The NAR settlement is in the final stages of approval and will likely go into effect in the middle of July 2024.
It is not an understatement when I say that this change to how buyers agents are being compensated will introduce chaos into the real estate world until the systems in place adapt to this new reality.
BUYERS HIT HARDEST
These changes will leave Buyers having to directly pay their agents themselves. However, none of the current systems in place, including lending, are ready for this change. While it will lead to many more options for buyers in terms of representation, it also introduces risks to Buyers that they are likely not going to be aware of.
SELLERS MAY NOT BE OFF THE HOOK
While the new rules prevent Sellers from openly offering compensation to Buyers agents, there are methods that can be used for Sellers to contribute to "Closing Costs", which would then be used to compensate Buyers agents. Why would Sellers do this? The bottom line is that it will get their property more attention and also insure that their Buyer has representation that can protect the Seller for future litigation.
FASTEN YOUR SEATBELT
The bottom line is that we are about to see a complete upending of how the real estate market works and it will take at least a year for this work out. In the meantime, an already difficult market for buyers will become even more difficult to navigate.
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