As a result of the March 2024 agreement by the National Association of Realtors to settle one of several class action lawsuits brought against them and a variety of large national real estate firms and Multiple Listing Services, things in real estate are about to change in a big way. August 17, 2024 is the deadline for certain practice changes to begin in the real estate industry across the country.

Some of those changes include a prohibition of any offers of compensation (by a selling firm to a buyer’s agent’s firm) from being displayed on any MLS listing as happens now, and more specific disclosures regarding agent representation and real estate commissions. Such as, clear reminders to consumers that commissions charged by brokers for selling your property or acting as a buyer’s agent are not set by law and are fully negotiable.

For several years, Maine Realtors have been required to present to everyone they have a substantive interaction with about buying or selling real estate, a written explanation of the types of agent representation available. This common disclosure details the difference between remaining an unrepresented “customer” and becoming a represented client. Still, there is much confusion about the process. 

In Maine, we have used written Buyers Representations Agreements for many years, but states elsewhere are only beginning to. And, while in Maine it has always been that an interested party could view a listed home with an agent without ever signing anything, after Aug. 17, 2024, that can no longer happen (in all but limited scenarios). All real estate agents will be prohibited from showing you a listed property without a signed written agreement between you and the agent detailing the terms of representation and potential compensation (you can limit that agreement to just one property, and for just that day, if you choose). To be sure, there are many great reasons to have a trusted Realtor by your side guiding you and representing your interests when buying or selling real estate. That will not change, and in fact, it will be more important than ever after Aug 17.  

There is an expectation that these practice changes will enhance transparency going forward, and maybe even lower the cost of selling real estate for consumers. At Newcastle Realty, our old model called for standard listing commission tiers of some percentage of the sold price; it might have been 5%, 6%, 7%, or 8%, depending on whether we were marketing land, a home, a business, or commercial property for the client. Of that, we used to offer a portion to agents representing buyers, as an additional incentive (that used to be 50% of what we were charging our seller client). Now, we offer a modified option where our listing and marketing services cost half what they used to, and the seller decides how much (if any) additional compensation they wish to offer to a buyer’s agent, and we add those together. The result is often lower than what we might have expected to see in the past. 

Yes, this can and will have the effect of transferring some or all the cost for the buyer’s agent services (that used to be paid by the seller), onto the buyer’s side of the settlement statement—and that is a potential disadvantage for first-time home buyers without extra funds beyond their downpayment. It will take time for us to see the full impact of this evolution.

To be sure, there is a lot of confusion among consumers, and frankly, there is a lot of concern among some Realtors. At my firm, we have accepted and embraced these changes. We are ready to guide buyers and sellers through this new, exciting landscape. This is the future of real estate, and it begins Aug. 17. There are some very good sources of additional information available online if you want to learn more, such as www.nar.realtor/the-facts/home-sellers-what-the-nar-settlement-means and www.nar.realtor/the-facts/homebuyers-what-the-nar-settlement-means.