HOUSTON — The real estate industry is on the verge of major changes thanks to a massive lawsuit settlement by the National Association of Realtors (NAR). New rules are coming soon that will impact homebuyers and sellers.
The changes that take effect on August 17 are part of a $418 million NAR lawsuit settlement with home sellers challenging the commission-sharing policy. The settlement includes the Houston Association of Realtors (HAR).
“We are taking every step necessary to comply with the terms of the settlement,” said HAR Chair Thomas Mouton of Century 21 Exclusive Properties. “The exact impact of these changes will become clearer after implementation, and HAR will provide ongoing resources to educate both buyers and sellers.”
Here are the key changes, according to HAR.
Written buyer agreements required: Buyers must sign a written agreement, such as a residential buyer's representation agreement, before a real estate professional can show them a property, in person or virtually. By clarifying the agent's role and responsibilities, the agreements will give buyers a better understanding of the expertise, services and value that agents provide. The agreements will also address agent compensation.
Compensation discussions directly with agent: Compensation offered to buyer agents will no longer be displayed on the Multiple Listing Service (MLS). Buyers will need to discuss compensation directly with their chosen agent.
Compensation remains negotiable: Compensation is and will continue to be negotiable between agents and consumers.
Seller contribution options: To help facilitate a transaction, some sellers might want to contribute toward buyer expenses, such as closing costs. There is a new field on the MLS about seller contributions to buyers.
Impact for VA loans: The Department of Veteran Affairs announced a temporary policy allowing VA buyers to compensate their buyer broker directly while determining when a formal rulemaking process is necessary. The VA home loan guaranty program is a vital homeownership tool that provides veterans with a centralized, affordable and accessible method of purchasing homes as a benefit they earned for their service to our nation.
HAR launched the Reality of Real Estate as an online hub of resources for homebuyers, sellers and agents. It features guides, frequently asked questions, financial tools and videos in English and Spanish.
