Recent headlines have been buzzing with news concerning the National Association of Realtors (NAR), a prominent trade association representing real estate professionals, and a proposed settlement regarding litigation from home sellers in Illinois and Missouri regarding broker commissions. Although the proposed settlement does not directly impact Vermont, its potential approval by a judge in mid-July could trigger nationwide changes affecting the Multiple Listing Service (MLS).
As buyers, sellers, and Realtors begin to understand the potential changes we feel it is essential to communicate some important information that may answer our clients’ questions and address inaccuracies in the media coverage.
What does the settlement entail?
- NAR agreed to create a new MLS rule prohibiting offers of compensation on the MLS. This would mean that offers of compensation could not be communicated via an MLS, but they will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Sellers can still offer a buyer’s agent fee or a concession and buyers can include the fee in any offer they submit to a seller.
- NAR agreed to create a new rule requiring MLS participants working with buyers to enter into written agreements with their buyers before the buyer tours a home. NAR has long encouraged its members to use written agreements to help consumers understand exactly what services and value they provide, and at what cost. Our company has been using formal buyer representation agreements with our buyer clients for over 15 years and have always disclosed our fiduciary responsibilities and fees to buyers prior to representing them.
The Impact on Vermont Real Estate and How We Do Business
Our company, as well as real estate companies throughout Vermont, have practiced transparency regarding cooperation fees offered in MLS with both buyer and seller clients. Fees in our industry have always been negotiable and differ from brokerage company to brokerage company.
Despite the implementation timeline extending until mid-July, we are proactively adjusting our business practices. What the settlement does not address is the amount that can be charged. Real estate commissions have never been fixed and always were negotiated.
There has been much speculation that the settlement will reduce home prices, however we do not expect that outcome. Real estate values and affordability are predominantly influenced by supply and demand dynamics, indicating that this settlement is unlikely to impact prices significantly.
It's Important to Choose an Experienced Realtor
Real estate is often a person's most expensive asset. Buying and selling a home is typically done, on average, every 7-10 years and is a complex process. From market knowledge to negotiation, under Buyer Representation Agreements, homebuyers benefit from the expertise and experience an agent can provide throughout the home purchasing process.
For 66+ years, Coldwell Banker Hickok & Boardman Agents have been representing buyers and sellers throughout our marketplace, providing expert guidance on purchasing real estate as a primary, secondary, or investment property. Our agents have been recognized as best-in-class by our clients for their communication, negotiation skills, market knowledge, and are highly trained to provide buyers and sellers with the necessary support and risk reduction as they navigate to a successful outcome.
Please don’t hesitate to reach out if you have any questions. We are, and always will be, focused on our clients’ best interest in all real estate transactions and we value these relationships.
