The NAR Settlement and Its Impact on Cincinnati Realtors

Over the past few weeks there has been a lot of media coverage about the changes that could impact business practices in the residential real estate industry in the months and years ahead. As some of you may have seen or heard, there was a lawsuit filed against the National Association of Realtors (NAR) that ended with a proposed settlement that has not yet been finalized. 

This settlement may bring some changes in our process, but I want to assure you it will not impact my ability to continue to provide a high level of service to my clients. Since moving back to Cincinnati in 2008, with your support and referrals I have closed on more than 370 properties. I’ll continue to give every friend, colleague, and family member you refer to me the same positive customer experience through the sale process and beyond! Thank you again for all of your referrals and your recommendation of my business over these last 16 years.

OVERVIEW

There is a lot of media commentary about this case. Some of it has been incomplete or sensationalized. I wanted to share the facts about the proposed settlement that I have received from the leadership of my brokerage since many of you have reached out to ask how this will impact you when you are in the market to buy, sell, or invest in residential real estate.

HOW WILL THIS IMPACT YOU WHEN YOU CHOOSE TO BUY OR SELL A HOME IN CINCINNATI?

The biggest takeaways that you will notice as a client will be… 

For my buyer clients, when we have our initial consultation, we will be required to sign a buyer representation agreement, defining services and costs, before we begin working together. A buyer’s agreement has been a common practice in some markets and now it will be a nationwide mandate per the NAR settlement in order to enhance transparency and ensure fair dealings in real estate transactions. 

For my seller clients, when we discuss our marketing strategy prior to listing your property, we will address the role that buyer agent commissions will play in our approach to selling your home. 

As more details and a more defined timeline become available I will share them with you.

DETAILED SUMMARY OF PROPOSED SETTLEMENT (Source: Gary Keller, CEO Keller Williams International)

  1. Buyer Representation Agreements Required. Agents working with buyers must sign a written buyer representation agreement with the buyer before the agent can show a home listed on an MLS.
  2.  Agents cannot make offers of cooperative compensation on the MLS. MLS’s must eliminate all broker compensation fields on the MLS and prohibit the sharing of offers of cooperative compensation in any other MLS field.
  3. Offers of Cooperative Compensation May Be Made Off the MLS.
    1. Nothing in NAR’s proposed settlement prohibits sellers or listing agents from making offers of cooperative compensation to buyer agents off the MLS (e.g., by email, newsletter, calls, texts, etc.)
  4. Brokers Can Publish Offers of Cooperative Compensation for Their Own Listings on Their Own Websites. 
    1. MLS’s are prohibited from publishing cooperative compensation offers, the settlement allows brokers and their agents to publish seller-approved cooperative compensation offers for their own listings (but not other brokers’ listings) on their own websites.
  5. Agents Must Make Commission Disclosures.
    1. Agents must disclose in listing agreements, buyer representation agreements, and pre-closing disclosures that broker commissions are not set by law and are fully negotiable. NAR must require REALTOR® Boards and MLS’s to include these disclosures in any form agreements they publish.

 

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