Embracing Transparency: NAR Settlement Explained

April 4, 2024

Real estate is constantly changing, and you may have seen the many headlines around the recent National Association of REALTORS® (NAR) settlement. We at the Sackin-Stone Team have been having multiple conversations daily with both our customers and colleagues regarding this very topic. The misinformation that is out there surprised us a bit.

Staying informed and cutting through the noise of misinformation is crucial, now more than ever. The recent settlement announcement by NAR has sparked all kinds of conversations, questions, and, unfortunately, misconceptions. As real estate professionals committed to the highest standards of service, we at the Sackin-Stone Team feel it’s our responsibility to provide clarity and truth to our valued clients and community.

Why This Blog Exists

The purpose of this blog is not just to clear the air but to engage in an open dialogue with you, our clients, friends, family, colleagues, and readers. We understand that changes in the industry can be confusing and, at times, concerning. This is why we’re discussing the 3 most asked questions about the NAR settlement, solidifying our discussion in facts and shedding light on what these changes mean for you, as a consumer.

Since 1988, the core values of the Sackin-Stone Team have been centered around putting our clients first. We believe in the power of information, the strength of community, and the importance of transparency. If this settlement benefits the consumer, we stand by it, affirming what’s good for the consumer is good for us too.

We encourage you to read on, reflect, and reach out. Whether you reply to this blog, fill out a contact form, or give us a call directly, all of your questions, concerns, and conversations are welcome. Let’s navigate these changes together, with understanding and trust at the forefront of our journey together.

FAQ – Frequently Asked Questions

Is It True That NAR Has Set a Standard Commission Rate?

Myth: NAR has historically set a standard 6% commission rate for real estate transactions.

Truth: This is a common misconception. NAR has never set or guided commission rates. Commissions are, and have always been, fully negotiable between brokers and their clients. This aspect of the industry remains unchanged, emphasizing the tailored nature of real estate services to meet individual needs.

Our Take: We always have, and always will provide our clients with high-level, exceptional-value service. Our philosophy doesn’t change. We will continue to work tirelessly for all of our clients until their ultimate real estate goals have been met. And then after our clients reach their goals, we will continue to remain in contact, provide referrals to our vetted trades, and host all clients at our multiple private events throughout the year… again, all with providing exceptional value at the forefront of what we do at the Sackin-Stone Team. We know as it always has been, that our time spent on exceptional service will be appropriately compensated much like how it is for other service and sales-related businesses.

Will the Settlement Affect Buyer Agent (Cooperative) Compensation?

Myth: The settlement will eliminate the practice of Buyer Agent or cooperative compensation.

Truth: Cooperative compensation remains an option. The settlement ensures that offers of compensation, while not communicated through MLS, can still be part of the negotiation process off-MLS. This preserves the flexibility and choice for consumers in how they engage with real estate services.

Our Take: In one transaction, there can be up to 29 points of negotiation. From the price to the repairs, all the way down to Escrow and Title companies used for that transaction. All this proposed change does is add one more point of negotiation, cooperative compensation. Just because nothing is listed on the Multiple Listing Service (MLS) for Buyer Broker Compensation, does not mean the seller is not paying or unwilling to. The proposed change will allow for this to be negotiated between both parties, and the seller has the right to look at their overall bottom-line net. A good negotiator in your corner, whether you’re buying or selling, ensures you get the best overall deal for your transaction. This is why it’s been important for us at the Sackin-Stone Team, to be Certified Negotiation Experts (CNE). With up to now 30 points of negotiation, it’s that important. We will always have your back, your best interests, and negotiate vigorously to ensure you get the best possible outcome.

What Changes Will Consumers and Real Estate Professionals See (or not see)?

Myth: The settlement will drastically change how real estate professionals operate, limiting services and consumer choice.

Truth: The settlement introduces some changes. One change is removing compensation offers on the Multiple Listing Service (MLS). Right now, in California, both Real Estate agents and consumers have access to see what compensation is being offered to a Buyer’s agent. Another change requires written buyer representation agreements. Much like a seller signing a listing agreement with the listing agent, a buyer will be signing a buyer representation agreement with their buyer’s agent. These changes are designed to enhance transparency and understanding between real estate professionals and their clients.

Our Take: If you’ve purchased your home using a Sackin-Stone team agent recently, chances are you’ve worked off a handshake and an understanding. We have always asked for your loyalty and have never had an issue. However, many Buyer’s agents in our industry don’t ask for loyalty, they don’t ask for the handshake and it has caused issues. We like this change. An agreement in writing should have been standard practice in our industry. It’s good for both the buyer and the buyer’s agent. It’s an agreement in writing, that the buyer is 100% committed to their buyer’s agent, and therefore the buyer’s agent can be 100% committed to their buyer. No guessing. Buyers also have the option to choose location only, or individual homes only, and an agreement can be set up to be best suited for all parties involved. Lots of good options, and we hope that the buyers (not represented by the Sackin-Stone Team of course) in our marketplace, who are already having a difficult time, will get even better service from their agent.

Conclusion

In conclusion, while change is inevitable in any industry, our commitment to you remains the same. The Sackin-Stone Team is here to navigate these changes with you, ensuring that your home buying or selling experience is informed, transparent, and aligned with your best overall interests. We would love your questions, comments, and to begin a dialogue as we move forward together in this evolving real estate world. Talk soon!