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NAR Settlement: What You Need to Know

Learn how the NAR settlement regulations make changes in agent commissions.

Let’s discuss the upcoming changes to the NAR settlement regulations in August 2024 and how these changes will affect how buyers compensate their real estate agents. If you’ve purchased a home before, you likely didn’t directly pay your agent’s commission, as it was typically covered by the seller’s agent. However, this process is about to change. With the new regulations, buyers will now negotiate directly with their agents to determine the commission. Here are three ways this compensation might work under the new rules:

1. The buyer pays 100% of the commission. The first option is that the buyer pays 100% of the agreed-upon commission to their buyer’s agent. This way is similar to how sellers have traditionally paid their agents. In this scenario, buyers need to be prepared to cover the entire commission for their representation.

“The first option is that the buyer pays 100% of the agreed-upon commission to their buyer’s agent.”

2. The seller may pay 100% of the commission. Another possibility is that the seller continues to pay 100% of the buyer’s agent commission. While it’s uncertain if this practice will persist, it is believed that many sellers will continue this approach to attract more buyers to their homes and make the purchase more affordable.

3. A split between the two. The third option is a split commission, where both the buyer and the seller agree to share the commission costs. This way involves negotiating an arrangement where both parties contribute to the buyer’s agent’s compensation.

As we approach August, it’s important to stay informed about these changes, as they will vary based on the market, price point, and seller preferences. If you have questions or need more information about how these new regulations might impact you, feel free to call or email. We’re here to help.

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