Special offer

Wrong Reporting: Real Estate Commissions Unchanged, Terminology Shifts

By
Real Estate Agent with https://teamcoker.robertpaul.com 9023635

Wrong Reporting: Real Estate Commissions Unchanged, Terminology Shifts

The Newest NAR "Settlement" Does Not Universally Change the Amount of Real Estate Commissions as is being widely reported.

Commissions in real estate agreements have always been negotiable.
The Newest NAR "Settlement" DOESN'T Change the AMOUNT of Real Estate Commissions.
BUT, It Does Change How Commission are DESCRIBED and PAID to the Real Estate Brokerages involved in the transaction.

There are implications for home buyers and sellers.
The proposed and yet to be approved settlement does redefine and re-categorize how real estate commissions are described and explained inside the paperwork of the listing in the MLSs and in the paperwork of the closing.
Up to now, no lender has been willing to include Buyer brokerage fees in a purchase loan.
This new proposal provides a solution for buyers to finance their buyer agent fees.

IF the new rule goes into effect (July 2024 proposed), SELLERS and listing brokers will continue to offer concessions for buyer broker services. 
However such concession will not be communicated as commissions
The once "Split Commission" of the Listing Brokerage, would now become redefined/explained as "A Seller Concession" rather than a split of the Listing Brokerage's commission. 
The seller will still be able to decide IF they choose to provide any seller concession toward buyer closing costs.

The NAR explains this as, "The settlement expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS provided that such concessions are not specifically conditioned on the use of or payment to a buyer broker as commission." (NAR Notes here)
So IF the proposed settlement is approved, then on the transaction settlement statement at the closing (HUD/CD), there may/might be a "Seller Concession" to the Buyer for a dollar amount. 
What the Buyer does with that concession amount is up to/must be left to the BUYER.

So in summary - terminology has changed.
Consumers will still have their current choices regarding real estate services and compensation.
Commissions are still negotiable.
Buyer brokerages can still receive funds from the transaction at the closing.
Using Educated Professionals is still the best choice for consumers in a real estate transaction.

We know great professionals all over the United States and Abroad.

teamcoker.robertpaul.com

Posted by

Heath Coker, Associate Broker
Berkshire Hathaway Homeservices Robert Paul Properties
teamcoker.robertpaul.com
508-548-8888  Licensed in MA
Its a beautiful day on Cape Cod!

James Heath Coker | Create Your Badge

Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

Great post and very accurate !  And lets go Red Sox !!!  8 days.

Mar 20, 2024 08:05 AM
Associate Broker Falmouth MA Cape Cod Heath Coker
https://teamcoker.robertpaul.com - Falmouth, MA
Heath Coker Berkshire Hathaway HS Robert Paul Prop

Thank you for the comment, Michael Elliott. Great last name, my grandfather was an Elliott.

Mar 21, 2024 05:36 AM
Michael Elliott

We may be cousins!  Please follow me.

Mar 21, 2024 05:55 AM