Things have changed!

If you are thinking about buying a house or condo, THINGS HAVE CHANGED!

On August 17,2024, terms of the settlement of class action lawsuits against the National Association of Realtors (NAR) went into effect.  The plaintiffs alleged that NAR’s policy of showing in MLS what the listing broker would be willing to pay a cooperating broker would have the effect of “price fixing” the commission amount, resulting in an inflated price for the property. 

Two major changes NAR has agreed to are:

• Buyers working with an agent must enter into a written agreement with the agent describing the services the agent will provide and the amount of compensation the agent will receive.  This agreement must be signed by buyer and agent prior to touring any property. 
• MLS may no longer display the commission amount the listing agent is willing to share with the selling agent.  Any sort of compensation incentive by the listing agent, if any, must be negotiated separately.

If the listing agent is unwilling to offer any compensation incentive to the buyer’s agent, the buyer would be responsible for compensating their agent in accordance with their agreement.

These are some ripple effects of the settlement that could occur:

• NAR could lose members, since non-members are not affected by the litigation or the settlement.
• Buyers, to avoid agreeing to possibly having to pay a buyer’s agent out of pocket, would be inclined to buy a property without an agent representing them – dealing directly with the listing agent (particularly a bad idea in Alabama which is a “Buyer Beware” state).
• More FSBO’s.  Dealing with agents has gotten too complicated.

There are numerous online discussions about the lawsuit and the settlement that can be accessed by going to “NAR settlement,” or better yet, you could contact us at The Andrews Team and we’ll explain everything and give you our ideas on the best ways to proceed with representation.