There's a meme I've seen that goes something like "Everyone always asks 'How's the real estate market?', but no one ever asks 'How's the real estate agent?!'" LOL 😂

But with all headlines regarding the recent National Association of Realtors (NAR) settlement, I have had so many people very kindly reach out to check in! I am very grateful for everyone's interest and concern, and for the opportunity to clarify the reality of the situation which isn't quite what the media would have you believe.

It feels a little strange to be using this platform to talk about agent compensation, but based on the questions I have received and the confusion I have noticed, I thought it might be helpful to break it down based on our current understanding of the proposed settlement...

So, are real estate brokerage fees being reduced? 
The short answer is no. You may have read "Real estate commissions are being Slashed! and "6% fees are a thing of the past!" But here's the truth, the compensation paid to real estate brokerages has always been negotiable. Some listings are signed at 6%, some for more, and many for less. The fee is not set in stone and is whatever the principal and the broker / agent agree to. Those fees will continue to be negotiable and vary based on what services are provided and what both parties are willing to agree to.

So what is changing?
Most of the changes laid out in the settlement are related to how the buyer's agent in a transaction is compensated. Currently, the fee determined in the listing agreement is typically shared between the seller's agent and the buyer's agent. Whatever compensation to the buyer's agent is agreed to in the listing agreement, is then communicated to buyers agents via the listing in the MLS ( a.k.a., the multiple listing service).  In an effort to increase transparency and consumer choice around the fee paid to the buyer's agent, this will no longer be how the buyer's agent compensation gets determined or communicated.

So what will the new process be? 
Buyer broker agreements will be the norm going forward. Already commonplace in many markets and rising in popularity here in LA, come mid July, a signed buyer broker agreement will be required before any private showing with a buyer's agent. This agreement (between the buyer and their agent) will determine the amount of compensation received, the duties of, and the services provided by the buyer's agent.

So, who will pay the buyer's agent fee?
It depends. Sellers will still be able to offer buyer's agent compensation, and that offer can be communicated to the buyer's agents in a variety of ways other than the MLS listing. In scenarios where sellers decide not to offer compensation for the buyer's agent, the buyer can still ask for it as part of their offer when negotiating. Or, buyers may end up paying the fee themselves out of pocket at close.

Not all the details of implementation have been worked out and the agreement itself still needs to be approved, but at the end of the day, I think the increased transparency and accountability between agents and their clients will be a great thing for the industry.

I'm so curious to hear your take on all of this! So if you have any questions or thoughts on this topic, please let me know! Looking forward to connecting.