Delving into evolving rules regarding agent commissions
CLAYTON, CA (May 28, 2024) — With all the buzz in the news regarding real estate agent commissions and the National Association of Realtors’ (NAR) settlement, I thought I’d explain a few changes that we are already starting to see and will continue to see in the future.
The most current issue affecting Realtors is the outcome of the NAR settlement agreement regarding several outstanding lawsuit plaintiffs. That settlement is expected to go into effect in mid-August.
However, a few weeks ago, the Department of Justice (DOJ) received court approval to intervene in the lawsuit. Therefore, it is possible that the DOJ could object to the settlement or request additional changes.
I’d be remise if I did not start by saying that all real estate commissions are negotiable. They always have been.
Summary
Here is a summary of changes as currently outlined in the settlement agreement. These rules are subject to change.
1. The offer of buyers’ broker’s compensation through the Multiple Listing Service (MLS) will be prohibited after the August timeframe. Offers of compensation will no longer be displayed in MLS or its publications. Buyers, sellers and agents will negotiate compensation to agents through other media, advertising, etc.
2. Buyers’ agents will need to sign a buyer representation agreement with their buyer/client prior to touring property. It must specify the amount of compensation a buyer’s agent will receive. A buyer’s agent cannot receive payment from all sources which when combined totals more than the amount specified in that agreement.
3. According to CAR.org, both Fannie Mae and Freddie Mac last week addressed the current treatment of property seller-paid buyer agent fees under their interested party contribution requirements. Both confirmed their policies on commissions for home sales, stating that property sellers and their agents are permitted to make financing concessions toward the borrower’s closing costs in maximum amounts between 2% and 9% of the property value.
Pending settlement
On May 2 , the California Association of Realtors (CAR) placed an open letter in numerous newspapers throughout the state related to the pending NAR settlement. The letter, written under the current CAR president’s signature, aims to clarify misinformation and confusion about the process of buying and selling a home once new business practices become effective.
I will write a follow-up article in August, once the process is further along. If readers have any questions, please feel free to contact me at jennifer@bhrbroker.com.
Jennifer Stojanovich is an owner/broker with Better Homes Real Estate.
Jennifer Stojanovich
Jennifer Stojanovich is a seasoned real estate professional with over 20 years of experience. She is the broker and owner of Better Homes Realty of Clayton, a leading real estate firm in the area. Raised in Clayton/Concord, she has deep roots in the community and currently resides in Clayton with her husband, three children, and two dogs.
A graduate of Clayton Valley High School and Sacramento State University, Jennifer began her career in sales and marketing at Hewlett Packard Company, where she spent a decade excelling and earning numerous awards for her outstanding performance. She joined Better Homes Realty in 2004, leveraging her extensive sales and marketing experience to build a strong and successful team. In 2011, she obtained her broker's license and has since specialized in traditional sales for both buyers and sellers.
Outside of her professional life, Jennifer enjoys spending quality time with her family and friends, hiking, camping, and cheering on her kids at their sports games. Her dedication to her clients and community is evident in her work and personal life.