Being a real estate agent has never been an easy career. It is long hours, sometimes without any pay at all. Real estate agents only get paid when they close a deal. So an agent may take a seller around for months without ever being paid if the buyers can’t or just doesn’t close on a home for whatever reason. Or if a seller has unrealistic expectations of the value of their home or is unwilling to make needed repairs to make a buyer comfortable. Now real estate agents are dealing with the new NAR lawsuit and settlement that has slowly been taking effect in the real estate industry.
The NAR Lawsuit and Settlement Impact on Buyers and Sellers
The National Association of Realtors (NAR) faced a huge legal challenge with the lawsuit addressing commission structures and practices within the real estate industry. This settlement has brought changes that affect how commissions are negotiated and disclosed. Sellers can still pay but there is an extra step needed (give me a call and I can explain this from the buyers or sellers perspective or both 303-503-8793). Real estate agents must now navigate these new regulations, which aim to increase transparency and fairness in real estate transactions. All it is really doing making things less transparent. Since before the buyer agent co op was advertised in the MLS (something you can no longer do) a buyer is going in “blind” not knowing if the seller will be paying all or none of the buyer agent commission that buyer will now be responsible to pay if the seller doesn’t pay any or only partial. So in trying to be more transparent they have become way less transparent.
Impact on Commission Structures in the Real Estate Transaction – What it Means to Buyer Agents and Listing Agents
The settlement has really messed with the traditional commission structures that agents and brokers have relied on for multiple generations. One of the most notable changes is the requirement for greater transparency in commission rates. Buyers and sellers must be informed about the commission fees involved in a transaction, including how these fees are divided between the buyer’s and seller’s agents. It is something that was not only always negotiable but also way more transparent. It literally said in the MLS.
This change is significant because it allows consumers to understand better how much they are paying for real estate services and to negotiate these fees more effectively. For agents, this means adapting to a more open and competitive environment where they must justify their commission rates and provide clear value to their clients.
Adapting to a New Market Reality
Real estate agents are now adjusting their business models to align with the new regulatory landscape. Some are adopting flat-fee services or offering tiered commission rates based on the level of service provided. This flexibility can attract a broader range of clients who may have different needs and budget constraints.
Agents are also investing more in marketing and technology to differentiate themselves in a competitive market. By leveraging advanced marketing strategies and cutting-edge technology, agents can provide superior service to their clients and justify their commission rates.
The Role of Technology and Marketing
The use of technology in real estate has become even more critical in the wake of the NAR settlement. Agents are using customer relationship management (CRM) systems, virtual tours, and social media marketing to reach a wider audience and streamline their operations. These tools help agents manage their client interactions more efficiently and provide a more personalized experience.
It is important now, more than ever to have effective marketing is essential for agents to showcase their expertise and the value they bring to the table. Creating compelling listings, engaging in social media campaigns, and maintaining a strong online presence are crucial strategies for agents looking to attract and retain clients in a transparent commission environment. That is how we do it at Orson Hill Realty for every buyer and seller.
Challenges and Opportunities
While the NAR settlement presents a ton of challenges, it also offers opportunities for real estate agents to innovate and improve their services. There will be offers being rejected just because of the real estate agents commission. By pretending to embracing transparency (but in reality being less transparent), NAR and the DOJ believe agents can build stronger trust with their clients and establish themselves as ethical and reliable professionals in the industry. I don’t see that being the case. I am waiting for buyers to sue next.
Looking Ahead
As the real estate industry continues to evolve, agents must remain adaptable and proactive. The NAR settlement has ushered in a new era of transparency and accountability, which ultimately benefits consumers. For agents, this is a time to reassess their business practices, enhance their value proposition, and leverage technology to stay ahead in a competitive market.
For more information how the NAR commission lawsuit settlement will impact your next real estate transaction give me a call at 303-503-8793 or visit my website or or brokerage site. Danny Skelly broker/owner/agent Orson Hill Realty Evergreen, CO
Dan Skelly is a real estate broker/owner/agent at Orson Hill Realty in Evergreen CO. Dan is also a Realtor in Southwest Florida on Marco Island and Naples Florida
Dan Skelly Real Estate
