Aug. 23—With new real estate industry rules set in place this month, the process of buying or selling a home may look a little different for everyone involved.
The biggest change many New Mexicans will experience is having to enter into a written agreement before touring houses with an agent. That’s because buyers may have to negotiate and pay for agent commission fees, something historically predetermined and covered by sellers.
The end goal is to make buying and selling homes cheaper, though it remains unclear if that’s immediately happening.
The National Association of Realtors is the largest trade organization in the nation, representing 1.5 million residential and commercial real estate industry members. After years of federal litigation, NAR announced a settlement earlier this year that went into effect in Albuquerque Aug. 1 and nationally Aug. 17.
The agreement came about a series of class-action lawsuits filed on behalf of home sellers alleging NAR rules break antitrust laws, resulting in higher home prices, reduced broker price competition and, generally, lower quality service for people selling and buying homes.
Real estate professionals often use Multiple Listing Service, or MLS, platforms to list their inventory. Previously, agents could list buyer agent compensation on MLS platforms, which resulted in the traditional 5-6% commission rate shared by buyer’s and seller’s agents.
The new rules prohibit compensation offers on MLS platforms.
That’ll open up more commissions to negotiation, as they’ll no longer be predetermined by the listing broker. Sellers could still pick up the costs for buyers, but it’s not required.
Buyers working with an agent using MLS have to enter a written contract beforehand specifying agent services and prices.
The Greater Albuquerque Association of Realtors is a member of NAR and covers much of central New Mexico, including Bernalillo, Valencia, Sandoval, Santa Fe and Torrance Counties. GAAR set the new rules in place at the start of August in advance of the national implementation.
GAAR President Morgan Cannaday said earlier this month in a statement the change allows for more flexibility, including for specific client needs in buyer-broker agreements and compensation negotiation.
“The settlement emphasizes a more direct and personalized relationship between clients and their brokers, shifting the focus from broker-to-broker negotiations to client-centered conversations,” Cannaday said.
Under the settlement, NAR also agreed to pay $418 million in damages over four years. The organization maintains that the settlement doesn’t indicate any wrongdoing with its MLS cooperative compensation model rule.
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