{"id":78513,"date":"2024-09-09T05:30:12","date_gmt":"2024-09-09T12:30:12","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=78513"},"modified":"2024-09-09T05:32:43","modified_gmt":"2024-09-09T12:32:43","slug":"redfin-agents-report-nar-rules-negotiation","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/redfin-agents-report-nar-rules-negotiation\/","title":{"rendered":"New NAR Rules Are a Bargaining Chip, Putting Pressure on Commissions in Competitive Markets, But Redfin Agents Say Most Sellers Are Willing to Cover Some Fees"},"content":{"rendered":"

A few weeks after the new NAR rules went into effect, Redfin agents report some homebuyers and sellers are confused about fee agreements and who is responsible for paying the buyer\u2019s agent. Once they understand the guidelines, most sellers are still willing to cover the buyside commission\u2013but negotiation has become more common in some markets and at higher price points, which could put pressure on fees.<\/span><\/i><\/p>\n

The National Association of Realtors (NAR) <\/span>settlement<\/span><\/a> went into effect on August 17, rewriting the playbook on how real estate agents fees are communicated and negotiated among consumers and agents. The result is that homebuyers and sellers are more likely to negotiate which party pays agent fees, and that may lead agent commissions to come down over time, but it\u2019s too soon to say by how much or how quickly fees could change. They\u2019d already <\/span>begun to fall<\/span><\/a> slightly in the lead-up to implementation.\u00a0<\/span><\/p>\n

Under the new rules, listing agents may no longer include a unilateral offer for the buyer\u2019s agent commission in NAR-affiliated multiple listing services (MLSs), and agents must <\/span>tell potential buyers<\/span><\/a> what they charge before buyers start touring homes. While consumers and agents are still adjusting to the new rules, Redfin agents report different impacts in different parts of the country.\u00a0 In some areas, negotiations over fees are becoming more common, while other markets have not experienced much change at all.\u00a0\u00a0<\/span><\/p>\n

\u201cWe’ve found a tale of two markets,” said Redfin Chief Economist Daryl Fairweather<\/a>. “In slow markets where there’s less demand from homebuyers, like Austin, agents report that most sellers are still willing to pay the buyer’s agent commission to attract buyers, and agent fees are mostly the same as before.\u00a0 In markets with low inventory and robust demand, like San Francisco and Boston, agents report more instances of negotiation around fees, with sellers asking buyers to make their best offer rather than preemptively deciding what they want to offer a buyer\u2019s agent. Now, like the amount of earnest money deposit or including an inspection contingency, the amount the buyer is asking the seller to pay her agent is a term that impacts the strength of the offer. That will likely drive fees down over time.\u201d<\/span><\/p>\n

Redfin will <\/span>continue to report<\/span><\/a> on how the new rules are impacting agent commissions in different metro areas as we collect data. The new rules have made it harder to track fees by removing them from the MLS.<\/span><\/p>\n

Buyers are confused about signing an agreement before a home tour<\/h2>\n

The requirement that agents and buyers agree on fees before they tour is intended to make fees more transparent. But buyers are understandably wary about signing paperwork to tour homes.\u00a0<\/span><\/p>\n

Redfin\u2019s approach is to ask house hunters to sign a simple fee agreement\u2013which can be signed online with one click\u2013before their first home tour. The agreement doesn\u2019t obligate the customer to use Redfin; its purpose is to tell prospective clients what we would charge if Redfin were to represent them. Once a prospective client has met a Redfin agent, they can decide whether to continue working with them. Redfin offers competitive buyer agent fees as low as 1.75% depending on the market.\u00a0<\/span><\/p>\n

Many agents at other brokerages are taking a more heavy-handed approach, requiring buyers to sign a full buyer agency agreement to tour. These agreements typically obligate the buyer to work exclusively with that agent for their home purchase for a certain period of time.\u00a0<\/span><\/p>\n