NAR Settlement Myth Busters

NAR Settlement Myth Busters: Clearing the Air for Real Estate Pros

Years in our industry brings experience, and I often get questions from agents who are unsure about how the recent NAR settlement affects their business. With so much misinformation floating around, it’s important to set the record straight and focus on what really matters—serving our clients with integrity and professionalism. Here’s what you need to know:

Myth #1: Broker-to-Broker Compensation is Gone

Let's get this straight—broker-to-broker compensation still exists! The NAR settlement did not eliminate this crucial aspect of our transactions. Depending on your state, your listing agreements still include the option for the listing broker to pay the Buyer Agent Commission (BAC). So, rest easy; the tools you rely on are still in place.

Myth #2: We Have to Work for Less

Absolutely not! We still set our own fees, and nothing about that has changed. Yes, we must avoid collusion to artificially inflate fees, but that’s always been the case. Remember when commissions used to be 7-10%? Setting your fee based on the value you bring to the table remains entirely in your hands.

Myth #3: Open Houses Require Buyer Representation Agreements

Not true! You can still hold open houses without a buyer representation agreement. Remember, you represent the seller and their interests and that agreement is already in place. Buyers may already have an agent, and they have always had the choice to go unrepresented if they wish. However, if you start acting as their buyer agent and engaging in activities beyond viewing the open house, then a buyer representation agreement is required. Just stick to the basics, and you’ll be fine.

Myth #4: Buyer’s Agents Don’t Need to Know Compensation Sources

In many states, this is simply not the case. For example, in Texas, the Addendum Regarding Broker Fees differentiates between compensation coming from the listing broker or the seller. This must be designated on the form when submitting an offer, so make sure you’re aware of your state’s requirements.

In Summary

Keep things simple. Discuss compensation with your clients, showcase your value, and set your rate accordingly. At the end of the day, the money comes from the buyer—without them, no one gets paid. Where it "comes from" on paper is just a matter of semantics. The process doesn’t have to be complicated. Happy selling!