If you intend to buy or sell residential real estate, your conversations with your broker will be very different from what they were in the past. The proposed NAR settlement of the Burnett case is intended to create transparency and encourage negotiation. We'll see...
The old adage of why a buyer should work with a broker - "because it's free" - will be no more. Buyers working with agents will be required to sign a written agreement which will outline how that broker gets paid - by whom and how much. Disclosure and transparency, yes! It will result in buyer agents demonstrating their value in order to justify their commission.
Sellers may choose to pay a buyer broker, or not. Their decision to pay a buyer broker, and how much, will be part of a marketing plan to sell their home, and will be included as part of a written listing agreement. The conversations between listing agents and sellers will include strategic discussions about the benefits to a seller of having a buyer work with a broker.
A seller's offer of compensation to the buyer brokerage community will no longer be part of a listing on any MLS or similar website (StreetEasy, Zillow, ie). This means that consumers who search online for homes will not know whether the seller will be willing to pay their broker or they, as the buyer, will need to pay their broker. The amount of closing costs required for a purchase will vary depending on which property they buy and the (unknown) commission structure. A buyer's online search will become even more challenging.
As a lawyer and as a 30+ year brokerage veteran, I know that the details and nuances of the settlement are confusing, and the practical implications are hard to predict. Yes, there will be additional disclosures and paperwork, nuanced conversations, and workarounds. There will also be a "new normal" where the cream of the industry who can most effectively communicate their value will rise to the top. The media's alarming, hair-on-fire headlines are ridiculous; the system as we know it will not blow up, commissions will not be slashed but rather disclosed and negotiated, buying a home will not become significantly cheaper, and home sellers will not reap any significant windfall.
I am proud of my work as a broker and the value I bring to a transaction, representing either buyers or sellers. I work with many great agents who also make buying and selling a reality despite the challenges of the marketplace and our clients' circumstances. Our work is critical and we will be paid, and should be paid, what we are worth.
(Am I the only one who thinks that the only significant beneficiaries of this settlement are the lawyers?)
