The spring real estate market is typically a busy time for home buyers. However, this year's spring market is preceding a significant change in real estate due to the recent settlement with the National Association of Realtors (NAR).
The high volume of press surrounding the settlement has left many home buyers and sellers weary.
We’re here to break down what these changes mean for YOU.
NAR has been at the center of a legal battle surrounding allegations of anti-competitive practices. The core of the settlement seeks to address these concerns by enabling more transparency in the real estate market and removing select industry norms that often hurt consumers.
Among the changes are adjustments that provide more visibility into the commissions that home buyers and sellers pay and the ability for buyers to negotiate the terms of these commissions.
The settlement creates an environment where consumer interests are protected and practices that favor brokerages are disrupted.
The most important thing for consumers to know is that this settlement aims to give buyers and sellers more control by separating buyer and seller agent commissions. Starting in July, buyers will need to communicate with sellers directly if they wish for the seller to compensate their agent. Alternatively, buyers could compensate their agent directly.
Typically around March, the real estate industry witnesses a spike in inventory, increased buyer demand, and a general uptick in transactions.
The spring market is traditionally a time when sellers can expect higher property valuations and a competitive market environment. Knowing this, many sellers choose to list in the spring, which means buyers have more options when they begin their search.
However, the 2024 spring market is unfolding against a backdrop of change influenced by the NAR settlement terms. Prospective buyers and sellers need to factor in these uncharted conditions as they make one of the biggest financial decisions of their lives.
No pressure, right?
The first consideration in selling a home should always be what your specific needs are. If you wait, hoping for savings resulting from the settlement, you could miss out on the spring market, potentially resulting in a lower total sale price.
It's also worth mentioning that nobody knows what the real estate landscape will look like immediately after changes go into effect. There's a strong chance that some buyers will either drop out of the market or push for sellers to offer concessions to offset their buyer's agent fee.
If you're looking for commission savings, Houwzer has always been a pioneer in the lower-commission, full-service space. That's why we only charge sellers a 1% listing fee—and have been long before the NAR settlement.
It depends.
Waiting to buy until July means you may be responsible for directly covering your agent's fee. After the changes from the settlement go into effect, you'll need to negotiate how much you'll pay your agent upfront. All buyers working with an MLS-affiliated agent will be required to sign a representation agreement for increased transparency.
If you're ready to buy before July, you'll likely have your agent's commission covered by the seller (as has been standard in the past).