COLUMBIA, MISSOURI – On August 17, 2024, new national practice changes went into place for REALTORS® which aim to more clearly communicate to homebuyers and sellers the compensation paid to their agent and the services they receive in return. This piece is meant to address some FAQs we’re hearing locally following stories in the national news. For additional resources, visit facts.realtor.
“Buying and selling a home is one of the largest financial transactions most people will ever undertake, and consumers have a wide range of choices when it comes to representation by a real estate professional,” Derek Schriewer, a second-generation real estate agent and 2024 President of Missouri REALTORS®. “Agents who are REALTORS® are a trusted source of advice and stand ready to help navigate this often-complex process so you can make decisions that work best for you. A recent settlement entered into by the National Association of REATORS® (NAR) has led to several changes that benefit consumers, and we wanted to clearly lay them out for current and prospective homebuyers.”
Here is what the settlement means for homebuyers, according to Schriewer:
- You will need to sign a written agreement with your agent before touring a home. This is already part of Missouri’s real estate license law, and the type of agreement will depend on the kind of representation you’re seeking.
- Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent. The agreement should ensure you understand exactly what services will be provided, as well as the cost of these services. This, too, is already required under Missouri’s real estate license 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. Again, another element that’s part of Missouri’s current real estate regulations.
- You can still request, negotiate, and accept concessions from the seller, such as offers to pay your closing costs, certain repairs, or your broker’s compensation. If you’re using a mortgage, check with your lender to be sure any concessions agreed to are allowed based on your loan type.
Here is what the settlement means for home sellers, according to Schriewer:
- You continue to have the choice of offering compensation to buyer brokers. You may consider doing this as one of the tactics for marketing your home; however, your agent cannot include such offers on a Multiple Listing Service (MLS). MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale. This data is also often syndicated to public real estate and brokerage websites for consumers to view.
- You can also negotiate requests for compensation to a buyer’s broker if a homebuyer includes that in their purchase offer, similar to other requests they may make to cover closing costs, certain repairs, or other concessions.
Schriewer further notes, “The practice changes required under this settlement seek to more clearly communicate to homebuyers and sellers the compensation paid to their agent and the services they receive in return. But it’s important to note this settlement does not change core elements of an agent-client relationship, in particular, that consumers continue to have choice in the type of representation they use, and the value of the guidance and expertise provided by a REALTOR®.”
Here is what the settlement does not change:
- Agents who are REALTORS® are here to help you navigate the homebuying 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 also abide by the REALTOR® Code of Ethics to have clear and transparent discussions with you about compensation.
- 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.
“For additional resources, we encourage homebuyers to visit facts.realtor,” said Schriewer, “or better yet, reach out to a REALTOR® for information specific to your situation.”
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Founded in 1936, Missouri REALTORS® is the largest trade association in the state serving over 25,000 members. As members of organized real estate, REALTORS® subscribe to a strict code of ethics and have access to numerous services and programs to enhance their professionalism within the real estate industry. Through collective strength, influence, and professionalism, Missouri REALTORS® unite to advocate for real property rights in Missouri, deliver comprehensive risk management programs and services, connect members through various media and events, and deliver association management services.
The National Association of REALTORS® is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.