NAR and DOJ Settlement: Impact on Real Estate Explained

By Matt Brown

Matt Brown is a 20-year real estate industry veteran and has worked every aspect of the industry representing sellers, buyers, investors, and banks, in both the residential and commercial markets.

In the wake of the settlement reached between the National Association of Realtors (NAR) and the Department of Justice, a cloud of misinformation has obscured the facts, leading to widespread confusion. As real estate professionals, it’s our responsibility to clarify what this settlement entails and its implications for both agents and clients.

One of the primary outcomes of the settlement is the requirement for agents to secure a buyer representation agreement before showing homes. For many of us in Minnesota and Wisconsin, this has been standard practice for decades. However, this is now formally mandated by NAR, aiming to standardize professional engagements across the board.

The aspect of the settlement causing the most discussion involves the disclosure of commission. To clarify, commissions are not being eliminated; rather, how they’re disclosed is changing. Previously, when a commission was negotiated with a seller, a portion allocated to the buyer’s agent was publicly listed on the MLS. Under the new settlement, this specific disclosure on MLS is prohibited.

However, commissions can still be advertised on personal and other websites, and direct communication between agents remains unchanged. It’s essential to note that the mechanisms for disclosing commission details are evolving, and further clarifications are expected as NAR and the Department of Justice finalize the details.

When discussing this settlement with sellers, it’s crucial to emphasize the value of having a professional real estate agent involved on both sides of a transaction. Professional representation ensures that both buyers and sellers navigate the process efficiently, with all legal and financial aspects handled expertly.

I’ve prepared a document listing “13 Reasons Why a Seller Would Want a Professional Helping the Buyer Purchase Their Home.” This resource underscores the benefits of professional guidance in real estate transactions, highlighting how it can lead to smoother, more successful outcomes.

The recent NAR settlement introduces significant changes to how real estate transactions are conducted, particularly regarding the disclosure of commission. Despite the adjustments, the core principles of transparency, professionalism, and client advocacy remain unchanged.

If you’re interested in learning more about the implications of this settlement or wish to discuss the value of professional representation in real estate transactions further, please don’t hesitate to reach out. Whether through a text, an email, or a phone call, I’m here to provide clarity and support in navigating these changes.