A house buyer's real estate agent provides a range of services to help house buyers navigate the home purchasing process. I want to give you context on why the payment or compensation for services are changing for the home buyer. This is what they will look like post NAR settlement.
From the NY Times... "4 Ways the Settlement Could Change the Housing Industry
The influential National Association of Realtors agreed to make several changes to its policies to settle class-action lawsuits brought by home sellers who say they were forced to pay inflated commissions to real estate agents."
The takeaways from the article:
"Home prices will drop. The 6 percent commission will cease to be the norm. Steering — the practice of agents directing buyers to more expensive houses — will be less common. About one million real estate agents could leave the profession."
There are additional organizations and brokerages involved with the commission's settlement. "All parties have settled the Sitzer/Burnett suit, so what’s next? Industry experts weigh in on the key steps that follow in the wake of all defendants settling in the Sitzer/Burnett case"
"“We are really concerned about whether the buyer can afford representation in a world where, if a seller doesn’t want to offer anything, then the buyer is on their own,” Dwiggins said. “The big concern is that there are significant consequences here if the federal government doesn’t create a way for veterans to be able to pay for representation and for consumers to pay for representation.”
Dwiggins noted that unrepresented buyers also pose a major threat to the industry. When they are involved in a transaction, the risk of litigation increases."
Here are some of the key services a buyer's agent typically offers:
1. Home buyer needs assessment:
Understanding the home buyer's preferences, budget, and housing needs to help guide the search process.
2. Property search:
Identifying properties that match the home buyer's criteria, including those listed on the MLS and off-market properties. Agents will still help buyers identify suitable properties, but the way they communicate about properties may change slightly due to the prohibition on publishing buyer agent commissions on the MLS.
3. Property tours:
Agents will continue to accompany buyers on property visits. However, before showing MLS-listed homes, the agent must enter into a written agreement with the buyer outlining their services and compensation.
4. Market expertise:
Agents will still provide guidance on market conditions and pricing, but they may need to adjust their advice to account for the fact that buyers may be responsible for their agent's compensation.
5. Financial guidance:
House buyer agents can still offer advice on mortgage options, down payment requirements, and other financial considerations related to the purchase, but specifics around their own compensation will need to be addressed in the written agreement.
6. Offer preparation:
Agents will continue to assist with offers, but those offers can no longer include a request for the seller to pay a specific commission to the buyer's agent.
7. Negotiation:
Agents will still negotiate on behalf of buyers, but discussions around the buyer agent's compensation will be handled separately from the offer process.
8. Vendor recommendations:
Providing referrals to trusted lenders, inspectors, attorneys, and other professionals involved in the transaction.
9. Transaction management:
Agents will continue to oversee the transaction, but they will need to ensure compliance with the new written agreement requirement and commission rules.
10. Post-closing support:
Assisting with any issues that may arise after closing, such as property defects or warranty claims.
The specific services provided can vary based on the real estate agent and the terms of the buyer representation agreement (Our smarter home buyer ai assistant can answer questions, provide information, engage in conversations, and generate text.). With the NAR settlement changes, these real estate services and the associated compensation would need to be spelled out in a written agreement before the agent takes the buyer to tour homes listed on the MLS.
