​Big Changes in the Real Estate Industry How They Affect Buyers and Sellers

The media has been full of stories about big changes coming to the real estate industry as a result of a lawsuit settlement by the National Association of Realtors (NAR) and many major brokerages around the country. In New Jersey, legislative changes took effect this month. Here is a breakdown of some of those changes:

Sellers:

• A seller’s disclosure is now mandatory and must be completed by all sellers to the best of their knowledge.

• Sellers can still offer compensation to buyer agents, however, that information can no longer be shared by a Multiple Listing Service (MLS). An ‘MLS’ is a local marketplace used by both buyer brokers and listing brokers to share information about properties for sale.

• Sellers can still offer buyer concessions, now that can include buyer agent compensation.

Buyers:

• You must enter into a written agreement with a buyer's agent in order to be shown properties. This is known as a ‘buyer agency agreement,” which outlines the role of a buyer’s agent and how they are to be compensated. This agreement is required for both in-person AND video/ virtual showings. Any realtor showing a home without a signed agreement is at risk of losing their license.

• You do not need a written agreement if you are just speaking to a realtor at an open house or asking them about their services. At that point, you would be considered an “unrepresented buyer,” not a client, so there would be no fiduciary responsibility but, as always, the REALTOR® Code of Ethics requires that all agents must always be honest and forthcoming to all parties.

Here is what the settlement doesn’t change: 

• Agents who are REALTORS® are here to help you navigate the process of selling your home and are ethically obligated to work in your best interest.

• Compensation for your agent remains fully negotiable, and if your agent is a REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with you about compensation. When finding a listing agent to work with, ask questions about compensation and discuss what you would like to offer in regards to buyer agent compensation. I HIGHLY suggest compensation is offered to help attract the most potential buyers possible to your listing.

• You have choices. Work with your agent to understand the full range of these choices, which will help you make the best possible decision for your needs.

Have questions? Reach out today so we can have a more in-depth conversation about the changes and how they affect you and our local real estate market.I hope everyone is having a great summer.