How the $418 million NAR settlement will change Real Estate transactions in the Tennessee Valley
As part of the proposed $418M settlement to the NAR lawsuit, there’s going to be a few changes for both buyers and sellers in the TN Valley.
The first big change is that buyer agreements are now required before viewing a home. It’s always been a requirement to go over a RECAD disclosure (even though many agents ignore that state law), but now an actual agreement with compensation terms are required before viewings.
I recommend consumers request a buyer’s consultation with the agent prior to viewing a home to interview the agent, ask questions, and to create a game plan for your home purchase.
It is also possible with many agents to reduce the buyer agreement to either a day or a specific home if you want to conduct an “on the job interview” with the agent.
The second big change is that buyer agency commission will no longer be advertised in the MLS.
There’s a lot of real estate agents that are scrambling to add compensation to websites, make phone calls, and find alternative means to communicate this information.
I think these efforts are outside of the intentions of the rule changes, and it’s best to just have your agent include their compensation in the additional provisions section of your offer.
For sellers, there will be some updated forms and disclosures to review with your agent. The forms used by our team will include the compensation for our services. You’ll also have the opportunity to decide if you want to offer a seller concession to the buyer.
You’ll also want to consider and plan on offers to include buyer agent compensation offers to attract the most number of buyers and the highest possible offer.
The biggest challenge in the real estate market is affordability.
Don’t believe politicians that say the changes above are going to fix affordability.
The problem with affordability comes down to lack of supply and also the money printing and deficit spending in Washington.
The real value of homes vs gold, which is real money, has values still slightly below historical averages. The challenge is that 40% of the US Dollars were printed during the pandemic, so our fiat currency supply has been diluted.
I think this scenario is unlikely, but even if commissions were to come down 1 or 2% this does very little to help with affordability and doesn’t even put a dent in the 40% currency dilution the Fed and Washington has created. In reality, many, if not most, buyers will likely have their buyer agent’s compensation paid by the seller in the contract. That would be business as usual for buyers.
For situations where the seller does not pay the buyer agency compensation, then the seller wins and the affordability for home buyers declines further.
