What the NAR Settlement Means for Sellers
Navigating the Changes
The recent settlement involving the National Association of Realtors (NAR) has introduced significant changes to the real estate landscape, particularly when it comes to how commissions are handled. If you’re planning to sell your home, it’s important to understand how these changes affect the process—from listing your home to closing the deal.
In the past, sellers typically paid the buyer’s agent commission as part of the transaction without much negotiation. But now, the process is becoming more transparent and involves more communication between sellers, buyers, and their agents. Let’s break down what these changes mean for sellers and how to navigate this new environment.
How Buyer’s Agent Commissions Work Now
Under the new guidelines, sellers are still likely to contribute to the buyer’s agent commission, but there’s more room for negotiation. Previously, it was common for sellers to automatically offer a standard commission rate, often around 3%. However, with the NAR settlement, sellers now have the flexibility to offer a commission that is more closely tied to what the buyer and their agent have negotiated.
For example, if a buyer’s agent has agreed to a 2.5% commission with their client, the seller may choose to match that rate instead of offering a full 3%. This helps sellers avoid overpaying on commission costs while still maintaining a fair transaction. On the flip side, if the seller doesn’t offer any commission, they risk limiting the pool of buyers able to purchase the home, as buyers will need to cover their agent’s fees out of pocket in addition to their down payment and closing costs.
The key takeaway for sellers is that buyer’s agent commissions are no longer a set amount, and the terms will likely be discussed more openly and negotiated during the offer process.
Transparency and Negotiation Are Key
One of the most significant changes brought on by the NAR settlement is the increased transparency in the commission structure. Both buyers and sellers are more informed about who is paying what, and there will be more communication between the two parties when it comes to agent compensation.
For sellers, this means that negotiating the buyer’s agent commission has become part of the overall offer and counteroffer process. Sellers can expect buyers to propose different commission structures based on what they have agreed to with their agents. In many cases, it will be up to the seller to decide whether to meet those terms or negotiate further.
While this might feel like one more thing to handle during an already complex transaction, the good news is that sellers now have more control over how commissions are allocated. Working with an experienced real estate agent will help guide you through these discussions and ensure that the terms work for your financial goals.
Real-Life Scenario: Negotiating the Buyer’s Agent Commission
Let’s imagine a couple, Emily and Ben, who are selling their home. Under the new rules, they list their home and offer a 2.5% commission to the buyer’s agent, which matches what the buyer and their agent have agreed upon.
However, when they receive an offer from a buyer whose agent has a 2.75% commission agreement, the buyer requests that Emily and Ben pay the full 2.75%. After discussing it with their own agent, Emily and Ben decide to hold firm at 2.5%, knowing that they are under no obligation to meet the buyer’s request.
In the end, the buyer decides to move forward with the purchase anyway, covering the difference in the commission out of their own funds. This scenario highlights how sellers now have more flexibility to negotiate commission terms, while buyers may need to take on additional costs if their agent’s commission isn’t fully covered.
What Does This Mean for You as a Seller?
If you’re selling your home, here’s how the NAR settlement may impact your transaction:
Negotiation is Now the Norm: Buyer’s agent commissions are no longer set in stone. Expect buyers to propose different commission rates based on what they’ve agreed to with their agents.
Transparency in Costs: Both sides will have a clearer understanding of how commissions are being handled, creating a more open conversation about fees and compensation.
Sellers Have More Control: You’ll have the flexibility to offer commissions that align with the buyer’s agent agreement, helping you avoid overpaying. But keep in mind that offering no commission may reduce the number of buyers interested in your home.
More Communication: Be prepared for more back-and-forth discussions about commission rates during the offer process. Having an experienced agent to guide you will help smooth out these negotiations.
How to Prepare for the New Commission Structure
As a seller, the best way to prepare for these changes is to work closely with your real estate agent. They’ll help you understand how commission offers might affect buyer interest and guide you through the negotiation process to ensure you get the best deal possible while maintaining a competitive position in the market.
Your agent will also be able to assess how competitive your listing is and help you decide what commission rates to offer in order to attract the most buyers without overspending.
Conclusion: A New Era for Sellers
The NAR settlement has brought about important changes for sellers, but with the right strategy, you can navigate these new rules and still achieve a successful sale. While buyer’s agent commissions are now up for negotiation, working with a knowledgeable real estate agent can help you maintain control over the process while ensuring a fair and transparent transaction.
At Campbell Salgado Real Estate Group, we understand that selling your home is a significant decision.
With over a decade of experience in the Portland market, we stay on top of the latest industry changes—like the NAR settlement—so you don’t have to.
We guide our clients through every step of the selling process, from navigating commission negotiations to ensuring your home is priced right for today’s market. Our goal is to make the process smooth and transparent while helping you get the best value for your home.
Ready to sell your home or have questions about how the NAR settlement impacts your sale? Call or text us at 503-951-8547 to get started today.
