New Real Estate Rules Kick In

• Who Pays the REALTOR®? •

Did you hear that the National Association of REALTORS® (NAR) and the Real Estate Brokerages settled the big Sitzer lawsuit after losing in court? Starting August 17, 2024, advertising Buyer’s Agent compensation will be banned from the MLS in San Diego due to the landmark ruling.

Today, we’re answering questions about how NAR’s March 15th Proposed Settlement Agreement signals a shift in San Diego real estate. Find out how new rules affect REALTOR® compensation and how fees may be discussed to prepare for these inbound changes.

New Rules on REALTOR® Fees

In a nutshell, the new real estate rules mean that REALTORS® splitting commissions is a thing of the past. Now Buyers & Sellers will each pay their own agent or reach an agreement on fees during Offer time. It also means there are brand new Listing Agreements, Purchase Contracts, and Agency Forms that will address these changes.

REALTOR® compensation can still be advertised off MLS and will be negotiated between the Buyer & Seller in your Offer. Starting August 17, 2024, the San Diego MLS (SDMLS) can no longer be used to communicate a REALTOR® fee or commission. Any compensation advertised off SDMLS must be discussed through alternative channels, outside of the MLS.

Instead, if a Seller wants to advertise compensation, that incentive can be shared through other common platforms, such as flyers, signs, emails, and other conversations – as long as it’s all off the MLS.

For example, we real estate agents can advertise a REALTOR® fee for listings on our own websites.  However, we can’t display REALTOR® fees for other agents’ listings on our website if they rely on MLS data or syndication feeds. This includes any API keys, IDX data feeds, or RETS transfers that could parse out commission info across the web.

Commissions Remain Negotiable 

Sellers, you still have the option to give Buyers a concession toward their Closing Costs – which can be advertised on the MLS – as long as that amount isn’t specifically tied to using or paying a Buyer’s Agent, and also follows the new SDLMS rules. It would be tacked on as an Addendum to the Offer Contract that may apply a concession towards the Buyer’s non-recurring closing costs, for example.

Buyers, you can also request to have the Seller cover compensation in your Purchase Offer, but keep in mind this might lower the amount the Seller actually gets from the sale. Basically, whatever the Seller pays toward a Closing Cost credit could come out of the Purchase Price.

Sellers can still be open to concessions for Buyers, which leaves room for Contract negotiations between both parties during Offer time. These concessions can be advertised on the San Diego MLS – as long as they follow the rules and aren’t tied to using or paying a Buyer’s Agent.

These new real estate rule changes in San Diego give both Buyers & Sellers the flexibility to work out favorable terms, allowing for more transparent home sales that benefit everyone involved.

 

Contract Required for Showings

Come August 17th, Buyers must now sign an Agreement before touring a property listed for sale. When you want to see a certain home, the Contract can be only tailored to viewing that home – and for the duration of the contract – it would exist for just that home if you want to buy it after visiting. Naturally, there are long-term forms too for more committed relationships, of course.

The new Contracts are designed to inform you, as a Buyer, that you’re responsible for paying your own REALTOR® if the Sellers refuse to cover the cost.

These new changes, under the lawsuit settlement, now require San Diego home Buyers to sign an Agreement before visiting a home listed for sale to outline – in writing – an agreed fee for your Buyer’s Broker services if you do indeed buy the house.

The Bottom Line 

For the most up-to-date and accurate information about the new Settlement rules or how this info impacts San Diego real estate, please visit facts.realtor. These industry-wide changes mark a major shift in the ways residential real estate sales will change in San Diego, especially how San Diego REALTOR® fees are handled and advertised.

As we all adapt to these new rules and adjust accordingly, it’s super important to stay informed about the San Diego housing market and work closely with a local REALTOR® to keep your plans running smoothly. For San Diego home Buyers and Sellers, staying on top of these updates will help you make the best decisions possible.

Sources: 

https://www.nar.realtor/the-facts

https://www.justice.gov/opa/press-release/file/1338606/dl

https://www.realtor.com/advice/finance/realtor-fees-closing-costs/

https://www.justice.gov/atr/case/joshua-sitzer-et-al-v-national-association-realtors-et-al

https://www.nar.realtor/videos/window-to-the-law/understanding-rules-offers-compensation

https://www.nar.realtor/the-facts/nar-settlement-faqs

https://www.realestatetrainingbydavidknox.com/videos/catalog

https://vimeo.com/947059809