What’s the Big News in Real Estate?

Posted April 8, 2024 in Real Estate Trends

Scott Hogan, Clark County WA real estate agent

You don’t have to be too focused on real estate to have heard about a national lawsuit settlement announced in March concerning Realtor commissions. The National Association of Realtors (“NAR”) announced just weeks ago that they had settled a class-action lawsuit by paying millions and, perhaps more significantly, changing the way Realtors are paid.

The custom has been that a seller, when listing their home for sale, would contract with their Realtor concerning what percentage commission was to be paid and how much of that was to be paid to the buyer’s Realtor. The second part— the Buyer’s Agent Commission, or BAC—was the subject of the settlement. Sellers can still agree to offer a commission to the Realtor that represents their buyer—or can still, as before, choose not to do so.

What’s different, then? Now, any commission offered to the Buyer’s Realtor, according to the settlement, cannot be disclosed on the MLS (Multiple Listing Service). The MLS is the main way Realtors (and their clients) discover properties for sale. The lawsuit’s claim was that “advertising” that commission kept overall Realtor commissions higher than they would have been without that disclosure and, as a result, kept home prices or total transaction costs higher.

Is that true? Only time will tell, now that this long-standing commission practice is apparently ending.

As a longtime service provider to Realtors and their clients, I’ll say this: the “old” way of commission-sharing worked pretty well. Anyone can argue that a certain percentage commission is too high or low, but both buyers and sellers usually ended up with a professional Realtor representing their interests. Now, if a Seller declines to offer any commission to their buyer’s Realtor, that buyer could end up paying out-of-pocket for that same representation or, worse, making a huge investment without good counsel. That will hit budget-conscious people like “starter home” buyers particularly hard.

If you are a buyer just starting to look at homes, you can expect that your Realtor will ask you to sign a Buyer’s Brokerage Agreement at your first meeting. That shouldn’t be considered aggressive—it’s a minimum requirement under the new “rules.” Now, more than before, you’ll want a professional Realtor who can explain these changes in commissions.

Just as before, the professionals at Clark County Title are happy to assist you in dealing with any aspect of real estate. We don’t quote mortgage rates or sell houses, but we know people who do. Our role is to be a neutral, third party to help all parties get what they bargained for, and accomplish their goal of buying, selling, or refinancing.

Best wishes for an excellent month of April!
From your friends at Clark County Title,