As Realtors, we understand buying a home is one of the largest financial transactions most people will ever undertake, and you deserve to have all the information you need to navigate it with confidence.
We are prepared to be a trusted source of advice and stand ready to help you navigate your home buying journey and make the choices that work best for you.
Earlier this year, the National Association of Realtors reached a settlement agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. While the settlement terms confirm transparency and choices, they also introduce some changes that benefit homebuyers. So, we wanted to clearly lay them out for you.
You will sign a written agreement with your agent before touring a home. Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand exactly what services and value will be provided and for how much. The buyer agreement must include four components concerning compensation:
1. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined
2. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate) – and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”)
3. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer
4. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.
Written agreements apply to both in-person and live virtual home tours. You do not need a written agreement if you are just speaking to an agent at an open house or asking them about their services.
The seller might agree to offer compensation to your agent. This practice is permitted but the offer cannot be shared on a Multiple Listing Service. MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
You can still accept concessions from the seller, such as offers to pay your closing costs.
The above-described settlement practice changes went into effect Aug. 17. And to reiterate, many aspects of buying a home do not change moving forward. Agents who are Realtors are here to help you navigate the home buying process and are ethically obligated to work in your best interest.
Compensation for your agent remains fully negotiable, and if your agent is a Realtor, they must abide by the Realtors Code of Ethics and have clear and transparent discussions with you about compensation. When finding an agent to work with, ask questions about compensation and understand what services you are receiving.
You have choices. Work with your agent to understand the full range of these choices when buying a home, which will help you make the best possible decision for your needs.
As we move forward with these changes, rest assured that Realtors will continue to provide the trusted advice and support you need to achieve a successful home purchase. More details about these changes and what they mean can be found at www.facts.realtor. If you have any questions about these new practices or how they might impact your home buying experience, don’t hesitate to reach out to your local Realtor. We are here for you every step of the way. #ThatsWhoWeR
Founded in 1912, Greater Chattanooga Realtors is the voice for real estate in Greater Chattanooga. A regional organization with more than 2,700 members, Greater Chattanooga Realtors serves Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade, and Walker counties in northwest Georgia. The Association is one of approximately 1,100 local associations/board of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors owns and operates a Multiple Listing Service (MLS), which is one of approximately 600 MLSs in the country and services more than 3,000 MLS users. Local Association membership consists of Realtors servicing the Greater Chattanooga area and specializing in a variety of disciplines – appraisal, commercial, industrial, land, multifamily, property management and residential. Working alongside Realtors are our Affiliate members, who represent related industries in sympathy with the objectives of the Association. Our Affiliate members include mortgage lenders, home inspectors, title and closing services, pest inspection and control and insurance.