Get ready for lots of negotiating - NAR settlement changes take effect 17 August

Starting 17 August 2024, offers of buyer agent compensation will no longer be listed in the MLS. What exactly does that mean for you as a buyer/seller of real estate now?

First, a quick look at what the MLS compensation field currently shows, and why. When a seller chooses to sell a property using a real estate agent with access to the MLS, a discussion is had about if and how much compensation the seller wants to offer any buyer agent that successfully brings the buyer and closes on the property. This is negotiated, up front, between the seller and seller's agent, then published on the MLS for all buyer/buyer agents to be informed on what you could expect from that seller if anything at all.

On 17 August, among a couple other changes, agents will no longer be able to put that offer of compensation on the MLS. This creates some very interesting situations. The most important is this -- it ramps up the forced communication between clients and their agents and agent between agents. Why?

Because now, simply having a buyer be interested in a property will require a call, text, email or something in order for the buyer agent to confirm with the listing agent whether or not their is an offer of compensation being offered and how much that might be. In some cases, depending on the specific buyer details, this may even have to be clarified before viewing the property. It's critical information to the buyer whether or not compensation is offered and how much it is... which used to be readily available information on the MLS.

Of course, buyers can still put in an offer on any home they choose. But, buyers will now be required to lay out the buyer agent compensation details within their offer and that can of course be countered.

Sellers will find themselves evaluating offers not just based on price but also on the proposed buyer agent compensation. Multiple offers with varying compensation amounts will most definitely create a bit more of an ....interesting string of negotiation processes for sellers.

These changes underscore the importance of working with a skilled and knowledgeable real estate agent who can navigate the complexities of this new landscape.

Yes, the standard Colorado forms have been updated and will be implemented on that date.

As we approach August 17th, it's crucial for both buyers and sellers to stay informed and prepared for these changes.

#realestate #realestateagent #realestatechanges #homebuying #homeselling #brokerage #compensation

Jerome Hanson, Broker/Owner, Hanson Realty