I'm pleased to inform you that the proposed settlement announced by the National Association of Realtors on Friday, March 15, 2024, marks a significant step towards a more open and competitive marketplace, particularly benefiting sellers and trustees seeking to maximize proceeds for estate administration. This development signifies a departure from the previous practice where sellers were obligated to pay or share commissions with the buyer.
Under this settlement, sellers now have the option to offer zero dollars, a flat amount, or a percentage to the buyer or the buyer's brokerage for the purchase of their real estate. Similarly, buyers can arrange their terms with a Realtor of their choice. Notably, sellers are not required to disclose their chosen compensation structure upfront, leaving it to negotiations between parties.
To illustrate, if you typically pay a total commission of 5%, with 2.5% to each side on a $2,000,000 sale, eliminating the 2.5% buyer's side commission would result in a $50,000 increase in net proceeds to the estate.
Looking ahead, there will likely be a need for transparent discussions upfront regarding your commission payment policy to buyer's brokerages. Alternatively, decisions on commission payments could be made on a case-by-case basis for each transaction. It's anticipated that buyers may increasingly approach listing agents directly to facilitate deals. Whether dual agency becomes more accepted in legal and professional circles remains uncertain.
Overall, this development is highly favorable for consumers, fostering a more transparent approach to residential real estate transactions. As we navigate these changes, it's essential to stay informed as we uncover further implications.
Ronald L. Greenwald, MBA, SRES
DRE 01264025
m: 760.390.0149
