It made headlines a few week ago.  A lot of misinformation and misguided opinions were broadcast in the local and national media.  The National Association of Realtors, NAR, PROPOSED a settlement to the case in Missouri that would handle all the copycat suits at the same time.  When, and if, this proposal is accepted by the Court, then there will be changes for all Realtors.

In part, the settlement would change the rule so that displaying compensation to a cooperating Broker, i.e. the Buyer’s Agent, would no longer be allowed on the Multiple Listing Service, MLS.  This doesn’t mean the seller can’t pay the buyer Agent’s compensation as agreed in the CA Listing Agreement form.  It simply means they’ll have to find a different way to make it know what the seller has agreed to pay through the listing Agreement.

The media has jumped all over this for the wrong reasons.  Many say it “eliminates the ‘standard’ commission”…first, there’s never been a “standard” and, second, it doesn’t eliminate anything other than displaying whatever that is on the MLS.  All commission have been fully negotiable.  The CA listing agreement even has verbiage that puts this notice in bold type on the form.  Compensation for a cooperating Broker can still be displayed on an Agent’s website, the website for the property, a flyer for the property, in a variety of way only limited by the creativity of the listing Agent

Another comment being made in the mainstream media is this will lower the prices on homes.  It’s unclear how that will happen as a seller’s Agent has a duty to get them the best price, regardless of the compensation being offered or paid.  With low, local inventories of homes available for sale, it’s unlikely we’ll see prices come down anytime soon.

The second significant aspect of this settlement is Realtors will be required to have a signed ‘Buyer Representation and Broker Compensation Agreement’ before showing homes to potential buyers.  This is getting less press time but, potentially, a more significant change in how the Real Estate industry operates.  Buyer and potential Agents will have to have a consultation about what is being looked for, what responsibilities both parties have to make the home buying goal a success and what the compensation for the Agent will be.  Just like one signs a retainer with an Attorney, one will have to have a signed agreement when they want professional help.

Whether buying or selling a home the confusion created by the misinformation in the media concerning this proposed settlement will only complicate an already very involved legal transaction.  Both buyers and seller will benefit, though, as the transparency regarding compensation will be enhanced.  The value a Realtor brings to the transaction, whether for the buyer or the seller can’t be fully detailed here.  For more information and for further service contact me at (408) 887-4731 or email to

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W. Gene Hunt

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