Good News For Consumers and Florida REALTORS®
Rich Barnhart – Broker, By The Sea Realty
If you have been following the news lately then you have undoubtedly seen or heard about the proposed settlement by the National Association of REALTORS® (NAR). The settlement has been granted preliminary approval with a final approval hearing set for November 26th. In the meantime, NAR is actively moving forward by implementing the terms of the settlement agreement. While denying any wrongdoing, NAR has agreed to the settlement as a means to protect their membership, and to provide a path forward for REALTORS® so we may refocus on our core mission to support buyers and sellers.
Unfortunately, there has been a great deal of misinformation in the media about the lawsuits and the proposed settlement agreement. I am taking this opportunity to provide our friends, family and customers with the facts. More importantly, I will share some thoughts on the positive side of these events and explain By The Sea Realty’s path forward as your trusted real estate brokerage since 1992.
Let me be clear. I am proud to be a member REALTOR®. By The Sea Realty has been a member of NAR and the Florida Association of REALTORS® since 1992. All of our brokers and sales associates are members as well. For 100+ years, NAR has been a champion for homeownership and private property rights in America. NAR stands for professionalism and all members are required to adhere to a strict code of ethics. We take this code of ethics seriously and we proudly post it on our website (link below).
First the Facts
FACT: NAR does not set commissions. Real estate commissions have always been negotiable between brokers and their customers. When a seller lists their home for sale, the seller and listing broker agree on what fee the seller will pay for the broker’s services. The seller also retains, as they always have, the discretion to offer compensation to brokers who represent potential buyers for their property. This practice has been in place in the U.S. for decades and it will likely continue this way for the majority of real estate transactions.
FACT: The broker compensation model benefits consumers. The practice of listing brokers’ offering compensation to buyer brokers leads to brokers sharing inventory with each other. In turn, that means sellers have access to the largest possible pool of potential buyers, and buyers have access to the greatest number of housing options.
FACT: Real estate prices will not come down as a result of this settlement. Real estate values are determined by supply and demand, not real estate commissions. It is true that some brokers may decide to reduce their fees as a result of the settlement, but this is nothing new. Discount commission models have always been available and will continue to be available for consumers seeking those options. By The Sea Realty agents and brokers have always strived to provide the very best service and value. We welcome transparent discussions with our customers about how to save money on real estate fees.
Changing Business Practices
The proposed settlement mandates two key changes to the way REALTORS® do business. By The Sea Realty is fully prepared to implement these changes agreed upon in the NAR settlement. In fact, we are embracing these changes and we view them as a new benefit to our customers and to the entire brokerage community. These changes will officially go into effect mid-July of this year.
- Offers of compensation (buyer broker commissions) can no longer be communicated through our MLS system. Offers of compensation can still be offered, but must be communicated “off-MLS” through negotiation and consultation with your real estate professional. We expect that buyer broker commissions will be negotiated through a separate agreement between brokerages and/or as part of the real estate contract. We are awaiting guidance from our local board on how this change should be implemented.
- Buyer brokers must enter into written agreements with their buyers before touring any property. While this requires an extra step in the home touring process, we plan to make it as seamless as possible for our buyers. Written “Buyer Representation” agreements have been required in other states for many years. We welcome this change in Florida and we believe it will provide for a much more professional experience for our customers on both sides of the transaction.
The bottom line is that this settlement is good news for consumers and is bringing welcome change to our industry. Not too much will change at By The Sea Realty. We will continue to provide the very best service and value available in our local marketplace. We have always put the customer first and that will continue to be our priority as we navigate these changes in our business practices. Transparency and open communications are keys to success. We will continue to keep you posted on these issues and we welcome your questions and feedback. Please don’t hesitate to reach out to me personally. I am here to support all of our agents and customers as we navigate these industry changes together.
Thank you,
Rich Barnhart, Broker/Owner
By The Sea Realty
Cell: 954-980-7795
rich@bythesearealty.com
Additional Resources
NAR: The Truth About The NAR Settlement Agreement
