Navigating the Future of Real Estate Transactions Under New NAR Steering Policies
Lisa Mailhot | June 7, 2024
Buyers
Lisa Mailhot | June 7, 2024
Buyers
Recent developments from the National Association of Realtors (NAR) suggest a pivotal shift in real estate practices. With a new proposed settlement potentially ending the practice of steering, the landscape of real estate transactions is set for a significant transformation. This blog delves into the details of the settlement, its implications for real estate professionals, and what it means for the market as a whole.
The NAR’s proposed settlement addresses the longstanding issue of steering—where buyer agents influence client choices based on commission rates offered by listing agents. This practice has been a point of contention, leading to several antitrust lawsuits. The settlement not only seeks to make compensation offers from listing brokers to buyer brokers "irrelevant" but also mandates that these offers should not be made through multiple listing services (MLS).
Michael Ketchmark, the lead plaintiffs’ counsel in a major lawsuit resolved by this settlement, emphasized the legal gravity of steering and the commitment to enforce the new rules vigorously. With the Department of Justice (DOJ) keeping a close watch, the real estate industry is under scrutiny to adhere strictly to these new guidelines, which are pending final approval.
In response to the settlement, NAR has updated its FAQ section to clarify these changes. From August 17, 2024, buyer brokers must enter into written agreements with buyers, stipulating the compensation they will receive, which cannot exceed the agreed amount. This move aims to discourage brokers from steering clients towards properties offering higher commissions, thereby fostering a fairer, more transparent marketplace.
Despite the settlement, NAR continues to support the idea of cooperative compensation, where listing brokers can still advertise compensation offers to buyer brokers through various non-MLS channels. This ongoing support highlights the complexities of transitioning to the new system and the balance NAR seeks to maintain within the industry.
As the real estate landscape evolves, understanding these changes becomes crucial for anyone involved in buying or selling property. If you're considering a move and want expert guidance tailored to these new realities, let's connect.
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