Real Estate Matters

The Silver City Regional Association of Realtors is actively addressing recent industry shifts sparked by the National Association of Realtors' (NAR) antitrust settlement, specifically changes around broker commissions and mandatory written buyer-broker agreements. These adjustments are designed to increase transparency for all parties—buyers, sellers, and brokers—especially in terms of how compensation is negotiated and paid.

A significant change requires buyers to sign a written agreement with their broker before attending home showings, whether virtual or in-person. Under this new framework, buyers are now responsible for compensating their broker directly, a departure from the traditional model where sellers paid the commission to their listing broker, who then shared a portion with the buyer's broker. Buyers, however, won't need an agreement if they're simply gathering information at an open house or inquiring about a broker's services.

The buyer-broker agreement will specify the compensation the buyer agrees to pay for the services the broker will provide. Brokers are restricted from accepting compensation beyond what's agreed upon in the contract. Sellers still have the flexibility to negotiate compensation with their listing broker, but brokers can no longer advertise a commission offer in the Multiple Listing Service (MLS), a tool maintained by real estate professionals to help clients buy and sell homes.

Kim Clark, Association Executive of the Silver City Regional Association of Realtors, highlights that while broker commissions have always been negotiable, the new rules introduce a potential financial burden for buyers, particularly first-time buyers already grappling with higher home prices and interest rates. Clark notes that sellers can still opt to cover the buyer broker's fees and may also offer concessions like paying a portion of the buyer's closing costs. Although buyer-broker agreements have existed previously, they are now mandatory under the settlement terms.

Clark acknowledges the learning curve the new rules have presented for Realtors. Many have adapted quickly, while others took advantage of educational resources, such as webinars and training, to solidify their understanding of the changes. She emphasizes that the real estate industry has successfully adapted to numerous regulatory and transactional changes over the years, helping clients make informed choices despite practice changes.

Finally, Clark advises both buyers and sellers to work with a Realtor they trust, emphasizing that Realtors are bound by a Code of Ethics requiring clear communication about compensation. She encourages consumers to feel comfortable discussing any concerns openly with their broker.

For those seeking more information, NAR provides consumer guides outlining how these changes may impact the buying and selling experience, available at nar.realtor/the-facts.

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Silver City Regional Association of Realtors (SCRAR) is a professional trade organization representing Realtors and affiliate members engaged in the real estate business. SCRAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in southwest New Mexico.

The term Realtor® is a registered collective membership mark which identifies a real estate professional, who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.

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