Don’t Buy A House Until You Read This

A new settlement involving the National Association of Realtors (NAR) could seriously change how buying and selling homes works from here on out. The long-standing structure of real estate commissions is changing, and everyone in the market—whether you’re a buyer, seller, or agent—needs to be aware of it.

Why The NAR Settlement Matters

For many years, sellers have traditionally been responsible for paying both their own agent's commission as well as the buyer's agent's commission. This structure often lacked transparency, with the costs being embedded in the overall price of the property.  Often, it led to inflated home prices, as sellers would factor in the cost of both agents' fees when setting their asking price. Buyers, in turn, unknowingly absorbed these costs.

The recent settlement aims to address this lack of clarity by restructuring the way commissions are disclosed and handled. By introducing greater transparency into the transaction process, both buyers and sellers will have a clearer understanding of how commission costs are allocated, providing buyers with more negotiating power and offering sellers the flexibility to adjust pricing strategies.

Here’s What You Need to Know

Commissions Will Be More Upfront

All parties involved in a home sale are working towards transparency. Instead of the commission being wrapped up in the final price, buyers and sellers will clearly see who’s getting paid and how much. This means no more guessing at hidden fees or inflated prices. If you’re buying a house, you’ll know exactly what your agent’s cut is—and you can negotiate from there.

Buyers Might Have to Pay More

Historically, sellers end up the ones footing the bill for both agents’ commissions. But now, buyers might have to cover their agent’s fees themselves. Yes, that could mean more out-of-pocket costs, but it also gives buyers a bit more leverage. Knowing exactly what you’re paying could make it easier to negotiate a better deal on the house.

Sellers Get Some Breathing Room

With the updated system, sellers are no longer automatically required to assume this cost, providing an opportunity to adjust their asking price more strategically. This additional flexibility allows sellers to reallocate potential savings, enhancing their ability to negotiate more favorable terms or incentives with prospective buyers. Ultimately, it introduces a more dynamic and adaptable approach to pricing and deal structuring.

How This Affects Your Next Move

If you’re a buyer, it’s important that you plan your budget with more clarity. You might need to factor in your agent’s fees, but you’ll also have more control in negotiations. 

Sellers, on the other hand, will find they have more say in how deals are structured, which could lead to quicker sales or better offers.

Real estate is definitely changing, and if you’re in the market, it’s worth paying attention to these. Being informed now could help you make smarter decisions down the road.

Let's schedule a time to discuss where you currently are in the buying process and map out the smartest way to move forward. Book a call with us today.