What Does the NAR Settlement Mean for Home Sellers?

The recent resolution reached by the National Association of Realtors (NAR) marks a turning point for all parties in the real estate industry sellers. The NAR's decision on March 15 to resolve lawsuits alleging it enforced rules that artificially inflated real estate commissions is a breaking development. This agreement, which includes a $418 million payout spread over four years, is expected to bring about changes in the framework of real estate fees. For years a standard practice involved a 6% sales commission divided between the agents representing the seller and buyer and factored into the homes selling price. However this settlement aims to reduce the strain on sellers and transform how real estate transactions unfold.

Major Changes for Sellers

The elimination of Seller Paid Buyer Agent Commissions marks a shift known as "commission decoupling." In the past, sellers bore the burden of covering all commissions for both their agent and the buyers agent. However under the arrangement both buyers and sellers will independently cover their agents fees. This change could potentially result in cost savings for sellers and bring about changes in how negotiations unfold in real estate transactions.

  • New Rules Impacting Buyers: As buyers adjust to potentially covering their agents' fees, the way agents are compensated might shift towards more varied structures, such as flat fees or hourly rates. This could lead to buyers opting for fewer services to save on costs, thereby impacting the overall transaction dynamics from both ends.
  • Complicated Negotiations: The settlement could make negotiations more complex for buyers who don't have cash on hand. Buyers may ask sellers to pay their agents fees during the closing process as they do occassionally with closing costs. In seller's markets, they might reject these requests and prefer offers without such terms.

Real Estate Fees Explained

Real Estate Fees Are Subject to Negotiation: There isn't a uniform fee or commission rate that brokers follow in our region; fees vary by office. Each brokerage has the autonomy to determine the fees they charge for their marketing and real estate services.

Our Fee Structure: Our office applies a 6% fee on the sale price to facilitate the sale of your property. This fee is due at closing, contingent upon a successful sale. We cover all expenses associated with listing your property, including digital photography, targeted marketing, and both online and offline promotion, at no additional cost to you. Should the property not sell, you owe nothing. The fee distribution is as follows:

  • 3% goes to Fathom Realty Wa LLC.
  • 3% goes to the buying agent’s broker, which could be Fathom Realty or another firm.

Paying the Buyer's Agent: Out of the total fee, payment is made to Fathom Realty, who then compensates both your agent and the buyer's agent or brokerage. It is not obligatory to compensate the buyer's broker.

Options for Lower Fees: It's possible to reduce the 6% fee by decreasing what is offered to the buyer’s broker. You have the freedom to propose any compensation amount to the buyer’s broker, even none at all. In such cases, the buyer would need to pay their agent's fee. While this might seem equitable, it could potentially narrow the pool of interested buyers, particularly those who are financially prepared for a mortgage but unable to afford additional agent fees. Though we suggest a 3% offering to the buyer’s broker, the final decision is yours.

Buyer Requests for Fee Assistance: Regardless of your decision on agent fees, buyers may request financial assistance to cover their agent's commission, akin to a request for seller concessions towards closing costs.

Explanation of Closing Costs and Net Proceeds: Upon receiving an offer, your agent will detail your closing costs and provide an estimate of your net proceeds for your consideration.

The Realtor's Role: More Vital Than Ever

Despite these sweeping changes, the role of a skilled and knowledgeable Realtor remains crucial. For sellers, a Realtor's duties extend far beyond merely listing a home. From conducting market research and advising on home preparations to managing listings, negotiating offers, and navigating closing processes, Realtors offer invaluable guidance through every step. Think your Realtor doesn't deserve that commission? Here's what we really do.

The Realtor's Comprehensive Services for Sellers Include but may not be limited to:

  • Prepare Listing Presentation for Sellers
  • Research Sellers Property Tax Info
  • Research Comparable Sold Properties for Sellers
  • Determine Average Days on Market
  • Gather Info From Sellers About Their Home
  • Meet With Sellers at Their HomeWhat does the NAR Settlement mean for sellers
  • Get To Know Their Home
  • Present Listing Presentation
  • Advise on Repairs and/or Upgrades
  • Provide Home Seller To-Do Checklist
  • Explain Current Market Conditions
  • Discuss Seller’s Goals
  • Share Your Value Proposition
  • Explain Benefits of Your Brokerage
  • Present Your Marketing Options
  • Explain Video Marketing Strategies
  • Demonstrate 3D Tour Marketing
  • Explain Buyer & Seller Agency Relationships
  • Describe the Buyer Pre-Screening Process
  • Create Internal File for Transaction
  • Get Listing Agreement & Disclosures Signed
  • Provide Sellers Disclosure Form to Sellers
  • Verify Interior Room Sizes
  • Obtain Current Mortgage Loan Info
  • Confirm Lot Size from County Tax Records
  • Investigate Any Unrecorded Property Easements
  • Establish Showing Instructions for Buyers
  • Agree on Showing Times with Sellers
  • Discuss Different Types of Buyer Financing
  • Explain Appraisal Process and Pitfalls
  • Verify Home Owners Association Fees
  • Obtain a Copy of HOA Bylaws
  • Gather Transferable Warranties
  • Determine Need for Lead-Based Paint Disclosure
  • Verify Security System Ownership
  • Discuss Video Recording Devices & Showings
  • Determine Property Inclusions & Exclusions
  • Agree on Repairs to Made Before Listing
  • Schedule Staging Consultation
  • Schedule House Cleaners
  • Install Electronic Lockbox & Yard Sign
  • Set-Up Photo/Video Shoot
  • Meet Photographer at Property
  • Prepare Home For Photographer
  • Schedule Drone & 3D Tour Shoot
  • Get Seller’s Approval of All Marketing Materials
  • Input Property Listing Into The MLS
  • Create Virtual Tour Page
  • Verify Listing Data on 3rd Party Websites
  • Have Listing Proofread
  • Create Property Flyer
  • Have Extra Keys Made for Lockbox
  • Set-Up Showing Services
  • Help Owners Coordinate Showings
  • Gather Feedback After Each Showing
  • Keep track of Showing Activity
  • Update MLS Listing as Needed
  • Schedule Weekly Update Calls with Seller
  • Prepare “Net Sheet” For All Offers
  • Present All Offers to Seller
  • Obtain Pre-Approval Letter from Buyer’s Agent
  • Examine & Verify Buyer’s Qualifications
  • Examine & Verify Buyer’s Lender
  • Negotiate All Offers
  • Once Under Contract, Send to Title Company
  • Check Buyer’s Agent Has Received Copies
  • Change Property Status in MLS
  • Deliver Copies of Contact/Addendum to Seller
  • Keep Track of Copies for Office File
  • Coordinate Inspections with Sellers
  • Explain Buyer’s Inspection Objections to Sellers
  • Determine Seller’s Inspection Resolution
  • Get All Repair Agreements in Writing
  • Refer Trustworthy Contractors to Sellers
  • Meet Appraiser at the Property
  • Negotiate Any Unsatisfactory Appraisals
  • Confirm Clear-to-Close
  • Coordinate Closing Times & Location
  • Verify Title Company Has All Docs
  • Remind Sellers to Transfer Utilities
  • Make Sure All Parties Are Notified of Closing Time
  • Resolve Any Title Issues Before Closing
  • Receive and Carefully Review Closing Docs
  • Review Closing Figures With Seller
  • Confirm Repairs Have Been Made
  • Resolve Any Last Minute Issues
  • Attend Seller’s Closing
  • Pick Up Sign & Lock Box
  • Change Status in MLS to “Sold.”
  • Close Out Seller’s File With Brokerage

Whew! That's quite a list, right!

Supporting Your Realtor:

Given the evolving environment it's crucial to show your backing for your neighborhood real estate agent more than ever. Whether you're in the market to buy or sell real estate, agents offer assistance that eases and enhances property deals. Supporting your agent goes beyond availing their services; it includes recommending them to others spreading the word about properties or leaving a positive feedback. Each gesture of support plays a role in enabling real estate agents to carry on with their contributions within the community.

Conclusion

The recent agreement, by the National Association of Realtors represents a turning point in the real estate sector bringing about changes for those selling properties. While it presents obstacles it also opens up chances to save money and have options in selecting services that cater to personal requirements. Amidst these shifts the significance and knowledge of a real estate agent continue to be invaluable underscoring the need for decision making and continuous backing for these experts as they navigate the changing terrain of real estate.

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