The NAR Settlement and its impacts and changes explained simply.
Have you been wondering about the recent news on the settlement between the National Association of Realtors (NAR) and a lawsuit, aiming to clarify its impact on the real estate market? One of the key points being addressed is the misconception that the settlement will directly impact commissions paid, whereas it primarily affects how commissions are structured and negotiated. In the past, commissions were typically shared between seller and buyer brokerages, but now, negotiations will happen directly between sellers and buyers upfront.
Contrary to some perceptions, this change is not expected to drive down prices significantly, especially in Utah, due to the persistent supply-demand imbalance in the state. With demand surpassing available properties for sale, prices are more likely to continue appreciating over time. Another significant change is related to buyer representation, where buyers now need a signed buyer-broker agreement before touring homes, emphasizing the importance of having proper representation.
Additionally, the settlement alters how commissions are handled, with buyers potentially being responsible for paying their agent’s commission unless pre-negotiated otherwise. It’s best to be aware of unrepresented buyers working directly with seller agents, highlighting the inherent risks in terms of fiduciary responsibility and negotiation dynamics.
That may pose a challenge for first-time homebuyers is particularly in terms of upfront commission payments. Ongoing discussions among lenders and the federal government to address these concerns suggests we should to stay tuned for further developments on how this settlement specifically impacts first-time homebuyers.
As always, if you’ve got questions about what’s going on in the real estate world or specifically with this settlement and how it impacts real estate, give us a call or text us. We look forward to hearing from you!
