SouthCoast Realtors on how commission settlement could change homebuying
The National Association of Realtors recently reached a $418 million settlement that bars the association from establishing any sort of rules regarding agent commissions.
The landmark legal case about home sale commissions has implications across the country and for Massachusetts homebuyers and sellers.
The impact may vary across the state, according to Massachusetts Association of Realtors (MAR) CEO Theresa Hatton.
"Real estate is a highly local practice, thus any changes implemented as a result of any ruling will vary across the commonwealth,” she said.
Hatton offered insight into what happens next. She said the Massachusetts Association of Realtors is not a party to this litigation but “is working closely with NAR to provide information and resources to effectively navigate next steps.”
“There will be some changes to the process of working with a Realtor, though what will remain is that NAR members will continue to lend their expertise in helping consumers – both buyers and sellers – navigate what could be the most significant transaction of their lives,” she said. “Buyers and sellers will continue to be guided by NAR members’ skill, care, and diligence during the process of buying or selling a home.”
She said NAR has long encouraged its members to use written agreements because they help consumers understand exactly what services and value will be provided. Now, as part of the settlement, NAR has agreed to implement a rule mandating written representation agreements with buyers.
“MAR offers a buyer agency agreement available to its members,” she said. “Real estate professionals across the country will continue to work closely with their clients and help Americans freely buy, sell, lease and transfer real property.”
The impact on the real estate market
Since it was announced almost three weeks ago, Al Becker, president and chief operating officer and real estate agent at the Jack Conway Company, said they won’t have definitive rules until mid-July.
Until then, the system is continuing to work the same way where it appears most sellers are still offering a cooperating compensation, or the commission offered by the listing broker to other real estate agents who bring buyers to a property through the Multiple Listing Service (MLS).
“I think that our feedback from buyers and sellers through a lot of surveys done locally and nationally is that buyers and sellers believe in the value of using a Realtor, and we don’t think that’s going to change too much,” he said.
The Jack Conway Company has offices in Dartmouth and Mattapoisett on the SouthCoast and 22 offices overall.
“We’re really working with our agents right now to make sure that they can explain their value to their buyers and sellers so that they’ll continue to be compensated because they’re working really hard for these people,” he said.
He said when you talk to most buyers and sellers post-transaction, they really feel good about the work that was done on their behalf.
While confident that will continue, he said the way that’s going to work now will be a little bit different, and that’s what they’re training their agents on now. It’s not something the consumer will really have to change if they’re working with an agent, which they hope they will.
“They’ll be learning from that agent about how the commission will be paid in the future,” he said.
He said he doesn’t predict a big change in the number of consumers using agents and, in fact, that number continues to rise over the years. He said close to 90% of all transactions are completed with an agent on each side.
“I don’t think a change to the rule of how compensation is handled will diminish that dramatically,” he said.
Looking to the challenges ahead
Becker said they have been preparing for this for about nine months, once there was a settlement locally in the MLS Property Information Network class action buyer broker commission lawsuit and once they had a chance to understand what some of the new rules might be and began training their agents.
"We’re just continuing that, we’re really working hard to help our agents communicate the value that they provide,” he said. “The value has always been there, but they may not have communicated it in the way they need to going forward, so we’re working on that. That’s a big part of what we’re doing right now.”
He said even though there is a bit of a challenge ahead, there’s also opportunity to get stronger as an industry and as a brokerage. He said real estate is an industry that thrives on awareness and accountability.
Standard-Times staff writer Kathryn Gallerani can be reached at kgallerani@gannett.com. Follow her on Twitter: @kgallreporter. Support local journalism by purchasing a digital or print subscription to The Standard-Times today.
