T
he National Association of Realtors (NAR) is intensifying its efforts to educate both buyers and sellers about recent industry rule changes. In response to these changes, NAR is expanding its series of post-settlement guides for consumers, with a particular focus on helping sellers understand their options when it comes to making an offer of compensation.
The new seller guidelines emphasize that an offer of compensation is a voluntary practice, and sellers have the ultimate decision-making power. NAR is taking a clear stance on reaffirming these practice changes for agents while ensuring consumers remain in control. The guidelines state, "It is up to you to determine if making an offer of compensation is the best approach for selling your property." Additionally, they emphasize that agents can only offer compensation or make a payment to a buyer's agent with the seller's written approval and sign-off on the amount.
NAR is also working to educate sellers about different types of compensation. While commissions have always been negotiable, many consumers, particularly younger sellers, may not be aware of this fact. A recent NAR report found that nearly a quarter of millennials were unaware they could negotiate agent fees. This may be due to the historical norm of sellers paying a 5-6% commission, shared between the listing and buyer agent. However, with cooperative compensation no longer set in stone, NAR is being more direct in its communication with consumers, reinforcing the idea that commissions are negotiable and sellers have a range of options for compensating agents.
The latest guide from NAR emphasizes that there are numerous options available to sellers to discuss with their agents. 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.
NAR is also clarifying the difference between concessions and compensation. 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 challenging issue for some MLSs (Multiple Listing Services). 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.
