Below is a quick FAQs article on what the National Association of Realtors (NAR) settlement means for homebuyers, especially when it comes to open houses and open house disclosures, commission transparency, and working with a real estate agent.
For more information:
NEW – Signed PDF Disclosures & Visitor Signature Capture
If you are required to have a visitor view and sign disclosures before attending an Open House this can make life a LOT easier!
The Signed PDFs Add-on is now available and builds on our existing Disclosure capabilities.
(See it on the Smartphone settings page.)
How it works:
- Visitors are shown your disclosure text as well as links to view your PDF disclosures.
- The Visitor can then accept terms of the disclosures or forms, then sign and while registering for the Open House.
- Visitors also have the option to have the signed PDF emailed to them as well.
- Agents can also opt to be copied on the signed PDF also.
1. What is the NAR Settlement about?
The NAR settlement is all about improving transparency and giving buyers more control over real estate commission structures. This came after lawsuits raised concerns about how commissions are set and shared. Now, agents need to be more upfront about commissions, especially buyer-agent fees, and offer more flexibility in how these fees are handled.
2. How does the NAR settlement affect open houses?
Open houses are impacted by new disclosure rules, so agents now have to clearly explain commission details at these events. At an open house, agents should be ready to discuss the exact breakdown of commissions, helping buyers understand who pays what. This approach to open house disclosures allows buyers to ask questions upfront and get a clear picture of costs.
3. Will I know the buyer’s agent commission at an open house?
Yes. With the new rules, agents must be clear about commission amounts for both the listing and buyer’s agents, making it easy for buyers to understand how much the buyer’s agent will earn. This open house disclosure is all about transparency, so buyers can make informed choices.
4. Can I negotiate my buyer’s agent fees?
Absolutely! One major change from the settlement is that buyers now have more power to negotiate what they pay their agent. Traditionally, buyer-agent fees were set by the seller, but now buyers can ask about different payment options. This might include flat fees or even hourly rates, which can make home-buying costs more flexible. At open houses, agents might discuss this flexibility, so buyers are aware of all their options.
5. What does this mean for buyer representation agreements?
The settlement requires buyer representation agreements to be more detailed and transparent, so buyers understand exactly what they’re signing up for. At open houses, agents can introduce these agreements and explain any associated costs. This makes sure that buyers understand their agent’s role and fee structure right from the beginning.
6. Who covers the buyer’s agent commission now?
In the past, the seller typically covered both agents’ commissions, but the new rules mean buyers may sometimes be responsible for paying their own agent directly. This depends on what’s negotiated with the agent. At open houses, agents can explain these options to buyers and outline any potential responsibilities, helping buyers prepare financially.
7. What disclosures should I expect at an open house?
Thanks to the settlement, open houses should now have more detailed commission and fee disclosures. Agents may share informational sheets or summaries of how commissions work, what fees are negotiable, and the terms of buyer representation. This level of open house disclosure helps buyers feel more confident and informed about their decisions.
8. Does this NAR settlement apply to all real estate transactions?
Yes, the NAR settlement applies nationwide to all residential real estate transactions involving NAR agents or the Multiple Listing Service (MLS). It’s a big shift across the industry, aimed at making real estate transactions more transparent and competitive.
9. How does this benefit homebuyers?
Homebuyers benefit from greater transparency and more options for negotiating agent fees. The new rules allow buyers to make informed decisions about who represents them, what they’re paying, and how those costs are structured, starting with open house disclosures.
10. When will these changes take effect?
The changes are already rolling out, with many disclosure rules already in place. The NAR’s goal is to make the real estate market fairer and more transparent, giving buyers and sellers a more straightforward experience from the start.
With this NAR settlement in place, open house disclosures are more detailed, giving buyers a complete picture of agent fees, representation agreements, and negotiation options. This transparency makes it easier for buyers to feel informed and empowered throughout the home-buying process.
*The above information was provided from various source including the NAR website, to view more about the NAR Settlement, go directly to the NAR website –> https://www.nar.realtor/the-facts/nar-settlement-faqs