It's Travis Anderson, let’s talk about the lawsuit.
You may have heard that there's a $418 million settlement from the National Association of Realtors paying some home sellers regarding commissions. Let's talk about how that affects you and me in Minnesota and Western Wisconsin. Let's look directly at some information from the National Association of Realtors;
"NAR and plaintiffs have reached a proposed settlement agreement that would end litigation of claims brought on behalf of Home sellers related to broker commissions.”
Couple of things here very fast, it's currently a proposal it needs to be signed by a judge, it looks like it's going to going to affect probably mid-July and it sounds like there's lots of reasons that this will be the agreement. But as of now it's just a proposal. Let's continue reading.
"The agreement would resolve claims against N.A.R. over 1 million N.A.R. members, all State, Territorial, and local realter associations all owned MLS Services all brokerages with a N.A.R. member as principal that had a residential transaction volume in 2022 of $2 billion or below."
Okay so it looks like this lawsuit, this litigation and settlement this is going to remove any realtor including myself and brokerages from any liability on this and these particular claims moving forward. I don't think we would see a lot of claims like this in Minnesota and Western Wisconsin, I'll tell you why in a second; but it does remove us of liability.
It says brokerages less than $2 billion. As far as I understand HomeServices and its Affiliates are not a part of this specific settlement. So, if you're working with somebody or if you are an agent within those companies then I don't believe this fits you, but of course I'm just reading the information here in real time. Let’s keep reading.
"There will continue to be many ways in which buyer Brokers could be compensated including through offers of compensation except for using the MLS to communicate offers of compensation would no longer be an option. Compensation would continue to be negotiable and should always be negotiable between agents and consumers they serve."
Here in Minnesota and Western Wisconsin commissions are negotiable; typically they're paid for by the seller in some lump sum and then the seller's agent takes a portion of that and pays a buyer's agent if represented separate. Okay, that's how it currently works. It sounds like that's how it may still work; the difference is we will no longer be able to disclose that compensation on the multiple listings service. We may be able to disclose it in other places like on our websites or in print material or stuff like that, but we are unable to disclose it on the multiple listing service, that's what it says here.
How does this affect buyers? Let's keep reading. "The settlement provides MLS participants working with Buyers they must enter into a written representation agreement with those buyers. This change is set to go into effect mid-July."
So, what are we talking about? Here if you've been in Minnesota or Western Wisconsin and you call your favorite realtor and you say I want to look at 123 Main Street very likely, before this settlement, we could have just taken you to 123 Main Street and we could discuss your options from there. According to this agreement NAR members including myself will have to enter into a relationship a contractual relationship with a consumer before they show property.
Okay, so that's going to be the biggest change for buyers, and then once we have a property in mind we no longer are going to be communicating commissions on the multiple listing service. Buyer Agents are going to have to uncover what the commission agreement is going to be with the listing agent directly instead of it being publicly marketed.
So there will be a little bit extra work for agents up front and then buyers and agents are going to have to agree on if they're comfortable moving forward on that property. depending on the commission agreement already in place with the listing agent. So those are going to be the big changes.
1. Realtors have to change the way we disclose commissions.
2. Buyers agents are going to go ahead and have to have an agent agreement in place before they show properties.
I do want to touch on this here a little bit. Those agreements can be extremely limited you can limit them to one property you can limit them to one day. So don't think that if you're a consumer you need to be duped here into getting into some sort of agreement you wouldn't normally be comfortable with.
You can make it extremely limited extremely protective of yourself and we can still show you property. So this is the big change coming right now it's proposed we'll see how this affects us as we move forward. Stay tuned I'll be putting together at least a video a week; we'll be touching on some of this stuff; but if you've got questions about this or anything else regarding real estate buying selling or investing. Go ahead and give me a call shoot me a message this is Travis Anderson with Keller Williams look forward to connecting.