Top 3 Changes in Real Estate: How the National Association of Realtors (NAR) Reforms are Impacting Buyers, Sellers, and Agents
It’s been about 45 days since the National Association of Realtors (NAR) introduced several significant changes to how real estate transactions are conducted. These reforms aim to increase transparency, ensure clarity in agent-client relationships, and address ongoing concerns about commissions and representation. As a realtor working closely with both buyers and sellers, I’ve already started seeing how these changes are affecting the way we do business. Let’s dive into the top 3 changes that are making an impact and what they mean for you.
1. Commissions are No Longer Displayed in MLS
Previously, commission rates offered to buyer’s agents were clearly displayed in the Multiple Listing Service (MLS), which helped guide both agents and buyers in understanding how compensation was structured. Under the new NAR rules, commission amounts are no longer visible in MLS listings. This shift removes a layer of transparency but also opens the door for more direct negotiations.
How this affects you:
For buyers, this change means that instead of relying on preset commission structures, you and your agent will now negotiate the terms of the commission before making any decisions about viewing properties. This encourages more open discussions and allows for greater flexibility based on the service you’re receiving.
For sellers, this change requires you to be more proactive in discussing commission arrangements with your listing agent. Since commissions are not displayed to buyers upfront, you will have the opportunity to negotiate terms that align with your goals.
2. Buyer Representation Agreement Required Before Viewing Properties
One of the most significant shifts is the requirement that buyers and buyer’s agents have a formal Buyer Representation Agreement in place before viewing any properties or discussing real estate in detail. This agreement establishes the agent-client relationship and solidifies the terms of how the agent will be compensated for their services.
How this affects you:
As a buyer, you’ll need to sign this agreement before stepping into any homes or discussing the market with your agent. This formalized relationship ensures that both parties understand their roles and responsibilities and agree on the commission structure upfront. This also provides you with clarity and assurance that your agent is working in your best interest.
As a real estate agent, this change ensures that we have a formal commitment from the buyer, allowing us to dedicate time and resources confidently, knowing that we’re legally bound to represent the buyer’s best interests.
3. Seller and Seller’s Agent Must Negotiate the Terms of Their Agreement
For sellers, the changes emphasize the importance of fully understanding the terms of your agreement with your listing agent. Sellers and their agents are expected to negotiate the terms of their compensation and representation early in the process. This is an opportunity for sellers to ensure they are getting the best value for the services provided.
How this affects you:
As a seller, this change places the responsibility on you to have a detailed conversation with your agent regarding commission rates and the scope of services provided. Since commissions are no longer displayed in the MLS, this is your chance to negotiate terms that best suit your property goals, while still ensuring your agent is fairly compensated for their efforts.
As a listing agent, I’m more proactive in ensuring my sellers understand the value I bring to the table and the services included in our agreement. This clarity ensures there are no surprises down the road and helps us build a strong, transparent working relationship.
Final Thoughts
These NAR changes are reshaping the real estate industry by fostering more direct communication and negotiation between agents, buyers, and sellers. While some may find the new requirements a bit more formalized, they ultimately promote transparency and help ensure that everyone involved is on the same page from the start.
Whether you’re a buyer or a seller, navigating these new rules may seem daunting, but I’m here to guide you through the process and ensure your real estate goals are met. If you have any questions about how these changes affect you, or if you’re ready to buy or sell a property, let’s have a conversation!
Beth Terminella
Realtor, One10 Realty Group
Brokered by eXp Realty, LLC