Changes Ahead For Vermont Home Buyers and Sellers with NAR Lawsuit

There’s been a lot of buzz surrounding the National Association of Realtors (NAR) and a proposed settlement aimed at addressing certain practices in the real estate industry. As a Vermont homeowner or potential home buyer, it's natural to have questions about how this settlement might affect you. Misleading information and headlines has only added to the confusion. Let's dive into some misinformation surrounding the settlement to provide clarity on what it means for you if you’re looking to buy or sell a home.

Here's what we know right now about the NAR proposed settlement:

→ Going forward (from mid-July 2024) buyer broker compensation can’t be listed on the MLS.

→ Sellers and their agents could still make offers of buyer broker compensation via off-MLS negotiations and consults (meaning seller-paid buyer agent commissions are still an option).

→ NAR also agreed to a new rule that would require MLS participants—specifically those working with buyers—to enter into written representation agreements with their buyers. This isn't anything new for us in Vermont, as we already require written buyer agreements.

If you’ve been following the news about the proposed settlement, and really, who hasn’t? We want to address some of the more confusing headlines we’ve been seeing. 

Misleading Headline #1—
Home buyers and sellers won't have to pay a commission.

The truth:

While the proposed settlement affects how compensation offers are shared on MLS platforms, it doesn't eliminate the need for commissions. Sellers may still offer compensation to buyer agents through other means, and buyers can request that sellers pay the buyer’s agent as part of the transaction.

Misleading Headline #2—
Sellers don't need to offer compensation to buyer's agents.

The truth: 

Although the settlement changes how compensation offers are handled on MLS platforms, sellers can still offer compensation to buyer's agents through alternative methods.

Misleading Headline #3—
Buyers no longer need agents.

The truth:

Having a real estate agent represent you as a buyer comes with HUNDREDS of benefits, like local knowledge and expertise, negotiation skills, and detailed risk management. While the settlement may bring changes to how agents are compensated, it doesn't negate the value that a knowledgeable agent can bring to the buying process. Now, more than ever, Vermont home buyers need a local and experienced real estate agent to help guide them through the current real estate landscape.

How This Might Affect Vermont Home Sellers:

In real estate, commission rates stand out for their flexibility. There's no set standard for commission rates; they've always been up for discussion. This means that clients have the opportunity to discuss and agree upon terms that align with their specific circumstances and expectations.

Commission rates aren't set by the industry—they are and have always been negotiable. The proposed settlement doesn't alter the compensation offers, but it does take them off from being shown and shared on MLS platforms. Commission remains negotiable for Vermont home sellers, as it always has been.

How This Might Affect Vermont Home Buyers:

On the flip side, home buyers may also be affected by the proposed changes. Sellers can still offer compensation to buyer agents using different methods, and buyers can still ask sellers to cover the buyer’s agent's fee during the transaction. Today, home buyers require the assistance of a real estate agent more than ever to navigate the current real estate market in Northwestern Vermont. In a low inventory market with high competition, buyers encounter scenarios such as multiple offers, bidding wars, and homes being swiftly snatched up.

What Does This Mean for You?

Whether you're buying or selling a home in Vermont, it's essential to stay informed about the proposed settlement and its potential implications. We’re here to continue to keep you up to date as this progresses. Stay ahead of the curve with the latest updates—follow us on Instagram or Facebook. While the changes may not directly affect every transaction, they could still have a significant impact on the overall real estate market and industry practices.

The proposed settlement changes don't diminish the value that a knowledgeable agent adds to one of life’s most expensive and significant transactions.

In conclusion, while the NAR proposed settlement brings changes to how compensation offers are shared and disclosed in an effort to provide more transparency, it doesn't alter the essential aspects of buying and selling real estate. Transparency, negotiation, and the expertise of experienced agents continue to be essential. At Tamithy Howrigan Real Estate, we are committed to providing our clients with the highest level of service, transparency, and professionalism throughout these changes. We assist clients in St. Albans, Vermont and areas in and around Franklin County. Have questions? Send us a message or reach out – we’re here to help!