A Rundown on the National Association of Realtors Changes

Posted on: April 9, 2024

If you follow real estate news, then you have most likely come across articles about a lawsuit settlement by the National Association of Realtors (NAR) and perhaps some concerning takes that this will greatly disrupt the real estate industry. Firstly, fear not! The market has weathered much greater occurrences than a class-action lawsuit, like recessions, global events, and the pandemic. Perspective is key here.

The changes that NAR will have to implement by July 2024 may be new to them, but in Washington State, the Northwest Multiple Listing Service (NWMLS) has been ahead of the curve regarding transparency around agent compensation. Since 2019 in Washington state, brokerages have been allowed to disclose compensation offered to the buyer’s agent. Previously, the listing broker and the seller would decide on the gross commission, usually ranging between 5 to 6%, which was then split between the listing broker and buyer broker based on the seller's decision. Now, both the listing agent and the buyer's agent are paid directly by the seller, and it is considered compensation, not commission. Buyers and sellers suddenly gained the ability to see compensation clearly outlined from the get-go.

During a major transaction like the purchase or sale of a home, there may be many speedbumps or unknowns, but the compensation structure no longer needs to be one of them. Washington State continues to be at the forefront of implementing laws and regulations that ensure buyers and sellers thoroughly understand the roles of each party involved in a transaction, evidenced by the revised Agency Law which went into effect early this year and requires both buyers and sellers to sign a broker services agreement.

As someone who has worked in the real estate industry for over 35 years and weathered many market, regulation, and policy changes, I have always been an advocate for increased transparency in real estate transactions. Whether my clients are first-time buyers or seasoned investors, I believe it’s my duty to act in their best interest and guide them with my knowledge and analysis, ensuring that they understand all aspects of the transaction and ultimately feel good about their decisions.

If you’re curious about what the settlement may mean for you and your real estate goals specifically, please reach out. I’m happy to discuss its potential effects.

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My purpose has always been to help others, from being a tennis pro to teaching at Texas A&M to helping people invest in real estate. I have spent 30+ years helping people navigate the world of real estate. My goal is to both help you put together a real estate investment game plan and implement it.

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