What Buyers Need to Know About the New Real Estate Rules

Buying a home is one of the largest financial transactions most people will ever undertake, and it's important to have all the right information at your fingertips. The recent settlement involving the National Association of Realtors (NAR) has introduced several changes aimed at enhancing transparency and fairness in real estate transactions. These changes, effective August 17, 2024, will have a direct impact on how buyers interact with their agents and negotiate the purchase of a home. At Mathews & Co. Realty Group, we're committed to helping you navigate these changes effectively, ensuring you receive the best guidance and support throughout your homebuying journey. Below, we've outlined the key changes that you, as a buyer, need to be aware of, and how these changes will shape your experience. Key Changes for Homebuyers Under the NAR Settlement 1. Written Agreements with Your Agent Starting August 17, 2024, you will need to sign a written agreement with your real estate agent before touring any homes, whether in-person or virtually. This agreement will clearly outline the services your agent will provide and the compensation they will receive. Before signing, make sure the agreement reflects the terms you have negotiated and that you fully understand the value and services offered. 2. Transparency in Compensation The buyer agreement must include a clear and specific disclosure of the compensation your agent will receive or how it will be determined. This compensation should be objective—such as a flat fee or percentage—and cannot be open-ended or dependent on the seller’s offer. Additionally, the agreement will prohibit your agent from receiving any compensation beyond what you’ve agreed to, ensuring transparency and fairness. 3. Seller Contributions While the practice of the seller offering to compensate your agent is still permitted, this information will no longer be shared on a Multiple Listing Service (MLS). However, you can still negotiate other concessions from the seller, such as having them cover some of your closing costs. 4. Ethical Obligations and Negotiable Compensation These changes do not alter the fundamental responsibilities of your agent. If your agent is a REALTOR®, they are still ethically obligated to work in your best interest, abiding by the REALTOR® Code of Ethics. Compensation remains fully negotiable, so it’s important to have clear discussions with your agent about what you’re paying for and what services you’re receiving. How These Changes Benefit You The new rules introduced by the NAR settlement are designed to empower homebuyers with greater control and clarity during their transactions. By requiring written agreements and explicit disclosures, the process becomes more transparent, ensuring that you fully understand the financial aspects of your home purchase. This transparency helps in making informed decisions, ultimately leading to a smoother and more successful homebuying experience. Buyer Q&A on the New Real Estate Rules 1. What exactly will I be agreeing to when I sign the written agreement with my agent? Response:
When you sign the written agreement with your agent, you’ll be agreeing to the specific services that your agent will provide, as well as the compensation they will receive. This agreement will ensure that both you and your agent are on the same page regarding expectations and costs. At Mathews & Co. Realty Group, we’ll walk you through every detail of this agreement, making sure you understand the value of the services offered and how they align with your homebuying goals. 2. How will the requirement for a written agreement before touring homes affect my home search process? Response:
The requirement for a written agreement ensures transparency and clear communication between you and your agent from the start. While it introduces an additional step, it ultimately benefits you by making sure all terms are clearly laid out before you begin touring homes. At Mathews & Co. Realty Group, we’ll make this process as seamless as possible, helping you understand the agreement and get started with your home search quickly. 3. Will I have any flexibility in negotiating the compensation I pay my agent? Response:
Yes, compensation is fully negotiable. The new rules require that compensation be clearly defined and agreed upon in the written agreement, but they also emphasize that these terms are not set by law and can be negotiated to fit your needs. Mathews & Co. Realty Group will work closely with you to ensure that the compensation structure reflects the services you require and is aligned with your budget. 4. How will the prohibition of compensation disclosure on the MLS impact my homebuying process? Response:
While compensation details will no longer be listed on the MLS, this doesn’t change the potential for the seller to contribute to your agent’s compensation. This change simply means that compensation must be negotiated directly with the parties involved rather than being pre-determined by the MLS. We’ll help you navigate these negotiations to ensure that you’re fully aware of all compensation arrangements and how they impact your transaction. 5. Can I still ask the seller to cover some of my closing costs? Response:
Yes, you can still negotiate with the seller to cover certain closing costs or provide other concessions. These negotiations remain an important part of the homebuying process, and at Mathews & Co. Realty Group, we’ll guide you through these discussions to maximize the benefits you receive from the seller. 6. How does this written agreement apply to virtual home tours? Response:
The written agreement applies to both in-person and virtual home tours. This ensures that regardless of how you view a property, the terms of your relationship with your agent are clear and agreed upon. Mathews & Co. Realty Group will facilitate virtual tours with the same level of service and transparency as in-person tours, ensuring that your interests are protected. 7. What should I do if I don’t understand part of the written agreement or if I have concerns about the terms? Response:
If you have any questions or concerns about the written agreement, it’s important to address them before signing. At Mathews & Co. Realty Group, we encourage open communication and will take the time to explain every part of the agreement. Our goal is to ensure you feel confident and fully informed before moving forward. 8. What are the benefits of having a clear, written agreement with my agent? Response:
A clear, written agreement provides transparency and ensures that both you and your agent have a mutual understanding of the services to be provided and the compensation involved. This clarity helps prevent misunderstandings and sets the stage for a smooth homebuying process. Mathews & Co. Realty Group is committed to ensuring that these agreements are straightforward and tailored to meet your specific needs. 9. How will Mathews & Co. Realty Group help me navigate these new rules effectively? Response:
At Mathews & Co. Realty Group, we’ve already adapted our processes to align with the new rules, ensuring that our clients continue to receive top-notch service. We’ll guide you through every step of the homebuying process, from understanding and negotiating the written agreement to navigating compensation discussions and closing the deal. Our commitment is to make this transition as smooth as possible for you, ensuring a successful and positive homebuying experience. Final Thoughts... At Mathews & Co. Realty Group, we're here to guide you through these new changes with ease and confidence. Our goal is to ensure that your homebuying experience remains positive, transparent, and aligned with your best interests. For more detailed discussions on these changes and how they affect you as a buyer, be sure to check out our latest podcast episode where we dive deeper into these topics and offer insights on navigating this new landscape. Listen to the podcast here. If you have any questions or need further assistance, don't hesitate to reach out. We're here to support you every step of the way.