In light of the upcoming and highly anticipated implementation of the NAR settlement changes, Unique Homes spoke with real estate expert Denise McManus to break down exactly what brokers and buyers alike can expect moving forward after August 17th.
Please tell us about your background and expertise in real estate knowledge.
“I am a licensed real estate advisor with the global brokerage of Engel & Voelkers and a licensed Loan Originator in seven states with Xpert Home Lending.”
Can you explain the significance of the new Buyer Broker Agreement requiring buyers to sign an agreement disclosing their broker’s commission?
“The Buyer Broker Agreement is designed and implemented to protect both the consumer and the broker by outlining the duties and responsibilities of both parties. It is a legally binding employment agreement between the agent and consumer/buyer detailing what the agent will be paid for their services. It will also obligate the buyer to pay the negotiated commission to the buyer’s agent if the commission is not paid for by the seller.”
Impact on Buyers
How do you believe this change will affect the buyer’s experience during the home-buying process?
“It is really two-fold. First, hopefully buyers will take the professionalism of the agent they choose more seriously and recognize there is a tremendous amount of logistics and work that goes into representing a buyer in a real estate transaction. On the flip side, buyer’s agents will need to button up their professional skills and “interview” for the job with each buyer.
Next, this could have great monetary impact on buyers now that it is no longer considered customary for the seller to pay agent commissions on both sides. If there is no commission offered by the seller, the buyer will need to come out of pocket to pay the negotiated commission fee to his own agent.”
Denise McManus
Impact on Brokers
How are brokers preparing for the implementation of this new requirement?
“Oh wow… Lots of meetings! It is important to get the forms right and make sure everyone is covered under the new regulation.”
What challenges do you foresee brokers facing with this change, and how can they navigate them?
“Just being ready and then the implementation in the early months. There is so much confusion and millions of interpretations and urban myths about how to handle transactions and commissions.”
Market Implications
What impact do you think this change will have on the broader real estate market, particularly in terms of pricing and competition?
“I don’t think it will have a huge effect on the market. For the most part, it is business as usual, but marketing will change and the level of communication between agents will need to increase.”
Future Outlook
What advice would you give to buyers and brokers as they navigate these new requirements?
“Brokers: Don’t assume. Call your local associations and ask questions about new regulations if there is confusion. Buyers: Be aware of what you are signing. Ask questions!”
Personal Insights
From your perspective, what do you see as the most significant benefit of this change?
“There is absolutely nothing wrong with fees being completely transparent. It also makes all agents step up their professionalism.”
Is there anything else you think buyers, brokers, or industry professionals should know about this new regulation?
“It will all be ok! This is just a change from the way it has always been. We will all get used to the new forms and life will go on.”