You may have heard in the news recently that a big change was coming for the real estate industry. Well it has arrived and it is called the “NAR Settlement.” Basically a lawsuit was filed against several large real estate brokerage firms and the plaintiffs won, which resulted in a settlement by the real estate industry. As a result, there are some big changes in the way realtor’s commissions are handled.
In the “old days,” when a property was listed on the MLS (Multiple Listing Service), the database for most homes offered for sale, along with the property description and pictures would be information such as the amount of commission being offered to the buyer’s broker for showing the house to the buyer. That means that if a seller wanted to ensure their house would be shown to as many prospective buyers as possible, they would want to offer the customary commission amount of three percent (3%). If they offered less, they could run this risk of a buyer’s broker not wanting to show the property.
Now, with the recent verdict and subsequent settlement, the seller’s realtor can NOT list the buyer broker’s commission in the MLS listing. The seller can still offer a commission to the buyer’s agent, however this must be listed somewhere other than the MLS. It can appear on information handed out at the open house, on the sign posted in front of the house, on the realtor’s website, or social media. But it cannot be on the MLS.
One of the other changes can be seen on a broker’s agreement between the buyer and the buyer’s realtor. On this agreement, it must be disclosed that commissions are not set by law and that they are negotiable. Have they always been negotiable? Yes, but now that disclosure must be included on any written agreements. The language will look something like the following: “Brokerage commission are not set by law and are fully negotiable.”
Being a real estate agent, anywhere in south Florida, from Sunny Isles, to Wellington, to Jupiter is a difficult job and we are here to help agents and their clients understand the changing laws.
