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Case Closed: NAR $418M Settlement & SF Real Estate

March 25, 2024

NAR Settlement & SF Real Estate

A recent $418 million settlement by the National Association of Realtors (NAR) has been making headlines.

As real estate professionals, we're not immune from our own bias, but we've also seen this coming. Here's our perspective on what it means for Buyers, Sellers, and Agents.

Background:

  • Buyer agents were typically compensated from the seller's proceeds, as specified in the listing agreement and published on the MLS.
  • Commissions have always been negotiable.

Potential changes effective mid-July:

  • NAR will change how offers of Buyer Agent compensation are advertised on the MLS.
  • Sellers remain able to offer compensation to Buyer Agents if they want.
  • Buyer Agents must enter into written agreements with their Buyers.
  • Commissions remain negotiable.

Watch this for a summary and Danielle's thoughts:

Will This Affect San Francisco Real Estate?

The dust has yet to settle on the NAR settlement, but we can see the outcome going a few ways.

Buyers with limited up-front cash may face difficulties paying their Agents directly after saving for the down payment, potentially creating new barriers to entry and riskier decisions without professional advice.

On the other hand, many Sellers are likely to continue to want to incentivize Buyer Agents and not want their own Agent representing both sides of the transaction. Hello, added liability! 

Hopefully, these changes will lead to more thoughtful Agent-selection by consumers and a higher standard of professionalism within the industry.

Going forward, it's business as usual for now. Cooperating-broker compensation will still be part of the conversation, just not published on the MLS. What no one wants is to go back 40 years when Buyers had nobody on their side.

For more information on real estate commissions, read our blog post, Real Estate Agent Commission Rates in San Francisco.

In other news, the spring real estate season is underway. So far in 2024, new listings, home sales, and sales prices are rising compared to last year. Check out our latest SF Real Estate Market Update: March 2024.

As always, please feel free to reach out with any questions. We are happy to help and grateful for anyone you send our way!


San Francisco Real Estate Newsletter

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Here are other stories we covered in this edition:

Mapped: California's homeowners' age is rising - Axios SF

Get Unlimited Taco and Beer Tastings in San Francisco [Weekend Events] - Thrillist SF

Why this tech company signed 2024’s largest S.F. office lease as others shrink - SF Chronicle

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