The NAR Settlement. What’s Changing for Buyers and Sellers?

The NAR Settlement. What’s Changing for Buyers and Sellers?

Purchasing or selling real estate may or may not be in your immediate future, but it will likely be an aspect of your life at some point. Considerable changes are about to take place in the real estate industry due to a $418 million lawsuit against the National Association of Realtors (NAR) and proposal settlement. The lawsuit's impacts will take effect on Aug. 17, with some regions adapting the changes sooner, including here in Marin. In pursuit to be your trusted real estate advisor, below are the important details of the changes and some of my thoughts. If you have any questions about how this might impact you, please reach out. - Dana 415-609-7972

Marin County and BAREIS MLS BAREIS is the broker-owned multiple listing service serving real estate professionals throughout Marin, Sonoma, Napa, Solano and Mendocino counties. Changes to BAREIS rules and systems due to the NAR proposed settlement will be effective August 12th. The NAR Settlement Many articles have been in the news lately about the lawsuit and proposed settlement with the National Association of Realtors (NAR). It includes protections for firms that sold less than $2 billion of real estate in 2023. Many large brokerage firms, including Compass, which sold more than $2 billion, have already made separate proposed settlement agreements. It’s worth noting that these are still just proposed settlements and these changes must be approved and upheld by a Federal Court later this year. Changes for the Real Estate Industry There are two significant agreements made surrounding the case and subsequent proposed settlement. 1/ Sellers and listing agents will no longer be able to list an offer of compensation for buyers’ agents in any NAR-affiliated MLSs (although they can still offer compensation). 2/ Agents who are NAR members (and any members of brokerages who have also independently settled) must have a Buyer Representation agreement in place before showing a house to a potential buyer. Agents cannot perform real estate services without an agreement. Why these Changes? These changes are intended to address longstanding criticisms of the real estate industry and provide consumers with more choice and transparency. Changes to BAREIS Rules & Systems These are nine changes that will be effective August 12th for Marin County: 1/ Offers of Compensation will be Removed from the MLS and MLS Data Feeds 2/ Written Buyer Broker Agreements will be Required Before Showing a Residential Property to a Buyer 3/ Seller Approval will be Required for Payments from Listing Agent to Third Parties 4/ Required Disclosure to Buyers & Sellers that Commissions are Negotiable and not Set by Law 5/ MLS Data or Data Feeds Must Not Directly or Indirectly Establish or Maintain a Platform to Make Offers of Compensation from Multiple Brokers 6/ No Advertising Services for Free 7/ No Filtering Out Listings by Compensation or Brokerage/Agent Name 8/“Cooperation” is Defined 9/ “Concession” is Defined For a brief background on the NAR settlement, and detailed explanation of the nine (9) changes to BAREIS, plus FAQ's, visit this page on my website.

So, what do the “changes” mean for Sellers? Honestly, not much! Despite the headlines, there are not many changes here. The main takeaways in point form are: 1/ Separate discussion of listing and buyer broker commissions 2/ “Negotiable” commissions 3/ Placement of offer of compensation I am happy to elaborate on each of these in more detail. What “Changes” for Buyers? The requirement of a buyer representation agreements is a significant departure from how things were previously handled. Here are the main takeaways in point form: 1/ Buyer Representation Agreements are Required 2/ Buyers Prepared to Pay for Realtor Fees Possibly What I Like, and Don't Like About the Settlement So far, we have not seen much change as a result of the lawsuit or the settlement. However, it is creating lots of confusion and questions. These changes are extremely unlikely to lower the cost of housing and could make it even more expensive for buyers in some instances. While there is more transparency for consumers in how agents in their transaction will be paid and by whom, there needs to be more transparency surrounding how much compensation is being offered from other sellers to buyers agents. Currently, this is something we can see in MLS and can relay to clients. Without this information in MLS, it could lead to less understanding for buyers, sellers, and agents of the range of commissions for buyer brokers since it is less transparent to everyone in the process. The changes professionalizes the real estate industry. Many top agents and teams already operate through buyer representation agreements. I am glad that more buyers will be better represented going forward. The Bottom Line As with any changes, the market and the industry will quickly adjust, and having an agent on your side who is paying attention and has their finger on the pulse of the market is going to position you for success best.

Changes for BAREIS & FAQ

Dana Williams Your Partner in Real Estate MyRealtorDanaWilliams.com DRE# 01995115 M: 415.609.7972 dana.williams@compass.com

Statistics are generalities, essentially summaries of widely disparate data generated by dozens, hundreds or thousands of unique, individual sales occurring within different time periods. They are best seen not as precise measurements, but as broad, comparative indicators, with reasonable margins of error. Anomalous fluctuations in statistics are not uncommon, especially in smaller, expensive market segments. Last period data should be considered estimates that may change with late-reported data. Different analytics programs sometimes define statistics - such as "active listings," "days on market," and "months supply of inventory" - differently: what is most meaningful are not specific calculations but the trends they illustrate. Most listing and sales data derives from the local or regional multi-listing service (MLS) of the area specified in the analysis, but not all listings or sales are reported to MLS and these won't be reflected in the data. "Homes" signifies real-property, single-household housing units: houses, condos, co-ops, townhouses, duets and TICs (but not mobile homes), as applicable to each market. City/town names refer specifically to the named cities and towns, or their MLS areas, unless otherwise delineated. Multi­county metro areas will be specified as such. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers to be considered approximate. Many aspects of value cannot be adequately reflected in median and average statistics: curb appeal, age, condition, amenities, views, lot size, quality of outdoor space, "bonus" rooms, additional parking, quality of location within the neighborhood, and so on. How any of these statistics apply to any particular home is unknown without a specific comparative market analysis. Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.

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