How the NAR Settlement Can Affect Buying and Selling Your Home

On Course | June 18, 2024 | Volume 24, #3

Welcome. We at Compass Planning continue to appreciate your support. Thank you.   A recent settlement reached with the National Association of Realtors® (NAR) carries the potential to bring about substantial changes in the home buying and selling processes. One of the key changes is the way buyers’ and sellers’ commissions work. Read below to learn about how the settlement agreement might affect you as buyer or seller.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance with understanding how the NAR settlement might affect you, we are here to help you stay On Course! Jennifer Lane, CFP The National Association of Realtors® (NAR), a trade association for realtors, recently agreed to a settlement that will affect how people buy and sell their home.     Transparency for agent commissions The seller was historically responsible for compensating both the seller’s and buyer’s agents from the earnings of the home sale. Currently, the seller’s agent shares the commission with the buyer’s agent. Traditionally, the commission ranges between five to six percent. Under the settlement agreement, this traditional commission will undergo a significant shift. NAR maintains the Multiple Listing Service (MLS) where only NAR registered realtors can learn about and share local properties listings, including the amount of commission the buyer’s agent will receive. With the elimination of this fixed rate, sellers’ agents will no longer have to make offers of commission to the buyers’ agents. Sellers will likely negotiate commissions down. Over time, commissions will probably reflect the competence and efforts of the agents. With the elimination of this fixed rate, sellers’ agents will no longer have to make offers of commission to the buyers’ agents. Sellers will likely negotiate commissions down. Over time, commissions will probably reflect the competence and efforts of the agents. As part of the settlement, buyers’ agents will enter into a written agreement with their client. By paying a commission directly to their agent, buyers should have more insight into the work their agent is doing for them.   Potential outcomes from the settlement Prior to the settlement, NAR required that the listing agent state the amount of commission that a buying agent would receive. This created a practice called steering, in which buyers’ agents tend to show the homes where they will receive a bigger commission check. The settlement should eliminate this. Some experts believe the settlement will cause many real estate agents to leave the profession as the commission rates go down while those who have built strong relationships and have extensive networks survive the change.   Eligibility for Compensation under the Lawsuit Anyone who has sold a home listed on the MLS in recent years may be eligible for compensation due to the settlements. Compensation will likely not be substantial. To find out if you are eligible, check with the settlement administrator at 888-995-0207 or at www.realestatecommissionlitigation. Requirements differ by state.

If your house is in a good location or on a large lot, you may not need to keep it meticulously up to date. Your buyer may buy for the location rather than the house or plan to tear down and build new. Don't invest in upgrades if your house isn't as valuable as the lot it sits on. Get more tips in Jennifer's book Buy Now   Helpful Websites   Real Estate Commission Litigation

Jennifer In The Media

Below are links to Jennifer's frequent contributions to financial planning articles.   NBC10 Boston interviewed Jennifer to learn about college financial aid and the new FAFSA form. Click here to watch. USA Today turned to Jennifer for her advice on managing credit card debt. Click here to read Debt snowball vs. debt avalanche: The best way to pay off credit card debt. Jennifer contributed to a WBUR Radio Boston segment, How to Look Before Your Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.

Compass Planning News

Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice.