In August of this year, major changes took effect following the National Association of Realtors (NAR) legal settlement, reshaping how open houses are conducted and how agents interact with buyers. These new regulations have changed the traditional dynamic between sellers, buyers, and agents at open houses, impacting both real estate professionals and potential homebuyers alike.
To navigate these changes, here are the top things you need to know about the new NAR rules and how they will affect open house interactions going forward.
Prior to the recent changes, sellers were responsible for paying the commission for both their own agent and the buyer’s agent, typically around 2.5% to 3%. This information was publicly available through the Multiple Listing Service (MLS), encouraging a high volume of agents to bring buyers to a listed property. While this system provided clarity and convenience, it often left sellers feeling obligated to pay a set commission rate, even if they felt the amount was not justified by the level of service they received.
Now, the MLS will no longer publish buyer’s agent commission details. This means the expectation of a guaranteed 2.5% or 3% commission for buyer’s agents is no longer standard practice. While many sellers may still offer competitive commissions, they are likely to structure these as closing cost concessions rather than as a direct payment to the buyer’s agent.
For buyers, this adjustment might initially seem like an obstacle. However, it’s an opportunity to negotiate terms that better fit their situation. Sellers, on the other hand, will have more flexibility in determining how they want to incentivize buyers and their agents.
With the new rules in place, every buyer attending an open house will need to complete at least one form before entering the property. Here’s a breakdown of the main forms you might encounter:
This form acknowledges that the agent hosting the open house represents the seller and that there is no agreement for them to represent you as a buyer. It will also ask if you are represented by another agent and, if so, by whom. You can still access basic information about the property, such as the number of bedrooms and square footage, but more detailed questions—like the property’s flood zone status or the age of the roof—will require you to speak with your own agent or sign a representation agreement at the open house.
If you have more specific questions about the property, you may need to sign a Limited Property Representation Agreement. This temporary agreement allows the agent to provide more detailed information but is limited to the property you are currently viewing. It can last up to 30 days and ensures that you have access to critical insights about the home while maintaining a short-term commitment.
This more comprehensive agreement covers multiple properties over a longer period, usually up to three months. While it offers complete representation throughout your home search, signing one at an open house might feel premature for many buyers, akin to committing to a long-term partnership before getting to know the agent well.
Pro Tip: It’s recommended to choose an agent thoughtfully before committing to any agreements. Find someone who aligns with your needs and has a solid track record of successful transactions.
One of the most notable shifts is that buyer’s agents will now need to enter into formal agreements with their clients, much like how listing agents contract with sellers. This agreement outlines the agent’s commission, services provided, and the nature of the relationship, ensuring transparency and accountability from the start.
It means that choosing an agent is now a more deliberate process, similar to how you would select a professional to sell your home. Interview multiple agents, ask them to pitch their services, and decide who will best represent your interests. This process will help weed out less experienced or underperforming agents and ensure that the buyer-agent relationship is built on a solid foundation of trust and clear expectations.
If you’re hesitant about signing a full representation agreement, consider opting for the Non-Agency Disclosure Form at open houses. This form allows you to gather basic information without entering into a formal relationship. If you have more specific questions, take the time to speak with friends, look up agents in your area online, and check their reviews. Then, set up a meeting to discuss your needs and see if they’re a good fit.
This careful selection process can protect you from feeling pressured into a long-term commitment and ensure you’re working with someone who adds real value to your home search.
Overall, these changes are designed to create a more transparent and intentional process for all parties involved. Buyers will need to be more considered in choosing their agents, while sellers will have greater flexibility in how they offer commissions or concessions. The end result should be a more balanced playing field that emphasizes professionalism and value in every transaction.
By understanding the new rules and their implications, both buyers and sellers can navigate the real estate market more confidently. Whether you’re attending an open house for the first time or considering selling your home, being informed about these updates is crucial to making the best decisions for your specific situation.
As with any change, there is likely to be some confusion and adjustment in the short term. However, in the long run, these new regulations will encourage more thoughtful and transparent interactions between buyers, sellers, and agents—ultimately leading to a healthier real estate market.
For those planning to buy or sell in the coming months, make sure to stay informed, choose your representation carefully, and embrace the opportunities these new rules present.
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