Understanding Recent Changes Brought by the NAR

By Shamus Greene

Shamus Greene is a Realtor and the team owner of the Shamus Greene Realty Group with United Real Estate Louisville. Shamus has a strong background in the mortgage industry. He began his real estate career in 2005 as an independent agent and developed the Shamus Greene Realty Group in 2014.

We’d like to share a few insights on how changes brought about by the National Association of Realtors and the significant lawsuit are set to impact the real estate industry. Here are the key takeaways:

1. Set commission rates. Contrary to common belief, there has never been a mandated commission rate in real estate. While many have assumed an average of around 6%, this figure has always been flexible. Realtors have charged varying rates, from 4% to 7%, based on factors such as the agent’s expertise, the services offered, and the specifics of the property transaction.

2. Advertising offers on the MLS is not allowed. A major change is that agents can no longer advertise commission offers on the Multiple Listing Service (MLS). Previously, if a property was listed, the buyer’s agent could see the commission percentage being offered, such as 3% on a $200,000 house, which would amount to $6,000. This transparency is no longer allowed, and such details will now be negotiated privately and included in the contract.

3. Sellers are allowed to pay the buyer’s agent. Despite the changes, sellers can still pay the buyer’s agent’s commission. The financial outcome of a real estate transaction will continue to focus on the net proceeds for the seller. Offers can still include terms where the seller might cover certain buyer costs, but this will be settled during the contract negotiations rather than being advertised upfront.

These adjustments, while significant in practice, don’t really change the net result of real estate transactions. The ultimate costs are shared between the buyer and the seller, as they have always been, ensuring that the focus remains on achieving the best possible deal for both parties. If you have any questions or need further clarification, just call or email me. I am always willing to help!