twist. The NAR settlement actually encourages more transparency by requiring written agreements between buyers and their agents. These agreements will clearly outline the services provided and associated fees, ensuring both parties are on the same page from the outset.
Myth #6: Sellers are now stuck paying all the fees.
Fact: Sellers still have options. While they may choose not to offer compensation to a buyer’s agent, buyers may counter with an offer that includes a contingency requiring the seller to cover these fees. Ultimately, negotiation is key.
Myth #7: This settlement is a big win for buyers who can now negotiate agent fees.
Fact: This requires some nuance. Many buyers may have previously benefited from sellers covering their agent’s fees, allowing them to finance the cost over time rather than coming up with a large sum upfront. The NAR settlement may require some adjustments in how these fees are handled moving forward.
Myth #8: The NAR settlement means real estate agents are getting ripped off.
Fact: The NAR settlement has its complexities, but it’s not about punishing realtors. The vast majority of real estate professionals work hard and deserve fair compensation for their expertise. The brokerage community has a proven track record of adapting to changing market conditions, and this will likely be no different.
The Bottom Line: Transparency and Choice
While the NAR settlement represents a change, it’s not a revolution.The real estate market will adapt, and buyers and sellers will still have options. The most significant potential benefit of the settlement could be increased transparency in buyer-agent relationships through written agreements. Ultimately, the best course of action for buyers and sellers is to educate themselves, understand their options, and seek guidance from a qualified realtor they trust. Here at Dickson Realty, our experienced agents are here to help you navigate the buying or selling process in this evolving landscape.
