NAR Settlement, Agent Compensation

What BUYERS need to know….

I’m sure you’ve heard that real estate agents method of compensation will be changing nationwide.
As of August 17, 2024, those changes are now official

Please take the time to read this short explanation to understand how it affects you as a Buyer.

In short, ALL buyers looking to purchase any residential property must first sign a “Buyer Representation Agreement” aka: “BBA” (Buyer Broker Agreement) BEFORE walking into or even being shown a property virtually via video or FaceTime. Buyers must now compensate their own agent.

🏡 Can you just show me a house real quick?

Nope! 🚫

Starting August 17th, no REALTOR will be able to show a property (in person or virtually) without the Buyer first signing a Buyer Representation Agreement. This is non-negotiable and is part of a legally binding settlement for all REALTORS.  I fully intend to follow these new rules and must insist all new buyer clients sign this agreement
Any REALTOR that doesn't abide by this, is subject to hefty fines, license suspension or revocation

✍🏼 Wait…. What do I have to sign?

A Buyer Representation Agreement. It is a contract between you, the Buyer and your REALTOR & Realtor’s brokerage. It outlines the details of your relationship, roles and responsibilities, and the REALTOR’s compensation. The compensation stated is the MAXIMUM amount your REALTOR and their brokerage can receive from the transaction.

💰 Buyers have to pay their agent now?

Yes, BUT maybe not…
The new rules now state that the Buyer is responsible to compensate their agent. However, there are situations where others, including the Seller or the Listing Broker, may cover all or part of the cost. Reach out to your agent if you have questions about your specific scenario.

Some sellers are still willing to pay some, or all of the compensation BUT the new rules no longer allow the Sellers to advertise that information on the MLS. We now have to request that information and we usually do that when we submit an offer.

If you’re interested in a property, first you sign the BBA document, then I can reach out to inquire about the property, as well as, if the Seller will be paying some or all of the agent compensation.

In some situations, the Buyer may also need to pay part of the compensation. If the Buyer needs to pay, we can discuss ways to structure the deal to help keep your out of pockets costs as low as possible.

⁇ How did we get here?

Historically, Sellers paid the Listing Broker a certain percentage, which was then shared with the Buyer’s Broker. However, this led to a misunderstanding that “The Seller pays the Buyer’s agent,” which isn’t entirely accurate. This misconception resulted in a class-action lawsuit, driving these changes. With the new NAR settlement, Agents/Brokers cannot advertise ANY compensation via the MLS, meaning Buyer’s agents aren’t guaranteed compensation like before.

🧾 What do you charge to be my agent ?

Myself and The Short Term Shop charge 3%

All agents may charge different amounts based on the value and/or services that they provide and I’m sure you can find an agent that will work for less.

We at the Short Term Shop offer much more than any other team or typical agent. We offer weekly, ongoing live trainings, listing reviews, ability to network with other STR Investors, updated lists of local vendors to save you tons of time and so much more!!! 99.9% of other agents do not provide any of the support and resources after the sale that we do, and many may still ask for 3%.

At the end of the day, what we provide does cost us money to offer it. We are 100% confident that our compensation is fair and reasonable. There is a reason that we have helped thousands of investors and they come back to work with us again and again on multiple purchases or when it’s time to sell.

🤝 Alignment & Communication

Choosing the right REALTOR is now more critical than ever! Investor clients that come to The Short Term Shop do so because of our expertise, resources, trainings and ability to network within our community. With these new regulations in place, choosing to buy with an STS agent is now even more obvious than it was in the past.

Don’t take the chance of working with an agent that sort of understands the short term rental space. What I can tell you for sure is, other agents certainly will not be offering you any ongoing training or the resources that The Short Term Shop offers, after the sale is over.

As the saying goes,….you get what you pay for !!!
If you have any further questions, feel free to ask