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I am sure a lot of you have had a lot of questions about the recent changes and updates from the settlement made by the National Association of Realtors regarding commissions. A lot of people have been asking us why these changes should matter to them. The settlement looks to strengthen the already existing practice where compensation is, and always has been, negotiable. Here’s what you need to know:
What is NAR?
The National Association of Realtors is a prominent trade association representing real estate professionals in the United States. NAR sets ethical standards, provides educational resources, and advocates for policies benefiting real estate practitioners and consumers alike.
Settlement Goals:
- Increased Transparency
- Ethical Representation
- Fair Housing Practices
Key Updates:
- Clear Cooperation Policy (CCP): NAR’s Clear Cooperation Policy requires listing brokers who are participants in multiple listing services (MLS) to submit their listings to the MLS within one business day of marketing a property to the public. This policy aims to promote fairness and transparency in real estate transactions.
- Enhanced Code of Ethics Enforcement: NAR has enhanced its enforcement of the Code of Ethics, emphasizing the importance of ethical conduct among real estate professionals.
- Fair Housing Initiatives: NAR continues to prioritize fair housing initiatives, aiming to combat discrimination and promote equal access to housing opportunities for all. Buyers can benefit from a more inclusive and diverse real estate market as a result of these efforts.
What this means to you in the our local market:
Our local NWMLS has been working for many years to address transparency, ahead of the NAR settlement. In a decision broadcast to its members in May 2024, the NWMLS has stated that it would not opt-in to NAR’s proposed settlement agreement, which means they will not make any changes to its policies or new changes in regard to the settlement. Also new this year (though not as broadly discussed) are the changes the State of Washington adopted to ensure proper agency for buyers and sellers. The biggest change now requires that licensed brokers have an agency agreement in place with any buyers or sellers they are engaged in business with. The agency agreement is a contract to do business, namely purchasing a home, with a particular agent. So far we have had some push back from buyers in signing buyer agency agreements, especially those who are looking for their very first agent. However, we have found that if a buyer is committed and really wants to buy a home, they will select a broker and make a commitment to that broker through the agency agreement.
Back to the NAR settlement, which has been more loudly talked about in the news. As our local market has been ahead of the curve in being proactive in regard to enhancing transparency, ethical conduct, and fair housing practices within the real estate industry, in our opinion we are not seeing any significant changes in our local market in regard to the settlement. Buyers and sellers alike can feel confident if they have aligned themselves with reputable professionals, and they can navigate the market with confidence and achieve their homeownership or home sales goals.
