NAR Settlement Discovery Questions

Here’s an algorithm for discovery that explores the possibilities of how the new NAR settlement would work, considering the end goal of moving away from the seller paying the participating broker directly to an offer being made to the buyer

1. Can the Seller offer a monetary incentive to the Buyer as part of the real estate transaction?

? If Yes, proceed to Question 2.

? If No, end the algorithm and note the reason.

2. Can this monetary incentive be used by the Buyer to pay for any part of their transaction costs, including their agent’s commission?

? If Yes, proceed to Question 3.

? If No, end the algorithm and note the limitations.

3. Can the Seller advertise this monetary incentive in the property listing or marketing materials?

? If Yes, proceed to Question 4.

? If No, proceed to Question 5.

4. If the Seller can advertise the monetary incentive, how should it be presented to ensure transparency and compliance with regulations?

? Document the guidelines for presenting the incentive. Proceed to Question 6.

5. If the Seller cannot advertise the monetary incentive, how can they communicate the offer to potential Buyers or their agents?

? Document the permissible methods of communication. Proceed to Question 6.

6. Must the Buyer have a signed representation agreement with their agent to utilize the monetary incentive towards the agent’s commission?

? If Yes, proceed to Question 7.

? If No, proceed to Question 8.

7. What are the requirements for the representation agreement, and how does it affect the negotiation and use of the monetary incentive?

? Document the requirements and implications. Proceed to Question 8.

8. How does the Buyer’s agent disclose their commission arrangement to the Buyer, especially if it involves using the monetary incentive offered by the Seller?

? Document the disclosure requirements. Proceed to Question 9.

9. What are the potential impacts of this new process on the real estate transaction dynamics, including the negotiation between Buyers and Sellers?

? Analyze and document the potential impacts. End the algorithm.

10. What safeguards or best practices should be implemented to ensure fairness and transparency in this new process?

? Document recommended safeguards and best practices. End the algorithm.

This algorithm aims to uncover the intricacies of how the new process would work, considering the shift from direct seller-to-participating broker payments to an offer made to the buyer for transaction costs, including agent commissions.?