What the NAR Settlement Means for You as a Seller
The National Association of Realtors recently reached a $418 million settlement in a lawsuit alleging that current policies artificially inflated commissions and stifled competition in the market. Traditionally, sellers have paid out between 5-6% of their home's sale price in commissions, split between their own agent and the buyer's agent. With the new policy set forth by the settlement, which still requires approval from a federal judge, these commissions will no longer be advertised on the Multiple Listing Service (MLS).
This change might seem significant, but for sellers like you, the fundamental strategy of marketing your home remains intact. In real estate, offering a competitive commission is a powerful tool to ensure your listing gets the attention it deserves and secures the best possible sale price. Think about it: Does it matter if you offer a commission if it ultimately means you will net more from the sale of your home?
The lawsuit highlighted issues with the old system, where "steering" by agents—directing buyers toward homes offering higher commissions—could occur. This was possible because commissions were openly advertised on the MLS. Now, with these details removed, there's a stronger emphasis on the quality of service rather than the commission rate.
The ability to negotiate and tailor these offers privately can enhance your flexibility, allowing you to adapt to the unique demands of the local market and the value perceived by your listing agent. Even without public disclosures on the MLS, offering a compelling commission remains a strategic tool for attracting potential buyers and their agents. There will be new ways to discover commission details, such as contacting the listing agent directly or finding information on the agent’s private website. Commissions continue to be a vital tool for attracting attention and securing the best possible price for your home.
Ultimately, the goal remains the same: to sell your home at the highest possible price. If offering a competitive commission to the buyer's agent is what it takes to close the deal at an optimal price, then it remains a small price to pay for greater returns on your investment. The settlement may change how commissions are communicated, but the importance of offering a compelling incentive to attract buyers and their agents to your property remains unchanged.
