NAR Offers New Advice for Sellers on Agent Compensation
With industry rule changes now in effect, the National Association of REALTORS® has been doubling down on education and outreach to buyers and sellers.
NAR is growing its series of post-settlement guides for consumers, with the most recent addition aimed at helping sellers understand their options for choosing — or not — to make an offer of compensation.
What NAR Is Telling Consumers About Agent Pay
The new seller guidelines start with a brief summary of what an offer of compensation is and the typical costs. But ultimately, NAR is taking a clear stand on reaffirming the practice changes for agents and ensuring consumers that they are the ones in the driver’s seat.
“It is up to you to determine if making an offer of compensation is the best approach for selling your property,” one guideline states, while another adds that agents can “only offer compensation or make a payment to a buyer’s agent if they have your written approval and sign-off on the amount.”
Educating Sellers on Different Types of Compensation
While NAR has emphasized that commissions have always been negotiable, that’s news to some consumers — especially younger sellers. An NAR report earlier this year found that nearly a quarter of millennials did not know they could negotiate agent fees. That may be due to the fact that historically, the vast majority of sellers have paid 5-6% commission, shared between the listing and buyer agent.
But with cooperative compensation no longer set in stone, NAR is being more direct when communicating with consumers, reinforcing the idea that commissions are negotiable and sellers can choose to compensate agents in different ways.
“There are many options available to you as a seller to discuss with your agent,” NAR wrote in its latest guide. “These could include a flat fee paid directly to the buyer’s agent or allowing your agent to share a part of their compensation with the buyer’s agent.”
How Sellers Can Cover Costs
NAR clarifies the difference between concessions and compensation, noting that concessions can “make home ownership more accessible for buyers by reducing upfront expenses.” The guidelines list closing costs and property repairs as types of concessions, but do not mention buyer agent fees — though they do say concessions can cover “some transaction costs.”
Communicating concessions has been a tricky issue for some MLSs. In the spring, the country’s two largest MLSs, CRMLS and Bright MLS, added concessions fields that allowed agents to include an amount sellers were willing to offer. Bright MLS also gave agents the option of specifying, at closing, the type of concessions offered — including the payment of buyer-broker fees.
CRMLS ultimately changed its field to say only that sellers were willing to consider concessions, and Bright soon followed suit, while also removing any mention of buyer agent fees.
Source: Real Estate News
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