Understanding the National Association of Realtors® (NAR) Proposal: Key Information for Homeowners, Sellers, and Buyers

You've probably heard about the recent announcement from the National Association of REALTORS® (NAR) regarding real estate commissions. How could you not? The real estate industry is going crazy! 

I believe it’s essential to keep you informed about these developments that may affect your property transactions. Here's what you need to know:

Recently, NAR has proposed significant changes aimed at enhancing transparency and competition in the real estate market. These changes could impact how real estate transactions are conducted nationwide. Homeowners, sellers, and buyers must understand these proposals, as they may influence various aspects of the real estate process.

As you read or listen to the news, remember headlines are just headlines and it’s all speculation at this point. Headlines are created to entice you to read the story, but never fear, consumers are still going to be able to buy and sell houses and real estate agents will still give expert advice.

For homeowners looking to sell their properties, the proposed changes could have notable implications. Increased transparency regarding commissions may provide sellers with a clearer understanding of the costs associated with hiring a real estate agent and negotiating commission rates. Additionally, improved communication on commissions could foster a more transparent and trusting relationship between sellers and their agents.

In Colorado, not much has changed the only difference will be that buyer agency compensation will not be listed in the Multiple Listing Service (MLS), which applies to agents, not to homeowners.  My business fills a need in the marketplace, and my commissions have always been negotiated.

Here are examples of the proposed change:

If you’re selling a house priced at $700,000 and the listing agent charges you 3% (instead of 6% which includes payment to the buyer broker), will you be willing to lower your price by 3% ($21,000.00)? I’ll bet not. The best way to sell a house is to get it in front of as many buyers as they can. The best way to do that is to price your home right and

offer buyer agents a commission.

Buyers, on the other hand, may benefit from a better understanding of how commissions impact their transactions. For example: You’ve scrimped and saved to come up with the 20% down that you’ve always heard you need, which on a $700,000 house would be $140,000. If the seller doesn’t offer a buyer’s agent commission, you would now need to save $161,000 for your down payment and to pay your agent.  Unless you’re a VA buyer, the VA does not allow you to pay a real estate commission. This is when you really, really need your agent’s negotiation skills!

It's important to remember that NAR's proposal is still pending review and approval by relevant courts. Consequently, it may take time before these changes are fully implemented.

If you have any questions or concerns about how these proposed changes may affect you, whether you're a homeowner, seller, or buyer, please don't hesitate to reach out. I'm here to offer guidance and support throughout this process.

Thank you for trusting me with your real estate needs. Together, we can navigate these changes and continue to achieve success in the dynamic real estate market.